6 ms·

The statement is misleading. People are making 18% interest on the value of Bitcoin et al. at the value of 2022, which is less than $20k. Now that is $60k, back

The statement is misleading. People are making 18% interest on the value of Bitcoin et al. at the value of 2022, which is less than $20k. Now that is $60k, back to the value levels of 2021. Thus, the only reason there is interest is that the cryptocurrencies found gained back their value, and the bankruptcy court gets to consider the values when the bankruptcy started in 2022, not current/before 2022 values.

jjeaff 2y ago
Does it not also have to do with the increased value of some of the other assets FTX bought? I believe SBF invested a large amount in some AI companies.
- manquer 2y ago
  FTX invested $500M in Anthropic for 8% (at the time) and the bankruptcy estate sold 2/3rds of that for $884M, while it is tidy sum, it doesn't move the needle much in the overall money owed to creditors of $11.2B . The estate has recovered around $16B of the money, or basically close to half of the assets at the time, the bulk of the money is coming from bitcoin tripling in value, to put it another way if Bitcoin was same prices as 2022, then they would have only recovered ~ $5B or FTX continued operating without being frozen by the courts, they would need come with $33B to make their depositors whole in Bitcoin.
  - JumpCrisscross 2y ago
    > bulk of the money is coming from bitcoin tripling in value Source? I thought FTX's estate barely held any crypto.
    - manquer 2y ago
      They barely held any bitcoin or ether in their assets 0.1% and 1.2% respectively that customers had bought or deposited on the platform, they did hold a lot of crypto assets though. Notably SOL sales accounted for close to half of recovered money here is a link to the last batch of $2.6B sale they made in May 2024 (https://dailycoin.com/ftx-estate-sells-last-2-6b-of-heavily-discounted-solana-tokens/ https://dailycoin.com/ftx-estate-sells-last-2-6b-of-heavily-...) There was controversy from creditors over the steep discount, a discount itself is not unusual given the size of the block sale and the fact the tokens are locked for 4 years with monthly vesting. Naturally there was dispute on how much discount is acceptable . while Solona has grown 10x in price since the bankruptcy, it is not like people who had deposited SOL tokens are now covering for other deposits with just their holdings. What depositors assets had against their accounts at the time had little correlation to what FTX itself had as assets, the two most popular tokens Bitcoin (0.1%) ETH(1.2%) assets were lot less than what they would have been just storing the customer tokens as is. It is simpler to talk in bitcoin price given its popularity and use as baseline rather than prices of tokens and assets actually held by FTX itself or by users on FTX.
- eftychis 2y ago
  I am not sure. I don't think so but I haven't had time to read how the equities will get liquidated.
  - bobsyourbuncle 2y ago
    It literally says they made 900M off Anthropic in the article
    - eftychis 2y ago
      Let me rephrase my answer: FTX made a good number in the double digits of investments and acquisitions. (https://www.crunchbase.com/organization/ftx-exchange/recent_investments https://www.crunchbase.com/organization/ftx-exchange/recent_...) I believe Anthropic was the most acclaimed/highest current value, and they still have about 1/3 of the original 8% investment. a) I am curious at what discount they sell Anthropic shares right now; b) I am not sure what is the prognosis for the other shares FTX owns; [ c) which creditors have preference to which money pot; usually there is a pyramid. Here it talks about consumers. (Specifically those owed less than $50k.) And there is a separate matter for shareholders who are looking at getting some of the seized by DoJ proceeds. (https://www.reuters.com/legal/crypto-exchange-ftxs-liquidation-plan-receives-court-approval-2024-10-07/#:~:text=FTX%20has%20estimated%20that%20it,the%20company%20filed%20for%20bankruptcy https://www.reuters.com/legal/crypto-exchange-ftxs-liquidati....) ] Best way in general is to read the actual pleadings: news is not the best at giving a good idea what the court is actually ordering.
