Cryptocurrency! Either it's going to disrupt everything and usher in a new era of artistic and consumer freedom, or it'll hasten the climate apocalypse while largely benefitting a tiny number of investors. Let's yell about it!
I'm still not clear on what was legit about FTX, their FTT or crypto in general.
Are there any crypto firms that are above-board with their dealings? What's the example crypto firm that was/is operating with transparency?
Crypto firm: Deposit moneys with us
Also crypto firm: we will give you a token that may or may not be worth more in the future. You may not use this token like fiat money. It works in strange ways and is highly speculative.
Also also crypto firm: We are in no way taking your deposits and doing anything shady with them. We always have enough to cover any withdrawals (lol) and we have NEVER manipulated the price of our bespoke token, or the other tokens we (heh) "invest" in.
Crypto firm: Based on the above statements, by us, we are a legit business.
The term seems to have been used in the sense of "it actually makes money and provides real services to real customers", rather than "this is a financial service that is safe, insured, transparent and regulated". Lewis seems to consider any firm that makes money and provides services to be a "legit" business, since it's actually *doing* business successfully. That strikes me as a very Wall Street thing, but then he's a very Wall Street person lol.
I think he has very different ideas of risk tolerance and evaluation from the ordinary person, who makes an awful lot of assumptions about any company they see Tom Brady and Larry David hawking on TV. Traders, in my experience, are all about "caveat emptor" and laughing at people who don't do their due diligence. I think he still has something of that mindset.
If the companies had been well run, the transfer would never have occurred, and they'd have been able to continue doing business with all their entities.
Stop saying "transfer" like it was just this bank transfer that someone did behind everyone's backs or something. Is that the tact the Lewis book is taking to try to whitewash FTX's actual nature?
FTX's codebase implemented backdoors for Alameda to siphon funds. Backdoors that any “senior developer at FTX” could see, according to SBF's own attorneys (that's apparently supposed to be part of the defense of SBF, the fact that the fraud was right there in the codebase for the whole company to see).
We've now seen the Python code implemented to allow certain accounts to spend money regardless of the account's balance. The system was set up down to its core to facilitate fraud.
Also, once again, the Alameda balance sheet was puffed up full of FTX's price-manipulated FTT token. It was almost the entirety of Alameda's holdings. It was the Monopoly money that the company used as the "collateral" to take out loans. If you take away the FTX shenanigans from Alameda, then there is no Alameda left.
FTX was fundamentally broken and fraudulent. The fraud was baked into the code, the very thing that runs the company. It wasn't SBF sneaking around behind everyone else's back. This wasn't just a rogue "transfer" of funds between businesses that otherwise could have continued to run "normally" if only that didn't happen. The fraud was the business.
Legion, come on, it was literally a transfer of money. Gotta be a dozen ways to say it, I tried to choose one that was fairly neutral. Everything you said is true but I was posting on a website, not writing a legal brief. Don't read anything into it except that I was trying to express that "the money moved from company A to company B".
I quote your post:
They were set up to function legitimately,
Given the nature of Alameda's funny money balance sheet, I find any notion that they were set up to function "legitimately" to be a misread of the situation.
Your posts read like downplaying and minimizing. If I didn't know anything about FTX and Alameda, and only read your post, my takeaway would have been of two perfectly fine running companies, with a couple bad actors way in the back that messed around and ruined it for everybody.
EDIT: I've edited this to remove the question and instead state my point in its place. I don't intend to set up a long back-and-forth D&D comment war dialog, so framing something as a question was the wrong thing to do. I've made my point and I'll let it stand as that.
So the argument now is essentially: If a Tree falls in the woods and no one is there is it Fraud?
If a mom and pop corner store doesn't properly keep financial records that benefit them tax-wise is it fraud? Yes. Is it purposeful or just bad practice is another question.
If Michael Lewis is trying to wash this that FTX was legit and SBF was just a quirky silly guy vs Legions example of a mob front I'm leaning the latter until proven otherwise.
If FTX was legit and just needed money SBF had enough clout to just go get a bunch of dumb VC money.
All I can say is you're reading far too much into what I said. Not sure how I'm a villain in any of this but I am sure that you're drawing conclusions about my intentions that are dead wrong.
