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> Why buy a bank? Applying for a banking license is time-consuming. Buying a local bank is a comparatively quick way to end-run around that process. In and of

> Why buy a bank? Applying for a banking license is time-consuming. Buying a local bank is a comparatively quick way to end-run around that process. In and of itself it's not a sign of anything shady - buying a bank is a pretty common part of the business plan for fintech startups that don't want to sit around for years waiting for government approval.

cormacrelf 4y ago
The same thing is true of many extremely normal companies, which are sold to foreign companies wanting to list themselves on American stock exchanges.
aliqot 4y ago
Compounding pharmacies work like this too. There are people like Mikki the gambler (Spencer Cornelia's channel has a lengthy interview about this, with proof) who get the licenses and then sublet them in bulk.
FormerBandmate 4y ago
SoFi bought Golden Pacific Bank, a tiny, nothing bank, and runs their entire infrastructure off of its charter now. FTX was trying to expand into legitimate financial services, buying this bank up would have been a great way to do that if they were an actual financial company That being said, SoFi bought the entirety of Golden Pacific Bank for $23 million, and they were 20x the size of this bank (as well as having actual mortgage infrastructure and a wide variety of products). Buying 10% of a bank with only $10 million in assets for $12 million is very weird, at the very least it’s a horrible deal
- jbverschoor 4y ago
  Why? He won't "officially" control it, but has a lot of influence (see all the other briberies, I mean donations, he did). SBF is one sneaky bastard that knows very well what he's doing.
  - 22289d 4y ago
    I think it's a mistake to assume anything connected to FTX or that SBF did is by default shady or criminal in nature. Like, if you found out they purchased their company toilet paper from Amazon - would that indicate some nefarious motivations? Yes, they're criminals who belong in jail but only for the way they managed their balance sheet. They were also great builders who had awesome products and wanted to do all the great things they said they wanted to do. Buying a bank is something probably every crypto exchange has considered doing, so they can have access to the financial system and not have to pay massive amounts of money and have huge headaches processing payments for their customers. I'm surprised Coinbase doesn't own one by now - or perhaps they do.
    - leethaxor 4y ago
      If they paid 5x the normal price of toilet paper and they were picking it up in the middle of a desert then yes I'd assume there's something shady going on.
    - e1g 4y ago
      If they purchased toilet paper by paying 10-100x to a no-name supplier based in the middle of nowhere, and the same company is known for countless shady/fraudulent deals and non-existent financial checks and balances, then yeah that toilet paper has bullshit smeared all over it.
    - jbverschoor 4y ago
      Oh I'm all on the other side... I think it's a mistake to think anything SBF does is not shady. It's his history, everything that revolves about him, ftx, alameda, or his past is shady. I think SBF was VERY informed, especially looking at his background. It's simple greed for power (not even the money).
      - 22289d 4y ago
        What is shady about the fact that he likes to cook vegetables with oil and a lot of salt?
- cloutchaser 4y ago
  Doesn’t really matter if it’s a bad deal if you’ve got $16bn of customer deposits to spend.
jasonpeacock 4y ago
The fancy new X1 credit card is issued by Coastal Community Bank, a local bank in WA state. It seems an odd pairing, that a "revolutionary" new credit card aimed at techies is partnered with a seemingly random bank. Banking is weird. Like, how did they find this bank? What makes it better than other random local banks across the country? Is there a marketplace for these banking partnership opportunities?
- theCrowing 4y ago
  price, morals, the usual.
- FormerBandmate 4y ago
  Fintechs can’t just start up and operate as banks, because regulations are really high on who can accept deposits (for obvious reasons, this is a post about FTX). They get around this by using banking-as-a-service providers, which are essentially commercial banks that accept deposits from fintechs and allow them to get cards and deposits through their infrastructure. The Bancorp Bank is the biggest one but there are a lot of them, I’ve seen Column posted a lot here and Coastal Community Bank also appears to be one
nazka 4y ago
I agree. I don’t particularly like FTX but it could be the reason. It also reduces the risks to be rejected instead of applying with your own company…

cormacrelf 4y ago

The same thing is true of many extremely normal companies, which are sold to foreign companies wanting to list themselves on American stock exchanges.

aliqot 4y ago

Compounding pharmacies work like this too. There are people like Mikki the gambler (Spencer Cornelia's channel has a lengthy interview about this, with proof) who get the licenses and then sublet them in bulk.

FormerBandmate 4y ago

SoFi bought Golden Pacific Bank, a tiny, nothing bank, and runs their entire infrastructure off of its charter now. FTX was trying to expand into legitimate financial services, buying this bank up would have been a great way to do that if they were an actual financial company That being said, SoFi bought the entirety of Golden Pacific Bank for $23 million, and they were 20x the size of this bank (as well as having actual mortgage infrastructure and a wide variety of products). Buying 10% of a bank with only $10 million in assets for $12 million is very weird, at the very least it’s a horrible deal

jbverschoor 4y ago
Why? He won't "officially" control it, but has a lot of influence (see all the other briberies, I mean donations, he did). SBF is one sneaky bastard that knows very well what he's doing.
- 22289d 4y ago
  I think it's a mistake to assume anything connected to FTX or that SBF did is by default shady or criminal in nature. Like, if you found out they purchased their company toilet paper from Amazon - would that indicate some nefarious motivations? Yes, they're criminals who belong in jail but only for the way they managed their balance sheet. They were also great builders who had awesome products and wanted to do all the great things they said they wanted to do. Buying a bank is something probably every crypto exchange has considered doing, so they can have access to the financial system and not have to pay massive amounts of money and have huge headaches processing payments for their customers. I'm surprised Coinbase doesn't own one by now - or perhaps they do.
  - leethaxor 4y ago
    If they paid 5x the normal price of toilet paper and they were picking it up in the middle of a desert then yes I'd assume there's something shady going on.
  - e1g 4y ago
    If they purchased toilet paper by paying 10-100x to a no-name supplier based in the middle of nowhere, and the same company is known for countless shady/fraudulent deals and non-existent financial checks and balances, then yeah that toilet paper has bullshit smeared all over it.
  - jbverschoor 4y ago
    Oh I'm all on the other side... I think it's a mistake to think anything SBF does is not shady. It's his history, everything that revolves about him, ftx, alameda, or his past is shady. I think SBF was VERY informed, especially looking at his background. It's simple greed for power (not even the money).
    - 22289d 4y ago
      What is shady about the fact that he likes to cook vegetables with oil and a lot of salt?
cloutchaser 4y ago
Doesn’t really matter if it’s a bad deal if you’ve got $16bn of customer deposits to spend.

jasonpeacock 4y ago

The fancy new X1 credit card is issued by Coastal Community Bank, a local bank in WA state. It seems an odd pairing, that a "revolutionary" new credit card aimed at techies is partnered with a seemingly random bank. Banking is weird. Like, how did they find this bank? What makes it better than other random local banks across the country? Is there a marketplace for these banking partnership opportunities?

theCrowing 4y ago
price, morals, the usual.
FormerBandmate 4y ago
Fintechs can’t just start up and operate as banks, because regulations are really high on who can accept deposits (for obvious reasons, this is a post about FTX). They get around this by using banking-as-a-service providers, which are essentially commercial banks that accept deposits from fintechs and allow them to get cards and deposits through their infrastructure. The Bancorp Bank is the biggest one but there are a lot of them, I’ve seen Column posted a lot here and Coastal Community Bank also appears to be one

nazka 4y ago

I agree. I don’t particularly like FTX but it could be the reason. It also reduces the risks to be rejected instead of applying with your own company…