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Just makes one wonder why the binance guy even stirred the pot initially with FTX, like 3 possibilities exist: 1. He assumed the blowout would be minimal outsi

Just makes one wonder why the binance guy even stirred the pot initially with FTX, like 3 possibilities exist: 1. He assumed the blowout would be minimal outside of FTX and/or assumed FTX was shady but not as bad as it turned out 2. He acknowledged the possibility that binance will also get scrutiny but realized FTX was just so bad that letting it fester further will only get him arrested faster too. 3. He’s just another idiot who made money lucky. Curious which it is.

vgatherps 4y ago
I mean fourth possibility is that binance is solvent right? I’m not assigning probabilities to any of them but taking their insolvency as a foregone conclusion seems pretty incorrect?
- iudqnolq 4y ago
  Assuming rational actors I can't see any reason to evade audits for years, even after litigation, unless the result of the audit would be bad.
  - xvector 4y ago
    See Tether. Crypto is just a massive house of cards that will collapse and drag the economy with it.
    - WalterSear 4y ago
      It's too small. It's entire, and arguably entirely fantastical market cap is still smaller than Apple.
      - birracerveza 4y ago
        Yeah, but it makes for a fantastic scapegoat.
        hef19898 4y ago
        Scapegoat for what excatly?
        johnnymorgan 4y ago
        The economy collapsing...it's the first comment in this thread for context.
        hef19898 4y ago
        I thought Germany's dependency on Russian gas was the reason this time?
        birracerveza 4y ago
        It depends on how the media wants to spin it. My point was, even if the whole crypto ecosystem went to zero right now, the effects on the economy at large would be negligible. However, it would be the perfect scapegoat to finally crash the economy with no survivors. The media would not have a problem with just blaming it all on crypto: as you can see here, people are already very eager to do so! No other explanation needed to convince the masses!
        hef19898 4y ago
        Whom exactly would want to crash the whole economy?
        birracerveza 4y ago
        You are aware that the whole economy is a house of cards, right? Not just crypto? It is bound to crash down after the last decades of reckless policies and all-around fuckery going on. So why not do this "cleansing" while blaming it all on an already hated scapegoat? It doesn't matter if it's not real nor realistic, what matters is the narrative, which I'm sure everyone ITT will gladly lap up!
      - mbesto 4y ago
        > arguably entirely fantastical market cap The idea of using market cap as a frame of reference for crypto needs to die. There are much stricter controls about how a company issues more stock (and thus can inflate or deflate the price) than how a cryptocurrency issues more coins. Also, cryptocurrency market caps are denominated as an exchange of <insert your country> fiat, whereas a company's market cap is in the fiat in which the company is actually sourced (e.g. NASDAQ). You just can't compare the two.
    - deepsun 4y ago
      Crypto (coins, not graphy), is a superteeeny amount of "economy". Most serious finance players avoided doing anything serious with crypto mostly because it's just a very small market for them. Typical investment bank moves more money per day, than the whole cryptocurrency market is worth.
  - cma 4y ago
    Maybe an audit shows they are too solvent, only achievable with profits from a prior leverage of protected customer funds that they don't want to reveal. Say with Tether instead, if they invested in junky stuff but none of it went bust and they made way more than investing in t-bills or whatever they promised, then they may not want an audit to reveal they have 3X more than enough to cover outstanding tether, something t-bills couldn't have achieved.
  - heartbeats 4y ago
    Surely, the following two statements can be true at the same time? 1. Binance is run by criminals and all sorts of people would go to jail if anyone looked at their books. 2. Binance is solvent. Not saying this is the case, but there's many other reasons for a crypto firm to be shady than their insolvency.
  - amluto 4y ago
    (Not an audit expert) I can imagine that a full audit would uncover dangerous skeletons in the closet that don’t necessarily imply insolvency. At the very least, Binance made no secret of using extremely dubious banking relationships to collect money from its clients.