- jessriedel 2y ago
  The FTX stake in Anthropic was liquidated at a very high return back in ~May.
- ryanjshaw 2y ago
  The article mentions a stake in Anthropic that was sold for $900m, while it owes creditors $11.2b, so nah it wasn't enough to make a dent unless there were MANY other smaller investments that collectively added up to $3b on top of that.
  - OccamsMirror 2y ago
    Not to be pedantic but I think 8% of something can be considered a dent.
- paulpauper 2y ago
  As big of a piece of shit SBF is, he was technically not lying about FTX having the money. It's just that those tweets by CZ triggered a run on the assets at the worst time, which combined with mismanagement/fraud on SFB's part, did not help.
  - JumpCrisscross 2y ago
    > he was technically not lying about FTX having the money They didn't have the money. These gains are due to appreciation.
    - paulpauper 2y ago
      as early as Jan 2023, before bitcoin had appreciated, $5 billion had already been recovered https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-ftx-has-recouped-over-5-billion-in-liquid-assets-but-still-has-billions-more-to-go-to-meet-liabilities/ https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-f... Anthropic was another $1 billion
      - JumpCrisscross 2y ago
        $6bn out of twelve is very much not having the money.
        paulpauper 2y ago
        a far cry from zero, and the CZ tweets triggered a run. How many other exchanges have enough assets on hand to cover every depositor at once instantaneously? Even mainstream banks cannot cover everyone (this is what a bank run is and is why central banks exist to provide a backstop in such an event).
        JumpCrisscross 2y ago
        > far cry from zero Straw man. You said SBF "was technically not lying about FTX having the money." He was. If you ask me to hang on to your $12 and I spend half of it, I don't have the money. > How many other exchanges have enough assets on hand to cover every depositor at once instantaneously? All of them. Exchanges and clearinghouses in a proper financial system are fully collateralised. > this is what a bank run is and is why central banks exist Banks are leveraged. FTX was not supposed to be levered. It should have been able to survive a "run," because it wasn't supposed to have asset-liability mismatches.
arduanika 2y ago
You are correct. As phrased, this headline and large parts of the article are fake news. The first sentence about "profiting from the money they put into the exchange" is particularly egregious. Nobody was putting money into the exchange when withdrawals were frozen, which is when these marks are from. The reference amount that's being "repaid" is a low quote from near the bottom of the crash. Nobody signed up for this correlation between (1) crypto price crash and (2) the exchange halting withdrawals. It was a straight-up theft of optionality. That said, the repayments do exceed expectations. That is newsworthy. I just wish they could report that news factually.
- tim333 2y ago
  Some people like me did put cash equivalent (usdc) in just before they froze, so I guess I'm making 18%. Though there's an opportunity cost.
FreeTrade 2y ago
I'm seeing a pattern of misleading headlines wrt this. My guess is that it is PR at work to convince public that FTX was a victimless crime - this is to help SBF avoid his full sentence.
- arduanika 2y ago
  There's definitely a pattern, but I don't want to assume motive. I doubt SBF will get his retrial, but still, it's good PR for a lot of people -- for Effective Altruism, for Stanford, for Sequoia -- whose reputations took a hit here. It's even good PR for the bankruptcy team to say that they got full restitution. And for the journalists, of course, it's a headline that really pops. But sitting here, we can't really know why we're being lied to. All we can do is take note of the lies, and of who's repeating them.
