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The Almighty Buck

FTX Owes Nearly $3.1 Billion to Top 50 of Its 1M Creditors. Celebrity Endorsers Sued (abc13.com) 111

Posted by EditorDavid from the creditor-report dept.
ABC News reports: The cryptocurrency exchange FTX owes creditors $3.1 billion, according to court documents filed late Saturday night....

Creditors' names were not listed on the court filing, but the largest is owed $226,280,579, .

As part of its bankruptcy proceedings, FTX was required to list to the court its 50 largest creditors — either individuals or corporations — who are owed money. The second largest entity is owed $203,292,504, the court filing shows.
A video at the top of the article from ABC News adds that several celebrities "are being sued by a man who invested in the now-bankrupt crypto exchange... The lawyer behind the class claims that FTX was a massive ponzi scheme, only successful because it had a boost from celebrities."

Meanwhile CNN adds that FTX "owes about $1.45 billion to its top ten creditors, it said in a court filing on Saturday, without naming them."

The crypto exchange said on Saturday it has launched a strategic review of its global assets and is preparing for the sale or reorganization of some businesses. A hearing on FTX's so-called first-day motions is set for Tuesday morning before a US bankruptcy judge, according to a separate court filing....

There could be more than 1 million creditors in the US cases that are already filed, FTX Group said, adding that it has been in touch with "dozens" of US and international regulatory agencies including the US Attorney's Office, the US Securities and Exchange Commission and the Commodity Futures Trading Commission.

Meanwhile, authorities in the Bahamas — where FTX is based — are investigating whether any criminal misconduct occurred related to the company's implosion, the Royal Bahamas Police Force said in a statement last Sunday. The Bahamian authorities have also taken control of cryptocurrency assets held by FTX Digital Markets, The Bahamas-based FTX unit that filed for Chapter 15 bankruptcy protection Tuesday.
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FTX Owes Nearly $3.1 Billion to Top 50 of Its 1M Creditors. Celebrity Endorsers Sued More

FTX Owes Nearly $3.1 Billion to Top 50 of Its 1M Creditors. Celebrity Endorsers Sued

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  • All this proves (Score:4)

    by jmccue ( 834797 ) on Sunday November 20, 2022 @10:53PM (#63067275) Homepage

    All this proves, until the ultra-rich gets screwed, the government does not care who these ponzi schemes hurt. Now there are lots of investigates starting when it should have happened years ago.

    • Re:All this proves (Score:4, Insightful)

      by arbiter1 ( 1204146 ) on Sunday November 20, 2022 @11:02PM (#63067291)
      No it proves the ultra rich will have best chance to get the most their $ back and the little guy will get pennies on the dollar.
      • The ultra rich will also get pennies on the dollar. That's how bankruptcy works. But then would you count a teachers' pension fund as "ultra rich"? And in the end, you were in there because you were stupid. It's a tax on the stupid. The stupid ultra rich will have lost a lot more than the stupid little guy.
      • Ponzi schemes are one of the few things that affect the rich and poor equally. However, although "Ponzi Scheme" is the best term we have to describe FTX it isn't exactly one. It's more like an unregulated bank that failed because the owners stole money. The difference is that most of the people owed money by FTX weren't investors (who would be subject to claw backs), but rather people who considered themselves more like bank depositors or brokerage customers. Sadly there is little recourse for anybody i

        • Re: (Score:2)

          by linuxguy ( 98493 )
          FTX had many businesses. One of them was the FTT coin. This certainly was the classic Ponzi. Billions worth of FTT was sold to unsuspecting public. Now it is essentially worthless.

    • All this proves, until the ultra-rich gets screwed, the government does not care who these ponzi schemes hurt.

      That's not quite right - it proves you can hurt as many people as you like, as long as the right politicians receive tens of millions of dollars and, shall we say, other benefits.

    • Re: (Score:2)

      by clovis ( 4684 )

      You can't spend your whole life worrying about your mistakes.
      You fucked up! You trusted us!

      https://www.youtube.com/clip/U... [youtube.com]

    • Re: (Score:2)

      by dbialac ( 320955 )

      the lawyer behind the class claims that FTX was a massive ponzi scheme

      And the good news is that people are finally figuring out that crypto in general is nothing more than a ponzi scheme.

