6 ms·

This whole mess makes me wonder, what if they did everything right, with proper accounting and compliance practices etc.? Would we have ended up with a success

This whole mess makes me wonder, what if they did everything right, with proper accounting and compliance practices etc.? Would we have ended up with a successful crypto business that would advance the whole field forward? Perhaps Coinbase is an example of that, though maybe not as well known due to less drama?

HDThoreaun 4y ago
It's really hard to separate FTX's success from alameda. One theory now is that Alameda had recently been losing money hand over fist providing liquidity to FTX. Would FTX have anywhere near the volume without easy Alameda liquidity allowing traders to make tons of money?
- lordnacho 4y ago
  Once the snowball is rolling, any particular market maker becomes a lot less important. They come for retail, and retail comes because there's market makers. Perhaps as a kick starter Alameda was important, but I doubt they were needed after the usual suspects came on.
  - HDThoreaun 4y ago
    Sure, if all the market makers are in to profit. If alameda was providing quotes that consistently lose money only to FTX then retail and other flow would generally tend to migrate there since the spreads are better than other exchanges.
_fat_santa 4y ago
My impression is Coinbase is the thing that FTX was claiming to be, a well run exchange. Looking back, them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. It's very easy to see the celebrity endorsements, puff pieces and the companies name plastered over a stadium as endorsements of how solid the business is, after all, a bunch of kids living in the Bahama's couldn't just buy all this right?...right? While FTX tried to gain respectability through all that, seems that Coinbase is taking the tack of just focus on the fundamentals of the business and build trust that way (you know the old school way).
- gruez 4y ago
  >them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. This never made sense to me. To me celebrity endorsements and purchasing naming rights only mean that you have the money to pay for them. It might convey some legitimacy in the way of "they can pay for it", but I don't think of them as some sort of stamp of approval.
- zamalek 4y ago
  > Coinbase is taking the tack of just focus on the fundamentals of the business and build trust that way People who use Coinbase are called normies by the larger cryptocurrency community, as though relying on competency is a bad thing. It's this bizarre communal masochism. But then they complain when it all goes wrong? I don't get it.
  - coding123 4y ago
    is normies some kind of insult
  - wmf 4y ago
    Coinbase doesn't offer shorting or leverage that true degens need.
- Tenoke 4y ago
  FTX wasn't just like Coinbase, they were a better exchange than Coinbase with more products. They just ruined that by using the exchange's money to bail out Alameda's unrelated investments. As far as I can tell if they hadn't done that Alameda would've died and FTX would've just kept being a good exchange.
  - jaywalk 4y ago
    They had to bail out Alameda because Alameda was propping up FTX. I have seen nothing that indicates FTX would have been fine standing alone, and plenty to indicate the opposite. It was a giant scam. All of it.
bostonsre 4y ago
I haven't been following coinbase too closely, is there any visibility into their finances?
- dahdum 4y ago
  They are a public company traded on NASDAQ, so there's more visibility than just about anyone else.
  - bostonsre 4y ago
    That's good to hear. I don't invest in crypto, and it sucks that some unreputable companies are impacting the space, but at least there is a relatively safe haven where people that do invest can avoid scams.
    - foobarian 4y ago
      Honestly I think it's unfortunate that crypto turned into such a big investing platform. The whole point of something like BTC was that it would be a currency, not an investment. When filling a tank from zero, there is inevitably a lot of growth at first. I think this is what happened to BTC and attracted a lot of the wrong kind of usages. I wonder if when the ecosystem reaches an equilibrium it will become better at being what it promised originally.
      - bostonsre 4y ago
        Yea, I didn't really understand the hype wave/gold rush that turned it into an investment, so it seemed risky to invest. I did use it way back when in college as a currency on a site that no longer exists and it seemed to be a stable and pretty useful payment method at the time. But yea, maybe it will stabilize and become a currency again when enough apathy sets in or maybe when/if it becomes regulated.
      - Auracle 4y ago
        I honestly think the use case of a deflationary store of value makes more sense now than ever. Inflation is bad, it seems somewhat likely the stock market might tumble even more at some point relatively soon, etc. It would be a great way to park your money to ride out bad economic times if it wasn’t for the fact that people seemingly tie it to the overall economic attitude for no good reason.
