[HN Gopher] FTX's Sam Bankman-Fried cashed out $300M during fund...
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FTX's Sam Bankman-Fried cashed out $300M during funding spree
Author : mfiguiere
Score : 149 points
Date : 2022-11-18 19:35 UTC (3 hours ago)
(HTM) web link (www.wsj.com)
(TXT) w3m dump (www.wsj.com)
| skizm wrote:
| The amounts of money we're talking about here are sort of
| staggering. I know they did a pretty good job of not keeping any
| records of depositors, but do we have any sense of depositor
| demographics, total number of depositors, or average account
| size? _Any_ KYC at all? Like did retail "investors" really pump
| close to $16B into this? Could the scam here be crypto whales
| used this as an off ramp to turn their crypto into fiat, and then
| burn the ramp and all evidence of who used it behind them?
| DennisP wrote:
| Apparently some hedge funds had money at FTX, which is why
| there's talk about "contagion."
| jliptzin wrote:
| Dump your life savings into a crypto exchange based in the
| Bahamas, sure. But god forbid you invest $20k in a startup
| without being an "accredited investor"
| acjohnson55 wrote:
| I'm not sure what your point is. You can invest in whatever you
| want in the Bahamas without being accredited (as far as I
| know). If anything, the blowup of FTX seems to justify why
| investments in unregistered securities in US-based companies
| aren't allowed to be marketed to unaccredited investors.
|
| Are you saying we should allow companies with the level of
| oversight FTX had _more_ free reign to operate and market their
| equity in the US?
| sarahowen62 wrote:
| leet_thow wrote:
| How common was it for founders to cash out on common shares in
| the Series C-E rounds the last decade?
| Dwolb wrote:
| It's common to sell secondary, but usually limited to something
| like 10% of vested shares per person.
| twelve40 wrote:
| if the investors are willing to buy your shares from you, then
| why not? I've done secondary sales as early as seed. Unless you
| hide it from the board somehow, or you are explicitly
| prohibited from doing this, it's just a business transaction.
| leet_thow wrote:
| Not an ethics question of why or why not, I'm just curious.
| sarahowen62 wrote:
| slap_shot wrote:
| It was certainly much more common the last few years.
| However, those transactions are more of "hey investor, let
| me sell you some of my shares in this round" and not
| whatever complex behavior is described in this article.
| adrr wrote:
| So execs don't bounce. I left a company because they didn't
| offer a secondary and i was 3/4 vested with no exit in
| sight. I had a job offer to another company that promised
| an IPO in a year. If i would have been paid, i would have
| stayed but its hard to turning down a "guaranteed" 7 figure
| pay out. It's a numbers game, 1 out 10 startups will have
| an exit that makes people money.
| wmf wrote:
| Pretty common. With startups waiting ten years to IPO, many
| founders and employees would "take money off the table" along
| the way.
| NelsonMinar wrote:
| The article: "Mr. Bankman-Fried's cashout was large by startup-
| world standards, where such sales historically were taboo
| because they allow founders to reap profits before investors."
| Schnitz wrote:
| Very. It's usually not this egregious though. Founders might
| want stable finances for their family or the ability to buy a
| reasonable home, but VCs want them to keep going, so VCs allow
| founders to cash out some of their equity so that founders
| don't go for an exit for the sake of their personal finances.
| [deleted]
| leet_thow wrote:
| Makes sense, thanks.
| kkielhofner wrote:
| Agreed but it's never this significant. In the world of "real
| companies" investors, boards, teams, etc are not OK with
| providing a founder with "F U money" (which this certainly
| is) so that they can go on and do nothing, leave for another
| venture, etc.
|
| For the others involved from investors to employees it's
| never good to be working with someone who could
| (theoretically) stand up from a meeting and walk out to go on
| and do whatever they want forever.
| wmf wrote:
| I'm reminded of the "Grouponzi" round from 2010.
| https://venturebeat.com/entrepreneur/groupon-fundraising/
| kkielhofner wrote:
| Bingo. It could be argued the relative failure of Groupon
| was largely driven by key stakeholders/insiders cashing
| out way too big way too early.
