FTX/Sam Bankman-Fried
Discussion
Gecko1978 said:
Apart from very last line I mostly agree. SBF was / is a massive fraudster if it wasn't crypto it would have been equities or something else. He used client funds for his own gain.
BTC for example works just like a USD in that you can exchange it for goods or services (digitally like most fiat transactions) the person giving you the widget believes the BTC will hold some value. Just like usd.
What we see in BTC is a belief I think that one day 1 BTC will be worth $1M its like a lotto win belief etc. I doubt it will ever get that high bur I suspect $50k might be a long term sustained value (i picked that value as a pure guesstimate)
Crypto bros hyping the value are no different to people on tik tok shop selling you cheap pen lights or jewelry etc it's same thing a unregulated sales pitch to snare the unlucky few with a belief that they will make millions.
You're right - you can (in some transactions) use it like traditional currency. But to what end? We've already got traditional currencies for that, which are more widely accepted, and (generally) more stable in value, because for a traditional currency to go massively tits-up (such as Zimbabwe's) it's usually as a consequence of things going pretty tits-up in the country (again, see Zimbabwe).BTC for example works just like a USD in that you can exchange it for goods or services (digitally like most fiat transactions) the person giving you the widget believes the BTC will hold some value. Just like usd.
What we see in BTC is a belief I think that one day 1 BTC will be worth $1M its like a lotto win belief etc. I doubt it will ever get that high bur I suspect $50k might be a long term sustained value (i picked that value as a pure guesstimate)
Crypto bros hyping the value are no different to people on tik tok shop selling you cheap pen lights or jewelry etc it's same thing a unregulated sales pitch to snare the unlucky few with a belief that they will make millions.
If BTC were to stabilise tomorrow, become accepted everywhere tomorrow, then what? What problem has it solved?
KaraK said:
Gecko1978 said:
Apart from very last line I mostly agree. SBF was / is a massive fraudster if it wasn't crypto it would have been equities or something else. He used client funds for his own gain.
BTC for example works just like a USD in that you can exchange it for goods or services (digitally like most fiat transactions) the person giving you the widget believes the BTC will hold some value. Just like usd.
What we see in BTC is a belief I think that one day 1 BTC will be worth $1M its like a lotto win belief etc. I doubt it will ever get that high bur I suspect $50k might be a long term sustained value (i picked that value as a pure guesstimate)
Crypto bros hyping the value are no different to people on tik tok shop selling you cheap pen lights or jewelry etc it's same thing a unregulated sales pitch to snare the unlucky few with a belief that they will make millions.
You're right - you can (in some transactions) use it like traditional currency. But to what end? We've already got traditional currencies for that, which are more widely accepted, and (generally) more stable in value, because for a traditional currency to go massively tits-up (such as Zimbabwe's) it's usually as a consequence of things going pretty tits-up in the country (again, see Zimbabwe).BTC for example works just like a USD in that you can exchange it for goods or services (digitally like most fiat transactions) the person giving you the widget believes the BTC will hold some value. Just like usd.
What we see in BTC is a belief I think that one day 1 BTC will be worth $1M its like a lotto win belief etc. I doubt it will ever get that high bur I suspect $50k might be a long term sustained value (i picked that value as a pure guesstimate)
Crypto bros hyping the value are no different to people on tik tok shop selling you cheap pen lights or jewelry etc it's same thing a unregulated sales pitch to snare the unlucky few with a belief that they will make millions.
If BTC were to stabilise tomorrow, become accepted everywhere tomorrow, then what? What problem has it solved?
Gecko1978 said:
Kind of off topic but to answer your question unlike GBP you have autonomy over it. The government can devalue currency by printing more, it can seize your money in your account, it can restrict its movement etc. I don't see BTC as a replacement for money I see it more as another asset like shares, or gold, or watches etc. Something you can own as a mix bag of assets.
Ahh the same old tired nebulous reasons.. Yes with a traditional currency you're having to place a great deal of trust in relative strangers (i.e. a gov't) not to screw you over and leave you with nothing, but with a crypto you're still having to place a great deal of trust in relative strangers (the peers of the block chain, any exchange you might use) and that the gov't isn't going to go full China and declare the whole thing illegal (China's clampdown hasn't been super-effective.. yet, but I wouldn't bet against them getting better at it)
When it comes to devaluing of a fiat currency "normal" devaluations aimed at shifting trade balances can be a legitimate economic choice, one that doesn't really devalue your bank balance (unless you're looking to import stuff or buy foreign currency) and holding some BTC would potentially insulate from that effect - but so would holding other fiat currencies that would increase relative to your home one. If a gov't is going around wantonly printing money to the degree it's a serious problem (aka hyperinflation) then that's usually a symptom of wider problems and they don't do it generally because, well, it's not in their best interests.