    - iudqnolq 4y ago
      Also not an audit expert, but my understanding is that they've released an audited point-in-time snapshot of their bank accounts. The problem is that there are various ways to make that number go up for an instant, so people want (amoung other things) the value of their bank accounts over a longer period. Audits aren't all-or-nothing, they've already paid an auditing firm to do a custom audit they designed. They could have made that audit much better without going into what you're mentioning.
- Mistletoe 4y ago
  While we can’t be sure of the minutiae of their assets we can be sure due to the beauty of the blockchain that they own an incredible amount of Bitcoin. https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... #1, 5, 10… Same thing for Ethereum. https://etherscan.io/accounts https://etherscan.io/accounts This is very far from FTX in my opinion. Billion and billions of dollars of crypto in wallets we can see. And these are just the ones we know of.
  - ceejayoz 4y ago
    We know they hold a lot. That’s not the same thing as owning. The attestations Tether and Binance like to call audits are like printing off your house's appraised value of $1M. Real audits are the sort of thing that reveal you're underwater on its mortgage and leveraged its value to borrow another $1M to buy a pile of Beanie Babies.
TimJRobinson 4y ago
Or that they run a legitimate company and don't like scammers running competing exchanges and stealing customers money which makes the whole industry look bad
etempleton 4y ago
4. It is all ego driven.
typon 4y ago
As for 3), we really need to avoid the narrative that these people are idiots or stupid. They are sharks - intentionally malevolent people who have defrauded millions of people. SBF's current defense is that he was too naive and unaware of what was happening at FTX. Obviously its a lie - but we shouldn't help these people spread it.
- ramraj07 4y ago
  I’m implying they’re idiots as in they can’t always think 3 steps ahead. This says nothing about their benevolence or lack thereof.
- wombatpm 4y ago
  I though SBF’s defense was poor FTX was manipulated by those bastards running Alameda, and that he had no idea what going on there. Despite the fact that he owns Alameda.
- vgatherps 4y ago
  I think his defense is sort of: 1. We had a busted accounting system 2. Early on in FTX people had to route dollars via Alameda because banking is hard 3. We accidentally credited those dollars both to Ftx and Alameda 4. Each side thought they had billions to spend / lose (their VC and related spend was WILD), and suddenly, oops!!!!!! I suspect there's a grain of truth to this, in that steps 1-4 did actually happen to some degree and influenced expenditures/risk taking that the firm couldn't back. Given what's known (for some definition), the upper crew knew about the problem well before the bank run, and knowingly transferred funds from FTX to Alameda. This sort of 'best case' scenario still implies an absurd commingling of exchange and user funds. It doesn't strike me as plausible that nobody ever questioned the extra billions , and it definitely isn't believable that when Alameda got margin called, they just casually 'sent' some of the double counted billions without taking some time to think "hey, so about these billions". Also, this doesn't square with Sam constantly claiming that he misjudged whether FTT was good backing - if they didn't commingle/steal customer funds, he wouldn't have cared about FTT collateral!
  - Panzer04 4y ago
hef19898 4y ago
All of the above?
LarryMullins 4y ago
4. Years of living as a criminal, constantly afraid of getting caught, has taken a tole on his psyche. He's now starting to act in a self-destructive manner, not rationally in his best interest.
- johnnymorgan 4y ago
  Cool movie plot
anonymoushn 4y ago
Given the negative impact of recent events on his business, he either did not expect FTX to explode so easily or wanted to get it over with.
qikInNdOutReply 4y ago
4. He has relatives in mainland, and ccp wants crypto gone completely.
banannaise 4y ago
or (4) he thinks he's legit and simply experiencing a temporary setback. His intent is to put the spotlight somewhere else so he can keep the charade long enough to get the books back into balance. Motivated reasoning makes him sure this will succeed if he can buy enough time, even though that's obviously highly unlikely.

