He owned a stake. The terms are not at all public (some places say 600 million, but that is like all his money so he probably didn't put that much in the company)Astronuc said:It appears Brady may have invested in FTX. Did he own a stake? Was he a board member? Or was he simply hired to market the company?
It depends on how you define "scam". Were beanie babies a scam or just a cleverly orchestrated but honest bubble that got out of hand? I'm not sure if any of the people who run the exchanges are honest believers, but I'm also not sure it matters. I'm not a person who believes that well-meaning ignorance is a viable excuse for wrongdoing.fluidistic said:Many cryptos are a scam, yes, but not all of them.
Isn't Tom brady at best funneling money into a ponzi scheme by ignorance? This post makes it sound like you do think he is to blame on some level.russ_watters said:I'm not a person who believes that well-meaning ignorance is a viable excuse for wrongdoing.
No. He's a talking billboard, and that's it. The fact that he's a human with a brain is not relevant because it isn't being used - that's just not his role. His responsibility for the company is the same as the Geico Gecko's.Office_Shredder said:Isn't Tom brady at best funneling money into a ponzi scheme by ignorance? This post makes it sound like you do think he is to blame on some level.
russ_watters said:No. He's a talking billboard, and that's it. The fact that he's a human with a brain is not relevant because it isn't being used - that's just not his role. His responsibility for the company is the same as the Geico Gecko's.
Oh, absolutely. Because this talking billboard is a licensed representation of an actual person, it holds more sway with some people than a cartoon reptile voiced by an unknown person. It's something I don't get, but I'm aware it exists. Branded clothing makes sense to me because you are wearing the actual licensed image/logo. Other celebrity endorsements don't. No, Tiger, I'm not buying a Buick. I don't care that they lent you one.gmax137 said:I can't disagree with this, but... There is a reason celebrities are used as spokesmen; they apparently do have a convincing effect on at least some viewers. So, while we can agree that "the viewers should be aware that Tom Brady is not an investment advisor," we should also recognize that many viewers will be swayed by his endorsement.
Yes, I can totally see why it makes some people mad at him. I have bigger beef with him though.And so, it seems that endorsing a criminal (?) enterprise should really have some consequences. In other words, we "wish" Brady would be penalized somehow.
No, I haven't, but while that's sleazy wording it doesn't actually say anything of value. It's not inconsistent with "I haven't put any thought into this."This got me thinking, have you seen the advertisement where Police Commissioner Reagan is endorsing reverse mortgage loans? He even says something like "If I thought this is a scam I wouldn't do this commercial." So, should we really really believe him?
Luisa Beltran obtained documents that showcase SBF's style. “With each round FTX raised, Bankman-Fried sent a spreadsheet to potential investors displaying items like revenue, profit and losses, daily users, and expenses for FTX, according to an executive who received the documents,” Beltran writes. “Fortune was sent two sets of spreadsheets on the condition that we could review but not publish the original documents, which were dated December 2021 and June 2022.”
She continued, “Taken together, the documents show an early picture of an outrageously fast-growing enterprise run by a founder who eschewed traditional management structures, board oversight, teams of accountants and lawyers, and other standard practices of businesses that grow to this size. The spreadsheets are a far cry from audited financials; rather, they appear to be homespun Excel files, which are at times confusing and have inaccurate labels."
"They are sales documents and do not provide a clear accounting of how FTX was valuing its various tokens or liabilities when calculating figures such as 'net profits,'" Beltran writes.
Doug Leone, billionaire venture capitalist at investment firm Sequoia Capital, said his firm had done “careful due diligence” when investing in now-bankrupt crypto exchange FTX, according to CNBC Friday.
I'm aware that Brady is a real person of course. What I mean by what I'm saying is that what we get from celebrity endorsements is exactly what you see/hear on the screen and absolutely nothing more. The reason they work is that people infer more than what they see based on what they know or think about the history of the person even though that has absolutely no bearing on what you are seeing on the screen. From that perspective, it's fake, not unlike an actor endorsing a product who you only know from his movies/TV (Wilfred Brimley).Office_Shredder said:It's not a licensed representation of a person
It *is* a person.
Why/based on what?They have to have some modicum of responsibility for what they say.
russ_watters said:Why/based on what?
