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Is this right: 1. SBF created FTX 2. FTX created FTT 3. FTX lent FTT to Alameda. 4. Alameda pumped FTT and used it to borrow USD. 5. SBF spent USD.
by HN_is_for_gemes 4y ago
Is this right:
1. SBF created FTX
2. FTX created FTT
3. FTX lent FTT to Alameda.
4. Alameda pumped FTT and used it to borrow USD.
5. SBF spent USD.
- throw03172019 4y agoDon’t forget about all the user funds they lent out.
- LatteLazy 4y agoYes, but there are more, worse, bigger frauds than the FTT part of this. FTT was comparatively minor and honest given the rest of what was happening. More a tool than a crime in and of itself... The bigger fraud was: 1. You put money into FTX and either kept it as USD/EUR/JPY etc or used it to buy Crypto 2. FTX told you they had that money/coins 3. FTX gave that to Alameda who gambled it away on a "if we make money we keep it, if we lose it, that's your problem" basis. SBF, his parents and other senior people at both companies (plus other legal entities) were all helping themselves to peoples cash basically all the time as far as anyone can tell. Everything from fake expenses to "loans" they would never pay back to pump and dump BS. So it was BOTH a big fraud (using customer deposits to fund speculation) AND 1001 small frauds (taking funds meant to customers but used for speculation and actually using them to buy free houses for people or pay huge unearned bonuses etc).
- isitmadeofglass 4y ago[dead]
- YeBanKo 4y agoWere his parents actively involved in it?
- LatteLazy 4y agoHow much they knew is an open question. FTX funds were used to buy them a beachfront property as a vacation home. Apparently they were aware before the bankruptcy that this was not SBFs personal gift. And in fairness they are now offering to return it. https://finance.yahoo.com/news/sbf-parents-ftx-executives-bought-123341831.html https://finance.yahoo.com/news/sbf-parents-ftx-executives-bo...
- digitaltrees 4y agoI’ll never understand why they were doing this kind of stuff when they had a good viable business as an exchange and the volume of transactions meant even a small percentage fee would generate massive amounts of profit. Greed is a hell of a drug I guess.
- LatteLazy 4y agoIt baffles me too. Alameda made perfect sense when it was making money and providing liquidity. But it's time was over since it had no actual edge in the space except for being first (and there were now 101 other smarter, faster entities competing with it). If he'd just let it die gracefully he'd still be Mr Popular and Respectable...