3 ms·

Pretty long article to say some simple things. Well said, though. It's pretty straightforward they shouldn't have used the customer funds, or tied Alameda so c

Pretty long article to say some simple things. Well said, though. It's pretty straightforward they shouldn't have used the customer funds, or tied Alameda so closely to the exchange. It's still a bit slapstick though. I can see some young kids with no organisation falling into "oh let's borrow some from the customers, I bet banks do it all the time". It's still wrong of course but with the whole nerd act you might wonder whether there was any genuine thought about whether it was allowed. Even if you don't know the rules, you have to follow them. The whole thing beggars belief. How they got that big, while playing video games, having no oversight, with backing from real names. And then blew up seemingly in the space of a few days, but possibly "mortality wounded" for a long while before.

ilaksh 4y ago
How? Because everything operates around the level of delinquent 12-year olds following the latest trends. Centralized "crypto" exchanges are antithetical to cryptocurrency. It means NOT using cryptocurrency and giving it to a bank/speculators and then day trading off-chain. The only good reason to keep them around is for the fiat exchange capability. Which could better be served in other ways. The amazing thing is that most people still don't know what cryptocurrency actually IS, and think this FTX scam and other similar nonsense means that "crypto isn't trustworthy". When in reality it is all a perfect example of why the capabilities of actual cryptocurrency (such as public ledgers and smart contracts) are such important advances.
- newsclues 4y ago
  How is they had help, from family and other powerful connected people
  - ilaksh 4y ago
    That too.
- bscphil 4y ago
  > "crypto isn't trustworthy" This tends to be a bit of a motte-and-bailey point. What people mean when they say "crypto isn't trustworthy" is that if your spouse wants to "invest" in crypto, you put a hard stop to it right that second if you don't want to lose your house. Crypto is trustworthy in the limited sense that the underlying technology (public ledgers etc.) works - it's not fatally flawed from a technological point of view. But this is not a sense of trustworthiness that is clear or even very important to the general public.
  - tinco 4y ago
    You could also have your spouse do 5 minutes of research and not have them put your money at a bank that was always clearly a scam. There's trustworthy crypto banks, they just don't offer interest. If you think you need interest on your crypto you've already lost the plot somewhere. Maybe it was when you took financial advice from a super model and a football player. The thing that's not trustworthy is the financial industry. Crypto is just their latest tool. Before it was mortgage backed securities, and before that penny stocks.
    - bscphil 4y ago
      > There's trustworthy crypto banks, they just don't offer interest. If you think you need interest on your crypto you've already lost the plot somewhere. That's sort of the whole point encapsulated, isn't it? Most of the popular interest is in crypto as a supposed investment! There are trustworthy investments that offer interest - they're just not crypto investments, as you say. That's a pretty big difference between the traditional finance industry and crypto, without even getting into the question of regulatory oversight. The idea that "everyone is just getting crypto wrong" is what I meant by a motte-and-bailey view; you can hold it just so long as you view the vast majority of what goes on in crypto spaces as basically illegitimate.
      - tinco 4y ago
        But it isn't the vast majority as far as I know. Most people I know have their crypto on Coinbase or Kraken or Bitstamp, or they've invested in a hardware wallet. I don't know how succesful FTX's marketing was, did they really convince the average American to buy their crypto there? I hadn't even heard of FTX until they named a stadium. Not everyone gets crypto wrong, just the people who got duped. Maybe I'm underestimating how many those are, I'm not an American and never met anyone who had assets at FTX.
- EamonnMR 4y ago
  The True Crypto fans apparently didn't do a good enough job making the Fake Crypto fans (exchanges and exchange users) Pariahs. Probably because they depended on the latter to increase the value of crypto. So calling them rubes now seems pretty disingenuous. I didn't hear a lot of 'I love Crypto, never use an exchange.' Maybe a bit when MtGox collapsed, but then it fell silent.
unionpivo 4y ago
Sure, that's is what it looks at first, but then if you look closer you see: - Hiring compliance officer, who was on tape helping his former boss get away with fraud[1] (and that was not recent revelation) - Using self deleting messages and encouraging others to use them, for important discussions [2]. - Alameda research having backdoor into FTX, just so they could do stuff without rising any red flags [3] There are other things that point into direction of fraud, but this are the main 3. [1] https://nypost.com/2022/11/20/ftxs-ex-chief-regulatory-officer-tied-to-online-poker-scandal/ https://nypost.com/2022/11/20/ftxs-ex-chief-regulatory-offic... [2] https://d1e00ek4ebabms.cloudfront.net/production/uploaded-files/fdd-52615f0a-fb09-41ce-a398-b97b20bc1c36.pdf https://d1e00ek4ebabms.cloudfront.net/production/uploaded-fi... [3] https://www.wsj.com/articles/alameda-ftx-executives-are-said-to-have-known-ftx-was-using-customer-funds-11668264238 https://www.wsj.com/articles/alameda-ftx-executives-are-said...