I'm not talking about moral responsibility at all. If anything, I agreed with gmax that under certain circumstances it can be sleazy. This is about legal responsibility only. And I'd like to hear your actual logic please.Office_Shredder said:Your argument is as long as someone pays you to say something and you aren't regarded as an expert in that thing, then you have no moral or legal responsibility to decide whether to take that money?
What? I can't even...Like, if someone blames blonde people for all the world's problems and runs a commercial where Brady gets on TV and says "scalp a blond to help the world get along" while encouraging people to commit genocide, like yeah, I'm going to say that's messed up, and I'm not going to think "well nobody should regard him as an expert on who to genocide anyway so it's their fault for listening to him"
Well, money (and any regular stock) has those regulations (which crypto meant to circumvent, at least partially) around themselves (mostly) to prevent these kind of cases.kyphysics said:This this seems the story of crypto recently. What's the solution?
This is whats so f—-ing dumb, to fix the problem you need to recreate the government regulated financial system - banking regs, deposit insurance etc. that crypto was supposed to replacekyphysics said:Hypothetically, if you're a crypto supporter, how should the industry respond to this?
It seems weird, b/c part of the "appeal" of BTC/crypto is decentralization and lack of regulations. . . .Yet, those same selling points make it a target of heists and/or other "attacks," right?
Not saying the FTX Ponzi-gambling scheme was a heist/attack, since it was more about leadership's abuse of client funds, but just saying. . . .the industry as a whole just is constantly under attack.
You don't see hackers/thieves making off with Vanguard, Fidelity, Schwab accounts' money every other month to the tune of hundreds of billions. You don't see Bank of America, Wells Fargo, Truist, etc. getting robbed of hundreds of billions every month.
This this seems the story of crypto recently. What's the solution?
From what i understand your correct. Even a digital token needs to be tied to some more fundamental underlying structure in order for it to have any real power.Astronuc said:I'm still puzzled about tokens. Are they effectively derivatives, i.e.,. they derive value from some underlying crypto-currency. Why would one need to create tokens if one has crypto-currency, e.g., Bitcoin or Ethereum.
Well I might be stereotypical but it seems to me people who make their business in one of the minimally regulated tax havens are up to no good from the start.Astronuc said:The misappropriation of customer (and employee) funds should be investigated. I would suspect there is some criminal liability there, but is it under Bahamian Law? Where does US law apply?
Apparently a significant conflict of interest!Roger (Parloff) noted that the whole notion of FTX being an overseas entity which allowed for more leveraged and esoteric crypto trading, but not for U.S. customers, was fraught.
. . .
Parloff also pointed out that the relationship between https://www.alameda-research.com/, the now bankrupt trading company which SBF co-founded, and FTX was problematic.
I'm puzzled how $0.9 billion becomes $18 billion other than arbitrarily multiplying by a factor 20, or offering some kind of token collateral.Last month, FTX—of which Bankman-Fried owns nearly 60%—completed an industry-record $900 million fundraising at an $18 billion valuation. That valuation was 18 times higher than it had been 17 months earlier, at FTX’s first-round fundraising in February 2020.
Bankman-Fried also still owns 90% of Alameda Research, he says. Alameda’s digital wallet at FTX (which is not its only store of assets) contained over $10 billion in digital coins in mid-July, according to a screengrab he sent me. (More than $5 billion of that was “locked,” however—not yet eligible for conversion to conventional money—and another $4 billion was in FTT, a digital coin issued by FTX.)
But were the funds in FTX.us safe from FTX (Bahamas)?Basically, we’ve seen two approaches to cryptocurrency exchanges so far. One category of operation—companies like Coinbase Global (COIN), which went public in April, and Gemini, founded by Cameron and Tyler Winklevoss in 2014—have set up U.S.-based operations that attempt to comply scrupulously with U.S. regulatory frameworks, even though those are cumbersome and ill-suited to the nascent asset-class. As a result, these companies offer a relatively limited set of offerings—mainly spot-market sales of a select list of cryptocurrencies. (In June 2020, FTX launched a U.S. subsidiary, FTX.US—with offices in Berkeley, Chicago, and Miami—which also takes that conservative approach.)
Big returns or Big (or Bigger) Losses.a set of much more lucrative companies—like BitMEX, Binance, Bitfinex, and FTX’s international exchange—have taken a much riskier approach. They have set up offshore, and have offered a wide array of innovative products, including crypto futures, swaps, other derivatives, and “tokenized stock” (digital assets said to be tethered to actual stock holdings held by a custodian somewhere, like, in FTX’s case, a German bank). The offshore exchanges have also let traders—including unsophisticated retail traders—buy many of these volatile instruments on margin. Until last month, for instance, several exchanges, including FTX, spotted their customers margin ratios as high as 100:1; that is, you could buy a $100,000 position in a crypto derivative with just a $1,000 deposit!
