the first deceit of "finance"
one thing i keep seeing pop up is how people keep confusing VALUE with VALUATIONS
for instance
FTX had a valuation of ~$32billion.. but. FTX never had ~32billion of cash/assets
the ~32billion valuation was made up by FTX creating shares. and only selling a small percentage of those shares at a price where that price was then used as a multiplier against all combined shares to give a full valuation amount
EG
imagine it was 32billion shares it created but only sold 1 share for $1
instantly where by FTX only ever received just $1 created his company valuation of 32billions shares to be worth $32billion
you see it on TV shows like sharktank /dragons den
where they pitch their business at an ask of: $£100k for 5%
they are only asking for £$100k of actual cash to change hands.. but the judges/investors then scream
"are you really valuing your business at $£2million"
this is the first deceit of "finance"
Topic: FTX drama and it’s long term consequences: Bitcoin is a confidence Game. - page 2. (Read 672 times)
November 15, 2022, 06:39:04 PM
November 15, 2022, 06:38:15 PM
Many exchanges have already said are going to significantly improving their operations and transparency adding proof of reserves, as a first step
I'm not convinced this goes far enough. Proof of reserves means little without proof of liabilities. If you don't know what these people are doing with the funds they hold, what their financial obligations and debts are, etc, then there's no guarantee those funds are secure.
Proof of reserves is a first step.
This is a technically possible step that can be done with little development in exchange infrastructure. With publicity auditable results and also reproducible anywhere.
What you are requesting is an accounting auditing. Something is certainly possible and actually done in most of western "regulated" countries.
Of course there's not universal recipe for this, but small incremental steps in the right direction.
November 15, 2022, 04:23:51 PM
https://news.bitcoin.com/kevin-oleary-ftx-collapse-is-a-turning-point-for-the-industry-crypto-bottom-is-in/
Kevin O'Leary, Canadian VC/investor, FTX poster boy, is now calling on the U.S. to regulate crypto industry after his investment into FTX goes up in smoke.
I figured it was only a matter of time for industry regulations were amongst the horizon -- they'll be using a corrupt exchange as an excuse to target bitcoin as if FTX was any different than Lehman Brothers when it collapsed. And ironically, the government interference is what originally incentivized Lehman Brothers to have their mortgage backed securities inflate well beyond what they could handle.
Kevin O'Leary, Canadian VC/investor, FTX poster boy, is now calling on the U.S. to regulate crypto industry after his investment into FTX goes up in smoke.
I figured it was only a matter of time for industry regulations were amongst the horizon -- they'll be using a corrupt exchange as an excuse to target bitcoin as if FTX was any different than Lehman Brothers when it collapsed. And ironically, the government interference is what originally incentivized Lehman Brothers to have their mortgage backed securities inflate well beyond what they could handle.
November 15, 2022, 10:18:17 AM
What we really need is for somebody to get Bernie Madoffed (yes it's a term now) for a fraud like this and then die in prison. Or at least get a prison term that means they will eventually die there.
Not saying it will fix the problem, people will always want to get some of the 'free money' and there will always be someone there to swindle them. But, without any fear of punishment there is no reason to stop.
Just my view. But, like the Onion headline ChiBitCTy posted, so long as we expect to get scammed and the people scamming us to get away with it, it's going to keep happening.
-Dave
Not saying it will fix the problem, people will always want to get some of the 'free money' and there will always be someone there to swindle them. But, without any fear of punishment there is no reason to stop.
Just my view. But, like the Onion headline ChiBitCTy posted, so long as we expect to get scammed and the people scamming us to get away with it, it's going to keep happening.
-Dave
November 15, 2022, 10:12:51 AM
Why he can't help FTX then? FTX is a strong centralized exchanges since many people said it's a Binance killer, but when FTX is in crisis of liquidation, Binance didn't do anything and just said they're already tried their best. This mean CZ initiative is just a marketing, he will help a small exchange only and he will not help a big exchange that can beat Binance.
