OT: Ray, how's your Bitcoin investment going?

[redir]

Originally Posted by Ken Robb

I am investing in virtual tulips. I get all the appreciation of real bulbs while not getting my hands dirty.

Tulip NFT collection... I can picture it now!!!!

[verticaldoug]

So Genesis has 175mm locked up with FTX and they are in trouble and need $1b in funding. Interesting how the 175mm leads to 1 b in needs.

Gemini has 700mm in their EARN product, and they have suspended.

I look forward to seeing what was actually behind all these STAKING products offering the high interest rates. It makes no sense to me.

Finally, TETHER's biggest customer was SBF, so I can only assume he is one of the largest issuers of the commercial paper backing Tether. So there is another potential $60b whole in the crypto ecosystem balance sheet.

I wonder how much real 'FIAT' currency actually went into the system versus how much this claimed $ value is just fake dollars created by STABLECOIN issuance backed by fictious assets. (Actually to be technically correct - they were backed by assets, the assets just were never investment grade debt. Just junk debt issued by junk creditors. A bit like PIK bonds, and PIKS bonds never end well)

[verticaldoug]

https://www.cmegroup.com/content/dam...-committee.pdf

The CME testimony on FTX's system and weaknesses is one of the best I have seen.

[sg8357]

Originally Posted by redir

Tulip NFT collection... I can picture it now!!!!

First one to open a Tulip NFT gallery in the Metaverse,
wins the internet for a day.

[azrider]

https://www.nytimes.com/live/2022/12...ed-arrest-news

Sam Bankman Fried arrested in Bahamas.

Wasn't it Mark Twain who said that "Truth is stranger than fiction?"

This FTX backstory gets crazier and crazier the more you read into it. Sam Bankman is now blaming Caroline Ellison for the collapse, who was the CEO of Alameda which was a sister hedge fund company started by Bankman. It was thought that she is "on the run" somewhere in Hong Kong but was spotted getting coffee in New York across from DOJ office.

Oh and Sam Bankman and Caroline were linked romantically.

Oh and Caroline Ellison became sole CEO after co-CEO Sam Trabucco stepped down in August to "spend more time on his boat."

Crazytown.

.
.

[verticaldoug]

This was not a one man band- this is a story of everyone here being Greedy and/or ignorant. For some like the VCs, it was greedy and willful ignorance.
They had to ignore the warning signs like FoF investors did in Madoff.

I think Maxine Waters should recuse herself from these proceedings since her PAC received $9mm from SBF in Feb-22.

I'd like to see the Johnny 3 try to claw back the campaign contributions from these high and mighty carpet baggers.

[mstateglfr]

That SBF guy straight up called what he is doing a ponzi scheme during a podcast interview. He described it, the host said 'thats a ponzi scheme' and SBF is like 'yep, it is'.
The clip was played on Jon Stewart's podcast last week.

As Matt Damon declared in the crypto ad last year- fortune favors the brave!

[verticaldoug]

Originally Posted by mstateglfr

That SBF guy straight up called what he is doing a ponzi scheme during a podcast interview. He described it, the host said 'thats a ponzi scheme' and SBF is like 'yep, it is'.
The clip was played on Jon Stewart's podcast last week.

As Matt Damon declared in the crypto ad last year- fortune favors the brave!

That oddlots bloomberg podcast was from earlier in the year. It received a lot of traction. It was even highlighted in the FT.

https://open.spotify.com/episode/2SX...4267b4c9c&nd=1

Here is the full podcast from April this year.


Without further ado, and with our emphasis:

Levine:

Can you give me an intuitive understanding of farming? I mean, like to me, farming is like you sell some structured puts and collect premium, but perhaps there’s a more sophisticated understanding than that.

Sam Bankman-Fried:

Let me give you sort of like a really toy model of it, which I actually think has a surprising amount of legitimacy for what farming could mean. You know, where do you start? You start with a company that builds a box and in practice this box, they probably dress it up to look like a life-changing, you know, world-altering protocol that’s gonna replace all the big banks in 38 days or whatever. Maybe for now actually ignore what it does or pretend it does literally nothing. It’s just a box. So what this protocol is, it’s called ‘Protocol X,’ it’s a box, and you take a token. You can take ethereum, you can put it in the box and you take it out of the box. Alright so, you put it into the box and you get like, you know, an IOU for having put it in the box and then you can redeem that IOU back out for the token.

So far what we’ve described is the world’s dumbest ETF or ADR or something like that. It doesn’t do anything but let you put things in it if you so choose. And then this protocol issues a token, we’ll call it whatever, ‘X token.’ And X token promises that anything cool that happens because of this box is going to ultimately be usable by, you know, governance vote of holders of the X tokens. They can vote on what to do with any proceeds or other cool things that happen from this box. And of course, so far, we haven’t exactly given a compelling reason for why there ever would be any proceeds from this box, but I don’t know, you know, maybe there will be, so that’s sort of where you start.