      • FTX was like a Ponzi scheme but not exactly. In Ponzi schemes, one goes into it think they are investing money with a money manager who is then stealing and using future investors' money to pay returns to earlier investors. This works until it doesn't. But people who were giving money to FTX were not (purportedly) investing in FTX, but rather thought they were depositing at an institution that looks more like a brokerage except, well, it wasn't a brokerage. Although many of the mechanics are the same as

        • Re: (Score:2)

          by dbialac ( 320955 )
          How does this not describe bitcoin?
          • Bitcoin itself doesn't involve transferring money to anybody. You could, right now, go buy some used equipment and mine a BTC if you wanted to. BTC itself is not a Ponzi scheme. It may facilitate many Ponzi schemes but it isn't one. Many frauds are similar but the unique characteristics of each fraud determine which kind of fraud it is. And Ponzi scheme does not seem to be applicable here since nobody thought they were investing in a fund managed by FTX

            • Re: (Score:2)

              by dbialac ( 320955 )
              Go buy 10 everyday things that aren't illegal with bitcoin. Seems like a pyramid scheme to me.
              • That's a different word. Pyramid schemes are different than Ponzi schemes. Again I'm not saying anything good about bitcoin only that words have very specific meanings. The primary use of crypto-currencies is to facilitate various types of fraud for sure. But not all frauds are interchangeable. That may not matter much to the victims, I agree, but they are still different things.

        • Re: (Score:2)

          by linuxguy ( 98493 )
          FTX's coin FTT was most certainly a Ponzi. Billions worth of of FTT were sold. They are now essentially worthless.
          • Worthless securities are not a Ponzi scheme. They are a different type of fraud. More like a pump and dump. But that doesn't seem to be where the shortfall is. From what I can tell (and details are scant), the missing money is from users who had deposited cash and/or sold crypto for cash but not withdrawn it. There may be other shortfalls as well. But that money was simply stolen. It wasn't a Ponzi scheme. Just theft.

    • The ultra rich also get to hide their names from the public. On top of getting paid off well, they will also not be known. (Keep those creditors anonymous huh) Which is rare. I am wondering what crimes are being hidden there?

  • Since Bitcoin is worthless please post your private keys here.
  • The whole thing about reviving this disaster ⦠after hearing the stories of the management in Hong Kong, Northern Cali, the Bahamas ⦠are you kidding me? Thereâ(TM)s probably 12 people who should be headed for prison, and this clown show should be shut down.

    • There's probably 12 people who should be headed for prison

      They greased the right palms, Martha Stewart will have seen more jail time than anyone in FTX when this is all over.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      Are you sure? I have no idea what the banking laws are in Bermuda. I bet you don't either, nor do any of the people who thought FTX offering 15% interest was totally reasonable.

      The crypto types wanted unregulated, no borders, no nanny watching them, etc. Welcome to the future! To the moon! Well, something's going to the moon.

      • Bahamas haha. Lots of money parked there. One of the golden rules is never put all your eggs or investments in one basket. Try keeping a financial license if you don't. They second rule is know what you have lost (lessons for GFC) have not been learnt. Given the quantum and run on exchanges, things like these have got to be regulated, or treated as 'junk' no liability things, where the words investment, secure, safe, respected are not allowed to be used whatsoever. Mr Madoff would envy the opportunity if

      • Hopefully in a "Bang. Zoom. Straight to the moon!" style.

  • $226,280,579 (Score:3)

    by l810c ( 551591 ) on Sunday November 20, 2022 @11:29PM (#63067327)

    Haha.
    Have People not learned a Lesson?
    You Don't dump all of your savings into Anything.
    Too Good to be True?
    Yada Yada
    Unfortunately, it's the little guys that will suffer the most.

    • Re: $226,280,579 (Score:5, Interesting)

      by XMode ( 252740 ) on Monday November 21, 2022 @12:57AM (#63067453)

      What's more likely is that someone who has dumped $226M in to a crypto exchange hasn't dumped all of their life savings in to a crypto exchange. People with that amount of money don't usually put all their eggs in one basket and while its likely this would be noticed (I doubt anyone could not notice a loss of that size) its unlikely to bankrupt the person. The people most likely to be bankrupt by this collapse are the people not in the top 50.

      • Speaking of little guys - each time I visit Tesco and walk out with some buns and a chocolate, I notice some Ukrainian guys counting their pennies - they only ever buy bread and beer. These are the real little people that get hurt by the big criminals.
    • That one was probably Russ Hanneman trying to get back into the three commas club & failing, again. Tequila anyone?

    • Re: (Score:2)

      by znrt ( 2424692 )

      more likely 200m was the pocket change this rich person could afford to lose on a risky bet.

      tfa says one of them is suing celebrities who advertised the scam. that's probably more about hurt feelings than about concern for the lost money. having lots of money doesn't necessarily equate with being smart.

