Crypto exchange FTX bails out lending platform BlockFi

ft.com

20 points·Hbruz0··7 comments

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Usually it's the government bailing out financial companies? Breath of fresh air.

> Usually it's the government bailing out financial companies?

Looks like crypto is crossing through free banking into late 19th [1] / early 20th century [2].

[1] https://en.wikipedia.org/wiki/Panic_of_1893#Effects

[2] https://en.wikipedia.org/wiki/Panic_of_1907#J._P._Morgan

Hah, yeah.

Can't remember where, but I read some comment that said:

"The crypto community's re-inventing modern banking, repeating every mistake along the way, and learning all the same lessons".

The description I subscribe to is that the crypto community is doing a completionist speedrun of 19th/20th century banking.

In 6 years they’ve done the first 40 years of fuckups. By 2032 we’ll be doing totally new sorts of banking.

Blockfi promised interested bearing accounts. So they basically were running a bank.

They paid 100M US in fines as a result.

So, if they end up losing depositors money, who will be responsible?

I think regulators should either come out with a corporate death penalty to forcefully unwind illegal banks or rescind regulations on running a bank. I am not a fan of this gray zone business building where you have to break the law and pay a penalty later down the line.

If depositors lose money, do the executives go to jail?

What’s more, if the that fine bankrupts the bank, then the government literally caused the problem they were trying to avoid (consumers losing their money)

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