Regarding the cancellation of Binance's acquisition of FTX, CZ explained when attending the B22 Summit 2022 in Bali and was asked about the collapse of FTX and why it didn't help him. Nothing can protect an industry that is played by bad actors, including the crypto industry that is led by bad actors. good at lying."To be honest if a man is really good at lying, and he's really good at pretending to be what he's not. The law can't prevent that. But the law can help to reduce [emerging bad actors]," said CZ,
Another reason is that FTX misappropriated customer funds and mishandled it, which is why Binance did not want to acquire FTX.
Actually Binance is encourage their users to leave their coins on Binance, it's what SAFU actually mean. Everyone shouldn't get baited by Binance marketing strategy and must leave coins on hardware wallet.
About Binance Marketing, it is Binance's right, we can only decide whether to use it or not. The most recommended is indeed storage in a hardware wallet. But there's nothing wrong with SAFU funds, they are a safe choice for customer assets. 
November 15, 2022, 10:08:14 AM
and for user protection, Binance has announced that its SAFU Fund ( Secure Asset Fund for User ) is already worth $1 billion. Binance made a promise to the users as well as the ecosystem of wider crypto to maintain more adequate levels and will be built. In addition to protecting the interests of users, the SAFU definition includes three important components regarding mass adoption: trust, integrity, and transparency
Going forward, SAFU will continue to be a core part of our responsibility to the ecosystem, and we will continue to evolve to adapt to market conditions.
Going forward, SAFU will continue to be a core part of our responsibility to the ecosystem, and we will continue to evolve to adapt to market conditions.
So the solution to the problem of a big pile of money that a custodian could run off with is another big pile of money that a custodian could run off with? Tell us another one.
Seriously, have people learned nothing?
Many exchanges have already said are going to significantly improving their operations and transparency adding proof of reserves, as a first step
I'm not convinced this goes far enough. Proof of reserves means little without proof of liabilities. If you don't know what these people are doing with the funds they hold, what their financial obligations and debts are, etc, then there's no guarantee those funds are secure.
November 15, 2022, 10:04:04 AM
Alameda Research Portfolio: coins with the worst weekly performance!
$HXRO, $FTT, $SLRS, $SRM, $MAPS, $LIKE, $SOL
$HXRO, $FTT, $SLRS, $SRM, $MAPS, $LIKE, $SOL
Yes and this is how their assets looked like pretty much. Basically a bunch of coins that they minted and they pretty much set the prices. And this is where they got $3B worth of illiquid digital assets.
Coins like $SRM have such little bids that there is no way they would get the entire amount they claimed on their bankruptcy filings. Same with the other coins. And those investments that they did in companies are also useless because most of those will go bankrupt before anyone sees any money.
November 15, 2022, 09:09:41 AM
This is a great idea to mitigate the negative impact of Drama FTX furthermore, Binance is establishing an industry recovery fund that will help projects that are strong but in the crisis of liquidation.
Why he can't help FTX then? FTX is a strong centralized exchanges since many people said it's a Binance killer, but when FTX is in crisis of liquidation, Binance didn't do anything and just said they're already tried their best. This mean CZ initiative is just a marketing, he will help a small exchange only and he will not help a big exchange that can beat Binance.Quote
Going forward, SAFU will continue to be a core part of our responsibility to the ecosystem, and we will continue to evolve to adapt to market conditions.
Actually Binance is encourage their users to leave their coins on Binance, it's what SAFU actually mean. Everyone shouldn't get baited by Binance marketing strategy and must leave coins on hardware wallet. November 15, 2022, 08:42:19 AM
Alameda Research Portfolio: coins with the worst weekly performance!
$HXRO, $FTT, $SLRS, $SRM, $MAPS, $LIKE, $SOL
https://altfins.com/wp-content/uploads/2022/11/alameda-research-portfolio.png
$HXRO, $FTT, $SLRS, $SRM, $MAPS, $LIKE, $SOL
https://altfins.com/wp-content/uploads/2022/11/alameda-research-portfolio.png
November 15, 2022, 08:14:42 AM
-snip-
This is a great idea to mitigate the negative impact of Drama FTX furthermore, Binance is establishing an industry recovery fund that will help projects that are strong but in the crisis of liquidation.Even Justin, as the founder of Tron, fully supports Binance's initiative to set up the recovery fund.