And then you say, alright, well, you’ve got this box and you’ve got X token and the box protocol declares, or maybe votes by on-chain governance, or, you know, something like that, that what they’re gonna do is they are going to take half of all the X tokens that were re-minted. Maybe two thirds will, two thirds will offer X tokens, and they’re going to give them away for free to whoever uses the box. So anyone who goes, takes some money, puts in the box, each day they’re gonna airdrop, you know, 1% of the X token pro rata amongst everyone who’s put money in the box. That’s for now, what X token does, it gets given away to the box people. And now what happens? Well, X token has some market cap, right? It’s probably not zero. Let say it’s, you know, a $20 million market …

Levine:

Wait, wait, wait, from like first principles, it should be zero, but okay.

SBF:

Uh, sure. Okay. Completely reasonable comments.

Levine:

I mean, that’s not quite true, but, like, when you describe it in this totally cynical way, it sounds like it should be zero, but go on.

SBF:

Describe it this way, you might think, for instance, that in like five minutes with an internet connection, you could create such a box and such a token, and that it should reflect like, you know, it should be worth like $180 or something market cap for like that, you know, that effort that you put into it. In the world that we’re in, if you do this, everyone’s gonna be like, ‘Ooh, box token. Maybe it’s cool. If you buy in box token,’ you know, that’s gonna appear on Twitter and it’ll have a $20 million market cap. And of course, one thing that you could do is you could like make the float very low and whatever, you know, maybe there haven’t been $20 million dollars that have flowed into it yet. Maybe that’s sort of like, is it, you know, mark to market fully diluted valuation or something, but I acknowledge that it’s not totally clear that this thing should have market cap, but empirically I claim it would have market cap.

Levine:

I agree.

Weisenthal:

It shouldn’t have any market cap in theory, but it practice, they always do. Okay.

SBF:

That’s right. So, and obviously already we’re sort of hiding some of the magic impact, right? Like some of the magic is in like, how do you get that market cap to start with, but, you know, whatever we’re gonna move on from that for a second. So, you know, X tokens [are] being given out each day, all these like sophisticated firms are like, huh, that’s interesting. Like if the total amount of money in the box is a hundred million dollars, then it’s going to yield $16 million this year in X tokens being given out for it. That’s a 16% return. That’s pretty good. We’ll put a little bit more in, right? And maybe that happens until there are $200 million dollars in the box. So, you know, sophisticated traders and/or people on Crypto Twitter, or other sort of similar parties, go and put $200 million in the box collectively and they start getting these X tokens for it.

And now all of a sudden everyone’s like, wow, people just decide to put $200 million in the box. This is a pretty cool box, right? Like this is a valuable box as demonstrated by all the money that people have apparently decided should be in the box. And who are we to say that they’re wrong about that? Like, you know, this is, I mean boxes can be great. Look, I love boxes as much as the next guy. And so what happens now? All of a sudden people are kind of recalibrating like, well, $20 million, that’s it? Like that market cap for this box? And it’s been like 48 hours and it already is $200 million, including from like sophisticated players in it. They’re like, come on, that’s too low. And they look at these ratios, TVL, total value locked in the box, you know, as a ratio to market cap of the box’s token.

And they’re like ‘10X’ that’s insane. 1X is the norm.’ And so then, you know, X token price goes way up. And now it’s $130 million market cap token because of, you know, the bullishness of people’s usage of the box. And now all of a sudden of course, the smart money’s like, oh, wow, this thing’s now yielding like 60% a year in X tokens. Of course I’ll take my 60% yield, right? So they go and pour another $300 million in the box and you get a psych and then it goes to infinity. And then everyone makes money.

Levine:

I think of myself as like a fairly cynical person. And that was so much more cynical than how I would’ve described farming. You’re just like, well, I’m in the Ponzi business and it’s pretty good.

Weisenthal:

At no point did any of this require any sort of like economic case, it’s just like other people put money in the box. And so I’m going to too, and then it’s more valuable. So they’re gonna put more money in, and at no point in the cycle, did it seem to like, describe any sort of like economic purpose?

SBF:

So on the one hand, I think that’s a pretty reasonable response, but let me play around with this a little bit. Because that’s one framing of this. And I think there’s like a sort of depressing amount of validity…

Levine:

Can you comment on like the sustainability of that? Because, you know, on the one hand you’re like, well, a trillion dollars of institutional money is going to come into Bitcoin. And on the other hand you’re like basically there are a lot of Ponzis that have done really well.

There really is nothing more to add.

Nevertheless, if you’d like to gain greater insight about “valuable boxes” with no economic use case that go “to infinity” because of “the bullishness of people’s usage of the box”, don’t forget to sign up for the FT’s Crypto and Digital Assets Summit beginning Tuesday.

[peanutgallery]

And oh, both sets of parents for SBF and Ellison are entrenched in academia at MIT and Stanford, respectively

Found that a little odd

Thank you to the NY post for keeping up with this

Originally Posted by azrider

https://www.nytimes.com/live/2022/12...ed-arrest-news

Sam Bankman Fried arrested in Bahamas.

Wasn't it Mark Twain who said that "Truth is stranger than fiction?"