| dmitryminkovsky wrote:
| Thanks for this. Love the end:
|
| > And this stealth IPO has one more advantage: There's
| nothing preventing Groupon from doing a real IPO in 2011.
| If anything, the reassuring cash pile makes it a more
| attractive investment.
| engineer_22 wrote:
| FBM is a loon, and everyone knew it, but as long as they were
| making money they looked the other way.
|
| The crypto bubble crash was directly driven by the COVID bailout.
| People had pockets full of money from day trading on robin hood,
| money flowing out of Blackrock like it was the big rock candy
| mountain. Nobody should be shocked, and the professional pension
| fund managers should be ashamed.
| metadat wrote:
| https://archive.today/eMyNR
| slap_shot wrote:
| > the concentration of control in the hands of a very small group
| of inexperienced, unsophisticated and potentially compromised
| individuals.
|
| The most fascinating part of this whole story to me is just how
| few checks and balances there were in this company. Even without
| a board, did major investors not get his quarterly financials? If
| the leaked balance sheet was any indication of their level
| financial engineering capabilities, it's hard to imagine there
| weren't major red flags through most of 2021.
| thr0wawayf00 wrote:
| When the hype train is rolling and the valuation is
| skyrocketing, nobody asks questions.
| thesausageking wrote:
| Part of my wonders if it was intentional on Sequoia's part to
| not take a board seat or get too involved. If they had and
| Alfred Lin were a director of FTX, he would've been pulled into
| the bankruptcy and all of the lawsuits, as well as all of the
| bad press.
|
| By being a passive investor, they can write off their
| investment and move on.
| kevin_thibedeau wrote:
| Zero interest rates make the rich desperate to find a new money
| printer.
| nipponese wrote:
| This is the MOST underrated statement in all the threads on
| this whole fiasco.
|
| Government and Wall St. (but _especially_ government bare at
| least some responsibility for letting the pot get too big.
| chips_n_fries wrote:
| These are the same group of people. Low interests are
| working out just fine for them.
| kjs3 wrote:
| I thought that was the whole point: unregulated (or at least
| extremely minimally regulated, preferably in a jurisdiction
| that has a looooong history of looking the other way and in a
| perfect world with no extradition treaties), decentralized,
| anonymous financial systems. It doesn't surprise me _in the
| least_ that these clowns were running across the high wire
| without a net using other peoples money. The fascinating part
| to me is that anyone _didn 't_ think this was the inevitable
| outcome. But then I spent an hour this morning with some
| banking industry blockchain folks spinning this as "well
| _obviously_ this debacle is great because it finally will shake
| out the bad actors and leave just us good-guys taking crusty
| old banking into the glorious crypto future ". Just like
| they've said about every debacle since Mt Gox.
| DennisP wrote:
| There was nothing decentralized about FTX. It was just a
| centralized exchange in the Bahamas that happened to trade
| crypto around.
|
| The whole point of defi is to build systems where nobody can
| do what FTX did. Uniswap for example doesn't even have admin
| functions. Nobody can move your funds on Uniswap besides you.
| anticrisis wrote:
| The whole circus is a mass delusion. I would really like to
| see some academic studies on the phenomenon.
| belter wrote:
| I give you the studies:
|
| "In individuals, insanity is rare; but in groups, parties,
| nations and epochs, it is the rule."
|
| -- Friedrich Nietzsche
| jeffskiling wrote:
| jacoblambda wrote:
| There's a weird split in the space in that regard. There's a
| lot of right-libertarian-esque "no gods or kings, only man"
| ethos in the cryptocurrency space but there's also been a lot
| of work trying to build the guard rails that are common to
| society into the systems.
|
| People like to joke that cryptocurrency is just right-
| libertarians speedrunning financial legislation history but
| the reality is more that a lot of the tools that governments
| use to make finance "safe" don't have well established
| parallels that work on a decentralised platform. A lot of
| that "speedrunning" is the people who are actually building
| things trying to figure out how to still have reasonable
| safety and stability without relying on a single government
| or power to enforce policy.