ilaksh 4y ago

How? Because everything operates around the level of delinquent 12-year olds following the latest trends. Centralized "crypto" exchanges are antithetical to cryptocurrency. It means NOT using cryptocurrency and giving it to a bank/speculators and then day trading off-chain. The only good reason to keep them around is for the fiat exchange capability. Which could better be served in other ways. The amazing thing is that most people still don't know what cryptocurrency actually IS, and think this FTX scam and other similar nonsense means that "crypto isn't trustworthy". When in reality it is all a perfect example of why the capabilities of actual cryptocurrency (such as public ledgers and smart contracts) are such important advances.

newsclues 4y ago
How is they had help, from family and other powerful connected people
- ilaksh 4y ago
  That too.
bscphil 4y ago
> "crypto isn't trustworthy" This tends to be a bit of a motte-and-bailey point. What people mean when they say "crypto isn't trustworthy" is that if your spouse wants to "invest" in crypto, you put a hard stop to it right that second if you don't want to lose your house. Crypto is trustworthy in the limited sense that the underlying technology (public ledgers etc.) works - it's not fatally flawed from a technological point of view. But this is not a sense of trustworthiness that is clear or even very important to the general public.
- tinco 4y ago
  You could also have your spouse do 5 minutes of research and not have them put your money at a bank that was always clearly a scam. There's trustworthy crypto banks, they just don't offer interest. If you think you need interest on your crypto you've already lost the plot somewhere. Maybe it was when you took financial advice from a super model and a football player. The thing that's not trustworthy is the financial industry. Crypto is just their latest tool. Before it was mortgage backed securities, and before that penny stocks.
  - bscphil 4y ago
    > There's trustworthy crypto banks, they just don't offer interest. If you think you need interest on your crypto you've already lost the plot somewhere. That's sort of the whole point encapsulated, isn't it? Most of the popular interest is in crypto as a supposed investment! There are trustworthy investments that offer interest - they're just not crypto investments, as you say. That's a pretty big difference between the traditional finance industry and crypto, without even getting into the question of regulatory oversight. The idea that "everyone is just getting crypto wrong" is what I meant by a motte-and-bailey view; you can hold it just so long as you view the vast majority of what goes on in crypto spaces as basically illegitimate.
    - tinco 4y ago
      But it isn't the vast majority as far as I know. Most people I know have their crypto on Coinbase or Kraken or Bitstamp, or they've invested in a hardware wallet. I don't know how succesful FTX's marketing was, did they really convince the average American to buy their crypto there? I hadn't even heard of FTX until they named a stadium. Not everyone gets crypto wrong, just the people who got duped. Maybe I'm underestimating how many those are, I'm not an American and never met anyone who had assets at FTX.
EamonnMR 4y ago
The True Crypto fans apparently didn't do a good enough job making the Fake Crypto fans (exchanges and exchange users) Pariahs. Probably because they depended on the latter to increase the value of crypto. So calling them rubes now seems pretty disingenuous. I didn't hear a lot of 'I love Crypto, never use an exchange.' Maybe a bit when MtGox collapsed, but then it fell silent.

unionpivo 4y ago

Sure, that's is what it looks at first, but then if you look closer you see: - Hiring compliance officer, who was on tape helping his former boss get away with fraud[1] (and that was not recent revelation) - Using self deleting messages and encouraging others to use them, for important discussions [2]. - Alameda research having backdoor into FTX, just so they could do stuff without rising any red flags [3] There are other things that point into direction of fraud, but this are the main 3. [1] https://nypost.com/2022/11/20/ftxs-ex-chief-regulatory-officer-tied-to-online-poker-scandal/ https://nypost.com/2022/11/20/ftxs-ex-chief-regulatory-offic... [2] https://d1e00ek4ebabms.cloudfront.net/production/uploaded-files/fdd-52615f0a-fb09-41ce-a398-b97b20bc1c36.pdf https://d1e00ek4ebabms.cloudfront.net/production/uploaded-fi... [3] https://www.wsj.com/articles/alameda-ftx-executives-are-said-to-have-known-ftx-was-using-customer-funds-11668264238 https://www.wsj.com/articles/alameda-ftx-executives-are-said...