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These frauds can continue so long as they can continue to grow or at least maintain a steady state. Since they promise higher returns than can be achieved thro
by jandrese 4y ago
These frauds can continue so long as they can continue to grow or at least maintain a steady state. Since they promise higher returns than can be achieved through honest means the liabilities grow faster than assets over time, but so long as nobody tries to realize their gains it's fine.
FTX only came down because they pissed off the Binance guy who dumped his position all at once and exposed the fraud. I'm dubious Tether could survive a similar attack. I also think that at least some people investing in these are completely aware of the situation and are ok with it because it means they can beat the market so long as they get out before the whole thing suddenly collapses. Basically playing financial chicken.
- anonymoushn 4y ago> These frauds can continue so long as they can continue to grow or at least maintain a steady state. Since they promise higher returns than can be achieved through honest means the liabilities grow faster than assets over time, but so long as nobody tries to realize their gains it's fine. Honestly this sort of comment makes me want to stop reading hacker news comments sections altogether. Could you explain what returns are promised for depositors of USD at FTX international and holders of USDT?
- jandrese 4y agoIt didn't matter if those holdings weren't making returns, because they were all connected to a Ponzi scheme that was siphoning off the money from the rest of the company. https://www.theblock.co/post/186187/alameda-promised-high-returns-with-no-risk-in-2018-pitch https://www.theblock.co/post/186187/alameda-promised-high-re... 15% returns, guaranteed, no risk.
- anonymoushn 4y agoIt didn't matter that my comment was completely wrong and irrelevant because some other facts I omitted from my comment!