FTX Collapse

[B-Man]

 

 

It’s the people who brought you 2022 — C’mon Gray Lady, make this panel happen!

 

In the meantime though, will SBF show up for this discussion, which was announced by the New York Times in October? Yellen, Zelensky and Zuckerberg Will Speak at DealBook Summit. The conference, scheduled for Nov. 30, will bring together the biggest newsmakers in business, politics and culture.

 

[KD in CA]

2 hours ago, Foxx said:

This is complicated. Please allow me some time to gather the various thoughts on the matter and I will respond with the verbosity it requires.

Thanks.  Don’t forget to sufficiently dumb it down for us.

[Foxx]

10 minutes ago, B-Man said:

 

 

It’s the people who brought you 2022 — C’mon Gray Lady, make this panel happen!

 

In the meantime though, will SBF show up for this discussion, which was announced by the New York Times in October? Yellen, Zelensky and Zuckerberg Will Speak at DealBook Summit. The conference, scheduled for Nov. 30, will bring together the biggest newsmakers in business, politics and culture.

 

I see where someone said that he is not the biggest criminal on that panel. Not sure to whom the reference was though.

[Foxx]

51 minutes ago, Hedge said:

Thread

 

 

 Another, much longer, analysis thread on the filing.

 

The last Tweet in that thread

 

[Hedge]

 

The messages he is referring to are in the article linked below

 

 

 

 

[Foxx]

Some of the big boy names are starting to surface. The extent, or what exactly their role was, is not known at this time though.

 

JPMorgan Chase, Wells Fargo among potentially exposed FTX parties

Quote

... Currently it remains unclear as to the extent of the named organizations role in the collapse beyond the categorization. 

 

A small selection of persons of interest includes: 

 

... Banks and Financial Entities

• Bank of America
• Circle
• JPMorgan Chase Bank, N.A.
• Wells Fargo
• Silvergate Bank

...

 

[Foxx]

Hahahahaha, what a shitshow.

 

FTX suggests Sam Bankman-Fried transferred assets to Bahamas government custody after bankruptcy: Filing

Quote

FTX in a bombshell emergency court filing Thursday said evidence suggests Bahamian regulators directed former CEO Sam Bankman-Fried to gain “unauthorized access” to FTX systems to obtain digital assets belonging to the company after it had filed for bankruptcy protection.

The filing said that Bankman-Fried transferred those assets to the custody of the Bahamian government. ...

 

... The accusations were made by FTX in a motion in the United States Bankruptcy Court in Delaware. In that motion, FTX said the alleged conduct puts “in serious question” a request by Bahamian regulators for recognition as liquidators in the bankruptcy.

 

″[I]n connection with investigating a hack on Sunday, November 13, Mr. Bankman-Fried and [FTX co-founder Gary] Wang, stated in recorded and verified texts that “Bahamas regulators” instructed that certain post-petition transfers of Debtor assets be made by Mr. Wang and Mr. Bankman-Fried (who the Debtors understand were both effectively in the custody of Bahamas authorities) and that such assets were “custodied on FireBlocks under control of Bahamian gov’t,” the filing said. ...

 

[Foxx]

Hahahahaha, what a shitshow.

 

A new bankruptcy filing shows the value of FTX's crypto holdings is just $659,000, after Sam Bankman-Fried said they were worth $5.5 billion

Quote

...A particularly jarring disclosure is that the total fair value of crypto held by FTX International was just $659,000 as of the end of September, compared to claims from its founder Sam Bankman-Fried's that the company held $5.5 billion in "less liquid" crypto tokens.

 

"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here," new FTX CEO John Ray III, who is overseeing the liquidation of the company, said. 

 

That's quite the statement coming from Ray, given that he oversaw the liquidation of Enron following its more than $60 billion bankruptcy in 2001. ...

 

[Foxx]

Bahamas confirms they control the remaining FTX crypto assets

 

[Ann]

From last week...
 

 

[Foxx]

On 11/16/2022 at 10:50 PM, KD in CA said:

Could this mess all have been avoided if people had listened to your “if you don’t have the keys, you don’t own the crypto” adage, or are these the wallets themselves collapsing?

This could get a bit wordy, so I apologize in advance. I will try to do a tl;dr at the end once I see what spills from these fingertips. 

 

Could it have? Sure. However, that is not a realistic expectation. People have been utilizing exchanges for a long time, and custodians for as far back as recorded history goes, probably even farther. The caveat here is that this is a new frontier within the financial realm, and with it comes the inevitable learning curve.