vgatherps 4y ago

I mean fourth possibility is that binance is solvent right? I’m not assigning probabilities to any of them but taking their insolvency as a foregone conclusion seems pretty incorrect?

iudqnolq 4y ago
Assuming rational actors I can't see any reason to evade audits for years, even after litigation, unless the result of the audit would be bad.
- xvector 4y ago
  See Tether. Crypto is just a massive house of cards that will collapse and drag the economy with it.
  - WalterSear 4y ago
    It's too small. It's entire, and arguably entirely fantastical market cap is still smaller than Apple.
    - birracerveza 4y ago
      Yeah, but it makes for a fantastic scapegoat.
      - hef19898 4y ago
        Scapegoat for what excatly?
        johnnymorgan 4y ago
        The economy collapsing...it's the first comment in this thread for context.
        hef19898 4y ago
        I thought Germany's dependency on Russian gas was the reason this time?
        birracerveza 4y ago
        It depends on how the media wants to spin it. My point was, even if the whole crypto ecosystem went to zero right now, the effects on the economy at large would be negligible. However, it would be the perfect scapegoat to finally crash the economy with no survivors. The media would not have a problem with just blaming it all on crypto: as you can see here, people are already very eager to do so! No other explanation needed to convince the masses!
        hef19898 4y ago
        Whom exactly would want to crash the whole economy?
        birracerveza 4y ago
        You are aware that the whole economy is a house of cards, right? Not just crypto? It is bound to crash down after the last decades of reckless policies and all-around fuckery going on. So why not do this "cleansing" while blaming it all on an already hated scapegoat? It doesn't matter if it's not real nor realistic, what matters is the narrative, which I'm sure everyone ITT will gladly lap up!
    - mbesto 4y ago
      > arguably entirely fantastical market cap The idea of using market cap as a frame of reference for crypto needs to die. There are much stricter controls about how a company issues more stock (and thus can inflate or deflate the price) than how a cryptocurrency issues more coins. Also, cryptocurrency market caps are denominated as an exchange of <insert your country> fiat, whereas a company's market cap is in the fiat in which the company is actually sourced (e.g. NASDAQ). You just can't compare the two.
  - deepsun 4y ago
    Crypto (coins, not graphy), is a superteeeny amount of "economy". Most serious finance players avoided doing anything serious with crypto mostly because it's just a very small market for them. Typical investment bank moves more money per day, than the whole cryptocurrency market is worth.
- cma 4y ago
  Maybe an audit shows they are too solvent, only achievable with profits from a prior leverage of protected customer funds that they don't want to reveal. Say with Tether instead, if they invested in junky stuff but none of it went bust and they made way more than investing in t-bills or whatever they promised, then they may not want an audit to reveal they have 3X more than enough to cover outstanding tether, something t-bills couldn't have achieved.
- heartbeats 4y ago
  Surely, the following two statements can be true at the same time? 1. Binance is run by criminals and all sorts of people would go to jail if anyone looked at their books. 2. Binance is solvent. Not saying this is the case, but there's many other reasons for a crypto firm to be shady than their insolvency.
- amluto 4y ago
  (Not an audit expert) I can imagine that a full audit would uncover dangerous skeletons in the closet that don’t necessarily imply insolvency. At the very least, Binance made no secret of using extremely dubious banking relationships to collect money from its clients.
  - iudqnolq 4y ago
    Also not an audit expert, but my understanding is that they've released an audited point-in-time snapshot of their bank accounts. The problem is that there are various ways to make that number go up for an instant, so people want (amoung other things) the value of their bank accounts over a longer period. Audits aren't all-or-nothing, they've already paid an auditing firm to do a custom audit they designed. They could have made that audit much better without going into what you're mentioning.
Mistletoe 4y ago
While we can’t be sure of the minutiae of their assets we can be sure due to the beauty of the blockchain that they own an incredible amount of Bitcoin. https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... #1, 5, 10… Same thing for Ethereum. https://etherscan.io/accounts https://etherscan.io/accounts This is very far from FTX in my opinion. Billion and billions of dollars of crypto in wallets we can see. And these are just the ones we know of.
- ceejayoz 4y ago
  We know they hold a lot. That’s not the same thing as owning. The attestations Tether and Binance like to call audits are like printing off your house's appraised value of $1M. Real audits are the sort of thing that reveal you're underwater on its mortgage and leveraged its value to borrow another $1M to buy a pile of Beanie Babies.

TimJRobinson 4y ago

Or that they run a legitimate company and don't like scammers running competing exchanges and stealing customers money which makes the whole industry look bad

etempleton 4y ago

4. It is all ego driven.

typon 4y ago

As for 3), we really need to avoid the narrative that these people are idiots or stupid. They are sharks - intentionally malevolent people who have defrauded millions of people. SBF's current defense is that he was too naive and unaware of what was happening at FTX. Obviously its a lie - but we shouldn't help these people spread it.

ramraj07 4y ago
I’m implying they’re idiots as in they can’t always think 3 steps ahead. This says nothing about their benevolence or lack thereof.
wombatpm 4y ago
I though SBF’s defense was poor FTX was manipulated by those bastards running Alameda, and that he had no idea what going on there. Despite the fact that he owns Alameda.
vgatherps 4y ago
I think his defense is sort of: 1. We had a busted accounting system 2. Early on in FTX people had to route dollars via Alameda because banking is hard 3. We accidentally credited those dollars both to Ftx and Alameda 4. Each side thought they had billions to spend / lose (their VC and related spend was WILD), and suddenly, oops!!!!!! I suspect there's a grain of truth to this, in that steps 1-4 did actually happen to some degree and influenced expenditures/risk taking that the firm couldn't back. Given what's known (for some definition), the upper crew knew about the problem well before the bank run, and knowingly transferred funds from FTX to Alameda. This sort of 'best case' scenario still implies an absurd commingling of exchange and user funds. It doesn't strike me as plausible that nobody ever questioned the extra billions , and it definitely isn't believable that when Alameda got margin called, they just casually 'sent' some of the double counted billions without taking some time to think "hey, so about these billions". Also, this doesn't square with Sam constantly claiming that he misjudged whether FTT was good backing - if they didn't commingle/steal customer funds, he wouldn't have cared about FTT collateral!
- Panzer04 4y ago

hef19898 4y ago

All of the above?

LarryMullins 4y ago

4. Years of living as a criminal, constantly afraid of getting caught, has taken a tole on his psyche. He's now starting to act in a self-destructive manner, not rationally in his best interest.

johnnymorgan 4y ago
Cool movie plot

anonymoushn 4y ago

Given the negative impact of recent events on his business, he either did not expect FTX to explode so easily or wanted to get it over with.

qikInNdOutReply 4y ago

4. He has relatives in mainland, and ccp wants crypto gone completely.

banannaise 4y ago

or (4) he thinks he's legit and simply experiencing a temporary setback. His intent is to put the spotlight somewhere else so he can keep the charade long enough to get the books back into balance. Motivated reasoning makes him sure this will succeed if he can buy enough time, even though that's obviously highly unlikely.