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I'd like to see a public (or at least anonymized) accounting of how many FTX customers lost how much money. And I'm not talking about losses denominated in magi

I'd like to see a public (or at least anonymized) accounting of how many FTX customers lost how much money. And I'm not talking about losses denominated in magical unicorn bucks converted to USD with the highest exchange rate ever traded. I want to know how much cold hard USD was actually "lost," meaning it was deposited into FTX and eventually became inaccessible, either due to exchanging it for crypto holdings that tanked, or because the funds simply couldn't be withdrawn. If we can identify the actual amount of inflowing USD, then the next question naturally becomes ... where did it go? Whereas the current obfuscation with mixing of peak altcoin valuations and actual dollars makes it impossible to understand the true scale of loss. As it stands, I remain unconvinced that FTX was not a wash trading front for a money laundering operation run by an intelligence agency that is now throwing SBF under the bus as part of the larger plan to blow it all up so it's too messy for anyone to investigate. Just keep screaming fraud as loudly as possible so nobody dares question the premise. There were a lot of red flags with FTX. It popped up out of nowhere. SBF was a relative unknown amongst his peergroup, eg MIT'14 Bitcoiners. I guess that's because he came from the econ side? I'm not MIT, but I am '14 and I was more involved than your average person with cryptocurrency back then. The first I ever heard of SBF was when he was put in front of congress in ~2019 and labeled the CEO of a massive crypto exchange I'd never heard of. Call me crazy but that set off alarm bells for me at the time, and I'm not sure it ever added up. But by far the weirdest red flag about FTX was the dearth of Reddit posts from people asking how to get their money back when it finally crashed. There were hardly any subscribers to the FTX subreddit (~5k), and there was only a tiny trickle of posts from real users looking for refunds. Maybe this is attributable to FTX having more sophisticated "investors" (?) than other crypto scams, but the 5k subscribers made it a clear outlier. Compare the Reddit activity (both volume and sentiment) around any remotely similar crypto crash and the difference is stark. Where are all the victims?