  • One can hope this will end the crypto craze (Score:5, Informative)

    by khchung ( 462899 ) on Sunday November 20, 2022 @11:36PM (#63067333) Journal

    Let's hope this fallout is big enough to kill off the crypto craze completely. That's would have done humanity a great service by killing this crazy pointless source of CO2.

    • Re:One can hope this will end the crypto craze (Score:4, Insightful)

      by DrXym ( 126579 ) on Monday November 21, 2022 @04:34AM (#63067615)
      Sadly it won't because people are fucking morons. It has been obvious that cryptocurrency has been a crowd sourced ponzi since its inception but the idiots keep coming. In waves almost - as crypto seems to rise, they sink their savings into this ponzi only for the thing to burst again. And of course many other more elaborate scams have appeared since - rug pulls and such like.

  • I don't believe it (Score:5, Informative)

    by hdyoung ( 5182939 ) on Sunday November 20, 2022 @11:43PM (#63067339)
    If there's one thing we've learned about crypto, it's that a "dollar" of cryptocoin is absolutely not the same as a USD. Is this 3.1 billion actual real US-government dollars that people handed to FTX? I don't believe it. More likely, most of those 3.1 billion "dollars" are my-freshly-minted-crapcoins-that-I-totally-swear-are-worth-a-dollar-each? Which means we're dealing with a lot of fictional numbers entered into a spreadsheet, dressed up to look pretty with the term "crypto" and a grifter's pinky promise.

    Even the "stable coins" have been shown to be barely any better.

    Literally, the only people I will believe in this situation are the federal investigators, after they complete their investigation and the evidence is presented in federal court. At that point, we'll know what actually happened. And that's probably going to take years. And it won't be pretty.

    But no matter how you look at it, SBF is FKD.

    • Re:I don't believe it (Score:4, Interesting)

      by Ed Tice ( 3732157 ) on Sunday November 20, 2022 @11:48PM (#63067343)
      As far as I know, this represents more than $3.1B of actual money handed to FTX. Some amount much greater than $3.1B was handed to them supposedly to by "crypto assets" but they just stole the money. However, anybody who logged in saw a balance. The price of all crypto is way down. People went to redeem but so much money had been stolen that redemption was impossible. Assuming only a 50% drop in assets, this means $6.2B was deposited but there wasn't even $3.1B let to withdrawal. If that had stolen only 70% or 80% of they money they would have gotten away with it!
      • I haven't followed the details, but I'm interested in what you mean by "crypto assets". Because it's been determined that the people in control can get around the encryption aspect by doing a business-to-business loan and posting collateral in newly-minted shitcoins, thus circumventing the secure aspect of crypto. Then, you add in the fact that a ton of "crypto assets" have fictional valuations, because a lot of people people wrote programs to ping-pong digital tokens back and forth all day to inflate tradi

        • he's going to be in court for literally ever even if he doesn't see prison time.

          He picked the wrong jurisdiction to stay in. The US has an extradition treaty with the Bahamas.

        • I think you are missing the point. Let's say I come along with a billion dollars. I wire it to FTX as US dollars. They are supposed to use that money to buy Bitcoin, shitcoin, or whatever, and hold it in my account. What they actually do is create an entry in their database that says I now have 1 Billion shitcoins in my account that I can either withdraw directly at any time or convert back to USD and withdraw the proceeds. This is no different than any other brokerage. It's exactly what happens if I
          • I understand what you're saying. My main question is this: did you

            1. Come along and invest an actual BILLION US DOLLARS into FTX.
            2. Set up a small crypto mining operation, burn a few megawatt worth of energy mining whatever-cryptocoin-is-popular-this-quarter, put them into a ping-pong automated trading algorithm to make them look way more popular and actively traded than they actually are, and then hand your "billion dollar account" over to FTX?

            Crypto bros will claim these two things are the same,
            • What I am trying to point out is that, in case #2, FTX wouldn't be in trouble. They would simply return the crypto-currency that they held in accounts. It's crypto-currency that now has a trading value near zero (as you correctly point out) and nobody would even know that FTX is a fraud!

              FTX is on the hook for the billion dollars (your scenario #1) that they stole and they can't repay. But it's not actually a billion dollars. Because even in scenario #1, the crypto-currency lost value which means FTX w

              • Wow. Fair enough. If that many real USD went into this, SBF is especially and truly boned. That's an Elizabeth Holmes-level fraud.