  - marcuskane2 2y ago
    Or, it's just kinda and interesting story on it's own, no crazy conspiracy theories needed? When Bernie Madoff or Enron or any of the other major headline-grabbing frauds fell apart, the victims generally got back almost nothing. The fact that FTX is returning all of the user's money, plus interest, is quite unique and newsworthy.
    - jimmydddd 2y ago
      But it's not really "all of their money." That's just the way the news is spinning it. I think that's the point folks are discussing.
    - Scoundreller 2y ago
      Madoff is kinda like an FTX: on average, everyone has received 72% of their “investment” back. But there was some rule about everyone getting their first $1m or something back 100%. Funny thing about madoff is that it is still ongoing, distributions have diminished but last one was this year: https://www.madofftrustee.com/index.php?mobile=false https://www.madofftrustee.com/index.php?mobile=false Where madoff is a bit different is that they were more aggressive in taking money back that people took out. You’re really only getting back what you put in (and obvious losses through time value of money). And madoff didn’t gamble with the money, he mostly just sat on it.
KoolKat23 2y ago
I struggle to see the issue with the headline, this is how bankruptcy works, it's how they would usually report in relation to creditors.
- norswap 2y ago
  I don't know how bankruptcy documents work, but this is not a filling, it's a general-audience article. The truth is if you had one Bitcoin in FTX, that was worth 20k. You might have bought for more or less than that. Now it's worth 60k. You didn't get the 20k back immediately (in which case you could have repurchased the Bitcoin immediately and not lose anything). - If you bought Bitcoin above 20k, you lost money, whereas you wouldn't have otherwise. - If you would have kept your Bitcoin, you would have 60k now. You didn't get a choice in the matter. The problem if of course "what is money" — the thing you owned was a Bitcoin, and now you're getting back its value from back then in dollar terms. This value changed meanwhile, shocking! But quite clearly, most people would have had more money now if that hadn't happened. So while it's possible that some people would have sold lower than 24k (it didn't stay that low very long), most people wouldn't have, and so they lost money, in the commonly accepted undertanding. Imagine the government seized your house 10 years ago, then paid you back today its price from 10 years ago +20%. Did you not lose money?
  - deleted 2y ago
    [deleted]
  - Sakos 2y ago
    This is such a bad faith argument. Imagine you put up your house as an investment into some crypto exchange and the exchange goes bankrupt because it turns out they're misusing customer funds and defrauding their customers. You'll get your house back when legal proceedings are done. What value that house has before or after is sort of irrelevant except as a way for you to twist the issue to fit your narrative. Nobody made you put up your house in some nonsense crypto exchange. That was you. Be glad the government is involved at all or you might not be getting anything back.
    - 2y ago
moomin 2y ago
In yet another “crypto is just speed-running regular finance” moment, they ran the same crock about _Nick Leeson_. And that was a far from victimless crime as well.
- yieldcrv 2y ago
  or crypto is regular finance its just a bankruptcy case being handled well, and far faster because of the blockchain records showing where things went.
- harambae 2y ago
  Worth noting, for people not familiar, that Nick Leeson got massively less time in prison than SBF. A couple differences between them but the biggest one may be how hard the USA goes on financial crimes.
paulpauper 2y ago
What if Bitcoin had fallen to $4k or something. then converting to cash would in hindsight seemed brilliant and creditors would be happy.