 

 

 

To start with, at present, exchanges are only good for two things. The first and probably most important of these aspects is that they serve as a ramp, on-ramps, and off-ramps for fiat; to get in and out of the game. Secondly, they exist because you can not exchange one digital asset for another without them. Exchanges make exchanging assets easy for the average user. As we have seen time and again, the thing they are not suitable for, is custodianship.

 

Regarding that 'average user,' many utilize exchanges as the on-ramp to get into the game. They transfer fiat, purchase certain crypto and then let their assets reside in that custodial wallet. They then don't do much with them, letting them sit there, hoping they will appreciate in time, whereby they can exit back into fiat.

 

In a largely unregulated environment, the average user must understand that using an exchange as a custodian for their property is ripe for experiencing a loss. It has happened innumerable times before and will happen again in the current environment. They don't know they can have a wallet they control and have the keys to. Or if they do, they are too lazy to invest the time required to understand what is needed and to employ that knowledge once gained. They trust the unregulated wild west, thinking it scrupulous when nothing could be further from the truth.

 

You also have the 'day trader' that utilizes an exchange for speculation and trading assets with regularity. Withdrawing assets in the manner a trader like this employs have the potentially negative effect of being cost prohibitive. Of course, it is not as prohibitive as losing one's stake.

 

A little bit more about the need for exchanges...

 

All crypto coin exists on their own blockchain, and all crypto tokens exist on a coin blockchain. You can also have many tradable tokens (not coins) on a particular blockchain (you still need an exchange to trade these assets). For example, Ethereum's blockchain allows for the 'smart contract,' which enables the creation of different tokens. ETH runs on an algorithm/blockchain known as Ethash. 

 

To further illustrate, you cannot trade BTC (SHA-256 algorithm) for LTC (Scrypt algorithm) on the same blockchain. Though blockchains are, when boiled down, essentially just immutable ledgers, they are not able to be intermingled.

 

Understand, what we are currently going through, termed the 'Crypto Winter,' has been experienced before. During the previous crypto winter that began in 2018, there were doubts that crypto would even survive. In a very relatively short period of time, BTC went from 5 digits to 4, ETH went from 4 digits to 3, and LTC went from 3 digits to 2. Back then, a ton of Shitcoins/Shittokens had little utility and, thus, little use. Perhaps the scariest thing to happen, though, was that things got very, very quiet. This current Crypto Winter began roughly at some point in 2021. This time around, there is little doubt that crypto will survive and that it is the future. Utility abounds, and use cases are all across the board now. At its high point, BTC was in the upper mid five figures, and it currently still resides at five figures, although admittedly, those are lower five digits.

 

 

 

Why do I say it stinks? Just look at the character that is Bankman (I swear Universe has a weird sense of irony). If appearances are any indication, there is no way in hell this kid is the mastermind of a billion-dollar empire. Add in the fact that you have a Harry Potter wannabe as the CEO of Alameda, and it just doesn't add up. To top things off, simply look at all the big names that are and have been associated with the creation and their ongoing involvement. I mean, it has just come out they didn't even have an accounting dept. How are these large entities investing without an audit of FTX's books? That shit just doesn't happen. The Ontario Teachers Pension Fund investing in it? In their defense, I guess, is the fact that they're just hosers, eh? What about Sequoia Capital? Again, that shit just doesn't happen in high finance. Then you have Kevin O'Leary, who said he would invest in SBF all over again. Yeah, okay, remind me never to follow any advice this idiot puts out there.

 

It just stinks all the way around. It stinks to high heaven, and one might even go so far as to say it was a takedown with ulterior motives.

 

If it was a takedown, what is the goal? More than likely, strict regulation. Regulation is not bad because it is needed in many areas here. I'm pretty sure, though, that the framework for that regulation primarily exists already. At this point, only the subtle nuances remain to be hashed out. 

 

I do have fears about the centralization of what those regulations will ultimately contain, though. Read; taking the decentralization of it away from the everyman. You remove the decentralization, and you are removing a core tenet of the whole crypto movement—freedom for the everyman from the machine. With crypto, you don't need a bank for custodianship. You can be your own banker. Unlike physical fiat (and/or precious metals), crypto isn't cumbersome to store yourself. Once you understand safe practices of how to do so, banks are useless as a store for digital value.

 

To this end, there is the coming CBDC that they are already testing. The CBDC, much like its counterpart, the US Dollar, is inflationary, meaning they can create it at their discretion. Long live Keynesian economics and the current model of finance.