                That being said, I'm gonna wait until the actual investigators release their findings to judge. Whenever I read the terms "crypto" and "dollars" in the same paragraph, I heavily discount the validity of the dollar values being stated.
                • Well the company is in bankruptcy so there aren't traditional investigators. There is a special master. The same one who came in and cleaned up after Enron. One thing the he has released to the judge is that fictitious expense reports were approved for enough money to buy houses and then the records were deleted making it nearly impossible to prove who stole what and so some of the employees are going to get away with keeping houses bought with the stolen money.
                  • If that happened, they will probably be sniffed out. There are only so many FTX employees, friends and acquaintances. Very easy for someone with court approval to investigate if someone unexpectedly coughed up 500k to buy a house.
                    • I know nothing about the laws in the Bahamas, so I can't comment. Finding out that the person seemed to have come up with the money out of nowhere seems pretty easy. Whether or not the necessary standard of proof can be met in order to recover the asset and sell it for the benefit of creditors (customers), we will have to wait and see. But there is no waiting to know that this might be a world record amount of fraud.

          • Since the price of crypto is down everywhere, they had to have stolen nearly all of the money.

            Wait a second. If you gave them a billion dollar to buy 20,000 bitcoin at $50,000, and bitcoin is down to $20,000, and you wanted to sell your bitcoin and get the money back and everything is legit, you would get $400 million. If they put your million into a secret bank account, and you wanted to sell your non-existing bitcoin, they could just pay you $400 million and have $600 million profit. So what happened must be something else.

            • Yes, what happened is that they stole more than $600 million! That's what is so astonishing here. If they had only stolen like half the money they would have gotten away with it!
    • Garbage in, garbage out. In this case, cash in, garbage out.

    • Re: (Score:2)

      by DrXym ( 126579 )
      The joke about "stable coins", is that it would be better for exchanges to just hold assets in a bank account. Either a major "fiat" currency directly, or something tangible like gold. They could even invite and accounting firm in to audit & certify their holdings and publish that info as a public statement on their website.

      But no, they need to use smoke and mirrors to pretend that the magic beans that they conjured up are directly analogous to USD for "reasons" and then it turns out to be an elaborat

    • Is this 3.1 billion actual real US-government dollars that people handed to FTX? I don't believe it.

      The overwhelming majority of our money supply is money created ex nihilo by fractional reserve banking via commercial banks. The only "real fiat" is the physical money issued by the Fed under authorization by the Treasury. The loans that the Fed gives commercial banks operate under the same principle as fractional reserve bank loans by commercial banks, but happen at a lower level in the money supply.

      The aver

      • Except for the US govt's (& most govts') promise to pay is a lot more reliable & trustworthy than a bunch of crypto-bros in the Bahamas, clearly.

        BTW, all money is technically debt; it's been an IOU for goods & services since it was invented. It's the details in how it's implemented that are important & determine whether a particular currency will maintain value & stability & therefore be useful. Crypto has consistently shown it can do neither.

        Inflation & interest rate hikes hav
        • In a weird way I wonder if part of crypto's falling lately is money being moved to I-Bonds. I see almost like a hot restaurant mentality to finance vehicles. Crypto was hot, now not so much. I-bonds got hot with their 9% return albeit for 6 months only. Everyone was talking about it, to the point it crashed the treasury site. And yet TIPS which have probably a better return over time are not hot (yet). I remember the late 90's stock boom chatting with another engineer who should have known better I'd think.
          • I know somebody who shorted Yahoo! with that same thinking. He lost all of his investment money. Partial loss of value due to inflation is way more desirable than most other things that risk losing all of your money. I moved most of my retirement money to TIPS a few years ago. Unfortunately, those TIPS are down too in terms of market price but the nominal value at maturity is of course unchanged.
            • I bought more recently, waited until TIPS paid a little interest (around 1.6%) and of course the inflation protected part. As you say, your brokerage is probably showing you the secondary market price for your tips, which is less than nominal since current tips offer some interest. Of course if you hold to maturity, you'll get what you paid plus the inflation amount. I think my 5 year TIP is up a bit. I plan on holding though. The other nice thing about tips is there is a secondary market so more liquid tha
              • I have bought puts which is similar to shorting except there's a limit on losses. I once had a coworker ask me "What, are you scared of unlimited losses?" Yes, I am, as a matter of fact!
      • Currency is issued by and backed by governments. The US dollar is backed by the full faith and credit of the US government which includes things like a military (to defend against foreign threats) and law enforcement (to defend against domestic ones). If the actual government fails, things go to hell pretty fast and there's really nothing you can do in terms of recourse. A bunch of crypto-currency sure won't help. Food and water will help as long as nobody knows you have it. Some weaponry to defend it

  • My investments are safe and will be worth millions!

