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Well, yes, the issue is it was fake. But they compounded their fraud by publicly asserting a value of the fund, and the fact they implemented it as a random num
by fnordpiglet 3y ago
Well, yes, the issue is it was fake. But they compounded their fraud by publicly asserting a value of the fund, and the fact they implemented it as a random number shows malicious intent. Sometimes you can wave around incompetence etc as a mitigating factor, but this is clearly intentional deception and this proves it clearly and beyond a doubt.
- function_seven 3y agoOn the contrary, you want your fund to cover unlucky situations. By linking the size of the insurance to a random number, you cancel out unlucky external events with a lucky internal event, thereby ensuring proper coverage. So long as the random value is truly random. Were there lava lamps in the FTX server room?
- Incipient 3y agoYou don't cover "unlucky" with 'random numbers". You cover it with a detailed risk analysis. Insurance companies have very detailed models on how much risk their customers provide, how much they're likely to cost, and charge accordingly. They don't just go "yolo random(1,100)'l" and hope they're in business in 5 years.
- fnordpiglet 3y agoWell, a random number covers nothing at all. Money covers risk, a number backed by nothing is nothing.
- londons_explore 3y agoIn this case, the random element was almost insignificantly small after a few days. The fund size was 7500 * the trading volume since the fund was set up.
- gcr 3y agoOP was joking