CZ some time ago also visited Indonesia at the B20 Summit 2022 event, CZ said he wanted the industry, as well as regulators, to be responsible for cleaning up their actions.
“We will try to gather other industry players together to form an industry association globally, and try to address some common standards in business,” said CZ, citing recent crypto market events as the reason for the initiative. "as soon as possible.".
and for user protection, Binance has announced that its SAFU Fund ( Secure Asset Fund for User ) is already worth $1 billion. Binance made a promise to the users as well as the ecosystem of wider crypto to maintain more adequate levels and will be built. In addition to protecting the interests of users, the SAFU definition includes three important components regarding mass adoption: trust, integrity, and transparency
Going forward, SAFU will continue to be a core part of our responsibility to the ecosystem, and we will continue to evolve to adapt to market conditions.
November 15, 2022, 07:20:51 AM
This is yet again another moment to go back to basics. We have been doing this a number of times. But since we're always failing to learn lessons, history is bound to repeat and we're once again forced to be reminded of the most fundamental principles of nothing else but Bitcoin.
Yep, and I hate to say it but there's no progress in financial intelligence because each generation has to learn the hard way on its own. That's why booms and busts keep happening every 10-20 years, over and over again.Some of the Youtube videos I've been watching are by people in their 20s, and they're talking about things that seem really obvious to me but are apparently new to them. I'm not blaming any of this crap on the younger generation by any means, but SBF and other big time crypto scammers are all young and obviously ignorant, no matter how wise they've been previously portrayed in the media.
Everything in trading, investment, and finance is a "confidence game". It always has been, going back to the days of JP Morgan and well beyond that. Anyone who uses a centralized exchange has to have some sort of confidence in it, regardless of how little. Anyone who trades with anyone else has to have confidence in their counterparty. No matter how trustless we'd like things to be, if we're buying or selling bitcoin we've got to have a smidgen of trust somewhere.
This whole thing is ugly to the tenth power.
November 15, 2022, 02:18:11 AM
[/li][/list]
<...>
- Exchanges: instead of focusing on crystal clear operations, regulations and service for clients, setting up convoluted tokenomics schemes, in the best hypothesis out of levity on unintended consequences, but often in dire fraud Hopefully this will lead to a refocusing on that matter the most for their clients
It's a start, it's a free market solution, not imposed by regulators, but from the market itself.
It might be marketing, but rest assured also de FDIC insurance is marketing, as it is not capable of savaging anything during a global deposit run.
Binance Starts Recovery Fund for Crypto Projects Facing Liquidity Crisis
Quote
November 15, 2022, 12:18:23 AM
The problem here is that there is absolutely zero accountability. Sam Bankman-Fried stole about $10 billion of customer funds and then diverted them to his own trading firm. When all that money lost as a result of his own bad judgement, he just came up with an apology. He said, "I am sorry" and that is it. All the funds are gone and the customers are left high and dry. And the joke here is that Sam Bankman-Fried will not face imprisonment even for a day. He was one of the top donors for the Democrat party, and the powerful members of that party will make sure that he remains protected from arrest.
This sounds like a lot of conjecture. There’s no final resolution yet to this story and there’s a lot yet left to be done. I’m not saying he will serve the time he deserves in a prison cell, but I think there’s still plenty of opportunity for him to be charged, arrested and tried.
However there is some silver lining to this story, it sure has taught people a very valuable lesson, one that hasn’t been learned by so many that should have via the Mt Gox days.
November 14, 2022, 10:29:58 PM
The problem here is that there is absolutely zero accountability. Sam Bankman-Fried stole about $10 billion of customer funds and then diverted them to his own trading firm. When all that money lost as a result of his own bad judgement, he just came up with an apology. He said, "I am sorry" and that is it. All the funds are gone and the customers are left high and dry. And the joke here is that Sam Bankman-Fried will not face imprisonment even for a day. He was one of the top donors for the Democrat party, and the powerful members of that party will make sure that he remains protected from arrest.
November 14, 2022, 02:44:57 PM
When everything started, it wasn't about centralized exchanges, lending platforms, investment opportunities, security tokens, lending, and so on and so forth. It was purely about freedom, ownership, peer to peer, transparency, censorship resistance, and so on.