|
| Things like privacy preserving transactions/communication and
| decentralised consensus are useful and valuable features but
| it's taken years for game theorists and cryptographers to
| work out schemes that are even close to being sustainable at
| scale without compromising on priorities. Doubly so to build
| those tools for stability that are essential for a well
| functioning society such as the capacity for KYC, tax, and
| regulatory compliance without compromising on the above
| priorities.
|
| So in a sense that argument that "this is good because it
| shakes out the bad actors before they can do too much more
| damage" is accurate but not in the sense that it allows the
| "good guys" to continue in their glorious libertarian
| fantasy. Rather it's a good thing because it minimizes the
| potential damage that can be done until researchers and
| engineers can develop the technology to a degree that the
| average person could actually use it.
|
| It's a race against a regulatory clock and when it strikes
| midnight, unless there is a working example of a "good" and
| "safe" cryptocurrency, regulators will absolutely go for the
| throat. Unless the tech is sufficiently mature, they will
| divide the space into one that is illegal & only used by
| criminals and another which throws any semblance of
| decentralisation or privacy preservation out the window. This
| take is unfortunately fairly US- and Euro-centric but the
| reality is that those two sets of governments and regulatory
| bodies will be the ones to decide what form digital
| currency/digital assets take going forward.
| icedchai wrote:
| How would that help? Anyone can lie on a spreadsheet or deck.
| sarahowen62 wrote:
| throwaway4good wrote:
| I think those investors got all the paperwork they wanted and
| it looked good.
| wmf wrote:
| Given what we know now, those financials were probably
| completely wrong.
| matt_s wrote:
| Yeah I'd venture a guess based on what we're hearing that
| they just wrote up whatever they wanted it to look like.
| karmakurtisaani wrote:
| I think the reason is that he was seen as a financial genius
| boy wonder who just understood crypto better than anyone from
| the "old guard". So he got away with wildly inappropriate
| things.
|
| More generally, we (as a society) seem to be worshiping those
| who make a fortune, and forget that they too are just as faulty
| as the rest of us. Initial innovative success gets projected to
| mythical proportions, and once the investment streams are open
| there is no limit to the wealth they accumulate. Looking at you
| Elon and Zuck.
| colechristensen wrote:
| In other words, the investors were stupid and deserved what
| they got.
|
| Customers were owed better, but large scale investors who
| don't do due diligence and end up losing their shirts deserve
| every bit of it.
| dsr_ wrote:
| Are you familiar with the term "accredited investor"? It's
| a formal term that the SEC uses to differentiate Joe Upper-
| Middle who has put 200K in a retirement program, from
| Josefina Nouveau, who has either:
|
| earned income exceeding $200,000, or $300,000 when combined
| with a spouse, during each of the previous two full
| calendar years, and a reasonable expectation of the same
| for the current year
|
| or
|
| a net worth greater than $1 million (either by yourself or
| combined with a spouse), excluding your primary residence.
|
| and is therefore expected, rightly or wrongly, to be able
| to judge the riskiness of a potential investment and absorb
| the loss without being crippled.
| notch656a wrote:
| I think it's more likely that the more sophisticated
| investors knew there was a lot of handwaving going on and
| they thought they'd get through the exits with
| principal+profit before they became clogged. Sometimes
| people are known to just not ask if they think the details
| are odious and they want to maintain plausible deniability
| about knowledge of source of the profits.
| amanj41 wrote:
| I have to agree with this. While I don't like to victim
| blame usually, the VCs are too much in a position of power
| to truly be victims here. They absolutely could have pushed
| for more transparency or a board and likely would have
| smelled smoke when there was none
| preommr wrote:
| > VCs are too much in a position of power to truly be
| victims here
|
| Sam playing league of legends during his pitch meeting
| with squioa capital gets memed a lot but it truly is
| absolutely staggering that so little common sense was
| applied here.
| loceng wrote:
| Elon and Zuck aren't comparable - other than earning billions
| from scalable enterprise.
| gilleain wrote:
| Ha, I'm genuinely unsure which one you think is
| better/worse than the other.
|
| It's like working out which return value from a comparison
| operator is the right one - +1 or -1?
| woeirua wrote:
| It was fraud all the way down.
