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[RTH10260]

At least $1bn in investor assets missing after FTX collapse – reports
Sources tell Reuters funds were part of $10bn founder Sam Bankman-Fried transferred to his hedge fund

Lauren Aratani
Sat 12 Nov 2022 20.00 GMT

Amid the fallout of the implosion of FTX, once the second-largest cryptocurrency exchange, at least $1bn in investor assets appears to be missing, according to multiple reports.

On Saturday morning, Reuters reported that FTX was missing at least $1bn in client funds, according to two anonymous sources who held senior positions at FTX and said they had been briefed on the company’s finances. The sources claimed the funds were part of $10bn in client funds that the FTX founder, Sam Bankman-Fried, secretly transferred to Alameda Research, the hedge fund he owns.

A later report from the Wall Street Journal added that it appeared hackers had actually taken $370m.

The moving of FTX funds to Alameda was one of a series of crises that led to FTX filing for bankruptcy and Bankman-Fried’s resignation on Friday.

Bankman-Fried told Reuters that he “disagreed with the characterization” of the transfer, saying: “We had confusing internal labeling and misread it.”

When asked about the missing customer funds over text message by Reuters, Bankman-Fried replied with: “???”

Separately, in a tweet on Saturday, FTX’s US general counsel, Ryne Miller, said that the company had detected “unauthorized transactions” and that it had moved all digital assets to cold storage, or offline, as a precaution. Elliptic, a cryptocurrency analytics and compliance firm, estimates that $473m in crypto assets were stolen from FTX last Friday night, though the specific amount has not been confirmed.



https://www.theguardian.com/technology/ ... sing-funds?

[RTH10260]

inside job '?

Yes, that would be my guess.

The longer I think of it, it's an inside job with knowlege of critical passwords, the exploit used to cover all the funds that had gone missing before.

[Gregg]

Okay, the FTX story has a few levels. I think they're all ponzi schemes but this one got set up.

They were first, a bank, that was trying very hard to act like they weren't a bank. "Put your coins here in our wallet and we will pay you interest on your coins" which, I mean, sounds a lot like a bank to me.

Your coins are backed dollar for dollar to fiat currency so there is no risk. Which begs me to ask "how then are you paying 9% APY"? but, they're not a bank so we're not allowed to ask that question.

One way they were paying that 9% was they had their own coin, FTT, and they were selling that to investors and such, creating their coins out of thin air, all while looking down their noses at the Federal Reserve for creating money out of thin air (do NOT get me started on how that is not true, just trust me it ain't true"

Okay, so there is another "not a bank" bank and the owner of that one is in a soap opera drama with the owner of FTX. FTX is owned by a guy who is called FSB (names are so passe', we go by initials) and the other one is Chinese and everyone calls him CZ. They hate each other, it's like JR and Bobby Ewing up in here. Why, dear lord, why, can "the future of money" not involve having to keep up with a soap opera?

Okay, FTX is backing it's ponzi scheme with reserves made up with FTT coins, and CZ came out and announced his not a bank was going to liquidate it's holdings in FTT because "it might be a ponzi scheme" which it was but that's a side point here.

Now CZ didn't really have much FTT but when he announced he was dumping it, everyone else panicked and they dumped theirs and since centralized future money is not in fact backed by things like cheap fiat money, there was a run on the bank and FTT collapsed.

The FTT that was propping up FTX.

Now, CZ, steps in to play the hero and says "I will buy FTX and save everyone" to much applause from the peanut gallery. But his "I will save you all" announcement has a "subject to due diligence" line in it. This is important.

When CZ stepped in FTX got sort of stable for a few hours, long enough for a lot of people to GTFO and then, don't ya know, "well, we looked at the books in our due diligence and NO DAM WAY THIS IS A FEKKIN PONZI SCHEME" and then FTX died.

They closed off withdrawals, FSB resigned (he of the "I'm a billionaire but I drive a 12 year old Camry" fame) and that's when the billion disappeared overnight to "unauthorized withdrawals"

You can do a few hour deep dive on Youtube, its a pretty good story for anyone who ever wondered "whatever happened to the guys who ran HYIPs on TalkGold?"

The invented crypto scams.

[GlimDropper]

[John Thomas8]

Been binging Coffeezilla overnight.

I'm so so happy I've stayed out of crypto.

[neonzx]

https://www.ftxarena.com/news/detail/mi ... ent-on-ftx

Miami-Dade County and the Miami HEAT has released the following statement:

“The reports about FTX and its affiliates are extremely disappointing. Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena. We are proud of the impact our Peace & Prosperity Plan — sponsored by County Commissioner Keon Hardemon and funded through the original deal — is already having in preventing violence and creating opportunity for young people across Miami-Dade, and we look forward to identifying a new partner to continue funding these important programs in the years ahead.”