Even if you've got a rogue, or hugely incompetent gov't doing that then BTC doesn't really offer anything that informally adopting another traditional currency does (such as Zimbabwe de facto adopting the USD), "but that's also vulnerable to the same thing!" cry the crypto-bros, yes, but if (say) UK gov tanked GBP to the extent that we were shifting to another currency like USD and that got tanked by the US gov then, frankly, to get to that point I think it means a pretty major international catastrophe is going on and I don't see how BTC fixes that.
As for control - sure the gov't can freeze your money, but outside of doing it to criminals/suspected criminals they generally don't, if nothing else because it's not a vote winner to go around seizing money off innocent citizens for no reason. It can also work in your favour - e.g. your boss decides to make off with the contents of the pension fund, would you prefer the gov't be able to freeze his accounts and possibly reclaim your money? Or would you prefer that they just had to shrug and say tough luck?
But that's talking about reasonable governments, so let's imagine they've gone out of their tiny little politician minds and are cracking down on innocent citizens in flagrant disregard of the existing status quo, seizing money left and right, preventing you from transferring it out of the country, the whole nine yards. Are we expecting them to stop there? Or will they restrict internet access (strangling peer-to-peer stuff like bitcoin traffic is difficult, but not impossible), travel, start grabbing people off the street and bundling them into vans, that sort of thing?
They can also do quite a lot to actually seize your BTC too - after all a hot wallet is only as secure as you can keep your key, hardware wallets are only as secure as you can keep the device, and exchange wallets are complete joke.
Cutting off one way a bad actor gov't can abuse you as a citizen is all well and good, but in the end it doesn't make much practical difference. Sure if you've got some BTC in a cold wallet and can hop a migrant boat across the channel you can get to your money and set up life again, but how is that any different from having offshore accounts of traditional currency?
But you say it's an asset instead of money, like gold or what have you. Well, what does it offer that other assets don't? If it's just a abstract digital version of gold then I suppose it's a bit lighter and less bulky than gold, and it offers another diversity option to protect you from the volatility of the prices of that sort of asset. If you've got 50% of your assets in gold, 50% in BTC and the price of gold tanks you haven't lost everything - but how many different forms of this does the world need? There's already gold, silver, platinum, etc. Was it really worth burning a shedload of electricity to add another string to that bow? BTC doesn't even have quite the same permanence, bit rot will come for off-line digital storage, online infrastructure isn't especially permanent either: software and protocols march on. If you wanted to bury a gold ingot your great-grandkids could dig it up 100 years later and it's still a gold ingot and is worth what ever the price of gold is then. Good luck trying that with an offline BTC wallet! Even using assets as a form wealth storage depends on you being able to convert that back into usable money to realise the value - so even if we imagine the scenario where the volatility was addressed and the value was relatively stable it still means bringing exchanges into the mix, which means opening up the can'o'worms of hacks, rug pulls, collapses, blah blah. You could make exchanges safer by regulating them - but that means bringing the authorities in and giving them real power to control what goes on there, and the crypto-bros tell me that the benefit of crypto is that the gov't can't control it... and round and round we go.
KaraK said:
.... but with a crypto you're still having to place a great deal of trust in relative strangers (the peers of the block chain, any exchange you might use) and that the gov't isn't going to go full China and declare the whole thing illegal (China's clampdown hasn't been super-effective.. yet, but I wouldn't bet against them getting better at it)....
The risk of significantly adverse regulations is the main reason why I never 'invested' in crypto. A government doesn't even need to ban it - they could easily make a rule, implementing something like a 'holding tax' or other punitive restriction, which would kill the value of crypto. It doesn't matter than many current users holding crypto perhaps wouldn't comply, as it wouldn't then have mainstream appeal, and the perceived value would drop accordingly. And the risk of that type of new rule increases dramatically if/when governments perceive crypto as a threat than than a novelty.In addition, there is a (fairly) close correlation between a leveraged ETF like TQQQ and say Bitcoin. So, if someone has that type of risk appetite, they could just hold TQQQ and probably get a fairly similar result, but without also taking the unknown regulatory risks.
https://www.bbc.co.uk/news/technology-67492753
Now Binance head Zhao is gone after money laundering charges and a $4.3BN fine.