| kieselguhr_kid wrote:
| I don't know if it will happen, but a potentially good outcome
| here would be some regulation on the business practices of
| sufficiently large private companies in order to ensure they meet
| some basic level of corporate governance. Maybe they don't need
| the same level of scrutiny publicly traded companies have, but
| establishing minimum standards of conduct would help avert crises
| like this that can spread across entire sectors.
| oldgradstudent wrote:
| Fraud ands theft are already illegal.
| sarahowen62 wrote:
| bombcar wrote:
| And it's becoming more and more apparent that the "investors"
| had no desire to look closely at their golden baby.
| kieselguhr_kid wrote:
| Yes, but the total lack of corporate governance that
| contributed to it is totally legal, and could have possibly
| prevented the fraud and theft.
| luckylion wrote:
| Not investing into companies that are obviously either
| frauds or extremely incompetent is the investor's job. We
| don't need a lot of new regulation to make it harder for
| you to buy bridges from people you meet on the subway.
| kieselguhr_kid wrote:
| The idea behind the lack of regulation is that the impact
| is contained to the investors. It's obvious that in
| sufficiently large cases, that's not true. If these
| actors are able to do damage to entire sectors, they
| should have to do some minimum stuff: keep track of their
| money, have board meetings, submit to audits, etc.
| luckylion wrote:
| And they will ... it's just that they'll provide false
| numbers to audits, their board will be them and their
| friends, and they'll keep track of their money as it
| makes its way into their pockets.
|
| I guess we need more blockchain! But what business will
| have 100% of their relationships, contracts and
| transactions publicly visible?
| [deleted]
| vngzs wrote:
| In Europe there are rules that work out to: if you have 50
| employees or assets over EUR ~5 million, you must disclose
| audited financial statements publicly (this is not _strictly_
| true, but it is true to a first order approximation).
|
| It wouldn't be crazy sounding to require that companies worth
| over $10 billion USD disclose financial statements audited by
| reputable firms.
| kieselguhr_kid wrote:
| Some version of this would make sense to me.
| tppiotrowski wrote:
| SBF sold a portion of his shares in the company for $300M instead
| of selling other outstanding shares. This meant he got to cash
| out before investors which is frowned upon because it signals
| that SBF believed that a $300M investment in another place was
| more valuable than keeping his $300M invested in FTX.
| AustinDev wrote:
| I wouldn't say it's frowned upon. I think that determination
| depends on the context.
| yieldcrv wrote:
| For people looking for prosecution like embezzlement or something
| else, these things usually rely on a violation of company policy
| then enabling a violation of a criminal law
|
| FTX/Alameda had no company policies and in this case disclosed
| what they were going to do to investors. "Buyout binance's
| stake".
|
| There is only so much the governments do to prevent you from
| wiring money to a sketchy opaque shadow bank in the Bahamas.
| kieselguhr_kid wrote:
| There are likely other charges that they could face. I don't
| think this rises to the level of embezzlement (although IANAL),
| but the missing customer deposits, lack of strict segregation
| between Alameda and FTX, and the use of company assets for
| personal loans and purchases will probably lead to indictments.
| yieldcrv wrote:
| that I agree on, just commenting on this specific article
| sarahowen62 wrote:
| trompetenaccoun wrote:
| It goes much deeper. They clearly stole a lot of customer
| money and SBF is supposed to have had a "backdoor" he could
| use to move funds between the exchange and Alameda to avoid
| detection by auditors. It doesn't get much more criminal
| than that in finance.
|
| https://www.reuters.com/markets/currencies/exclusive-
| least-1...
|
| Of course, with the way he and his family are connected, it
| wouldn't surprise me if he eventually walks free.
| thepasswordis wrote:
| Just a general statement on people commenting on this saga: Sam
| wasn't doing effective altruism. He was lying about doing
| effective altruism.
|
| It's weird to me that people talk about this as an indictment of
| EA...but this rings similar to me as claiming that this is an
| indictment of DeFi or cryptocurrency generally. Sam/Caroline
| weren't doing DeFi, and neither were they really doing anything
| related to cryptocurrency. This was _just_ a pretty
| staightforward scam.