I'm still not clear on what was legit about FTX, their FTT or crypto in general.
Are there any crypto firms that are above-board with their dealings? What's the example crypto firm that was/is operating with transparency?
Crypto firm: Deposit moneys with us
Also crypto firm: we will give you a token that may or may not be worth more in the future. You may not use this token like fiat money. It works in strange ways and is highly speculative.
Also also crypto firm: We are in no way taking your deposits and doing anything shady with them. We always have enough to cover any withdrawals (lol) and we have NEVER manipulated the price of our bespoke token, or the other tokens we (heh) "invest" in.
Crypto firm: Based on the above statements, by us, we are a legit business.
You've basically just described investment banking though. Swap "token" for "balance in your portfolio", and you've absolutely described that.
I think the argument is coming from people using different interpretations of "legit business". Just cause it's a legit business doesn't mean it's a nice, safe, or ethical business. Lots of legit businesses scam people.
I'm struggling to understand this point.
You say not hypothetical and could in the same sentence here. I don't think those concepts line up.
FTX, Alameda, and North Dimension are all the same company.
SBF and co treated them like they were the same company, but in principle they were supposed to be separate.
FTX would have been a normal, profitable company, if they had not appropriated customer funds to finance their other, unprofitable company. I should probably have used 'would' instead of 'could' in the previous post. They were making megabucks, and its not speculation to say that FTX would still be around if it wasn't for the fraud. Alameda on the other hand, would have collapsed much earlier.
I'm still not clear on what was legit about FTX, their FTT or crypto in general.
Are there any crypto firms that are above-board with their dealings? What's the example crypto firm that was/is operating with transparency?
There are loads. Coinbase, Kraken and Bitmex have all been operating for years with exactly the same business model as FTX, and have managed not to steal their own customers funds.
You've basically just described investment banking though. Swap "token" for "balance in your portfolio", and you've absolutely described that.
The difference here is that FTX controlled the issuance and the majority of the supply of their own token, so they were able to manipulate its price to hide their losses. Investment banks can't do that.
Top_Shelf wrote:I'm still not clear on what was legit about FTX, their FTT or crypto in general.
Are there any crypto firms that are above-board with their dealings? What's the example crypto firm that was/is operating with transparency?
There are loads. Coinbase, Kraken and Bitmex have all been operating for years with exactly the same business model as FTX, and have managed not to steal their own customers funds.
Thanks.
As I understand it, Coinbase is being sued by the SEC for not following securities laws. I suppose one could argue that, "breaking a law" is not the same as, "=/= legit biz" as there are many examples of companies that have done that (Wells Fargo seems to find a way to get fined on the regular for unethical practices).
I'm trying to understand what makes these exchanges "legit." Place your money with our firm and we'll...do what? Let you trade your funny money with other enthusiasts? So it's kinda like a baseball card shop where you're trading your pieces of cardboard that have pictures of good athletes on them to other enthusiasts with the idea being that your collectible will be worth more than you paid?
So I guess the argument is that these exchanges offer the "service" of allowing participants to trade their funny money back/forth with each other?
But what is the funny money doing? I get that it allows people to buy stuff on black markets. I don't get what it allows an honest person to do that they couldn't otherwise do with fiat money.
Other than speculate.
It looks so much worse.
How is it still getting worse for Sam Bankman-Fried?
In the break after Caroline Ellison stepped down from the stand, Barbara Fried engaged defense lawyer Christian Everdell in an animated conversation. Fried, the defendant’s mother, was gesticulating, and clearly had a strong opinion about something. Everdell walked off, and Mark Cohen talked to her for a bit after that.
Fried seemed frustrated, and I couldn’t blame her. The defense absolutely biffed the cross-examination of Ellison and, to make matters worse, was unable to keep a recording of an all-hands meeting where Ellison confessed to taking customer funds from being played for the jury. Is this really the best the defense can do?
Before this case, I had been told that Everdell and Cohen were “workman-like,” which I took to mean that they were unshowy but competent. I now believe that comment was an insult. I have been waiting for a juicy cross-examination, as I live for chaos and drama. I am beginning to think I am not going to get one.