Now Binance head Zhao is gone after money laundering charges and a $4.3BN fine.
glazbagun said:
https://www.bbc.co.uk/news/technology-67492753
Now Binance head Zhao is gone after money laundering charges and a $4.3BN fine.
Haha love it.Now Binance head Zhao is gone after money laundering charges and a $4.3BN fine.
One by one, the dominoes of scam fall down. Clock still ticking for Tether (and therefore btc) but it'll happen eventually
Some Gump said:
glazbagun said:
https://www.bbc.co.uk/news/technology-67492753
Now Binance head Zhao is gone after money laundering charges and a $4.3BN fine.
Haha love it.Now Binance head Zhao is gone after money laundering charges and a $4.3BN fine.
One by one, the dominoes of scam fall down. Clock still ticking for Tether (and therefore btc) but it'll happen eventually
Does anyone actually believe that Tether is fully covered by underlying funds.
glazbagun said:
https://www.bbc.co.uk/news/technology-67492753
Now Binance head Zhao is gone after money laundering charges and a $4.3BN fine.
Coffeezilla is doing good work again explaining more details....Now Binance head Zhao is gone after money laundering charges and a $4.3BN fine.
https://www.youtube.com/watch?v=De4QjH9fpgo
KaraK said:
My (pretend) money is on Kraken
that link said:
FTX is going after the ByBit cryptocurrency exchange for almost $1 billion, hoping to recover funds that the firm was able to withdraw just before FTX stopped processing withdrawals. According to the lawsuit, ByBit used its VIP access to FTX to successfully withdraw their funds even when other customers could not, and pressured FTX employees to prioritize their withdrawals.8 The FTX team also alleges that ByBit is holding $125 million in FTX assets “hostage” on its own exchange, trying to use them as “leverage” to regain access to their $20 million remaining on FTX.
FTX also alleges in the lawsuit that ByBit is part of a “fraudulent scheme” involving BitDAO (later renamed to Mantle), a supposed decentralized and community-run organization that a ByBit executive reportedly admitted the company actually controlled. After the FTX bankruptcy and the crash of the FTT token price, BitDAO tried to undo a past deal where they had agreed to exchange BIT for FTT. When the FTX bankruptcy team did not agree to let BitDAO go back on the deal, the group came up with a scheme to effectively erase FTX’s BIT holdings, which was agreed upon by “community vote” involving voters who certainly seem to be ByBit execs. (Free word of advice here: if you’re an exec who wants to avoid getting caught doing this, maybe don’t cast 20 million votes from your firstinitial-lastname.eth wallet).
After “extensive negotiations” between the remnants of the imploded Three Arrows Capital hedge fund and the bankrupt Genesis cryptocurrency lender, Genesis is seeking permission from the bankruptcy court to settle $1 billion in claims from Three Arrows by issuing a $33 million unsecured claim. Three Arrows had also borrowed extensively from Genesis to the tune of around $1.2 billion.9
Hodlnaut, a crypto lender based in Singapore that halted withdrawals in August 2022, is going to be liquidated.10 It’s not exactly been smooth sailing over there: first it came out that the CEO apparently lied when he said they had no exposure to the Terra collapse (when in fact they realized a ~$190 million loss) [W3IGG], then the founders tried to hide financial records from court-appointed advisers brought in to oversee the company’s affairs while they evaluated if they would need to liquidate [W3IGG].
Bittrex, a one-time major player among US crypto exchanges, is closing up shop completely [W3IGG]. This is not exactly a surprising development, given that they paid a then-record $29 million fine for sanctions violations in October 2022 [W3IGG], shut down US operations in March 2023 [W3IGG], filed for bankruptcy in the US in May [W3IGG], and then paid $24 million to settle a lawsuit from the US SEC in August [W3IGG].
There’s been one more unfortunate event for Coin Cloud, to add to the whole series of them I wrote about in February [I19]. Hackers have claimed to have exfiltrated private information belonging to around 300,000 of the crypto ATM firms’s customers, and around 70,000 selfies taken by ATM cameras as a part of know-your-customer processes. The personal information includes details like social security numbers, dates of birth, names, and addresses. The hackers also claim to have obtained the company’s source code.