dahdum 4y ago
> Perhaps Coinbase is an example of that, though maybe not as well known due to less drama? Coinbase is about the least exciting exchange out there. They don't offer the derivatives, futures, and leverage the others do and are very slow to add any new tokens or coins. They don't fly as high and fast as others, but there was never a high chance of crashing and burning. Now that they are public it's even lower. The company itself may flounder and crypto may tank, but I doubt there's a safer place for customer deposits outside of holding the keys yourself.
- nemo44x 4y ago
  Also, it gives Coinbase plenty of growth opportunities ahead. This makes Coinbase, IMO, a great way to get exposure to the crypto space.
twblalock 4y ago
Even a well-run exchange would not make the magic beans worth anything.
- oldgradstudent 4y ago
  But that's the customer's problem. An exchange can make money letting the customers trade different types of magic beans with each other.
  - vkou 4y ago
    > An exchange can make money letting the customers trade different types of magic beans with each other. An exchange that only does that won't have any customers, because they'll all be going to the ponzi-exchanges that pay out 8-12% APR if you buy and hold their shitcoin, or where the market makers piss away mountains of customer funds to tighten the spreads. Now that I think of it, maybe the best way to reign all this madness in is to require that celebrity endorsers and sports arenas can only get paid a decade after they shill for an exchange/coin/etc.
- rabuse 4y ago
  Coinbase makes money on every cash to crypto transaction. The price is irrelevant with that revenue. They also generate revenue from trading fees, which does though, but I seem to recall they make the most from purchases.
memish 4y ago
Coinbase did all the right things with compliance and ethics, but went through hell because of their no politics at work stance. The media did hit pieces on their CEO because of it. He and Coinbase were villainized on social media. FTX and SBF avoided this and really any scrutiny by repeating the correct words and opinions, but were actually fraudulent under the surface. It goes to show how shallow it all is.
- jandrese 4y ago
  One thing that stands out is that SBF knows how to buy influence and was not shy in doing it. That paid off in spades. There are indications that government regulators knew he was a total fraud but were willing to look the other way because he was too influential. His big mistake was making an enemy that was sitting on enough fake token to crash the exchange. Had SBF stayed on good terms with Changpeng Zhao FTX would still be around today and could probably have survived for many years.
- paxys 4y ago
  No one other than a handful of internet commenters gives a shit about Coinbase's stance on internal politics one way or another. The company is having problems because they have too many employees (5000+), sky-high expenses, and very little revenue (due to falling crypto prices and the implosion of NFTs). If they want to succeed, they need to be making money. It's as simple as that. Cries of "we're getting cancelled!!" isn't going to save the company.
- HDThoreaun 4y ago
  Coinbase went through hell because their product is worse than offshore exchanges. Less tokens available, much higher fees, no leverage. Why would any serious trader use coinbase when the alternatives exist? On top of that their expenses are far higher than their competitors, it's easy to see that the politics thing was the least of their issues.
  - Schweigi 4y ago
    Coinbase probably does all this because they want to be a reliable, profitable and somehow auditable business. If you don’t care what happens to customers funds, sure, yes, provide leverage and all kinds of tokens to your customers. I guess in a way you get what you pay for…
randal_handle 4y ago
If they hadn't touched user funds they had a profitable broker business and a potentially profitable trading business. There's no reason for their books to be this bad.
nullc 4y ago
They wouldn't have had any business if they weren't fraudulent. Most of the actual customer interest came because they were paying people 8%/yr on deposits, because their exchange was paying high rates for total dogshit scamcoins (presumably because their market maker Alameda was buying that dogshit), and because they were offering derivatives products like perpetuals that are live grenades.
sgammon 4y ago
Coinbase is under investigation, listed tons of shxtcoins and probably helped employees pump them. I don't know if I would defend them in light of what happened at FTX. That being said, nobody wants to see a true white knight in Crypto more than me. Just pointing out that what they were saying about FTX, before, that is now proven correct, is also being said about Coinbase and has been for some time.
deleted 4y ago
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HDThoreaun 4y ago

