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> But to make this all appear legitimate they claimed these bets were fully collateralized, but the secret being that they'd accept illiquid magic beans as the

> But to make this all appear legitimate they claimed these bets were fully collateralized, but the secret being that they'd accept illiquid magic beans as the collateral (and not just their own, but other random trash too). This is a key lie that SBF has been allowed to peddle in these interviews. He claims that, had he not panicked and announced bankruptcy, FTX would have been fine; however, the lawyers and suits that took over have decided to burn it to the ground instead. He handily omits that the liquidity he's claiming would have saved the day is the now worthless magic beans. It reminds me of how people dishonesty reference "market cap" for NFTs and cryptocurrencies with incredibly high valuations extrapolated from a handful of sales.

nullc 4y ago
Yeah, it's not clear to me why people keep allowing him to attribute significant value to those assets in these interviews particularly since the public disclosure that Alameda's balance sheet was mostly that stuff is what initially triggered the collapse. It's like a bank-of-lore collapsing after people heard that their gold vaults were full of tungsten bars ... and then none of the interviews go into talking about the tungsten bars.
andirk 4y ago
Valuations often have non-liquid portions of their estimates. Market caps of regular stonks are fairly incorrect, too, since if a large holder sold all of their shares, that price per share would drop. But yeah making ones own super magic bean FTT in an already magical bean world should have been a VERY obvious red flag to anyone who knew that. I'm more shocked that he was able to get any investors with his abysmal accounting practices.
vba616 4y ago
I love this: “Here’s a list of stuff, will you give us a few billion dollars for this list of stuff? Look! The top thing on the list is this nice clean Robinhood stake. Okay that’s enough looking.” You take a wad of crumpled $1 bills and $3 bills and dry cleaning receipts and chewing-gum wrappers, you wrap some crisp $20s around the outside, you hold the wad up in front of people and see what they’ll give you for it.

nullc 4y ago

Yeah, it's not clear to me why people keep allowing him to attribute significant value to those assets in these interviews particularly since the public disclosure that Alameda's balance sheet was mostly that stuff is what initially triggered the collapse. It's like a bank-of-lore collapsing after people heard that their gold vaults were full of tungsten bars ... and then none of the interviews go into talking about the tungsten bars.

andirk 4y ago

Valuations often have non-liquid portions of their estimates. Market caps of regular stonks are fairly incorrect, too, since if a large holder sold all of their shares, that price per share would drop. But yeah making ones own super magic bean FTT in an already magical bean world should have been a VERY obvious red flag to anyone who knew that. I'm more shocked that he was able to get any investors with his abysmal accounting practices.

vba616 4y ago

I love this: “Here’s a list of stuff, will you give us a few billion dollars for this list of stuff? Look! The top thing on the list is this nice clean Robinhood stake. Okay that’s enough looking.” You take a wad of crumpled $1 bills and $3 bills and dry cleaning receipts and chewing-gum wrappers, you wrap some crisp $20s around the outside, you hold the wad up in front of people and see what they’ll give you for it.