refulgentis 3y ago
It was well-known in the precursor to the /r/WSB subculture. In 2019 I remember being disgusted by gamification UX and non-existent verification turning people on to options in Robinhood. I literally could not believe FTX when I found it because it was like Robinhood except had capture most of zoomer crypto heads by 2019. It was very, very, popular but you would have heard about it from finance people, not computer science people. They had little interest in the coin lore.
- refulgentis 3y ago
  Peak HN: "came from nowhere and the feds did it (p.s. I went to MIT)" top comment, nice normal text. "Sir I saw it during the period you label as nowhere" is -1.
  - chatmasta 3y ago
    I said not MIT. But otherwise sure... I know my audience :)
altruios 3y ago
I too was blind sided with the fact FTX was going down... Never even heard of them before they crashed. I would like to see a public accounting too!
nullc 3y ago
When it first imploded I was on HN taking the position that the astronomical losses were account of marking to market illiquid unicorn poop, and that the real losses to customers would be substantially lower. Eventually some commenters came out of the woodwork to claim some real losses. So I can't say that I've heard of literally no private parties that had losses anymore, it still continues to seem dubious to me-- the entire set of claims around SBF and FTX were obviously implausible even starting from the ridiculous arbitrage gain claims. If you're looking for a specific thread to pull on, I would suggest the mobilecoin transaction: FTX supposedly lost about a billion dollars to an undisclosed party that deposited an astronomical amount of mobilecoin then received a huge loan on the basis of the deposit (marked to market on a thin market which had suddenly surged) and withdrew the loaned funds, leaving FTX holding a bunch of relatively worthless mobilecoin. Shortly after this was made public one of the mobilecoin executives was murdered in San Francisco, though current reports suggest that this premeditated murder was somehow the result of a domestic dispute. You would think that recovering these funds would be a top priority as its a substantial and fairly atomic loss which was the product of a pretty obviously fraudulent trade, but it's been total silence on that front from what I've seen. Even by the low standards of scamcoin casinos, letting someone deposit almost the entire circulating supply of some scamcoin then giving them a withdrawable loan based on the last trade price would be uniquely and surprisingly stupid, and utterly smacks of a laundering scheme. Of course, one would need to come up with a theory as to why someone (say, an intelligence agency as you suggest) would want to launder a billion dollars to parties connected to mobilecoin... It would have to be an operation more significant than paying RSA to use DualEC in bsafe, something as significant as CryptoAG to justify that kind of payment.
- KirillPanov 3y ago
  It wasn't a withdrawable loan; the attacker used pumped-up MobileCoin as collateral to go leveraged-long on some other shitcoin in a wash trade against another FTX account which he (presumably) also controlled. The attacker withdrew the profits from the second account; when the first account went into liquidation MobileCoin tanked and the collateral was worthless. At least that's what Michael Lewis' book Going Infinite says happened. FTX's mistake was that their liquidation engine valued collateral using something that could be manipulated. It's actually a very hard problem for an illiquid asset -- the correct valuation is the order book depth during the margin account's liquidation -- but that's always in the future so you can't know it exactly. And an attacker with two accounts can manipulate most of the things you might want to use as an approximation (like the last trade price or the order book depth right now). The book claims that the bankrupcy trustee found the exploiter and the trustee CEO claimed they "had video of him entering and leaving his house" in (IIRC) Mauritius. However since the funds haven't been recovered the bankruptcy trustee could be bluffing or simply wrong about this. Or they can't extradite the guy. So not quite total silence, but also definitely not resolved. BTW the book is really good, although it feels a bit rushed (obviously Lewis had a hard deadline for optimal publication date so this is totally forgiveable). There is a crapton of juicy stuff in there, like "Operation Warm Blanket". The number of powerful people who have egg on their face because of that book is absolutely unbelievable. No redactions. So many of them would have been able to quietly sneak out the back door with no public record if not for Lewis. Oh yeah and the mother of all easter eggs on the inside of the dust jacket.
cyanydeez 3y ago
The actual value of FTX is absolutely unfactual.
ShamelessC 3y ago
This is the most cryptocurrency response possible. I thought people were finally moving away from this Reddit, WSB, financial conspiracy theory bs.
- chatmasta 3y ago
  I hold no cryptocurrency and am generally skeptical of its value. My experience is limited to my '14 senior research project about designing a proof-of-bandwidth altcoin, where I quickly resized the only way for it to have value was for unrelated traders to irrationally trade it with each other based on speculation. But during that year I met and spoke to a lot of people in the ecosystem and I never heard of nor met SBF. But he was an econ major and approached crypto from the perspective of a trader, so that mostly explains it.
  - ShamelessC 3y ago
    > My experience is limited to my '14 senior research project about designing a proof-of-bandwidth altcoin, where I quickly resized the only way for it to have value was for unrelated traders to irrationally trade it with each other based on speculation. Out of curiosity, how did you not realize this prior? Academia's propping-up of cryptocurrency throughout basically its whole lifetime, but especially over the past decade has been deeply sad for me to watch. I thought these were the people evaluating things from first principles rather than merely taking things on faith (or more likely, due to some conflict of interest). Seeing that they have whole classes at MIT dedicated to it is, again, profoundly sad.
LapsangGuzzler 3y ago
So US intelligence propped up a kid on the spectrum to take money from huge venture capital firms while playing video games during the pitch meetings and running this billion-dollar company on quickbooks, in such a successful way as to remove any trace that they were involved at all? All to launder money? If the goal was to launder money, why not just operate clandestine wallets like every other organized criminal and why wouldn’t they put some sort of guardrails in place to not let the firm blow up? If it’s a government front, wouldn’t someone on the inside be like “maybe let’s not put our name on an NBA arena and pay these huge celebrity endorsements and Super Bowl ads”? How would they be smart to pull this off without detection but dumb enough to let it all blow up? There’s just no part of this theory that adds up to me.
- dartos 3y ago
  Maybe it’s just a truthfully “dumb money” with a very sleazy accountant trying to scrape off some crumbs while he could.
  - LapsangGuzzler 3y ago
    Yeah, tbh I’m more interested in that parent looked around and didn’t see any signal in their normal internet hangout spots or found it weird that they hadn’t heard of SBF and immediately came to the conclusion that it’s a government conspiracy. Maybe the average victim doesn’t hang out on Reddit? That seems just a little less out there than the alternative theory posted.
- chatmasta 3y ago
  Maybe. But I don't believe SBF is not on the spectrum no matter what he tells you. He strikes me as the prototypical insecure nerd, impressionable and easy to take advantage of.
itsthebiz 3y ago
“I remain unconvinced that FTX was not a wash trading front for a money laundering operation run by an intelligence agency” Haha this is not an opinion you should share with others. :)
- mnky9800n 3y ago
  9/11 was an inside job!
- chatmasta 3y ago
  says the anonymous account
Scoundreller 3y ago
> Maybe this is attributable to FTX having more sophisticated "investors" (?) than other crypto scams, but the 5k subscribers made it a clear outlier. Compare the Reddit activity (both volume and sentiment) around any remotely similar crypto crash and the difference is stark. Where are all the victims? The creditors list provides a bit of a peek. Of course it’s down for maintenance right now: https://restructuring.ra.kroll.com/FTX/Home-DocketInfo https://restructuring.ra.kroll.com/FTX/Home-DocketInfo 10m creditors, mostly redacted but top 50 were identified and owed $3b in total. Can fill some more blanks on transfers of claims to hedge funds (since they can show more info) but that’s a lot of digging.