Yeah, um, did they tear down the FTX signage yet?

Oh, and "naming rights" of sportsball venues is one of the many reasons I eschewed my "pro" sports fanboy status a few decades ago.

[FiveAcres]

https://www.ftxarena.com/news/detail/mi ... ent-on-ftx

Miami-Dade County and the Miami HEAT has released the following statement:

“The reports about FTX and its affiliates are extremely disappointing. Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena. We are proud of the impact our Peace & Prosperity Plan — sponsored by County Commissioner Keon Hardemon and funded through the original deal — is already having in preventing violence and creating opportunity for young people across Miami-Dade, and we look forward to identifying a new partner to continue funding these important programs in the years ahead.”

Yeah, um, did they tear down the FTX signage yet?

Oh, and "naming rights" of sportsball venues is one of the many reasons I eschewed my "pro" sports fanboy status a few decades ago.

It's kind of odd how many companies that have gone under purchased "naming rights" to sportsball venues. It's almost as if it's a signal of bad judgment by the C-suite.

[pipistrelle]

Oh, and "naming rights" of sportsball venues is one of the many reasons I eschewed my "pro" sports fanboy status a few decades ago.

[Dr. Ken]

This is why I put very little money in these digital coins. I think I put at most $300 which I know I'll never see again.

[RTH10260]

It's kind of odd how many companies that have gone under purchased "naming rights" to sportsball venues. It's almost as if it's a signal of bad judgment by the C-suite.

It gives an extra level of name exposure. It will be on tickets, it will be on road signs, it will carry over on maps, radio and tv will be speaking of the venue, plus memorabiliy and merchandise.

[Gregg]

https://www.ftxarena.com/news/detail/mi ... ent-on-ftx

Miami-Dade County and the Miami HEAT has released the following statement:

“The reports about FTX and its affiliates are extremely disappointing. Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena. We are proud of the impact our Peace & Prosperity Plan — sponsored by County Commissioner Keon Hardemon and funded through the original deal — is already having in preventing violence and creating opportunity for young people across Miami-Dade, and we look forward to identifying a new partner to continue funding these important programs in the years ahead.”

Yeah, um, did they tear down the FTX signage yet?

Oh, and "naming rights" of sportsball venues is one of the many reasons I eschewed my "pro" sports fanboy status a few decades ago.

Maybe they could call Enron?

[Gregg]

But you heard it here first, the next "OMG how could this have happened?" event in Cryptoland is gonna be Crypto.com collapses in a heap of "we're not having any problems-leading to they're having problems".

The announced today that they will be proving to investors that they are solvent.

An audited proof of the exchange's reserves will be published within weeks, Marszalek said on Monday. The exchange did not engage in any "irresponsible lending products," he added.

Which leads me to ask, if you have billions of dollars of other people's money, why have you never had audited proof of your reserves before? That alone screams "we don't have your money" to me at least.

There are hundreds of these "coin projects" that are big enough to be semi important, and no one has yet explained to me the need for any of them or the economic activity underlying why they have returns to brag about. If it's "the money of the future" there shouldn't be any investment returns, money, by definition, is a stable store of value (actually, by definition, money is a stable store of value that the government will accept as payment of taxes but let's give them a break) Money can not be subject to changing in value by 10% over a long weekend, if you have a million in the bank on close Friday it's bad for business if it's only $900k on Monday morning.

But even go past that and concede, for the sake of argument, that the world DOES need a form of money free of any government control or regulation. Explain to me why it needs more than one. Explain to me why it needs 500. Explain why it needs unregulated offshore exchanges where these things are traded to and fro mainly for the benefit of speculators, criminals and insiders.

Cryto is, and I'm serious here, the 1990s HYIP market made semi respectable mostly because the con men who run it have finally convinced enough people that it is so complicated that you just have to trust them there is a good reason, there is a good served, and there is something somewhere in the underpants gnome business plan that gets us to "profit", but only the gnomes know how.

[Foggy]

But you can generate crypto money just by running your computer! How cool is that?

And I like the part about - waitaminnit, gotta do mah Gregg London School of Economics voice here - the definition of money.

... money, by definition, is a stable store of value (actually, by definition, money is a stable store of value that the government will accept as payment of taxes but let's give them a break).

That's correct.

It's also dangerous, and metaphysically absurd, man.

So one time within the past 25 years, I went down to the bank and found that the state government done took all the money, because they mistakenly thought I owed it (I didn't), and it took a little time to straighten it all out.

And why did they take it, instead of, for example, stealing my car and selling it? Because they accept bank deposit money as payment of taxes, precisely as you described.

Whereas, if all my money was entirely imaginary, the state government wouldn't want anything to do with it!

