4 ms·

If you put $1B of somebody elses money with no or BS research then it is still your fault. It sometimes seems to me I put more effort into researching products

If you put $1B of somebody elses money with no or BS research then it is still your fault. It sometimes seems to me I put more effort into researching products I buy on Amazon than some of these do when transferring hundreds of millions of dollars.

danuker 4y ago
How could you detect secret preferential treatment? You could only do so after something happened to expose it. From Wikipedia: > According to John J. Ray III, Alameda had a “secret exemption” from FTX’s auto-liquidation protocol. This could only become apparent once Alameda was not margin called when it should have been. Which is when something went quite wrong to trigger the need for the margin call.
- twawaaay 4y ago
  It is very rarely that there is only one fishy thing about bad business. Bad businesses are run by bad people and bad people can't really help themselves but be bad in a lot of things they are doing (it is a matter of character). In almost every case those bad deals had red flags all over them if you only care to look. "Crypto" is red flag enough -- anything about it should already be treated with extreme caution. It has always been interesting to me to see people go do a version of a woman falling for a man who mistreated his ex wife. No. If he mistreated his ex wife it is very likely he will do the same to you. It is a matter of character and changing ones character substantially is very difficult because it requires you to have qualities that you are missing if you are a bad person.
  - gjvc 4y ago
    It is very rarely that there is only one fishy thing about bad business. Bad businesses are run by bad people and bad people can't really help themselves but be bad in a lot of things they are doing (it is a matter of character). This is very true. If you've ever had a "bad boss" at work, chances are that they did not do just one thing, but many things that were bad / against other people's interests.
  - danuker 4y ago
    I agree anything crypto-related needs an analysis of what happens in a 99% drop. That is because even Bitcoin crashed 70%+ quite a few times since inception. As such, leverage is reckless. An exchange should not have been exposed to price fluctuations. Only to trading volume (if the fees are proportional to the amount exchanged).
- rvba 4y ago
  When "boring" companies do real due diligence, the due diligence team is supposed to read the contracts to find such things. Also, the management team of FTX, should in fact inform the ones making the due diligence about such cases...
- mrguyorama 4y ago
  This is why public companies are required to disclose mountains of paperwork. Forcing them to admit things in a legally culpable way makes it harder to hide shenanigans. Man, it's almost like the regulation has a point or something.
Operative0198 4y ago
What probably happened here is one VC played the 'pump and dump' game for one of these tokens 'gamed' by SBF then shared that with other VCs. Before you know it, that fucker had clients lining up to him to invest in his 'proven' scheme no questions asked. Greed was the main theme here, not lack of due diligence.
- twawaaay 4y ago
  What greed does is make people blind and deaf to reality when that reality does not agree with their beliefs. Whether they knew or did not knew the facts is irrelevant to me. Does it really make a difference which scenario happened? a) They decided to forgo research ("better not do it in case the findings will endanger my bonus") b) They did research but decided to not act on it because they already committed themselves to making the decision There are technical legal differences here but for me in both cases you just failed in your responsibility for somebody's assets.
  - anonymoushn 4y ago
    Can you cite the research you performed in the last few years that allows you to differentiate between exchanges that are scams and exchanges that are not scams?
    - Operative0198 4y ago
      The question has too many variables. Though none of these exchanges are regulated by any authority so it's impossible to know which one will disappear with your money tomorrow.
  - Operative0198 4y ago
    AFAIK Almost all crypto companies operate in the dark. There's little due diligence to be had when none is (legally) required. I recall coming across a clip of Chamath Palihapitiya, a prominent VC saying he once had the opportunity to invest in one of SBF's companies and demanding he (SBF) create some corporate governance in order for him to invest and SBF blew him off. There were clearly some concessions made by thirsty VC firms to pass on the due diligence in the promise of 'guaranteed' returns. Does any of this information matter to clients? Ofc not when they continue to get their annual dividends from the VC firms. Crypto is just one piece in the basket of investments for them. The smart VCs hopefully didn't invest too much of their allocation.

danuker 4y ago

How could you detect secret preferential treatment? You could only do so after something happened to expose it. From Wikipedia: > According to John J. Ray III, Alameda had a “secret exemption” from FTX’s auto-liquidation protocol. This could only become apparent once Alameda was not margin called when it should have been. Which is when something went quite wrong to trigger the need for the margin call.

twawaaay 4y ago
It is very rarely that there is only one fishy thing about bad business. Bad businesses are run by bad people and bad people can't really help themselves but be bad in a lot of things they are doing (it is a matter of character). In almost every case those bad deals had red flags all over them if you only care to look. "Crypto" is red flag enough -- anything about it should already be treated with extreme caution. It has always been interesting to me to see people go do a version of a woman falling for a man who mistreated his ex wife. No. If he mistreated his ex wife it is very likely he will do the same to you. It is a matter of character and changing ones character substantially is very difficult because it requires you to have qualities that you are missing if you are a bad person.
- gjvc 4y ago
  It is very rarely that there is only one fishy thing about bad business. Bad businesses are run by bad people and bad people can't really help themselves but be bad in a lot of things they are doing (it is a matter of character). This is very true. If you've ever had a "bad boss" at work, chances are that they did not do just one thing, but many things that were bad / against other people's interests.
- danuker 4y ago
  I agree anything crypto-related needs an analysis of what happens in a 99% drop. That is because even Bitcoin crashed 70%+ quite a few times since inception. As such, leverage is reckless. An exchange should not have been exposed to price fluctuations. Only to trading volume (if the fees are proportional to the amount exchanged).
rvba 4y ago
When "boring" companies do real due diligence, the due diligence team is supposed to read the contracts to find such things. Also, the management team of FTX, should in fact inform the ones making the due diligence about such cases...
mrguyorama 4y ago
This is why public companies are required to disclose mountains of paperwork. Forcing them to admit things in a legally culpable way makes it harder to hide shenanigans. Man, it's almost like the regulation has a point or something.

Operative0198 4y ago

What probably happened here is one VC played the 'pump and dump' game for one of these tokens 'gamed' by SBF then shared that with other VCs. Before you know it, that fucker had clients lining up to him to invest in his 'proven' scheme no questions asked. Greed was the main theme here, not lack of due diligence.

twawaaay 4y ago
What greed does is make people blind and deaf to reality when that reality does not agree with their beliefs. Whether they knew or did not knew the facts is irrelevant to me. Does it really make a difference which scenario happened? a) They decided to forgo research ("better not do it in case the findings will endanger my bonus") b) They did research but decided to not act on it because they already committed themselves to making the decision There are technical legal differences here but for me in both cases you just failed in your responsibility for somebody's assets.
- anonymoushn 4y ago
  Can you cite the research you performed in the last few years that allows you to differentiate between exchanges that are scams and exchanges that are not scams?
  - Operative0198 4y ago
    The question has too many variables. Though none of these exchanges are regulated by any authority so it's impossible to know which one will disappear with your money tomorrow.
- Operative0198 4y ago
  AFAIK Almost all crypto companies operate in the dark. There's little due diligence to be had when none is (legally) required. I recall coming across a clip of Chamath Palihapitiya, a prominent VC saying he once had the opportunity to invest in one of SBF's companies and demanding he (SBF) create some corporate governance in order for him to invest and SBF blew him off. There were clearly some concessions made by thirsty VC firms to pass on the due diligence in the promise of 'guaranteed' returns. Does any of this information matter to clients? Ofc not when they continue to get their annual dividends from the VC firms. Crypto is just one piece in the basket of investments for them. The smart VCs hopefully didn't invest too much of their allocation.