refulgentis 3y ago

It was well-known in the precursor to the /r/WSB subculture. In 2019 I remember being disgusted by gamification UX and non-existent verification turning people on to options in Robinhood. I literally could not believe FTX when I found it because it was like Robinhood except had capture most of zoomer crypto heads by 2019. It was very, very, popular but you would have heard about it from finance people, not computer science people. They had little interest in the coin lore.

refulgentis 3y ago
Peak HN: "came from nowhere and the feds did it (p.s. I went to MIT)" top comment, nice normal text. "Sir I saw it during the period you label as nowhere" is -1.
- chatmasta 3y ago
  I said not MIT. But otherwise sure... I know my audience :)

altruios 3y ago

I too was blind sided with the fact FTX was going down... Never even heard of them before they crashed. I would like to see a public accounting too!

nullc 3y ago

When it first imploded I was on HN taking the position that the astronomical losses were account of marking to market illiquid unicorn poop, and that the real losses to customers would be substantially lower. Eventually some commenters came out of the woodwork to claim some real losses. So I can't say that I've heard of literally no private parties that had losses anymore, it still continues to seem dubious to me-- the entire set of claims around SBF and FTX were obviously implausible even starting from the ridiculous arbitrage gain claims. If you're looking for a specific thread to pull on, I would suggest the mobilecoin transaction: FTX supposedly lost about a billion dollars to an undisclosed party that deposited an astronomical amount of mobilecoin then received a huge loan on the basis of the deposit (marked to market on a thin market which had suddenly surged) and withdrew the loaned funds, leaving FTX holding a bunch of relatively worthless mobilecoin. Shortly after this was made public one of the mobilecoin executives was murdered in San Francisco, though current reports suggest that this premeditated murder was somehow the result of a domestic dispute. You would think that recovering these funds would be a top priority as its a substantial and fairly atomic loss which was the product of a pretty obviously fraudulent trade, but it's been total silence on that front from what I've seen. Even by the low standards of scamcoin casinos, letting someone deposit almost the entire circulating supply of some scamcoin then giving them a withdrawable loan based on the last trade price would be uniquely and surprisingly stupid, and utterly smacks of a laundering scheme. Of course, one would need to come up with a theory as to why someone (say, an intelligence agency as you suggest) would want to launder a billion dollars to parties connected to mobilecoin... It would have to be an operation more significant than paying RSA to use DualEC in bsafe, something as significant as CryptoAG to justify that kind of payment.

KirillPanov 3y ago
It wasn't a withdrawable loan; the attacker used pumped-up MobileCoin as collateral to go leveraged-long on some other shitcoin in a wash trade against another FTX account which he (presumably) also controlled. The attacker withdrew the profits from the second account; when the first account went into liquidation MobileCoin tanked and the collateral was worthless. At least that's what Michael Lewis' book Going Infinite says happened. FTX's mistake was that their liquidation engine valued collateral using something that could be manipulated. It's actually a very hard problem for an illiquid asset -- the correct valuation is the order book depth during the margin account's liquidation -- but that's always in the future so you can't know it exactly. And an attacker with two accounts can manipulate most of the things you might want to use as an approximation (like the last trade price or the order book depth right now). The book claims that the bankrupcy trustee found the exploiter and the trustee CEO claimed they "had video of him entering and leaving his house" in (IIRC) Mauritius. However since the funds haven't been recovered the bankruptcy trustee could be bluffing or simply wrong about this. Or they can't extradite the guy. So not quite total silence, but also definitely not resolved. BTW the book is really good, although it feels a bit rushed (obviously Lewis had a hard deadline for optimal publication date so this is totally forgiveable). There is a crapton of juicy stuff in there, like "Operation Warm Blanket". The number of powerful people who have egg on their face because of that book is absolutely unbelievable. No redactions. So many of them would have been able to quietly sneak out the back door with no public record if not for Lewis. Oh yeah and the mother of all easter eggs on the inside of the dust jacket.

