Here’s a thread to discuss FTX
Here’s an article called, “The Crypto-Ignorant Person’s Guide To What’s Going On With FTX And Founder Sam Bankman-Fried.”
Well, you can’t get much more “crypto-ignorant” than I am, and so I read it. It’s okay as far as it goes, but it doesn’t really deal with much of the backstory. That backstory is loaded with rumor and further conspiracy theories; here’s another article that goes into some of this.
The “Ukraine angle” is especially fascinating when one considers the many links between that nation and various leftist anti-Trumpian factions in ours (Chalupa, Vindman, Biden’s once-aspiring “Czarina of Disinformation”, as well as Ukraine-born Danchenko of the infamous “Steele dossier”, not to mention all the ties between Hunter and Ukraine, Joe Biden’s demanding that the prosecutor investigating Burisma be fired, the activities of our embassy in Kiev, and the lobbying by Ukraine in DC’s swamp on behalf of the Democrats, as well as R Giuliani’s many, many warnings about the corruption in Ukraine, the money-laundering and human-trafficking capital of Europe. It remains to be seen how much of any of this will be covered by the MSM, but it may well be the scandal of the decade, and the tweet from James Woods is spot-on indeed.
J.E @ 2:29 says:
” It remains to be seen how much of any of this will be covered by the MSM….”
I think we all know the answer to this.
it never made sense to me, unbreakable encryption, how convertible to cash, what it was backed by, not that our monopoly money is much better, of course guess who gave bank freedman, his big debut,
From a wag, “Crypto is everything you don’t understand about finance and tech.”
“I think we all know the answer to this.”
Indeed, this is no doubt going to be shoved as surreptitiously as possible into the “Nothing-to-See-Here-Move-Along” File…
(That is, since it’s just another flagrant episode of massive Democratic Party FRAUD…what else is new…(shrugs shoulders)).
OTOH, what IS rather INTERESTING is this particular tidbit**—more, especially, its TIMING***:
“Taliban adopts full Sharia law in Afghanistan: Judges are ordered by Islamist group’s leader to enforce stonings, floggings and limb amputations”—
https://www.dailymail.co.uk/news/article-11425583/Afghan-supreme-leader-orders-enforcement-Islamic-law.html
** “tidbit” meaning, in this case, “outrage of the MOST expected kind”.
*** “TIMING” meaning, NOW that the “elections” are “safely”(?) out of the way…
Which is, CLEARLY merely another CONSPIRACY THEORY OF THE MOST VACUOUS VARIETY….
NO DOUBT.
Nonetheless, enquiring minds might want to ask whether there’s a connection between this “rather INTERESTING” (if “vacuous”) “TIMING”, um, issue…and the following “curious”, if inconvenient, revelation:
“IG: Biden’s $1B boondoggle to the Taliban-controlled Afghanistan unaccounted for”—
https://www.foxbusiness.com/politics/ig-bidens-1b-boondoggle-taliban-controlled-afghanistan-unaccounted-for
…which “inconvenient revelation begins rather inauspiciously with:
“The U.S. government gave $1.1 billion in U.S. tax dollars to Taliban-controlled Afghanistan in humanitarian aid since the U.S. withdrawal in August 2021 — and a top federal watchdog says several U.S. agencies are refusing to explain how the money was spent….”
I’m sure there’s a perfectly acceptable reason. (There always is….)
how did this work, that’s a fundamental element, it looks like a high tech ‘boiler room’ from my perspective,
Interesting possibility. Bankman “loans” himself $10 Billion from the foreign investment side FTX.com, and loses it in bad investments. The FTX.us side is still whole. How much did Ukraine invest in the foreign side? $10 billion? There will be a movie about this.
“Sam Bankman-Fried’s trading firm Alameda Research reportedly owes his crypto exchange FTX $10 billion after taking loans funded by deposits from FTX customers, according to The Wall Street Journal.”
“As economist Frances Coppola pointed out to the Journal, exchanges like FTX shouldn’t be investing customers’ money. “It shouldn’t be doing anything with those assets. They should literally be sitting there so people can use them,” said Coppola. That’s especially true for volatile markets like crypto, where collateral could swing in value from one day to the next.”
“Bankman-Fried also promised that FTX.us users are fine (the domestic exchange operates as a separate entity) and that everything going on relates to the FTX.com exchange available internationally. However, the FTX.us site now has a warning saying that “trading may be halted on FTX US in a few days” and tells investors to “close down any positions you want to close down.” It still says that “withdrawals are and will remain open.””
https://www.theverge.com/2022/11/10/23451484/ftx-customer-funds-alameda-research-sam-bankman-fried
It was a boiler room operation which at the center had a bunch of kids who all knew each other –“long time” — working the grift and having orgies. Sex orgies. Not kidding.
https://fortune.com/2022/11/11/sam-bankman-fried-crypto-empire-ftx-alameda-run-gang-kids-bahamas-who-all-dated-each-other/
Perhaps a Robert Palmer song?