jjeaff 2y ago

Does it not also have to do with the increased value of some of the other assets FTX bought? I believe SBF invested a large amount in some AI companies.

manquer 2y ago
FTX invested $500M in Anthropic for 8% (at the time) and the bankruptcy estate sold 2/3rds of that for $884M, while it is tidy sum, it doesn't move the needle much in the overall money owed to creditors of $11.2B . The estate has recovered around $16B of the money, or basically close to half of the assets at the time, the bulk of the money is coming from bitcoin tripling in value, to put it another way if Bitcoin was same prices as 2022, then they would have only recovered ~ $5B or FTX continued operating without being frozen by the courts, they would need come with $33B to make their depositors whole in Bitcoin.
- JumpCrisscross 2y ago
  > bulk of the money is coming from bitcoin tripling in value Source? I thought FTX's estate barely held any crypto.
  - manquer 2y ago
    They barely held any bitcoin or ether in their assets 0.1% and 1.2% respectively that customers had bought or deposited on the platform, they did hold a lot of crypto assets though. Notably SOL sales accounted for close to half of recovered money here is a link to the last batch of $2.6B sale they made in May 2024 (https://dailycoin.com/ftx-estate-sells-last-2-6b-of-heavily-discounted-solana-tokens/ https://dailycoin.com/ftx-estate-sells-last-2-6b-of-heavily-...) There was controversy from creditors over the steep discount, a discount itself is not unusual given the size of the block sale and the fact the tokens are locked for 4 years with monthly vesting. Naturally there was dispute on how much discount is acceptable . while Solona has grown 10x in price since the bankruptcy, it is not like people who had deposited SOL tokens are now covering for other deposits with just their holdings. What depositors assets had against their accounts at the time had little correlation to what FTX itself had as assets, the two most popular tokens Bitcoin (0.1%) ETH(1.2%) assets were lot less than what they would have been just storing the customer tokens as is. It is simpler to talk in bitcoin price given its popularity and use as baseline rather than prices of tokens and assets actually held by FTX itself or by users on FTX.
eftychis 2y ago
I am not sure. I don't think so but I haven't had time to read how the equities will get liquidated.
- bobsyourbuncle 2y ago
  It literally says they made 900M off Anthropic in the article
  - eftychis 2y ago
    Let me rephrase my answer: FTX made a good number in the double digits of investments and acquisitions. (https://www.crunchbase.com/organization/ftx-exchange/recent_investments https://www.crunchbase.com/organization/ftx-exchange/recent_...) I believe Anthropic was the most acclaimed/highest current value, and they still have about 1/3 of the original 8% investment. a) I am curious at what discount they sell Anthropic shares right now; b) I am not sure what is the prognosis for the other shares FTX owns; [ c) which creditors have preference to which money pot; usually there is a pyramid. Here it talks about consumers. (Specifically those owed less than $50k.) And there is a separate matter for shareholders who are looking at getting some of the seized by DoJ proceeds. (https://www.reuters.com/legal/crypto-exchange-ftxs-liquidation-plan-receives-court-approval-2024-10-07/#:~:text=FTX%20has%20estimated%20that%20it,the%20company%20filed%20for%20bankruptcy https://www.reuters.com/legal/crypto-exchange-ftxs-liquidati....) ] Best way in general is to read the actual pleadings: news is not the best at giving a good idea what the court is actually ordering.
jessriedel 2y ago
The FTX stake in Anthropic was liquidated at a very high return back in ~May.
ryanjshaw 2y ago
The article mentions a stake in Anthropic that was sold for $900m, while it owes creditors $11.2b, so nah it wasn't enough to make a dent unless there were MANY other smaller investments that collectively added up to $3b on top of that.
- OccamsMirror 2y ago
  Not to be pedantic but I think 8% of something can be considered a dent.
paulpauper 2y ago
As big of a piece of shit SBF is, he was technically not lying about FTX having the money. It's just that those tweets by CZ triggered a run on the assets at the worst time, which combined with mismanagement/fraud on SFB's part, did not help.
- JumpCrisscross 2y ago
  > he was technically not lying about FTX having the money They didn't have the money. These gains are due to appreciation.
  - paulpauper 2y ago
    as early as Jan 2023, before bitcoin had appreciated, $5 billion had already been recovered https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-ftx-has-recouped-over-5-billion-in-liquid-assets-but-still-has-billions-more-to-go-to-meet-liabilities/ https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-f... Anthropic was another $1 billion
    - JumpCrisscross 2y ago
      $6bn out of twelve is very much not having the money.
      - paulpauper 2y ago
        a far cry from zero, and the CZ tweets triggered a run. How many other exchanges have enough assets on hand to cover every depositor at once instantaneously? Even mainstream banks cannot cover everyone (this is what a bank run is and is why central banks exist to provide a backstop in such an event).
        JumpCrisscross 2y ago
        > far cry from zero Straw man. You said SBF "was technically not lying about FTX having the money." He was. If you ask me to hang on to your $12 and I spend half of it, I don't have the money. > How many other exchanges have enough assets on hand to cover every depositor at once instantaneously? All of them. Exchanges and clearinghouses in a proper financial system are fully collateralised. > this is what a bank run is and is why central banks exist Banks are leveraged. FTX was not supposed to be levered. It should have been able to survive a "run," because it wasn't supposed to have asset-liability mismatches.

arduanika 2y ago

You are correct. As phrased, this headline and large parts of the article are fake news. The first sentence about "profiting from the money they put into the exchange" is particularly egregious. Nobody was putting money into the exchange when withdrawals were frozen, which is when these marks are from. The reference amount that's being "repaid" is a low quote from near the bottom of the crash. Nobody signed up for this correlation between (1) crypto price crash and (2) the exchange halting withdrawals. It was a straight-up theft of optionality. That said, the repayments do exceed expectations. That is newsworthy. I just wish they could report that news factually.

tim333 2y ago
Some people like me did put cash equivalent (usdc) in just before they froze, so I guess I'm making 18%. Though there's an opportunity cost.