This FTX backstory gets crazier and crazier the more you read into it. Sam Bankman is now blaming Caroline Ellison for the collapse, who was the CEO of Alameda which was a sister hedge fund company started by Bankman. It was thought that she is "on the run" somewhere in Hong Kong but was spotted getting coffee in New York across from DOJ office.

Oh and Sam Bankman and Caroline were linked romantically.

Oh and Caroline Ellison became sole CEO after co-CEO Sam Trabucco stepped down in August to "spend more time on his boat."

Crazytown.

.
.

[Mr. Pink]

The Ukraine money laundering process is being scoffed at for being a conspiracy theory or something like that, but, I'd like to have somebody look into that, because it certainly sounds plausible to me, and I dont wear tin foil hats.

[XXtwindad]

All the politicians that benefitted from the donations shouldn't emerge unscathed. But they probably will.

[rallizes]

Originally Posted by XXtwindad

All the politicians that benefitted from the donations shouldn't emerge unscathed. But they probably will.

I don't follow.

Were laws broken in accepting donations?

[Mr. Pink]

That's the problem. There are no laws against obvious influence buying. Because the same politicians write the laws.

That said,, he is being charged with campaign finance crimes. The few that exist. He allegedly (cough cough) contributed way too much as an individual and used straw people to contribute more. Let's see what that testimony reveals, if it makes it that far.

I think that we may see this end in a suicide. At first, considering the connections he made and the money involved, I thought he would be Epstiened, but, at his arraignment in the Bahamas, he claimed that he couldn't go to jail because he's vegan and he's depressed. Really. With his Mom sitting in the back. Tender flower.
The Bahamian jails are not nice at all, so he better hope for a quick extradition.

[verticaldoug]

Originally Posted by Mr. Pink

The Ukraine money laundering process is being scoffed at for being a conspiracy theory or something like that, but, I'd like to have somebody look into that, because it certainly sounds plausible to me, and I dont wear tin foil hats.

1. I am sure someone will look at this, but remember, the Ukraine Gov has already said publicly they used Kuna and FTX to convert private donations received in Crypto into fiat. Kuna would send Crypto to FTX, FTX would send FIAT back to Kuna, which would forward to Ukraine Gov.

Coinbase reported on this in June and the amount raised was $135mm, The Ukraine Gov announced the relationship back in March.

If you were moneylaundering, I do not think you'd make a public announcement.

The USAID from Gov-Gov is another channel and always in FIAT. If you were converting all the USD into Crypto, I think people who follow the blockchain would be reporting on the activity. Also, you need corresponding US banks to move the USD which FTX is not one.

-----------------------------------------------------------------------------

Knowing the history of the region, I think money was laundered, but not through FTX and not for the democrats.

It is classic to make accusations with no proof, and then force the accused to disprove.
More importantly, in this case, you would not need to launder the US Aid money because that by definition is clean. You would just insert yourself as a middleman for introducing deals like selling ammunition, food etc, and take a large fee. No need to launder that and so much simpler.

That's why the whole money laundering thing is probably false. w

[Mr. Pink]

Originally Posted by verticaldoug

1. I am sure someone will look at this, but remember, the Ukraine Gov has already said publicly they used Kuna and FTX to convert private donations received in Crypto into fiat. Kuna would send Crypto to FTX, FTX would send FIAT back to Kuna, which would forward to Ukraine Gov.

Coinbase reported on this in June and the amount raised was $135mm, The Ukraine Gov announced the relationship back in March.

If you were moneylaundering, I do not think you'd make a public announcement.

The USAID from Gov-Gov is another channel and always in FIAT. If you were converting all the USD into Crypto, I think people who follow the blockchain would be reporting on the activity. Also, you need corresponding US banks to move the USD which FTX is not one.

-----------------------------------------------------------------------------

I think money was laundered, but not through FTX and not for the democrats.

You know, there's a strange disconnect that happens at times like this. I try to avoid the tin foil talk, but, here's what I know. We are watching what, and, these arent my words, it's in the Southern Distrct indictment, the greatest financial scam in history in dollar amount. And SBF has practically confirmed a lot of that out of his own mouth in interviews. A few months ago, this firm and the man child running it was the darling of politicians and many investors and business leaders. Now we are finding out it was one big fraud. Well, I think crypto is one big fraud, so, a really big fraud in the heart of a massive fraud. Lies upon lies upon lies. Then, in the other court, we have Ukraine, until recently considered one of the most corrupt countries in the world, and now at war and has shut down all opposition parties, totally non transparent, and receiving tens of billions of cash aid (besides the military aid) just to survive, because it really has no economy at the moment, it's infrastructure imploding. If we stopped the cash flow, it would fall in days. OK, now, I am told that these two entities have a relationship. Do you blame me for being cynical and thinking, hoo boy, I wonder how many Ferraris and luxury villas all that money is buying all over the world right now. It's not as though it will be the first time.
But, the argument back is that there are controls, there are regulations, there are adults watching! Don't worry, everything is cool, you're nuts to think otherwise. Really? Then how did we get to this point?