Earnest young lad…
‘FTX Post-Mortem: Bankman-Fried Admitted The “Ponzi Business” Of Crypto Yield Farming Months Ago’—
https://ussanews.com/2022/11/09/ftx-post-mortem-bankman-fried-admitted-the-ponzi-business-of-crypto-yield-farming-months-ago/
How it’s done:
“Alameda Frontran Crypto Tokens Ahead Of New Listings On FTX”—
https://www.zerohedge.com/markets/alameda-front-ran-tokens-ftx-listed-them-their-exchange
But the sex sure was good…
File under: https://www.youtube.com/watch?v=qmRzbKNbTsY
This in from another site:
===
..There really was a red wave in the midterms, but it was macro-engineered to a trickle, as should have been expected. The scam of “malfunctioning” voting machines, the shortage of paper ballots, the tsunami of mail-in and late ballots, the temporary closing and slow-downs of polling stations, and so on would have been sufficient to determine an electoral result. 2020 was an early run for 2022, which in turn should be regarded as a template for 2024. I am absolutely sure that the Dems are now, even as we speak, preparing favorable ground for the next presidential election. As Stalin is reputed to have said, “It’s not the people who vote that count, it’s the people who count the votes.” To make Trump responsible for Democrat malfeasance is wholly misguided.
DeSantis is now the favorite among many Republican voters and almost all conservative commentators for the Party presidential nomination. Such passionate advocates seem to have missed two essential points:
In a rigged electoral system, no Republican candidate, not even DeSantis, can be expected to win a national election. DeSantis cruised to victory in Florida because, as governor of the state, he had the means and the authority to ensure a clean election. But he would be helpless against a massive crime organization, aka the … party, which effectively controls the electoral infrastructure, the physical apparatus, the paid loyalty of election workers, and the federal agencies that oversee the process. If the system is not repaired and made answerable to the people, there will never be a Republican president again.
https://pjmedia.com/columns/david-solway-2/2022/11/11/desantis-2024-think-again-n1645202
Gerard vanderleun:
See this for my opinion.
Tom Brady seems to have taken it down, but yesterday I saw a twitter post from him about the “safe” way to invest in cryptocurrency, while aiming a blow torch at a pile of what looked like money. Our long-time broker recently retired, and the new guy seems a bit more aggressive. That suits my husband; he’s done well with our investments. But I looked at the broker and said, “As long as you don’t tell me to buy bitcoin.” He rolled his eyes and said he would never advise that. I will not buy what I can’t understand.
Related:
“How World Economic Forum, others are hiding their past ties with FTX”—
https://nypost.com/2022/11/14/how-world-economic-forum-others-are-hiding-past-ties-with-ftx/
“Due to “poor internal labelling of bank-related accounts”, he (Bankman-Fried) said he “was substantially off” in his calculations of the sums the exchange had lent out to users to let them make leveraged bets – borrowing money to trade with, magnifying potential gains and losses.
That meant that he thought the company had enough money on hand to pay out 24 times the normal daily withdrawals – but in fact, it did not have enough to even pay out all the withdrawals on Sunday alone. “We saw roughly $5bn of withdrawals on Sunday – the largest by a huge margin.””
Riiiight!
“Bankman-Fried’s belated defence came hours after one FTX’s largest external investors had declared the company worthless. In a note to partners, the venture capital firm Sequoia said it had written down its $150m investment to nothing.”
“In recent days, a liquidity crunch has created a solvency risk for FTX. The full nature and extent of this risk is not known at this time. Based on our current understanding, we are marking our investment down to $0,” the investors wrote, in a message signed Team Sequoia.”
Ouch!
“Just two months earlier, the firm (Team Sequoia) had published a long self-congratulatory story about how its partners had invested in the company because Bankman-Fried was “obviously a genius” who had a vision to turn FTX into a super-app where you could buy everything from a bitcoin to a banana.
Other investors have lost similar sums, including the Ontario Teachers’ Pension Plan, which last year invested about $400m in the exchange, valuing FTX at $25bn.”
I thought public pensions were limited to the types of investments they could make. Fiduciary responsibility and all. I guess greed trumps everything!
“The leaks about Alameda turned into a crisis for FTX when Binance, the largest cryptocurrency exchange, announced it would sell its own major stake in FTT. The fire sale that followed crashed the value of the token far below the $22 floor that FTX had committed to support, and prompted the equivalent of a bank run at FTX itself, as customers raced to withdraw their deposits faster than the exchange could process them.”
