6 ms·

The code snippet where they generated the FTX backstop fund's "current balance" displayed on the website by multiplying the exchange's daily trading volume by a

The code snippet where they generated the FTX backstop fund's "current balance" displayed on the website by multiplying the exchange's daily trading volume by a random normal number is NUTS! This was the supposed crypto wonder-platform!

bmitc 3y ago
It is insane how there wasn't a single shred of accountability. I just wonder who was giving them tens and hundreds of millions of dollars without any auditing or due diligence. It seems even the most superficial audit would have revealed it to be a sham.
- jhobag 3y ago
  Sequoia led their one of their rounds, everyone assumed sequoia did enough due diligence, everyone goes in and fills the round; it's assumed its a trustworthy platform for retail
  - jjeaff 3y ago
    That's exactly how most funds operate. They don't want to spend the time and money to do due diligence so they just wait around for one of the bigger funds to supposedly do the due diligence. So if they see them invest, they will join the round. it's so much easier to fill out a round one you get your first big VC on board.
  - bmitc 3y ago
    I honestly feel Sequoia should be held partially responsible for funding and marketing such a blatant criminal enterprise. I'm a little tired of these venture capitalists claiming all innonence when they should have a burden of responsibility. They want all the upsides and none of the downsides to throwing millions at people.
    - deleted 3y ago
      [deleted]
    - fallingknife 3y ago
      The downside of throwing millions of dollars at someone is losing those millions, which they did. You are basically suggesting that a fraud victim should be punished more than the money they lost because they were too stupid to see the fraud.
      - nyokodo 3y ago
        > You are basically suggesting that a fraud victim should be punished more than the money they lost Their actions brought in more victims, and therefore investors ought to be wary of listening to them in future. They ought to be also punished by a hit to their reputation i.e. by being held partially responsible.
        fakedang 3y ago
        They didn't "bring" in more victims, more victims joined in because they were lazy, just like most of the VC industry.
        nyokodo 3y ago
        > more victims joined in because they were lazy... They were lazy because they relied on the reputation of who was pushing for FTX, now their reputations won't be so rock solid. That's some justice.
      - morsch 3y ago
        We punish banks for failing to do proper KYC even when they're also victims of fraud.
      - bmitc 3y ago
        It's a bit strong to call Sequoia "fraud victims". They were at a minimum incompetent and at a maximum intentionally misleading to other investors. You shouldn't write an article like this (https://archive.ph/GQkCp https://archive.ph/GQkCp) unless you have done your research. Did they do literally any due diligence prior to leading a massive investment round? Just because they stand to lose millions doesn't excuse their responsibility and influence. Venture capitalists have no one to blame but themselves for the risky companies out there. They are effectively snake oil salesmen, just looking to siphon off relatively short-term profits under the guise of "changing the world".
- Randomizer42 3y ago
  [dead]
finite_depth 3y ago
[dead]
lindq181 3y ago
As someone relatively involved in the crypto space the past few years, no one saw FTX as anything to be proud of. It was a centralized exchange, basically a web2 company that handled crypto. Only the TradFi VCs (the Mr. Wonderfuls of the world) spouted rhetoric like that. The engineers building out the chain ecosystems & protocols on top of it never thought much of it other than another place to trade with orderbooks (i.e. centralized company).
- jhobag 3y ago
  the funniest part about FTX was how utterly awful it was. books were thin, and everyone knew alameda was hunting customers in the books, while listing perps for their farm and dump investments. really just a sham of an exchange/casino, so around average by crypto standards, but KOLs and mainstream comms praised them.
  - colpabar 3y ago
    > KOLs and mainstream comms praised them I know this will just get me labelled a conspiracy theorist but I refuse to believe his well-connected parents had nothing to do with the praise FTX received in the mainstream media.
- echelon 3y ago
  > basically a web2 company Also known as a company.
- EdwardDiego 3y ago
  Really curious why you'd make this distinction? > web2 company Are web3 companies less fraudulent?
  - BLanen 3y ago
    Cryptobros try to pretend because "web3" is blockchain, that the blockchains will reveal anything bad before it can happen. Completely untrue, of course. There's always a real-world link(because otherwise nobody would be profiting(people want stuff)/nothing would actually happen)

bmitc 3y ago

It is insane how there wasn't a single shred of accountability. I just wonder who was giving them tens and hundreds of millions of dollars without any auditing or due diligence. It seems even the most superficial audit would have revealed it to be a sham.