I doubt that we'll ever get away from centralized exchanges. Its becoming part of the crypto ecosystem already wether we like it or not and yeah we stranded far away from original intention of bitcoin being created but its already part of it for now. Most people that get into crypto nowadays dont even know the term of " not your keys, not your coins" anymore
I can only hope that as soon as the dust settles down, there will be a significant change of behavior in the community, although I have doubts.
The effect is pretty decent though for the community. Abit off topic but imagine what would happen if it was Binance
November 14, 2022, 02:05:35 PM
I do agree that as long as there is confidence to any part of crypto then there would be a good amount of price increase, and when there isn't enough trust, to either the security or safety or the price or anything, then it doesn't do well at all.
That’s not something uncommon in the market, when we are talking about let’s say stock market, we would definitely not have anything major there neither, if people lose all their trust and hope about Apple or Amazon, they would definitely not invest into that or sell too. This is why I believe that trust and confidence and even "liking" something all matters even though it is mostly about numbers and data.
That’s not something uncommon in the market, when we are talking about let’s say stock market, we would definitely not have anything major there neither, if people lose all their trust and hope about Apple or Amazon, they would definitely not invest into that or sell too. This is why I believe that trust and confidence and even "liking" something all matters even though it is mostly about numbers and data.
November 14, 2022, 08:19:01 AM
Sharing is caring so here’s the list above for all the project connected and exposed to SBF and FTX that needs to be watch out on coming weeks for caution. I’m sure that the ripple effect will be experienced in long term because the main funds source is already busted. As Elon already stated recently, Bitcoin will survived but long crypto winter is inevitable which means worst is still not come.
*Photo is not mine. CTTO
November 14, 2022, 08:12:06 AM
At least now the people who keep their assets on the exchange have been forcefully made aware of what happened to FTX. And I think sometimes we have to take a stance before running fast, or we have to pull the arrow back before releasing the arrow to shoot forward. so the tragedy that happened to LUNA and FTX can actually be a lesson and a springboard for a better crypto future. so that the cryptocurrency world is cleaner than people who cheat. And now it seems that people have gradually left Cex and turned to Dex. and that's a positive thing to take.
November 14, 2022, 08:08:42 AM
At this point it seems obvious that FTX was a giant scam.
FTX gave a giant loan to Alameda and this loan was backed by the FTX token(which is financial nonsense). FTX wasn't supposed to use people's coins to give loans to a company, which is somehow connected to FTX. This is illegal and Sam Bankman-Fried will have to face the law.
There are rumors about SBF running away from the US and going to Argentina and the FTX team will try to cover this scam by claiming that the exchange was "hacked". It's pretty clear that FTX wasn't hacked, this is simply an exit scam.
Bitcoin is a confidence game, but the confidence in Bitcoin would be way higher if the crypto world wasn't full with scam companies like FTX, Voyager, Three Arrows, Terra/Luna, etc.
Bitcoin/crypto should return to the roots and we as Bitcoiners should forget about all the sketchy high leverage, high ROI, crypto projects.
FTX gave a giant loan to Alameda and this loan was backed by the FTX token(which is financial nonsense). FTX wasn't supposed to use people's coins to give loans to a company, which is somehow connected to FTX. This is illegal and Sam Bankman-Fried will have to face the law.
There are rumors about SBF running away from the US and going to Argentina and the FTX team will try to cover this scam by claiming that the exchange was "hacked". It's pretty clear that FTX wasn't hacked, this is simply an exit scam.
Bitcoin is a confidence game, but the confidence in Bitcoin would be way higher if the crypto world wasn't full with scam companies like FTX, Voyager, Three Arrows, Terra/Luna, etc.
Bitcoin/crypto should return to the roots and we as Bitcoiners should forget about all the sketchy high leverage, high ROI, crypto projects.
November 14, 2022, 04:34:58 AM
The essence of finance is consensus. If there is confidence in the consensus, the price of the currency will be higher and higher, and the industry will become more and more prosperous. Once the confidence is blocked, the consensus will also be blocked. At this time, the consensus will collapse, and the confidence will become more and more prosperous. Collapse, consensus building and confidence are the basic principles of value.
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