So you gotta balance the pluses and minuses, is what I'm saying.

[Gregg]

I am still stuck on the "Why".

You think it makes sense to have "money" that is outside of central control?

Well, Cupcake, it's not. Just ask any number of criminals who have F'dA and FO on that. Ironically, the governments who cannot control your super sekrit money have made quite a bit of real, kind you can pay your taxes with money by the increase in value of what they seize before they get around to liquidating it. Before it goes to zero sometimes.

What government won't (notice I don't say can't) do is use the laws they use to protect most investors from con men who run fake exchanges where the numbers on a screen keep growing but the redeemable for cash money is going out the back door. Yeah, they'll occasionally step in after the crooks have run off with the cash and put some people in jail, but the crooks got to run if with the cash in the first place because they won't play whack a mole with 500 different coins on those very carefully Cayman Islands based exchanges who are quick to say they'll get around to showing audited financials in a few weeks that show they might even still have the billions of dollars of other people's money.

The only utility of all of it, every digital dollar of it, is for criminals. It's great for drug dealers, easier to launder than dirty $20 bills, and not hard to turn dirty $20 bills into. Most of the Apex drug suppliers won't even take cash anymore, they all want Bitcoin, as do ransomware criminals, arms dealers and other people who are hoping they can make it hard for the man to follow them.

Then there is the entire and for now more or less legitimate "Crypto Exchange Industry" that thrives off of there being 495 outright scams running off the reputation of 5 not quite fell to zero and almost legitimate scams (BitCoin, Etherium etc...) that have made millionaires out of hype artists who pass for the New Age Financial Genius Class, many of whom know about as much about Economics as a new recruit into the 699th Puppy Pilot Program. At least Coffeezilla admits he doesn't actually know what he's talking about, he is an entertainer, not a financial analyst. The rest of them think they're Warren Buffet because they have managed not to drown in the middle of the Gobi Desert. Eventually they will fall face down in a puddle though. Reality always figures it out.

[Foggy]

The only utility of all of it, every digital dollar of it, is for criminals. It's great for drug dealers, easier to launder than dirty $20 bills, and not hard to turn dirty $20 bills into.

Too also, a lot of email threats (we have vídeo, we have your password, pay or we ruin your life) demand bitcoin because it's unpossible to trace.

[Gregg]

The only utility of all of it, every digital dollar of it, is for criminals. It's great for drug dealers, easier to launder than dirty $20 bills, and not hard to turn dirty $20 bills into.

Too also, a lot of email threats (we have vídeo, we have your password, pay or we ruin your life) demand bitcoin because it's unpossible slightly harder than a personal check to trace.

FIFY

[RTH10260]

from the UK

Failure of FTX crypto exchange will have huge implications, MPs hear
‘Hard to imagine sector bouncing back quickly from this ordeal,’ committee is told

Alex Hern UK technology editor
Mon 14 Nov 2022 20.05 GMT

Most of the customers of failed crypto exchange FTX were institutions but the effects of its collapse are still likely to reverberate across the sector and may affect small retail investors, MPs have been told.

“What we’re hearing … is that the majority of the funds in that platform were from institutional investors,” Ian Taylor, the executive director of the industry group Crypto UK, told the Treasury select committee on Monday.

“Now there are many UK-regulated crypto exchanges that take retail money and they are at the moment hopefully OK. We’ve not seen anything. But … this is a super fluid situation.”

Even as Taylor was speaking in the parliamentary hearing, Travis Kling, head of crypto hedge fund Ikigai, announced his fund had become one of the first serious casualties of FTX’s failure and was now in dire straits.

“We had a large majority of the hedge fund’s total assets on FTX,” Kling said. “By the time we went to withdraw Monday [morning], we got very little out. We’re now stuck alongside everyone else.

“There’s a lot of uncertainty about what’s going to happen next … At some point, we’ll be able to make a better call on whether Ikigai is going to keep going or just move into wind down mode.”

“It’s hard for me to imagine the space bouncing back quickly from this ordeal,” Kling added. “Too many got burned too hard. It’s obvious now that the space has not done enough to identify and expel bad actors. We’re letting way too many sociopaths get way too powerful and then we all pay the price.”



https://www.theguardian.com/technology/ ... s-mps-hear

[Gregg]

They are all sociopaths.

[RTH10260]

Crypto exchange FTX expects to have more than 1m creditors
Bankruptcy filing says ‘questions arose’ about founder Sam Bankman-Fried’s leadership

Alex Hern UK technology editor
Tue 15 Nov 2022 09.52 GMT

The collapsed crypto exchange FTX expects to have more than 1 million individual creditors, the company has said in its first bankruptcy filing, scattered across more than 100 companies in the wider group.

