That needs to go back to the 80s to capture the SnL crisis. It dwarfs 08 in bank failures. It better indicates the conglomeration of the many banks into the few we have today.
I'm just hoping this time it's something absolutely outrageous just for the lulz of it all. Like, let's get some FTX-style absurdity. All the absurdity happens in crypto right now but I still have faith in regular banking. Some people still like the challenge of regulated markets.
Most noteworthy is that this quick 8 month turnaround is partially thanks to the blockchain, and under no new laws being passed
you got a good link for this? I stopped paying attention a while ago
https://www.reuters.com/technology/bankrupt-crypto-exchange-...
I think the claim they have "recovered 7.3 billion" is an overstatement... but time will tell.
https://www.reuters.com/technology/bankrupt-crypto-exchange-...
https://cryptoslate.com/breakdown-of-current-ftx-assets-show...
The top token in that list, Serum, listed as worth $1.9 billion, had a trading volume of only $2 million yesterday on Binance. -2% depth is $60,000 lol.
unless we’re going to start with “they didn't lose $8.6bn and an independent valuation put all lost assets at $2bn so now everyone’s solvent what an amazing turnaround”
https://www.reuters.com/technology/bankrupt-crypto-exchange-...
You know, the core differentiating feature of cryptocurrency.
the main distinction involved here is that not knowing who to subpeona for records slows down everything, whereas with the blockchains used most of the participants consolidate funds into KYC’d exchanges and we know which ones they went to, speeding up requests for records and subsequent action
and then it comes to how they were used to leverage that capability, because people were not seeking to obfuscate or hide anything
if that's your actual goalpost, then don't worry, "they were holding it wrong" and you can hold it correctly to fit your needs
Traditional finance has plenty of clawback mechanisms.
You're completely straw-manning a world in which traditional finance isn't also mostly done on KYC'ed exchanges.
The main difference is the time, you're choosing to ignore that. 8 months versus .... how many years for Madoff? A decade?
>Bitcoin, which had dropped below $20,000 after FTX’s collapse, this week broke $30,000 for the first time since June 2022 , with other cryptocurrencies including ethereum charting a similar course.
This seems to go against your claims. - the existing assets just became more valuable in USD terms. Actual recoveries:
>Recovery efforts have more than doubled that figure so far, court filings show, including $800m in recovered cash and a further $600m in “settlements and investments receivable”.
And if you refuse, they can order your local (or not so local) PD to jail you until you comply.
Blockchain still exists in the real world with its very real rules.
If it was done with wire transfers and etc they'd have to do many requests to learn what transfers existed while with bitcoin all transactions are public so its just faster. Imagine having to walk down to the local PD every time to approve your web search vs just doing them without that.
Sure, for some transfers just knowing the wallets won't tell you who it is. The problem (for criminals) is that often they ultimately transfer the money to an exchange and that wallet is known. This is where the blockchain ends up coming in clutch. If you did a wire transfer of money to say Wells Fargo; the USG is going to have no idea it happened so they can't even think of freezing the money. However, each of yours (and everybody else's) bitcoin transfers are recorded to a public ledger so the second they notice a series of transactions starting from the theft to a known wallet they can immediately request the money to be frozen.
At this point USG can require the exchange to return the stolen money as well as whatever information they have on the account holder.
---
Can one steal bitcoins and get away with it? Yes!
Its just that the public ledger is not your friend in this instances and you'll need to account for it while this fact is not the case with many non-bitcoin thefts. If you commit wire fraud and then cash it out into physically currency and then re-deposit that currency into several banks there is no public way to link those two actions. (Privately one could track the serial numbers; but again private not public).
What are the specific examples of this that are intrinsic to crypto and not any digital transaction?
FTX really elevated fraud to an art. I'm not even joking. It's beautiful. It's so insane when I think about it that I don't even think it should be illegal. He should through his entire defense behind the 1st Amendment, say it was all part of an elaborate roleplaying game, and somehow walk.
and Sam Bankman Fried is not involved in that.
yes, Sam did that elaborate thing, the people recovering and the bankruptcy court are not Sam.
What Sam did was elevate things. Anyone can run a crypto scam. Literal kids do it. But to create art is something else. Something more human. Something timeless. SBF is perhaps the ultimate use case for crypto.
I had about $100 in FTX. Worth it. Totally worth it.
I’m stoked for the Coinbase collapse. My body is ready. Jesus, take the wheel!
I just want my Coachella 2022 NFT, wen bankruptcy judge do something
By the way I love your writing style here, reminds me of James Mickens.
its really a choice to consider mismanaged companies as the sector itself, at least the construction industry started putting X days since incident as an effort to differentiate each site since nobody was hearing about sites that were operating fine. confidence isn't shaken for everyone in the crypto space, and there might be a need for services to point out how many days since incident they've gone, since nobody currently indexes that or reports on that while the majority of activity occurs within services that operate smoothly and as expected
I'm not sold on crypto and you'd have a hard time persuading me to change my mind, I'm afraid.
> actually provide services… need
You’re valuing entertainment at zero (nobody needs that), vice at zero (nobody needs that), financial services at zero, and a perpetual bug bounty at zero, those are the major components of the crypto space
and you simultaneously hold every participant in any of those sectors as both representative of the whole thing, and equally as relevant as the next participant
persuasion is not the word I would go for, the disingenuous nature of that perception is the main observation
I totally buy it too.
It can make 10 billion USD spoofing gold prices for a decade and get away with a 1 billion USD fine (and keep doing it) for example.
The CEO can go on trips with Jeffrey Epstein, be friends with him and do business with him and get away with it.
