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If RWAs were adopted and the tokens were non-custodial then not much. The issue with FTX is it was a centralized company and all funds were fully custodial. And

If RWAs were adopted and the tokens were non-custodial then not much. The issue with FTX is it was a centralized company and all funds were fully custodial. And while all this was happening SBF was buddy buddy with Gary Gensler. Aka it was a tradfi problem, not a crypto problem.

singleshot_ 3y ago
Would you please explain why it matters that the "funds" were fully custodial?
- throwaway98797 3y ago
  not your keys, not your crypto but it’s a moot point because centralized exchanges like coinbase offer a valuable service of solving a lot of the issues with crypto ux
  - adolph 3y ago
    /solv/hid/
- junofan 3y ago
  My understanding is the stolen money was fiat from the “fiat@“ account routed through Silvergate Bank.
- dboreham 3y ago
  Customers sent real money to FTX expecting FTX to buy some coin and hold it on their behalf (because managing that properly themselves is out of scope for regular folks). So now the coin is defacto owned by FTX, not the customer. Similar to what does not happen when you buy ATT stock in your Schwab account.
  - AlotOfReading 3y ago
    That's very similar to what happens with stocks. When you buy a stock, it's Cede & co who actually own the physical certificates that transfer rights. There's a complicated web of contractual obligations between them and other DTCC companies that exists to give you essentially the same rights as if you were a true stockholder, but it's all being done "on your behalf" in a legal sense.
    - weard_beard 3y ago
      Unless you directly register your stock through a DRS transfer to the issuing agent for the company. This agent manages stock issued to insiders and employees as well but any stock holder can truly own their stock the same way the CEO of the company does. It’s a pain, takes forever, and brokers will play dumb and try to prevent it, but they legally must allow you. Generally only worth it if you intend to hold your stock for some time (which you should)
      - Scoundreller 3y ago
        Also sometimes you can start them directly with a company (bypassing brokers entirely). Others will let you send a cheque and buy more. Informal communities exist to buy that first share from another individual so you can continue. Sometimes all at no charge. Was handier back when brokerage commissions were a thing (and a lot higher). Did this with GE a while ago (worked out for me!)
    - dboreham 3y ago
      Exactly my point. In the Schwab case they don't get to buy yachts with your ATT stock.
- matheusmoreira 3y ago
  Because nobody would've lost anything had they held onto their coins instead of keeping them in centralized exchanges which are essentially banks in all but name. One of the reasons cryptocurrency was invented was to free us from the banks but they reinvented the entire banking system instead on top of it.
  - singleshot_ 3y ago
    It’s very interesting to me because when you put your money in a bank and it enters a bankruptcy proceeding, your account (which is in essence an unsecured loan you made to the bank) disappears into the bankruptcy estate, to be shared by the various tiers of creditors in order of priority (to wit: you lose your money). Of course, the FDIC protects you. When you put things (e.g., stock) in a “custodial account” with a company like Charles Schwab or similar, if they enter BK then your property is separate from the bankruptcy estate and must be returned to you, in theory. FTX seems to have combined all the best features of all systems: because they had custody of the tokens, they were able to actually lose them; when they entered bankruptcy, the customer assets could not go to the secured creditors (to the extent that they were custodial, not debt) and they couldn’t go to the customer either (because “not your keys, not your crypto”). Cherry on top: no FDIC protection. The only winner is the criminal, who is free (for a while) to use customer funds to pay Tom Brady to be his friend. “Free from the banks,” indeed.
actionfromafar 3y ago
There is only TradFi. Crypto grew up and was assimilated. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars.
- selimthegrim 3y ago
  Paddy Chayefsky, back from the dead?

singleshot_ 3y ago

Would you please explain why it matters that the "funds" were fully custodial?

throwaway98797 3y ago
not your keys, not your crypto but it’s a moot point because centralized exchanges like coinbase offer a valuable service of solving a lot of the issues with crypto ux
- adolph 3y ago
  /solv/hid/
junofan 3y ago
My understanding is the stolen money was fiat from the “fiat@“ account routed through Silvergate Bank.
dboreham 3y ago
Customers sent real money to FTX expecting FTX to buy some coin and hold it on their behalf (because managing that properly themselves is out of scope for regular folks). So now the coin is defacto owned by FTX, not the customer. Similar to what does not happen when you buy ATT stock in your Schwab account.
- AlotOfReading 3y ago
  That's very similar to what happens with stocks. When you buy a stock, it's Cede & co who actually own the physical certificates that transfer rights. There's a complicated web of contractual obligations between them and other DTCC companies that exists to give you essentially the same rights as if you were a true stockholder, but it's all being done "on your behalf" in a legal sense.
  - weard_beard 3y ago
    Unless you directly register your stock through a DRS transfer to the issuing agent for the company. This agent manages stock issued to insiders and employees as well but any stock holder can truly own their stock the same way the CEO of the company does. It’s a pain, takes forever, and brokers will play dumb and try to prevent it, but they legally must allow you. Generally only worth it if you intend to hold your stock for some time (which you should)
    - Scoundreller 3y ago
      Also sometimes you can start them directly with a company (bypassing brokers entirely). Others will let you send a cheque and buy more. Informal communities exist to buy that first share from another individual so you can continue. Sometimes all at no charge. Was handier back when brokerage commissions were a thing (and a lot higher). Did this with GE a while ago (worked out for me!)
  - dboreham 3y ago
    Exactly my point. In the Schwab case they don't get to buy yachts with your ATT stock.
matheusmoreira 3y ago
Because nobody would've lost anything had they held onto their coins instead of keeping them in centralized exchanges which are essentially banks in all but name. One of the reasons cryptocurrency was invented was to free us from the banks but they reinvented the entire banking system instead on top of it.
- singleshot_ 3y ago
  It’s very interesting to me because when you put your money in a bank and it enters a bankruptcy proceeding, your account (which is in essence an unsecured loan you made to the bank) disappears into the bankruptcy estate, to be shared by the various tiers of creditors in order of priority (to wit: you lose your money). Of course, the FDIC protects you. When you put things (e.g., stock) in a “custodial account” with a company like Charles Schwab or similar, if they enter BK then your property is separate from the bankruptcy estate and must be returned to you, in theory. FTX seems to have combined all the best features of all systems: because they had custody of the tokens, they were able to actually lose them; when they entered bankruptcy, the customer assets could not go to the secured creditors (to the extent that they were custodial, not debt) and they couldn’t go to the customer either (because “not your keys, not your crypto”). Cherry on top: no FDIC protection. The only winner is the criminal, who is free (for a while) to use customer funds to pay Tom Brady to be his friend. “Free from the banks,” indeed.

actionfromafar 3y ago

There is only TradFi. Crypto grew up and was assimilated. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars.

selimthegrim 3y ago
Paddy Chayefsky, back from the dead?