cyanydeez 3y ago

The actual value of FTX is absolutely unfactual.

ShamelessC 3y ago

This is the most cryptocurrency response possible. I thought people were finally moving away from this Reddit, WSB, financial conspiracy theory bs.

chatmasta 3y ago
I hold no cryptocurrency and am generally skeptical of its value. My experience is limited to my '14 senior research project about designing a proof-of-bandwidth altcoin, where I quickly resized the only way for it to have value was for unrelated traders to irrationally trade it with each other based on speculation. But during that year I met and spoke to a lot of people in the ecosystem and I never heard of nor met SBF. But he was an econ major and approached crypto from the perspective of a trader, so that mostly explains it.
- ShamelessC 3y ago
  > My experience is limited to my '14 senior research project about designing a proof-of-bandwidth altcoin, where I quickly resized the only way for it to have value was for unrelated traders to irrationally trade it with each other based on speculation. Out of curiosity, how did you not realize this prior? Academia's propping-up of cryptocurrency throughout basically its whole lifetime, but especially over the past decade has been deeply sad for me to watch. I thought these were the people evaluating things from first principles rather than merely taking things on faith (or more likely, due to some conflict of interest). Seeing that they have whole classes at MIT dedicated to it is, again, profoundly sad.

LapsangGuzzler 3y ago

So US intelligence propped up a kid on the spectrum to take money from huge venture capital firms while playing video games during the pitch meetings and running this billion-dollar company on quickbooks, in such a successful way as to remove any trace that they were involved at all? All to launder money? If the goal was to launder money, why not just operate clandestine wallets like every other organized criminal and why wouldn’t they put some sort of guardrails in place to not let the firm blow up? If it’s a government front, wouldn’t someone on the inside be like “maybe let’s not put our name on an NBA arena and pay these huge celebrity endorsements and Super Bowl ads”? How would they be smart to pull this off without detection but dumb enough to let it all blow up? There’s just no part of this theory that adds up to me.

dartos 3y ago
Maybe it’s just a truthfully “dumb money” with a very sleazy accountant trying to scrape off some crumbs while he could.
- LapsangGuzzler 3y ago
  Yeah, tbh I’m more interested in that parent looked around and didn’t see any signal in their normal internet hangout spots or found it weird that they hadn’t heard of SBF and immediately came to the conclusion that it’s a government conspiracy. Maybe the average victim doesn’t hang out on Reddit? That seems just a little less out there than the alternative theory posted.
chatmasta 3y ago
Maybe. But I don't believe SBF is not on the spectrum no matter what he tells you. He strikes me as the prototypical insecure nerd, impressionable and easy to take advantage of.

itsthebiz 3y ago

“I remain unconvinced that FTX was not a wash trading front for a money laundering operation run by an intelligence agency” Haha this is not an opinion you should share with others. :)

mnky9800n 3y ago
9/11 was an inside job!
chatmasta 3y ago
says the anonymous account

Scoundreller 3y ago

> Maybe this is attributable to FTX having more sophisticated "investors" (?) than other crypto scams, but the 5k subscribers made it a clear outlier. Compare the Reddit activity (both volume and sentiment) around any remotely similar crypto crash and the difference is stark. Where are all the victims? The creditors list provides a bit of a peek. Of course it’s down for maintenance right now: https://restructuring.ra.kroll.com/FTX/Home-DocketInfo https://restructuring.ra.kroll.com/FTX/Home-DocketInfo 10m creditors, mostly redacted but top 50 were identified and owed $3b in total. Can fill some more blanks on transfers of claims to hedge funds (since they can show more info) but that’s a lot of digging.