FTX says it has billions more than owed to victims | Hacker News Reader

FTX says it has billions more than owed to victims

bbc.com

23 pointsandsoitis19 comments

Because it didn't owe them the amount in kind, it was a dollar denominated amount at the time of bankruptcy (when crypto was low). The victims may not have lost everything but they are far from whole.

Also FTX owned a bunch of anthropic and probably other AI stocks that have performed well?

It's mainly coming from their victim's crypto that has rallied since they declared bankruptcy - because technically they only owe them what the crypto was worth in USD in November 2022, but they didn't sell it all then & now those assets are worth considerably more.

You are completely right. “Not your keys, not your coins” This lesson apparently needs to be learnt the hard way over and over and over.

To be clear I’m not trying to victim blame here, it’s just that if people actually understood what they were buying then they would have known this. FTX, and indeed all legally incorporated companies in the crypto space, are greedy scumbags antithetical to the entire purpose of crypto.

My understanding is that FTX's customers that lost their balances are being given priority in the bankrupcy over investors (of course) and other creditors. So really all this means is that the money that was lost/stolen less than or equal to that put in by investors and other lower priority creditors. Not that no money was lost/stolen.

Curious if investors are considered creditors through chapter 11. My understanding is that they will still lose the money, but the FTX users will recover everything.

"The firm says that once it has sold off its remaining assets it will have as much as $16.3bn (£13bn) to cover its debts, which stand at around $11bn."

25 years in jail for returning +50% to his customers that he (unduly) treated as LPs suddenly seems too much…

If someone steals an asset from you, which then goes on to triple in value, you should still be furious even if you were compensated the $ value at the point it was stolen.

It’s like putting huge amounts of money into a pension fund for decades, your wealth grows massively, then you discover the whole pension scheme was a fraud and you’re returned the original amount you deposited decades ago. People should be happy with this outcome?

>FTX added that a jump in crypto prices since the company failed had not given its finances a major boost. It said almost all of the Bitcoin and other digital currencies believed to have been held by the exchange at the time of its collapse were missing.

>The price of the biggest cryptocurrency, Bitcoin, has risen by around 270% since the firm filed for bankruptcy more than a year and a half ago.

the problem with your logic is that it misunderstands what theft is because you are looking nominal value instead of opportunity cost. he took peoples money, he gambled it, and theyre generally going to get back a little more than the nominal value of their claims.

I am not saying what they did was right, nor that is was wise. It was wrong and it was dumb, and they gambled a company in theory worth $ 40 B, at least according to some geniuses at VC funds, and his reputation and freedom.

But the goal was not to steal money; had the goal been to steal money, they would have been successful in doing so. The goal was to gamble it with their hedge fund and use the profits for causes they deemed right.

Again, this does not make his mistakes lighter.

Lastly, people who deposited their hard earned money in an account owned by Alameda Research, SBF’s hedge fund, in order to have it available on FTX (yes, this was the standard procedure) are imho also partly to blame for the mess.

If you take your investor's money and bet it on black at a roulette table and win, you'll still go to jail.

Yes, that’s what the judge said.

But too many people compared SBF to Bernie Madoff, and the more we learn about the FTX case, the less the comparison makes sense.

It still makes sense. They went bankrupt (because they literally ran out of money, they could no longer process withdrawals and billions was missing, it got put into receivership, and good to best outcome was achieved. This is not vindication of SBF or FTX, they sunk and were saved

I agree comparisons aren't useful - but consider the fact that Madoff screwed over accredited investors, institutions and generally very rich people. SBF messed with customer deposits of a million retail investors - he was going to be made an example of.

Where are you getting “returning +50%” from? The money over the $11B isn’t going to the customers, they are only getting the cash value of their crypto when FTX went under, when crypto was in a slump.

can a thief, once caught, avoid punishment by returning the value of the stolen property ?

And he is not the one “returning” it, it is the bankruptcy administration.

So (imo) it’s like saying if a thief can avoid punishment if the police return the value of the stolen property 2 years later at the value of the property 2 years prior.

You are still “down” the 2 years of not having that property, and the uncertainty that being able to recoup anything.

Nope, that’s justice. Thief goes to prison. Justice department returns stolen funds.

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