It's really hard to separate FTX's success from alameda. One theory now is that Alameda had recently been losing money hand over fist providing liquidity to FTX. Would FTX have anywhere near the volume without easy Alameda liquidity allowing traders to make tons of money?

lordnacho 4y ago
Once the snowball is rolling, any particular market maker becomes a lot less important. They come for retail, and retail comes because there's market makers. Perhaps as a kick starter Alameda was important, but I doubt they were needed after the usual suspects came on.
- HDThoreaun 4y ago
  Sure, if all the market makers are in to profit. If alameda was providing quotes that consistently lose money only to FTX then retail and other flow would generally tend to migrate there since the spreads are better than other exchanges.

_fat_santa 4y ago

My impression is Coinbase is the thing that FTX was claiming to be, a well run exchange. Looking back, them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. It's very easy to see the celebrity endorsements, puff pieces and the companies name plastered over a stadium as endorsements of how solid the business is, after all, a bunch of kids living in the Bahama's couldn't just buy all this right?...right? While FTX tried to gain respectability through all that, seems that Coinbase is taking the tack of just focus on the fundamentals of the business and build trust that way (you know the old school way).

gruez 4y ago
>them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. This never made sense to me. To me celebrity endorsements and purchasing naming rights only mean that you have the money to pay for them. It might convey some legitimacy in the way of "they can pay for it", but I don't think of them as some sort of stamp of approval.
zamalek 4y ago
> Coinbase is taking the tack of just focus on the fundamentals of the business and build trust that way People who use Coinbase are called normies by the larger cryptocurrency community, as though relying on competency is a bad thing. It's this bizarre communal masochism. But then they complain when it all goes wrong? I don't get it.
- coding123 4y ago
  is normies some kind of insult
- wmf 4y ago
  Coinbase doesn't offer shorting or leverage that true degens need.
Tenoke 4y ago
FTX wasn't just like Coinbase, they were a better exchange than Coinbase with more products. They just ruined that by using the exchange's money to bail out Alameda's unrelated investments. As far as I can tell if they hadn't done that Alameda would've died and FTX would've just kept being a good exchange.
- jaywalk 4y ago
  They had to bail out Alameda because Alameda was propping up FTX. I have seen nothing that indicates FTX would have been fine standing alone, and plenty to indicate the opposite. It was a giant scam. All of it.

bostonsre 4y ago

I haven't been following coinbase too closely, is there any visibility into their finances?

dahdum 4y ago
They are a public company traded on NASDAQ, so there's more visibility than just about anyone else.
- bostonsre 4y ago
  That's good to hear. I don't invest in crypto, and it sucks that some unreputable companies are impacting the space, but at least there is a relatively safe haven where people that do invest can avoid scams.
  - foobarian 4y ago
    Honestly I think it's unfortunate that crypto turned into such a big investing platform. The whole point of something like BTC was that it would be a currency, not an investment. When filling a tank from zero, there is inevitably a lot of growth at first. I think this is what happened to BTC and attracted a lot of the wrong kind of usages. I wonder if when the ecosystem reaches an equilibrium it will become better at being what it promised originally.
    - bostonsre 4y ago
      Yea, I didn't really understand the hype wave/gold rush that turned it into an investment, so it seemed risky to invest. I did use it way back when in college as a currency on a site that no longer exists and it seemed to be a stable and pretty useful payment method at the time. But yea, maybe it will stabilize and become a currency again when enough apathy sets in or maybe when/if it becomes regulated.
    - Auracle 4y ago
      I honestly think the use case of a deflationary store of value makes more sense now than ever. Inflation is bad, it seems somewhat likely the stock market might tumble even more at some point relatively soon, etc. It would be a great way to park your money to ride out bad economic times if it wasn’t for the fact that people seemingly tie it to the overall economic attitude for no good reason.

