The FTX First Day Declaration | Hacker News Reader

The FTX First Day Declaration

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"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here."

"From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented."

  - the guy who cleaned up Enron's mess

Damn!

Assets - liabilities:

  WRS Silo:                 ~1   million
  Alameda Silo:            ~12.9 million
  Ventures Silo:            ~0
  Dotcom Silo:              ~1.7 million
  Cash in other entities: ~700   million (<-- approximate based on the few "books and records" they could find; could be ~0)

That's it, that's all there's left. If that cash turns out to be an illusion then it's about 15 million tops. The obvious thing to ask is then, what happened to the billions?

These numbers are in the thousands so the Assets - Liabilities should be in the billions and not millions.

However, they did not do accounting for customer funds at all.

Whoops you're right, can't edit now.

So there's no other conclusion than this website was run by drugged up children.

However bad you think FTX was run, it's worse. They basically didn't keep track of anything, disbursed money to buy themselves houses in the Bahamas, etc.

It also seems, reading between the lines, that customers wired money to Alameda and this money never hit FTX and was just gambled away.

Contrast this to SBF's recent tweets and statements to the Vox reporter and you get a strong sense that SBF is somewhat delusional about his own competence and culpability in FTX's collapse. From the Vox DMs his biggest regret was filing for chapter 11, which suggests that he somehow wanted to continue running this shitshow with a huge hole in the balance sheet.

Go to any casino at 4am and you'll find the same mentality.

He's just angry he got kicked off the blackjack table because now he can't make it back up by gambling more

> Go to any casino at 4am and you'll find the same mentality.

At least the casino can tell you how much you've lost.

Also seems likely they staged a "hack" to suck out a few hundred million on the last day. Nice!

"The Debtors did not have the type of disbursement controls that I believe are appropriate for a business enterprise. For example, employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis."

What a clown show, how did the big money investing in this (the retail money should have known better than to fall for "guaranteed returns" too but the big money was in a place where they could demand more than the hilariously bad "balance sheet" that was revealed a few days ago) not at least demand they have an actual accountant or two on staff managing their books? Some schmuck with no real accounting background using QuickBooks would have done a better job than these jokers. But I guess that was part of the point, letting the money flow fast and loose without any oversight is part of what makes the scam possible. Just glad I never got on the crypto hype train.

While the original investment might have been made in a bullish market, there is no excuse for the investors being deluded after the Luna collapse.

"Unacceptable management practices included the use of an unsecured group email account as the root user to access confidential private keys and critically sensitive data for the FTX Group companies around the world"

No wonder they got "hacked" and lost $400 M.

Now that’s something, coming from the guy who was wrapping up Enron

If this is FTX, which was supposedly among the cleanest exchange - do think where the rest of the industry will be at.

As David Gerard said: every crypto exchange is Quadringa, it's just a matter of which ones have exploded and which ones are yet to.

Coinbase seems like they are doing everything right? They might be the last one standing if they're actually being boring and following the rules.

....at which point the cryptocurrency sphere will be entirely centralized (apart from the very small number of people holding everything in their own wallets).

Yeah. It may just be the best on/off ramp for crypto but but without any real compelling applications for it idk what that's really going to accomplish. You'll still be able to pull crypto out and spend it.

If they are the last ones standing and find a way to run a profitable business, then we may just see more competitors crop up that aren't actually scams. Or maybe existing banks will jump in. Who knows.

How can you be into Crypto and not be using a Cold Wallet, isn't that one of the key points of Cyrpto to not have one company/country control you assets. You should just keep your money in PayPal if you leave your Crypto at a Broker.

For some small number of crypto enthusiasts, sure! But for most—at least as I anecdotally experience things—the one thing the vast majority of crypto enthusiasts are into crypto for is: number go up.

Link to the actual doc: https://pacer-documents.s3.amazonaws.com/33/188450/042020648...

If only there were some decentralized finance technology out there that could be used to avert such things.

In all seriousness, the entire point of crypto-currencies is they are decentralized and transactions are open and traceable. People then setup companies that provide a centralized opaque facade over that. I'm sure the media will paint this event as the "crypto bubble popped" or some such thing but I really hope some journalist out there will report about how people can (and should) own their own wallets or at least demand hosted wallets be transparent and transferable between exchanges.

Yes, workers should own the means of production directly, not let a Party take control! Please, just embrace this idea of perfect utopia and ignore how things work in the real world.

Glad to see they weren't able to completely fuck up LedgerX in the ~year they had it.

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