Never trust a competitor!
https://www.theguardian.com/technology/2022/nov/10/cryptocurrency-exchange-ftx-now-worthless-says-key-investor
Saifedean Ammour is an author who enlightens people on why Bitcoin works as money in his short intro Willey book, “The Bitcoin Standard” (2018). His book begins by explaining what money is and how it functions. He has several (numerous?) Youtube videos on crypto currencies that you can view for free.
Slingshot Books via Audible has posted this outline of the first Chapter of “The Bitcoin Standard”:
“No time to read/listen to the original book? Get the main key insights from Summary of Saifedean Ammous’ The Bitcoin Standard in 23 minutes or less.”
A few key insights from chapter one:
“1. Bitcoin is the newest technology to serve the purpose of money. It is an innovation that takes advantage of the digital age’s technical possibilities to solve a dilemma that has long plagued humanity: how to transfer economic capital through time and space.
“2. To comprehend Bitcoin, one must first understand money, and there is no better way to comprehend money than to research its purpose and history.
“3. Money is a social convention. It’s a contract. If I give you something valuable, and you give me something valuable, and we both agree that the thing I gave you is worth the thing you gave me, then we’ve established the value of what I gave you.
“4. Many objects have acted as money throughout history, like gold and silver, copper, seashells, large stones, salt, livestock, government paper, precious stones, and, in some cases, alcohol and tobacco.”
These fundamental beginnings underpin what digitalised “currencies” are really all about.
You can also read Saifedean’s free paper online “Can Cryptocurrencies Fulfill The Functions of Money” via his website here
https://capitalism.columbia.edu/saifedean-h-ammous
at the Center for Capitalism and Society (at Columbia University).
It’s a more technical exposition of the far simpler first chapter of his “Bitcoin Standard” book.
Saifedean’s background is quite interesting because it explains why he sees through bovi excrement artists and advocates. He’s born a Palestinian and earned his first degree in mechanical engineering at the American University in Beruit. Heavily influenced by French science and engineering, his training was rigorously mathematical; the man can reduce after quantifying claims, finding the common terms. And then test the consequential claims.
He himself explains how his PhD field of study of trendy “Sustainability” about 15 years ago at Columbia turned him into a critic of both elite educational institutions and eco-enviro pretentious “thinking” at this LINK.
Saifedean’s two hour LONG discussion with author Alex Epstein finds him in supportive agreement with the latters analyses in exposing “Climate Hysteria,” newly posted at YT. https://www.youtube.com/watch?v=QXVrLIjNpG0
Tired of reading how appalling these special people are? Is your head spinning from all the strange fiscal strategy games explained and re-explained?
A sassy, smart, and satirical summary of the FTX collapse is found here in 99 seconds flat: “The FTX Collapse Explained in 99 Seconds” By Nobody Special Finance at Youtube: “Here’s a mountain of crypto-fraud mayhem crammed into 99 seconds.” https://www.youtube.com/watch?v=Ow-MN7qJnIY
You’ll either laugh once or twice in comedic delight — sadder but a Bit(coin) wiser — or else you need sleep more than even I do!
Not all crypto is fraud; some of it is just a pyramid scheme.
–Peter Zeihan
Kate,
“I will not buy what I can’t understand.”
If you and your husband have anything close to a normal American’s portfolio you are almost certainly invested in plenty you don’t understand. Do you own any treasuries? Explain the Federal Reserve system to me. Have you audited Fort Knox? How about the Federal governments’ debt system with its multiple balance sheets? Equities? Are you sure none of the CEOs of the corporations whose shares you hold are cooking the books? Investing company assets in Crypto? Have holdings in China?
None of this is intended to belittle you, or your husband. It’s meant as a brief synopsis of the fine kettle of fish we all find ourselves in.
This sounds like the cast of the Big Bang Theory, except that they’re all from MIT. Young genius nerds. They know math and computers but have no wisdom. They concoct a way to tap into the crypto craze and get rich. They are now gaining wisdom. Will be lucky if they don’t go to jail. Although being in the Bahamas may be some protection.
TJ’s book explaining crypto sounds interesting. I would mention that all nations currencies are backed by the taxing power of their governments. That taxing power depends a lot on the wealth of the country and the citizens ability/willingness to pay up. Thus, some currencies are much mor more valuable than others.
Currencies used to be backed by assets, like gold and silver in the national treasury. People have been willing to accept no backing since we went off the gold standard during the Nixon administration. That has led to the idea of Modern Monetary Theory. MMT theorizes that money is nothing more than numbers on computers, and governments can print or spend all they want to because we “owe it to ourselves.” We widely accept plastic cards as money now. Bills and coins are less used than ever. So, the reasoning goes, if plastic cards are valuable, why wouldn’t encrypted currencies be also? The value in plastic cards lies in the user’s ability to repay the money spent. Where is the value behind cryptocurrencies?