I am not sure these terms are clear for you. Let's take a cryptocurrency, such as Bitcoin, or Ethereum. (Notice the capital letters). Their respective "tokens" are called bitcoins and ethers (no capital letter here), and these are the ones that are traded, and have some price in USD in exchanges, such as Binance/FTX, etc.Astronuc said:I'm still puzzled about tokens. Are they effectively derivatives, i.e.,. they derive value from some underlying crypto-currency. Why would one need to create tokens if one has crypto-currency, e.g., Bitcoin or Ethereum.
1) Buy a certain amount of a particular cryptocurrency by spending X USD. Wait some years and sell it at Y, where Y > X.Astronuc said:While I understand investing, I'm puzzled by trading - crypto-currency or tokens. Trading for what?
That is my understanding. Such activity seems criminal to me.artis said:The problem was that nothing of what he did was successful so he lost alot of money along the way but since he told no one then nobody knew, meanwhile he kept transferring real investment money into his own company, the news of which eventually got out + the value of his own FTT dropped dramatically because of general crypto lowering in value, then his rival Binance CEO decided to "dump" their own assets of FTT.
Sure other traders got scared dumped theirs too, until what do you know, Sam can't turn those dumped FTT's into real money any more to give back to the traders, because Sam had taken his real assets and plundered them and siphoned off to who knows where.
https://www.msn.com/en-us/money/mar...ng-to-ever-regain-investors-trust/ar-AA14insBBetween 1995 and 2000, the tech-heavy Nasdaq jumped 400% as internet usage surged, with investors piling into any stock with ".com" in its name.
But the Federal Reserve started raising interest rates in June 1999, which eroded those companies' cash flows and burst the tech bubble.
The Nasdaq had tumbled almost 80% from its peak by October 2002, with share prices of tech stocks including Amazon, Cisco, and current bitcoin bull Michael Saylor's MicroStrategy all plummeting.
The market started going south when the Fed (and central banks) started raising interest rates. Ostensibly, that was predictable, and Alameda should have been unwinding positions (bad loans?), but perhaps they couldn't if they were losing value.
Wait, so when I hear stories of businesses saying they accept bitcoin as payment, that's from an exchange? Sorry if this sounds ignorant, as I genuinely am not sure how this stuff works.Office_Shredder said:The flip side is holding the coin in your own wallet means you can't transact in anything other than your coin, and as we know crypto currency is fairly useless as a currency on its own right now. So you have to keep moving money back and forth with the exchange as you want to do trades.
No, this is mostly correct. If I have bitcoin in a wallet I can give it to you. This requires you to accept bitcoin as a payment (which isn't that common). The store owner probably wants to convert that back into dollars at some point, which also requires an exchange.kyphysics said:Wait, so when I hear stories of businesses saying they accept bitcoin as payment, that's from an exchange? Sorry if this sounds ignorant, as I genuinely am not sure how this stuff works.
I was under the impression if Joe Blow owns, say, 2 bitcoins and stores it himself (not with a third party), then he can just offer that to the merchant he wants something from, no? Are you saying at the point of payment, Joe Blow needs to still interact with a third party?
The last part is done with QR codes. I am 99.99999% sure open source QR code scanner exist. You don't have to "trust" anything, since you can compile the code and use for yourself if you're really paranoid.Office_Shredder said:No, this is mostly correct. If I have bitcoin in a wallet I can give it to you. This requires you to accept bitcoin as a payment (which isn't that common). The store owner probably wants to convert that back into dollars at some point, which also requires an exchange.
but let's suppose we're fully crypto. This is still weirdly tricky
. I still have to access my money
Your bitcoin (to take one example) is accessed by knowing a really long random string, like AefjkGU76ggGyjjFH678
Then from this string you generate a signature that people can verify you created, but nobody can easily fake. And then you send this signature off to the internet.
So like, how do you remember this key, and how do you generate new signatures? The answer of course is you don't, you have an app do it for you. This app is probably not made by you, so you're still trusting someone in this process.
fluidistic said:The last part is done with QR codes. I am 99.99999% sure open source QR code scanner exist. You don't have to "trust" anything, since you can compile the code and use for yourself if you're really paranoid.