    • Re:I told everyone to invest in ugly monkey pictur (Score:5, Insightful)

      by Opportunist ( 166417 ) on Monday November 21, 2022 @08:24AM (#63067928)

      That whole ugly ape shit is even more hilarious than you may think. Allow me to take you on a tour into the art of money laundering, or rather, how to launder money with art.

      Art is perfect for this. First, there isn't really a "set" price for a piece of art. Because it's unique. It can have any value you like. Whatever buyer and seller agree on, nobody can really say "oh that's not worth this much, something is fishy". It's art. It has no intrinsic value, it has no "real" value, it's just something cheap arranged in a certain way and suddenly it's really valuable.

      Art auctions are also often anonymous, so that's another really attractive part of it. And art is very easy to transport to countries that aren't too sensitive when it comes to petty little crimes like laundering drug money. You can sell and buy it as often and to whoever you please, putting more and more transactions between you and the money.

      Now, unfortunately, countries that have some irrational problems with the idea of laundering dirty money have started to wisen up to these shenanigans and started to crack down on art laundering. You might have noticed, because art prices took a nose dive a few years ago. Well, NFTs to the rescue! They are even better than ordinary art. First, it's trivial to create them. You no longer need someone to tack a banana to a wall, you can now cut out that middle man and just declare something art. Actually, not even declare it, just take a string of numbers and trade this. Which also takes care of another pesky little problem conventional art has: You have to take the physical thing somewhere. NFTs solve that problem beautifully. You don't even need a laundering haven anymore, just put it in the cloud.

      This is the perfect money laundering tool.

      The absolutely hilarious bit is now that there were actually some dimwits who thought that these things actually have some sort of "artistic" value. Who bought these things with real, "clean" money.

      That was so bizarre to watch...

      • You can pay for real art with cash. Not sure NFTs make a good money laundering vehicle if the real payment amount is easy to track.

        • You can pay for real art with cash. Not sure NFTs make a good money laundering vehicle if the real payment amount is easy to track.

          You can buy NFTs with cash, but it's much more convenient to buy them with cryptocurrencies, washed through an exchange or two as another additional layers of laundering.

          • Crypto transactions are tracked on a public ledger. Washing through an exchange is interesting, but then you're trusting them to not keep (or at least "lose") internal transfer records.
          • You don't launder money by *buying* art, you launder money by *selling* art to an anonymous entity that you control and then claiming you made a profit. After that, you can burn the art for all it matters. Admittedly it's not really a "sale" as you are transferring to yourself. But you want that *second* "purchase" to be as anonymous as possible since it's terribly incriminating if that second transaction is traced to the previous owner.
            • You're describing laundering of money one has already obtained through under the table transactions. Parent comment described the laundered transaction of a drug deal, drugs under the table, money and (worthless) art or NFT over the table. There's no reason both options aren't in use.
              • In the situation you describe, the laundering still happens during the *selling* The *buyer* of the drugs isn't laundering money, they are simply buying drugs that come with a free NFT. The *seller* is laundering money by selling drugs but claiming it's profit on trading in art works. It's still the case that one *wants* to *buy* art in a traceable transaction (so it's clear you are the rightful owner) and then *sell* it in a transaction where the next purchaser remains anonymous. Since the art can't re

      • The absolutely hilarious bit is now that there were actually some dimwits who thought that these things actually have some sort of "artistic" value.

        Nah, no one thought they had artistic value. It was just another tulip mania.

        • Oh, there were people who bought NFTs. Not of the apes, but of other "art". Remember that guy who sold his works where you'd decide whether you wanted the NFT or the actual art piece, and whatever you don't choose gets destroyed? Yes, some people took the NFT instead of the actual piece.

      • You insensitive clod..... He TAPED that banana to the wall... :-)

        https://www.cnn.com/style/article/banana-artwork-eaten-scli-intl/index.html

  • Re: Celebrity Endorsers Sued (Score:3, Informative)

    by CommunityMember ( 6662188 ) on Monday November 21, 2022 @12:44AM (#63067429)
    It is likely the celebrities lawyer's motion to dismiss will ultimately be granted as FTX disclosed that the celebrities were participating in a marketing campaign (disclosure is a key to such things).