It made tons of money off of the Madoff ponzi by providing Madoff with a bank account and not reporting the (from their perspective) extemely obvious ponzi that was going on for 15 years. Nobody went to jail and JP Morgan's fine was probably lower than what they made from the ponzi.
There are 100's of other examples of quite outrageous FTX-style crime. This is just what I happened to read about and remember. And that's only the publicly known stuff.
Let's turn it around: why would JP Morgan (and other big banks) NOT be engaged in extreme levels of crime that could be described as "financial terrorism"? If JP Morgan blows up it would be the end of the US and they know it and the US govt knows it. I repeat: they can get away with ANYTHING.
I think you will get your lulz.
Bonus: he hasn't been caught yet. His crimes are still on-going.
Same principal crime model as Madoff though: own a market making business + a hedge fund, sell stocks (naked), take the money, give nothing in return.
There's some other petty stuff like front running household investors through PFOF and instructing the broker you buy order flow from to shut down the buy button for retail investors when the price moves against you. But that's just the petty crime.
Woah woah woah. FTX (in the most generous telling) didn’t even have its own bank account.
Let’s not conflate that with not proactively reaching out to snitch on a customer (as if they are some regulatory agency).
Unfortunately for USD backed currencies we still don’t have any idea where or who holds the backing assets. They might as well be non existent…
JP Morgan might be the biggest, but I just don't have faith in them like I do Wells and Citibank or even HSBC. Some lame overly complex scheme isn't want I want. I want a decimal in the wrong place that everyone just ignores despite nothing ever adding up. I want vaults full of gold on the books that don't even exist… said to be held in countries that don't exist anymore. I want Superman 3 salami slicing, but maybe one that's been running perpetually since 1980… and it turns out that's actually the inspiration for the scam in the movie. I want Snopes to have to change something from "Legend" to "TRUE".
The world needs to be reminded that the USA is #1 and always will be.
Quickbooks? I thought they were using post-it notes. Maybe I underestimated them..
Username: accounting@ftx.com
Password: hunter2
George W gaffes have become so hilarious to me, now that they're 15+ years in the past. I laughed out loud reading this one.
Credit Suisse is about the same size as SVB, Signature Bank, and First Republic combined but it got “acquired” by UBS at a price 60% below its last trading price in a deal where $17 billion of debt was wiped out so it doesn’t count here
Lehman Brothers is also not included because, even though it was a US bank, it was an investment bank with no FDIC insured deposits. It was around the size of all of this year's failures, combined.
As you note, bank bailouts that were not FDIC bankruptcies are also not included.
I think someone found an interesting dataset, tried to visualize it, and thought it looked interesting. I doubt that there was any motive to the dataset other than, "Here's what I get from the FDIC, what does it look like?" Then shared code and source so that anyone else could reproduce it.
If you can find another data source that gives a fuller picture, you should. But compiling these data sources takes work. And the ones you get are all going to be a particular slice that represents some things but not others.
I did not personally find it misleading.
This graphic seems to be modeling things from a taxpayer perspective. These banks failed and the government needed to step in to do something to ensure people could get their deposits.
Tax payers are legally required to pay taxes in USD. I'm not actually sure if the IRS technically accepts cash but if so it would be extremely rare. Meaning all tax payers have a bank account and ultimately foot the bill even though it is technically funneled through the banks' books first.
Banks are in an interesting place because effectively any tax payer is going to have to have a bank account. In my opinion, that means tax payers are directly funding banks and the FDIC.
There are other types of customers for banks so I wouldn't argue that tax payers are exclusively paying those feels but it feel disingenuous to see politicians claim tax payers aren't footing the bill at all.
WaMu was bought by JPM and is on the chart, presumably due to the FDIC involvement, whereas Bear, which was a similar size and was also bought by JPM is not.
1980s S&L crisis: $654 Billion (summed 1984-1992 failures) across 23 banks
2008 crisis: $733 Billion (summed 2008-2011 failures) across 61 banks
2023 so far (it's only May): $556 Billion (Signature + SVB + FRC) across 3 banks.
It looks like 2008-2011 is the "winner", although other commenters have mentioned forced mergers etc. may not be counted.
https://en.wikipedia.org/wiki/List_of_largest_bank_failures_...
I want to see the scale (sum) of what was actually lost when they went bankrupt, and how much we (the public) have to put up to keep the system from collapsing. Does anyone have an actual visualization of how much we ponied up to keep our banking system from collapsing?
Did the public just provide a reasonable interest rate loan for a few months to a year? Or was it a sweet 0% loan for...ever? The important details are lost in the media reports and it would be nice to get a sense for what really happened.
OneWest Bank for example after 2008 had a guarantee where if the assets defaulted above a certain amount they would receive full value of the loans in a payout from the government. They were actively foreclosing on people to justify catastrophic losses to get the bailout. Not sure how that ended up since I was only marginally aware of the start of that and everything went silent once the news got wind of the perverse incentives.
In terms of trends, the bailout game has been played consistently since the the dollar went off the gold standard (1971 iirc).
The ponzi is starting to unwind now that inflationary pressures are out of control. I expect concentration to eventually lead to nationalization followed by a new currency which will fail because they lost all credibility from their mismanagement as a private entity.
That's what's happened historically with every country that debases its store of value above the point macro effects become noticable which are around 3:1 ratio).
FDIC is paid by the banks but it seems probable it will be passed down to customers in banking fees at the end of the day.
There's a better figure here I think:
https://www.pewresearch.org/short-reads/2023/04/11/most-u-s-...
Also some nice figures here:
https://www.bankingstrategist.com/history-of-us-bank-failure...
There are still thousands of banks in the USA. I dont really see why there should be more than 100. Canada has 5 big ones and a few dozen tiny ones. Same in UK and Australia.