jhobag 3y ago
Sequoia led their one of their rounds, everyone assumed sequoia did enough due diligence, everyone goes in and fills the round; it's assumed its a trustworthy platform for retail
- jjeaff 3y ago
  That's exactly how most funds operate. They don't want to spend the time and money to do due diligence so they just wait around for one of the bigger funds to supposedly do the due diligence. So if they see them invest, they will join the round. it's so much easier to fill out a round one you get your first big VC on board.
- bmitc 3y ago
  I honestly feel Sequoia should be held partially responsible for funding and marketing such a blatant criminal enterprise. I'm a little tired of these venture capitalists claiming all innonence when they should have a burden of responsibility. They want all the upsides and none of the downsides to throwing millions at people.
  - deleted 3y ago
    [deleted]
  - fallingknife 3y ago
    The downside of throwing millions of dollars at someone is losing those millions, which they did. You are basically suggesting that a fraud victim should be punished more than the money they lost because they were too stupid to see the fraud.
    - nyokodo 3y ago
      > You are basically suggesting that a fraud victim should be punished more than the money they lost Their actions brought in more victims, and therefore investors ought to be wary of listening to them in future. They ought to be also punished by a hit to their reputation i.e. by being held partially responsible.
      - fakedang 3y ago
        They didn't "bring" in more victims, more victims joined in because they were lazy, just like most of the VC industry.
        nyokodo 3y ago
        > more victims joined in because they were lazy... They were lazy because they relied on the reputation of who was pushing for FTX, now their reputations won't be so rock solid. That's some justice.
    - morsch 3y ago
      We punish banks for failing to do proper KYC even when they're also victims of fraud.
    - bmitc 3y ago
      It's a bit strong to call Sequoia "fraud victims". They were at a minimum incompetent and at a maximum intentionally misleading to other investors. You shouldn't write an article like this (https://archive.ph/GQkCp https://archive.ph/GQkCp) unless you have done your research. Did they do literally any due diligence prior to leading a massive investment round? Just because they stand to lose millions doesn't excuse their responsibility and influence. Venture capitalists have no one to blame but themselves for the risky companies out there. They are effectively snake oil salesmen, just looking to siphon off relatively short-term profits under the guise of "changing the world".
Randomizer42 3y ago
[dead]

finite_depth 3y ago

[dead]

lindq181 3y ago

As someone relatively involved in the crypto space the past few years, no one saw FTX as anything to be proud of. It was a centralized exchange, basically a web2 company that handled crypto. Only the TradFi VCs (the Mr. Wonderfuls of the world) spouted rhetoric like that. The engineers building out the chain ecosystems & protocols on top of it never thought much of it other than another place to trade with orderbooks (i.e. centralized company).

jhobag 3y ago
the funniest part about FTX was how utterly awful it was. books were thin, and everyone knew alameda was hunting customers in the books, while listing perps for their farm and dump investments. really just a sham of an exchange/casino, so around average by crypto standards, but KOLs and mainstream comms praised them.
- colpabar 3y ago
  > KOLs and mainstream comms praised them I know this will just get me labelled a conspiracy theorist but I refuse to believe his well-connected parents had nothing to do with the praise FTX received in the mainstream media.
echelon 3y ago
> basically a web2 company Also known as a company.
EdwardDiego 3y ago
Really curious why you'd make this distinction? > web2 company Are web3 companies less fraudulent?
- BLanen 3y ago
  Cryptobros try to pretend because "web3" is blockchain, that the blockchains will reveal anything bad before it can happen. Completely untrue, of course. There's always a real-world link(because otherwise nobody would be profiting(people want stuff)/nothing would actually happen)