When you owe the bank a million, you have a problem.
When you owe the bank several billion, the bank has a problem.
When the unregulated-bank owes billions to millions of people, I guess the people have a problem?
When you owe the bank several billion, the bank has a problem.
When the unregulated-bank owes billions to millions of people, I guess the people have a problem?
https://twitter.com/molly0xFFF/status/1550160830762782724
I think when massive scams like FTX start airing Super Bowl ads, we all have a problem.
The Federal Trade Commission (FTC) does handle fraudulent advertisements and the like.... If they even address your complaint, AND if the complaint comes in your favor, you are still guaranteed nothing.
And the "punishments" are at the level of 'just doing business' for most cases.
With FTX, its when rich people get hit is when the government gets involved. The rest of us can get stuffed.
Take note of every commercial you see and you'll notice that some huge % of them have dead bodies on their balance sheets, poisoned water, coups, criminal behavior. Like how the (unnamed?) main character of Fight Club's job as an insurance adjuster was to figure out if it was cheaper to do a recall or pay off the victims' families.
All that said, yeah absolutely no one even glancing at FTX's books before letting them in the room is very 2008-ish.
And a bank is not the ears of corn in the analogy. The thief here is FTX which is like the bank. You don't blame the corn for being stolen. Yes, blame the thief.
Edit - better explanations below this
Also a friendly reminder to everyone not to trust any exchange at all with crypto unless you're actively trading it, keep it in a wallet!
+1 to this. Remember the classic phrase that goes something like "Not your keys, not your crypto"
Like the Kraken ToS.
> Ownership. Title to Digital Assets shall at all times remain with you and shall not transfer to Payward, except as provided herein. All interests in Digital Assets we hold for Kraken Accounts are held for customers, are not property of Payward. As the owner of Digital Assets in your Kraken Account, you bear all risk of loss of such Digital Assets. None of the Digital Assets in your Kraken Account are the property of Payward. Payward does not represent or treat assets in your Kraken Account as belonging to Payward. However, a court may disagree with Payward’s treatment of your assets and subject them to claims of Payward’s creditors.
Which means that the current fad of "proof of reserves" means absolutely nothing without the liabilities side, both customer accounts and for the company itself.
The bankruptcy will divide whatever value is still left to be divided. Some of the missing value may be obtained from the malicious people behind the company through lawsuits, and some people may go to jail for knowingly scamming people.
In the end, this is not a bank, and the regulations protecting people from scummy banks, even the new legislations written after the 2008 crisis, don't apply.
This isn't the first business with millions of customers to go bankrupt. When such a company fails, getting your money back is your problem. Large-scale mismanagement and uneducated customer bases like this is the reason banks and other finance companies are under so much regulatory pressure.
the people are the problem
That should definitely be the case. The moral risk of anyone else covering this would be catastrophic.