Ellison had given, in her direct testimony, fairly damning evidence tying FTX CEO Sam Bankman-Fried to the conspiracy to take FTX customer funds. There were fake balance sheets, one of which was sent to crypto lender Genesis. After a Genesis representative received the balance sheet, he texted Ellison to tell her he’d spoken to Bankman-Fried — strongly suggesting that Bankman-Fried was aware of the contents of the fake balance sheet. Not great!
But a lot of testimony relied on Ellison recounting conversations she’d had in person, or on auto-deleting text messaging platforms. This gave the defense an opportunity to try to make her sound unreliable. After all, she had an incentive to flip on Bankman-Fried: the possibility of leniency in her sentencing. Given her fun tweets about speed, the fact that she was Bankman-Fried’s ex-girlfriend, and that she’d apparently written a bunch of stuff down, I was expecting fireworks. For the first time in this trial, maybe the defense had an opening.
Instead, I got a sad trombone. In Cohen’s disorganized cross-examination, he mostly bored the jury. At one point, two different jurors appeared to be asleep.
Also, it's two and a half hours long, but Folding Ideas has another banger out.
Folding Ideas is pretty great. They've got a ton of other videos on various other interesting topics too. I don't remember who first posted their stuff here, but I'm glad I was introduced to them.
As I understand it, Coinbase is being sued by the SEC for not following securities laws. I suppose one could argue that, "breaking a law" is not the same as, "=/= legit biz" as there are many examples of companies that have done that (Wells Fargo seems to find a way to get fined on the regular for unethical practices).
I'm trying to understand what makes these exchanges "legit." Place your money with our firm and we'll...do what? Let you trade your funny money with other enthusiasts? So it's kinda like a baseball card shop where you're trading your pieces of cardboard that have pictures of good athletes on them to other enthusiasts with the idea being that your collectible will be worth more than you paid?
So I guess the argument is that these exchanges offer the "service" of allowing participants to trade their funny money back/forth with each other?
But what is the funny money doing? I get that it allows people to buy stuff on black markets. I don't get what it allows an honest person to do that they couldn't otherwise do with fiat money.
Other than speculate.
I mean I recently moved countries and I used crypto to move my cash across without being ripped off by exorbitant bank fees, which I think is a pretty legit use case. There's also decentralised trading, lending and staking services, which account for most crypto transactions. Lastly, purchasing drugs, sex or abortions might be illegal in various jurisdictions, but depending on your perspective may or may not be immoral. It is a shame that the rampant speculation overshadows any real utility and lead to these volatile boom and bust cycles.
The SEC vs Coinbase case is interesting. It was quite surprising that the SEC went after the company who has been the most rigorous at attempting to comply with regulation, but it they probably just felt the pressure to be seen to do something in the wake of the FTX collapse, especially considering the cozy relationship between SBF and Gary Gensler, and sued everyone in sight. Anyway, it looks like the SEC will almost certainly lose against Coinbase.
I mean I recently moved countries and I used crypto to move my cash across without being ripped off by exorbitant bank fees, which I think is a pretty legit use case.
I mean, this time.
Hamas is, allegedly, a huge cryptocurrency user.
But what is the funny money doing?
Buying access to high quality sports streams at low, low prices.
<_<
>_>
… so I’ve heard….
Don't forget money laundering and price manipulation the two main use cases for all crypto currencies.
Hamas is also a big users of banks, investment or otherwise, I suspect.
Hamas is also a big users of banks, investment or otherwise, I suspect.
Huh? They're on numerous terror lists.
And Russia is under an embargo, but there are tons of ultra-rich government and criminal folks who use the banking system.
Hamas has used NGOs and foundations to launder money into external operations since its inception.
You know who eats food? Hamas!
Seriously, there's an abundance of legitimate criticisms against cryptocurrency, no need to use fallacious ones.
Somehow criminals were able to move money and buy stuff well before shit like crypto or even the internet existed.
Let's make that easier.
And let's also use that as an example of how crypto benefits society.
As far as I can make out, the one societal benefit of crypto is the occasional collective schadenfreude of watching dickbags like Bankman-Fried fall from grace.
As far as I can make out, the one societal benefit of crypto is the occasional collective schadenfreude of watching dickbags like Bankman-Fried fall from grace.
Perhaps the only one.
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