 

Additionally, with that CBDC entity, there are much greater dangers involved. It can be controlled so that your social credit score will dictate how you can spend it. For that matter, how you earn it. However, this potential aspect is getting into the weeds and would require another lengthy response. I will only lightly touch on it by using the example of the "Digital COVID-19 Certificates" (point 23) currently being talked about in government circles worldwide. How will they control/enforce this? Why, CBDCs, of course. It will be hard-coded into the chain framework that they can disallow whomever to buy whatever they deem not worthy for an individual, based upon their social credit score and other factors they believe worthy of restricting.

 

 

In all of this here, my underlying fear is that this event may be the lynchpin for the next stage of the economic downturn (collapse, if you like) and push it all into something much worse than we saw in 2008. At the extreme end of that fear is a total collapse of the US Dollar. If the contagion reaches into too many areas of the institutional investor(s), it has this potential. If that contagion gets too deeply into the derivatives market... look out below; we are all screwed.

 

BTC and LTC are deflationary, and only a finite amount will ever be in circulation. The ledger is public, and because the algorithm is PoW (Proof of work (mining)), it is decentralized, and the chances of a 51% attack are just about impossible. My ultimate hope is that these types of crypto are what will ultimately win the day.

 

🤷‍♂️

[Foxx]

Does GBTC have what they say they have? It's easy enough to prove.

 

Grayscale Bitcoin Trust Says It Won't Confirm Its On-Chain Wallet Information Publicly

[Foxx]

Request for documentation

 

[Foxx]

If you think my perspective is out there, give the following a listen. A good 6 minutes. 

 

Portnoy is based.

 

I was never a real fan of his but my level of respect has been raised a notch or two with this.

[Foxx]

Question is, is the hacker an insider?

 

[Foxx]

One of the benefits of blockchain

 

[Nouseforaname]

 

[Foxx]

The CME head

 

[Ann]

Did Sam Bankman-Fried's Millions Buy the Media's Loyalty?

The mainstream coverage of SBF and FTX is more than a little blasé.

 

The public is only beginning to understand the full extent of alleged crimes committed by Sam Bankman-Fried (better known as SBF), a cryptocurrency entrepreneur who lost billions of dollars after his exchange, FTX, was revealed to be little better than a Ponzi scheme. SBF's net worth plunged from $10 billion to effectively nothing in the course of a few days. He has declared bankruptcy and was recently questioned by the police of the Bahamas, where he resides.

 

John Ray III, who was brought in to manage Enron following that company's self-destruction in 2001, is now the CEO of FTX. In a court filing last week, he said he has never seen such "a complete failure of corporate control," including at Enron.

 

"From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented," he said in a court filing.

 

</snip>

SBF was heavily involved in Democratic Party politics: In the 2022 election cycle, he was the second most prolific funder of Democratic candidates after George Soros. But he wasn't just a funder of electoral efforts. He funded both progressive and mainstream media organizations.

 

According to the journalist Teddy Schleifer, SBF gave money to Vox, the progressive news web site created by liberal bloggers Ezra Klein and Matt Yglesias. (Vox Media also owns several other outlets, including New York magazine.) SBF made a $3.25 million grant to The Intercept, which at the time of FTX's fall had already received $500,000 and was due to get the rest in the coming years. Acting editor-in-chief Ryan Hodge notes that SBF's bankruptcy will leave The Intercept with a significant hole in its budget.

 

SBF also gave money to Semafor, a new journalism project created by Ben Smith, formerly the media columnist at The New York Times and, before that, the editor in chief of BuzzFeed. And when FTX crashed, SBF was in the process of giving ProPublica a whopping $5 million. This was ostensibly in support of research to better understand the origins of the COVID-19 pandemic and to prevent future pandemics. And indeed, ProPublica's reporting on these subjects is well worth reading.

 

</snip>

 

Meanwhile, The Washington Post's reporting on this subject has centered on SBF's "pandemic prevention" spending. "Before FTX collapse, founder poured millions into pandemic prevention," writes the paper. "Most of those initiatives have come to a sudden halt."

 

Neither The New York Times nor The Washington Post were among SBF's beneficiaries, but it is striking how gingerly they have treated him thus far. These are both outlets that have sounded quasi-apocalyptic notes about how tech companies like Facebook and Twitter are ruining journalism, promoting misinformation, and undermining democracy. One hopes they wouldn't treat Bankman-Fried with kid gloves out of admiration for his philanthropy.

 

</snip>

[Ann]

Just a few crash pads