    • That may depend on how those deals were constructed. If they were doing it for lump sum of money then they are likely in the clear. On the other hand if they can be seen as "buying in" on the system then they might get involved with ponzi allegations - courts have sometimes taken profits from ponzi "early winners" to compensate final losers.

      • Yes, but, as I have pointed out other places, FTX wasn't exactly a Ponzi scheme. Normally Ponzi schemes involve what the victims believe to be "investing" but here the victims believed they were "depositing" which makes it something else. More like an unregulated bank that failed due to internal stealing. We haven't had such a thing since the FDIC came along and so it's not clear that there are even laws to cover this exact situation.
  • With my popcorn watching the whole thing go down. My only experience with crypto is making six bucks on BTC and that was good enough for me. My own personal opinion: crypto is worthless

    • I don't get it either. I can't figure out how it became so huge - and I think it's because I'm the one who lacks knowledge. It seemed to me that it had to be the Emperor's New Clothes. No assets... no fungibility... no trustworthiness... huge with "teenagers" (read: under 30 - HUGE red flag)... espoused by get rich quick schemes... scandal after scandal... bankruptcies everywhere... even the big banking players stayed out until greed pulled them in... I had people in cubicles next to me for a few years push

      • Re: (Score:2)

        by Budenny ( 888916 )

        No, you are not missing anything. At least, you are not missing anything about crypto, it really is worthless and a classic mania, always has been. Which did not prevent it offering great opportunities for speculation. Just as you could make a lot of money trading tulips, as long as you got out in time, and also make lots of money selling fertilizer and greenhouses to the tulipists, as long as you didn't let yourself get stuck with inventory when it all collapsed.

        The latest sign of the madness is that re

      • Re: (Score:3)

        by Budenny ( 888916 )

        I'd add one other thing, which originates with G K Chesterton. He said that the problem with loss of religious faith is not that people believe nothing.

        Its that they start believing in anything at all.

        This is where we are now.

      • It depends on the kind of business you are doing. It seems to be quite good for drug traders and parting fules from their cash.

      • What amazed me is that it lasted so long. One would expect it to go bust in 2014, when even Joe Sixpack on the street was talking Bitcoin and blockchains, but it managed to keep on going well after that.

        At least things went south before exchanges could sell derivatives to banks, and we would have had to do another TARP bailout and shuffling "toxic debt" around like in 2008. Thankfully the Feds were too smart to buy into the hype, and since exchanges didn't want to be regulated, they didn't get bailed out

    • I didn't get any money out of crypto, but countless hours of free entertainment.

  • I won't put into Tether or a CEX unless it can cryptographically prove that it is completely solvent. Solve that problem and crypto will see a golden age.

    • WhatwhatwhatWHAAAAT???

      You want oversight, checks and bounds in cryptocurrency?

      You are supposed to have faith in the blockchain!

      Burn the heretic!

  • review of its global assets and is preparing for the sale or reorganization of some businesses. Nothing left and who would want to waste $$$ tying to bail them out ?

  • Sue the investors (Score:4, Interesting)

    by ballpoint ( 192660 ) on Monday November 21, 2022 @08:03AM (#63067894)

    Every non-private entity (like teachers' funds etc.) that has directly or indirectly invested in FTX should be scrutinized and sued, possibly criminally if any personal links can be proven.

    • Every non-private entity (like teachers' funds etc.) that has directly or indirectly invested in FTX ...

      Not trying to debate you here, but do you really have details about teacher retirement funds depositing in FTX? I would be pretty surprised to see a retirement fund manager "investing" in crypto for the very reason you state. I haven't seen a list of depositors, but I think it's going to just be wealthy individuals. Or perhaps previously-wealthy individuals.

  • If it's not a Ponzi scheme, why would a crypto exchange need a $billion of anything, much less so much so quickly that they couldn't buy it over time? A $billion is a LOT of stuff.

    If they owe that much, I'm absolutely thinking Ponzi.

    • It's not a Ponzi scheme because Ponzi schemes are where you convince somebody that they are "investing" as opposed to "depositing." It's a different kind of fraud that we haven't seen since before the great depression. Hence we don't seem to have vocabulary to describe it. FTX has essentially no assets and no way to repay depositors.
  • Not really Enron guy, but the guy who supervised the Enron bankruptcy and is now at FTX. We should really put a collection together so that when everything is done, he writes a book that tells us and explains to everyone what really happened. How much real money and how much fictitious money was destroyed. And how much has just disappeared.

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