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Comment by kareemsabri | Hacker News Reader

According to this[1] when you dig into these deals the "savior of crypto" thing is mostly spin.

This submission seems like a PR piece for SBF / FTX.

1. https://protos.com/heres-why-sam-bankman-fried-is-not-the-jp...

Of course he did do it for profit, but still saved those companies and life of lots of people. Giving credit lines and improving risk management was crucial and Celsius leadership prefered destroying many peoples life over giving up control.

For sure. If I was an investor in a ponzi scheme, I would prefer a ponzi scheme that accepted a bailout from SBF rather than a ponzi scheme that continued paying executives millions of dollars of my money while those executives temporarily remain outside of prison and the company is in bankruptcy.

Grave misunderstanding. It was not because of "hoarding control" that celsius collapsed. No amount of giving up control can change the fact that it was a late stage ponzi running on borrowed time. You could extend that time but it would only cause further suffering by dragging even more people into that black hole

I don’t think it’s that simple. I got a loan against my Bitcoin at Blockfi last year, added more Bitcoins as collateral as price went down, and paying 13% interest rate. Another person can loan USD for 5-10% interest rate and Blockfi can manage payment timelines and put away money, just like a non-fractional bank would (for example the Norwegian thin bank).

The problem usually comes from the company loaning out my collateral. I would much prefer using a company that doesn’t loan out my BTC (but keeps it in a multisig wallet), but the best company that does this is US only.

Why would they pay interest on it if they are using it in a totally unproductive way?

In the case I described they pay interest on the USD and loan it out in exchange for BTC as collateral. It’s different from the scammy product that gives interest for BTC. The problem that makes the company scammy is not separating these 2 businesses (one is a valid business, the other is a ponzi sceme).

Makes sense! I misread your comment, sorry.

My take: they were reckless, careless, and incompetent. Basically executing a traditional dodgy-growth-fintech playbook. Executives not caring about long-term risk or ethics may or may not be influencing factors to that.

I'm just waiting for crypto.com to similarly blow up in the next big mess, whatever it is.

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