dahdum 4y ago

> Perhaps Coinbase is an example of that, though maybe not as well known due to less drama? Coinbase is about the least exciting exchange out there. They don't offer the derivatives, futures, and leverage the others do and are very slow to add any new tokens or coins. They don't fly as high and fast as others, but there was never a high chance of crashing and burning. Now that they are public it's even lower. The company itself may flounder and crypto may tank, but I doubt there's a safer place for customer deposits outside of holding the keys yourself.

nemo44x 4y ago
Also, it gives Coinbase plenty of growth opportunities ahead. This makes Coinbase, IMO, a great way to get exposure to the crypto space.

twblalock 4y ago

Even a well-run exchange would not make the magic beans worth anything.

oldgradstudent 4y ago
But that's the customer's problem. An exchange can make money letting the customers trade different types of magic beans with each other.
- vkou 4y ago
  > An exchange can make money letting the customers trade different types of magic beans with each other. An exchange that only does that won't have any customers, because they'll all be going to the ponzi-exchanges that pay out 8-12% APR if you buy and hold their shitcoin, or where the market makers piss away mountains of customer funds to tighten the spreads. Now that I think of it, maybe the best way to reign all this madness in is to require that celebrity endorsers and sports arenas can only get paid a decade after they shill for an exchange/coin/etc.
rabuse 4y ago
Coinbase makes money on every cash to crypto transaction. The price is irrelevant with that revenue. They also generate revenue from trading fees, which does though, but I seem to recall they make the most from purchases.

memish 4y ago

Coinbase did all the right things with compliance and ethics, but went through hell because of their no politics at work stance. The media did hit pieces on their CEO because of it. He and Coinbase were villainized on social media. FTX and SBF avoided this and really any scrutiny by repeating the correct words and opinions, but were actually fraudulent under the surface. It goes to show how shallow it all is.

jandrese 4y ago
One thing that stands out is that SBF knows how to buy influence and was not shy in doing it. That paid off in spades. There are indications that government regulators knew he was a total fraud but were willing to look the other way because he was too influential. His big mistake was making an enemy that was sitting on enough fake token to crash the exchange. Had SBF stayed on good terms with Changpeng Zhao FTX would still be around today and could probably have survived for many years.
paxys 4y ago
No one other than a handful of internet commenters gives a shit about Coinbase's stance on internal politics one way or another. The company is having problems because they have too many employees (5000+), sky-high expenses, and very little revenue (due to falling crypto prices and the implosion of NFTs). If they want to succeed, they need to be making money. It's as simple as that. Cries of "we're getting cancelled!!" isn't going to save the company.
HDThoreaun 4y ago
Coinbase went through hell because their product is worse than offshore exchanges. Less tokens available, much higher fees, no leverage. Why would any serious trader use coinbase when the alternatives exist? On top of that their expenses are far higher than their competitors, it's easy to see that the politics thing was the least of their issues.
- Schweigi 4y ago
  Coinbase probably does all this because they want to be a reliable, profitable and somehow auditable business. If you don’t care what happens to customers funds, sure, yes, provide leverage and all kinds of tokens to your customers. I guess in a way you get what you pay for…

randal_handle 4y ago

If they hadn't touched user funds they had a profitable broker business and a potentially profitable trading business. There's no reason for their books to be this bad.

nullc 4y ago

They wouldn't have had any business if they weren't fraudulent. Most of the actual customer interest came because they were paying people 8%/yr on deposits, because their exchange was paying high rates for total dogshit scamcoins (presumably because their market maker Alameda was buying that dogshit), and because they were offering derivatives products like perpetuals that are live grenades.

sgammon 4y ago

Coinbase is under investigation, listed tons of shxtcoins and probably helped employees pump them. I don't know if I would defend them in light of what happened at FTX. That being said, nobody wants to see a true white knight in Crypto more than me. Just pointing out that what they were saying about FTX, before, that is now proven correct, is also being said about Coinbase and has been for some time.

deleted 4y ago

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