FreeTrade 2y ago

I'm seeing a pattern of misleading headlines wrt this. My guess is that it is PR at work to convince public that FTX was a victimless crime - this is to help SBF avoid his full sentence.

arduanika 2y ago
There's definitely a pattern, but I don't want to assume motive. I doubt SBF will get his retrial, but still, it's good PR for a lot of people -- for Effective Altruism, for Stanford, for Sequoia -- whose reputations took a hit here. It's even good PR for the bankruptcy team to say that they got full restitution. And for the journalists, of course, it's a headline that really pops. But sitting here, we can't really know why we're being lied to. All we can do is take note of the lies, and of who's repeating them.
- marcuskane2 2y ago
  Or, it's just kinda and interesting story on it's own, no crazy conspiracy theories needed? When Bernie Madoff or Enron or any of the other major headline-grabbing frauds fell apart, the victims generally got back almost nothing. The fact that FTX is returning all of the user's money, plus interest, is quite unique and newsworthy.
  - jimmydddd 2y ago
    But it's not really "all of their money." That's just the way the news is spinning it. I think that's the point folks are discussing.
  - Scoundreller 2y ago
    Madoff is kinda like an FTX: on average, everyone has received 72% of their “investment” back. But there was some rule about everyone getting their first $1m or something back 100%. Funny thing about madoff is that it is still ongoing, distributions have diminished but last one was this year: https://www.madofftrustee.com/index.php?mobile=false https://www.madofftrustee.com/index.php?mobile=false Where madoff is a bit different is that they were more aggressive in taking money back that people took out. You’re really only getting back what you put in (and obvious losses through time value of money). And madoff didn’t gamble with the money, he mostly just sat on it.

KoolKat23 2y ago

I struggle to see the issue with the headline, this is how bankruptcy works, it's how they would usually report in relation to creditors.

norswap 2y ago
I don't know how bankruptcy documents work, but this is not a filling, it's a general-audience article. The truth is if you had one Bitcoin in FTX, that was worth 20k. You might have bought for more or less than that. Now it's worth 60k. You didn't get the 20k back immediately (in which case you could have repurchased the Bitcoin immediately and not lose anything). - If you bought Bitcoin above 20k, you lost money, whereas you wouldn't have otherwise. - If you would have kept your Bitcoin, you would have 60k now. You didn't get a choice in the matter. The problem if of course "what is money" — the thing you owned was a Bitcoin, and now you're getting back its value from back then in dollar terms. This value changed meanwhile, shocking! But quite clearly, most people would have had more money now if that hadn't happened. So while it's possible that some people would have sold lower than 24k (it didn't stay that low very long), most people wouldn't have, and so they lost money, in the commonly accepted undertanding. Imagine the government seized your house 10 years ago, then paid you back today its price from 10 years ago +20%. Did you not lose money?
- deleted 2y ago
  [deleted]
- Sakos 2y ago
  This is such a bad faith argument. Imagine you put up your house as an investment into some crypto exchange and the exchange goes bankrupt because it turns out they're misusing customer funds and defrauding their customers. You'll get your house back when legal proceedings are done. What value that house has before or after is sort of irrelevant except as a way for you to twist the issue to fit your narrative. Nobody made you put up your house in some nonsense crypto exchange. That was you. Be glad the government is involved at all or you might not be getting anything back.
  - 2y ago

moomin 2y ago

In yet another “crypto is just speed-running regular finance” moment, they ran the same crock about _Nick Leeson_. And that was a far from victimless crime as well.

yieldcrv 2y ago
or crypto is regular finance its just a bankruptcy case being handled well, and far faster because of the blockchain records showing where things went.
harambae 2y ago
Worth noting, for people not familiar, that Nick Leeson got massively less time in prison than SBF. A couple differences between them but the biggest one may be how hard the USA goes on financial crimes.

paulpauper 2y ago

What if Bitcoin had fallen to $4k or something. then converting to cash would in hindsight seemed brilliant and creditors would be happy.