Crypto= hidden, concealed, secret
Cryptocurrency = hidden money.
Who wants to hide money? Drug dealers, tax cheats, fraudsters, and other shady types. Cryptocurrency has been sold as a place to salt your money away from prying eyes of ….whoever. But it has nothing behind it. No taxing authority, no gold/silver/real estate/bonds/etc. What is it worth? Aye, there’s the rub. Its only value lies in the secrecy. How many people really need that? It’s an investment in secrecy and that’s about it. Proceed with caution.
I’ve been reading about crypto off and on for several years now. One thing I notice is that there is a quasi-religious component involved.
Crypto is not just a clever tech hack to get around governments, banks and currencies. To many young people, mostly male, it’s the path to a brighter utopian future which must triumph over the present disappointing economic reality as good triumphs over evil.
They speak of “hodling” crypto no matter what with “diamond hands.” Hodl is “Hold On for Dear Life” and “diamonds hands” are hands so armored that no fire of dropping prices will burn them.
This morning Insty directed to me to this “City Journal” article:
______________________________
The crypto world, according to Olson, is filled not only with hype but also with professional scammers, broken promises, predatory and antisocial behavior, desperation, greed—and rage. Rage at how the post-2008 world had turned out, rage at how the American dream doesn’t seem attainable anymore, rage at whomever and whatever could be blamed for robbing the people inside that online world of what they felt they were owed.
https://www.city-journal.org/the-new-gnostics
______________________________
Of course this religious dimension doesn’t help but makes crypto enthusiasts even more susceptible to scams.
In the last gasp of American Indian Wars a medicine man arose who taught a special dance which would bring back spirits to help fight American whites. This was called the “Ghost Dance.” It failed of course.
https://en.wikipedia.org/wiki/Ghost_Dance
My son in law is in the investment / brokerage business, and he told me about 6 months ago that anybody’s portfolio really needed to have at least a little bit of ‘crypto’ in it. I didn’t say much about that, except to look mildly interested, but there’s no freakin’ way I’m putting money into crypto when I understand * nothing * about it. I’d rather go to Vegas and blow it on lap dances while playing the slots with both hands. Something I’d never do, incidentally.
I read somewhere last week – it might have been here – that Charlie Munger refers to ‘crypto’ as “Rat Poison, squared”. I couldn’t agree more.
All I needed to know about crypto was that governments could squash it without a moment’s notice by passing a law or changing a few regulations.
Many people only this year wanted to get in “on the dip” and ride Bitcoin > $100,000.
BTC peaked ~$64,000 and is now $16,811.60.
I be soory. Wha’ did cha sayyy?
On the idea of the story being buried: only the Ukraine-Democrat money laundering connection. The RTX crash-and-burn will be an (if not the) impetus to push through crypto regulation.
I’m inclined to think some, at least of ‘exchanges,’ like RTX, is warranted. They’re basically banks doing all the bank things only with cryptocurrencies instead of specie or fiat currencies. On the other hand, the only trust I have for the folks who wrote the law (conveniently, there was a set of regulations SBF was championing, and I’ve little doubt they can be spun as preventing RTX’s destruction if only they had been implemented sooner) is that it’ll be set up to guarantee an income stream for themselves and/or their party.
Related:
Scandal on steroids….
https://twitter.com/bpcostello/status/1592532560374288384?cxt=HHwWgMDSpaL755ksAAAA
Saifedean Ammour posted an hour long discussion last night, FTX: Bryond Ponzi.
https://www.youtube.com/watch?v=xCoEFPCCvBM
He confesses that he’d been approached about SBF by a journalist who had assumed — no, presumed — that he would know who the guy was. The journalist presumed this based on his intro book, The Bitcoin Standard. Dr Ammour did not.
His sense is that the very premise that SBF was legitimately wealthy was impossible. Therefore this was a scam from the very beginning. Positive reputation effects were exploited from the get go.
Trading Bitcoin, he says, is completely different from platform hosting,
which is analogous to Nasdaq — market making.
This is, he explain, is pure “shit-coin-nomics.” Almost pure
gaslighting ponzu scamming.
FDT trading consist of less than 200 addresses (not necessarily as many participants). There is almost no liquidity in this trading platform whatsoever..
The whole thing looked fishy from the start.
He then goes on through a timeline of publicly known events.
He states “Whom the gods would destroy they first make talk shit about Bitcoin” — when SBF states only days ago online “there is no future in Bitcoin.”
It Saifedean’s version of QED.
People put in more money because other people are putting in money.
It is feasible is that people naively believe the con man game. Therefore,
it grows until the accordion collapses.
CORRECTION: FDT should be “FTT tokens”