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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.

by jjeaff 2y ago

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.

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.

by 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.