Note that there are also, apparently, P2P solutions on the Internet, without passing by an exchange.
The explanation from some link that I do not have now: sbf/ftx would produce a cryptocurrency and only release a small quantity on the market, this resulted in a high valuation. While simultaneously producing a very large quantity of this same cryptocurrency and holding it away from the market. Now he assigns the same artificial high valuation from the limited open market to the massive quantities that he is holding.Astronuc said:I'm puzzled how $0.9 billion becomes $18 billion other than arbitrarily multiplying by a factor 20, or offering some kind of token collateral.
Did SBF/FTX disclose they were doing this and people STILL bought...b/c they genuinely valued those tokens that high? Or, did he hide it and that's why people bought what they thought was a much more limited item?morrobay said:The explanation from some link that I do not have now: sbf/ftx would produce a cryptocurrency and only release a small quantity on the market, this resulted in a high valuation. While simultaneously producing a very large quantity of this same cryptocurrency and holding it away from the market. Now he assigns the same artificial high valuation from the limited open market to the massive quantities that he is holding.
The enormous difference between a qr code source code and a defi one is that one can be understood by noobs in programming (high level language) whereas the other is horrendously obscure, decompiled version of a program, usually on par with assembly and requieres a mastery in defi programming itself. There is a huge diff.Office_Shredder said:Defi exchanges and dao's in theory are open code, but people still find exploits. The point is all of this requires more trust than holding a dollar bill in your hand, or even a credit card, for which you aren't liable for unapproved charges. Instead you have to hope an open source app doesn't have a sneaky backdoor, or else someone can steal all your money.
I found an example of 'serum', one of their (FTX) tokens.morrobay said:The explanation from some link that I do not have now: sbf/ftx would produce a cryptocurrency and only release a small quantity on the market, this resulted in a high valuation. While simultaneously producing a very large quantity of this same cryptocurrency and holding it away from the market. Now he assigns the same artificial high valuation from the limited open market to the massive quantities that he is holding.
https://www.msn.com/en-us/money/per...ameda-research-lose-so-much-money/ar-AA14iAotBankman-Fried helped incubate the creation of serum, which was released in 2020. Serum has a low circulating supply of coins–initially, only 10% of it was freely tradeable, while the other 90% was locked up for years. But technically, he could extrapolate and assume that, if the circulating supply of serum was worth $1 billion, then the market value of all the coins in existence was $10 billion. Then he could get loans based on that higher valuation. Bankman-Fried ran this playbook with other digital assets too, which became known as “Sam coins” to industry insiders, crypto investor Jason Choi has written.
Choi concluded recently in a tweet, “This is likely how Alameda/FTX incurred the multi-billion-dollar hole: Alameda pledging illiquid collateral to borrow money to finance bets, which got margin called as markets went down this year.”
Investing Borrowed Money in Other Crypto Players
Another capital drain was venture investments. According to PitchBook, Alameda made more than 150 investments across the crypto industry, including in bitcoin miner Genesis Digital Mining and now-bankrupt crypto broker Voyager Digital. Alameda apparently took out loans to fund those bets. As the crypto market crashed, lenders reportedly attempted to recall those funds that were tied up in these illiquid investments. FTX’s and Alameda’s executives then took the questionable step of trying to pay back some of those Alameda loans using FTX customer funds, the Wall Street Journal has reported.
Borrowing for Other Big Spending
The finances of Bankman-Fried’s cluster of companies are so complex and entangled that huge chunks of it remain a mystery–even to the lawyers, financial investigators and bankruptcy veterans who have taken charge. But according to bankruptcy court filings, FTX executives also took out billions of dollars in loans from Alameda to fund everything from political contributions to Bankman-Fried’s purchase for $650 million of a 7.6% stake in Robinhood. It’s unclear how these loans may have also added to Alameda’s losses on top of everything else. Alameda itself has outstanding liabilities of $5.1 billion according to a filing Thursday in the Chapter 11 bankruptcy case in Delaware.
FTX customer deposits were not tracked, according to a bankruptcy filing, leaving it unclear in the bankruptcy proceedings what’s owed to customers. An example of this confusion: the leaked FTX balance sheet shows $8.8 billion in liabilities, while the Thursday filing in the Delaware bankruptcy case shows only $6.4 billion.