You almost couldn't make it up! I do wonder if there is a single crypto entity that would pass an audit. Hold on, i don't even wonder that much, i think the chances are too slim..FTX also alleges in the lawsuit that ByBit is part of a “fraudulent scheme” involving BitDAO (later renamed to Mantle), a supposed decentralized and community-run organization that a ByBit executive reportedly admitted the company actually controlled. After the FTX bankruptcy and the crash of the FTT token price, BitDAO tried to undo a past deal where they had agreed to exchange BIT for FTT. When the FTX bankruptcy team did not agree to let BitDAO go back on the deal, the group came up with a scheme to effectively erase FTX’s BIT holdings, which was agreed upon by “community vote” involving voters who certainly seem to be ByBit execs. (Free word of advice here: if you’re an exec who wants to avoid getting caught doing this, maybe don’t cast 20 million votes from your firstinitial-lastname.eth wallet).
After “extensive negotiations” between the remnants of the imploded Three Arrows Capital hedge fund and the bankrupt Genesis cryptocurrency lender, Genesis is seeking permission from the bankruptcy court to settle $1 billion in claims from Three Arrows by issuing a $33 million unsecured claim. Three Arrows had also borrowed extensively from Genesis to the tune of around $1.2 billion.9
Hodlnaut, a crypto lender based in Singapore that halted withdrawals in August 2022, is going to be liquidated.10 It’s not exactly been smooth sailing over there: first it came out that the CEO apparently lied when he said they had no exposure to the Terra collapse (when in fact they realized a ~$190 million loss) [W3IGG], then the founders tried to hide financial records from court-appointed advisers brought in to oversee the company’s affairs while they evaluated if they would need to liquidate [W3IGG].
Bittrex, a one-time major player among US crypto exchanges, is closing up shop completely [W3IGG]. This is not exactly a surprising development, given that they paid a then-record $29 million fine for sanctions violations in October 2022 [W3IGG], shut down US operations in March 2023 [W3IGG], filed for bankruptcy in the US in May [W3IGG], and then paid $24 million to settle a lawsuit from the US SEC in August [W3IGG].
There’s been one more unfortunate event for Coin Cloud, to add to the whole series of them I wrote about in February [I19]. Hackers have claimed to have exfiltrated private information belonging to around 300,000 of the crypto ATM firms’s customers, and around 70,000 selfies taken by ATM cameras as a part of know-your-customer processes. The personal information includes details like social security numbers, dates of birth, names, and addresses. The hackers also claim to have obtained the company’s source code.
"What underpins your made up currency?"
" we have 1.2x coverage of diverse assets"
"What assets?"
" We have lots of these other made up currencies"
"What underpins them?"
" they have 1.2x coverage of diverse assets"
"What assets?"
" well for a start they have 1bn of our made up currency"
Some Gump said:
You almost couldn't make it up! I do wonder if there is a single crypto entity that would pass an audit. Hold on, i don't even wonder that much, i think the chances are too slim..
"What underpins your made up currency?"
" we have 1.2x coverage of diverse assets"
"What assets?"
" We have lots of these other made up currencies"
"What underpins them?"
" they have 1.2x coverage of diverse assets"
"What assets?"
" well for a start they have 1bn of our made up currency"
As the infamous Jenga scene from The Big Short puts it:"What underpins your made up currency?"
" we have 1.2x coverage of diverse assets"
"What assets?"
" We have lots of these other made up currencies"
"What underpins them?"
" they have 1.2x coverage of diverse assets"
"What assets?"
" well for a start they have 1bn of our made up currency"
"When the market deems a bond too risky to buy, what do you think we do with it?... We just repackage it with a bunch of other stuff that didn't sell... and when the pile gets large enough(quantity aspect of diversification), the whole thing is SUDDENLY considered DIVERSIFIED, and then the credit rating agencies give it a AAA rating, no questions asked!"
Next one is probably CryptoData, sponsors and 60% owners of the (former) RNF Aprilia MotoGP team, who have been thrown out of the series due to "Repeated infractions and breaches of the Participation Agreement affecting the public image of MotoGP". Not really sure what that refers to but rumours of financial difficulties with the team. Crypto, financial difficulties, surely not. It's been proven time and again to be a stable, trustworthy financial model.
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