According to the filing at the bankruptcy court in the US state of Delaware, where FTX US is based, Sam Bankman-Fried, the founder and chief executive, stepped down at 4.30am on Friday, “after consultation with his own legal counsel”.

“FTX faced a severe liquidity crisis that necessitated the filing of these cases on an emergency basis last Friday,” the documents say. “Questions arose about Mr Bankman-Fried’s leadership and the handling of FTX’s complex array of assets and businesses under his direction.”

The new leadership of the company has been in contact with a large number of law enforcement organisations, the filing confirms, including “the US Attorney’s Office, the US Securities and Exchange Commission, the Commodity Futures Trading Commission, and dozens of federal, state and international regulatory agencies”.

Typically, the Delaware bankruptcy court requires the company to file a list of the 20 largest unsecured debtors but FTX has requested permission to do things differently: because it has more than 100 companies filing for bankruptcy as one bloc, it wants to amalgamate all the claims into one list of 50 people and organisations.

“There are over 100,000 creditors in these Chapter 11 cases. In fact, there could be more than one million creditors in these Chapter 11 cases,” the lawyers say. “The debtors anticipate overlap among the various debtors’ creditor lists, and certain debtors may have fewer than 20 significant unsecured creditors.” The company has also asked permission to file notice by email, rather than post.




https://www.theguardian.com/technology/ ... kman-fried

[RTH10260]

when you need real money

Sam Bankman-Fried’s $40m Bahamas penthouse reportedly up for sale
Entrepreneur at center of FTX scandal put luxury residence up for sale the same day crypto exchange filed for bankruptcy

Edward Helmore
Mon 14 Nov 2022 19.17 GMT

Sam Bankman-Fried, the crypto trader entrepreneur at the center of the FTX scandal, reportedly put his luxury $40m Bahamas penthouse up for sale on Friday – the same day the cryptocurrency exchange filed for bankruptcy.

Bankman-Fried’s penthouse – “the Orchid”, located in Albany, an exclusive private community in Nassau – was listed by real estate agent Seaside Bahamas at $39,500,000. The offering was first reported on Twitter by Autism Capital.



https://www.theguardian.com/technology/ ... ftx-crypto

[Gregg]

The entire leadership team of his many companies live in that suite in a strange meth fueled polyamories relationship.

Seriously.....

Tumblr Blog Linked to Ex-Alameda CEO Explored Race Science, ‘Imperial Chinese Harem’ Polyamory

Posts from a since-deleted blog linked to Caroline Ellison, Alameda Research’s former CEO, reveal the FTX-affiliated executive’s controversial views.

This is the CEO of Alameda Research, the hedge fund that FTX loaned all the money to so it could prop up the value of FTX. She says she only uses elementary school math to run her quant dept.

Well worth the read just because these people are like MAGA Scientologist NXIUM Crypto-Bro Nazis who worship Mortal Combat Capitalism and have weird pseudo sexual human sacrifice rituals to an alter of Gordon Gecko. On acid.

[busterbunker]

FTX’s Bankman-Fried, Celebrities Face Nationwide Class Action in Miami Federal Court

In the class action, Adam Moskowitz is joined by David Boies and Stephen Zack of Boies Schiller Flexner as proposed lead counsel for the plaintiff.

https://www.law.com/dailybusinessreview ... 1016155554

[Kriselda Gray]

Does any one else find Bankman-Fried's name humorously* appropriate?



*well, humorous if you weren't one of the ones whose money the bankman fried..

[MN-Skeptic]

I was at the Apple Store a few days ago with my niece who was getting an Apple Watch. As we were sitting at the tech table updating the iOS on her phone so that she could pair the watch, we were chatting with an Apple tech who appeared to be around 30 years old. I mentioned that I had bought Apple stock 10 years ago. It has done well. Besides going up in value, I've received 40% of my purchase price back in dividends. The Apple tech didn't really understand how dividends worked. But he had made one investment... cryptocurrency. There are a large number of financially naive young folks who have only invested in crypto. With his accent, I'm not sure if the tech said his initial investment of $10K had lost 50% or 95%. But he wasn't going to sell. Oh no... it was going to come back. I told him to set up an IRA at Fidelity who had an office down the street and to invest in a low expense ratio total market index fund. I also recommended Investing Made Simple by Mike Piper, a great simple read that I've been giving my nephews and nieces when they graduate from college. Another tech who was listening to the conversation and appeared to be about the same age piped up that he had an IRA at Fidelity and agreed with what I was saying, so not all young folks are gullible, but I hurt for those who have looked for the quick return and instead end up losing a big chunk of savings.

[Gregg]

I can't even talk about crypto with anyone under 60 anymore.

The next 20 something who dropped out of his classical film program at Cincinnati State who looks at me and tries to say I don't understand how money really works is going to need a stretcher.