| vrc wrote:
| Just the capitalized term EA to me reads like a scam. It's a
| new term created to explain some behavior that is simply
| injurious to the broader population, claiming that its for
| their benefit. I'm just not sure I buy it.
| rglover wrote:
| Especially when the definition of what is "effective" is
| totally subjective and up to the adherents belief system(s).
| Which sadly appears to have been funneling "donations" to bog
| standard NGO/political nonsense, not impactful things like
| making sure kids can eat or caring for veterans who've been
| disposed of.
| Tenoke wrote:
| That's not really an accurate characterization. The most
| promoted cause by EA has been the Against Malaria
| Foundation because it saves the most money per $ spent. If
| you donate to GiveWell (a basic recommended way to donate
| in EA) they mostly donate to Malaria and similar causes.
| Obviously, some members do a lot more but Political causes
| aren't the standard, that stuff is.
| rglover wrote:
| Most-promoted, but is it the most funded? For example,
| their landing page just links to the AMF's donors list
| page while claiming EA provided "significant support"
| with the only mentions of EA being people they've
| inspired to donate in relatively small amounts (relative
| to the billions moving through FTX). I'd imagine they're
| buried in there somewhere but if they're a major
| supporter I'd assume they'd be plastering that number all
| over the place.
|
| Sorry, but this whole FTX thing isn't just an "oopsie."
| They knew exactly what they were doing and tried to
| justify it with a few targeted donations. The landing
| page alone only showcases 6 initiatives, 50% of which are
| exactly what I described above.
| gruez wrote:
| >some behavior that is simply injurious to the broader
| population, claiming that its for their benefit
|
| what "behavior" are you talking about? The second paragraph
| of the wikipedia article on EA says:
|
| >Common practices of effective altruists include choosing
| careers based on the amount of good that the career achieves,
| donating to charities based on maximising impact, and earning
| to give. Popular cause priorities within EA include global
| health and development, animal welfare, and risks to the
| survival of humanity over the long-term future.
|
| I'm not sure how any of those causes can be considered
| "simply injurious to the broader population".
| brindlejim wrote:
| Kind of.
|
| Sam was not doing what EAism says you should do.
|
| But he was embedded in the EA movement, close to many of its
| other members, and abetted by people like Will.
|
| So if you look at EA descriptively, Sam was very much doing EA.
|
| He was lying about his business. But he wasn't lying about
| giving the money away. That was very real, and a big part of
| what "doing effective altruism" is.
|
| Sam/Caroline were also doing crypto.
|
| The two movements -- EA and crypto -- clearly want to
| excommunicate them. But both those movements were happy to work
| with them when they appeared to be successful, non-fraudulent
| billionaires.
|
| Nobody knows you when you're down and out.
| shapefrog wrote:
| He said "I'm doing EA" - the EA community said "He is amazing
| he is doing the best EA"
|
| What makes you think that he wasn't doing effective altruism
| slibhb wrote:
| It's an indictment of EA because many prominent EA people were
| associated with FTX/Sam. That shows poor judgement and, on some
| level, EA is about smart people making judgements about long-
| term good. How can we trust them to make those judgements when
| they decide to hitch their wagon to FTX?
| gruez wrote:
| >That shows poor judgement and, on some level, EA is about
| smart people making judgements about long-term good. How can
| we trust them to make those judgements when they decide to
| hitch their wagon to FTX?
|
| Charities in general aren't exactly known for conducting
| thorough due diligence on their donors. Sure, it might make
| sense to make sure the person you're getting money from isn't
| some sort of ruthless dictator or embroiled in some scandal,
| but "runs crypto trading firm" is a pretty plausible story.
| slibhb wrote:
| I wasn't talking about charities specifically, I was
| referring to stuff like this: https://forum.effectivealtrui
| sm.org/posts/xafpj3on76uRDoBja/...
|
| At least one of the people involved (MacAskill) is a big
| name in EA circles.
| hcurtiss wrote:
| Nobody has tried actual communism.
| Tenoke wrote:
| How was he not doing EA? He was lying AND donating to causes.
| I'm very pro-EA but that's a weird claim.
| hackerlight wrote:
| Because EA is about overall impact. (At least that's one
| strand of thought in EA, for those that lean more towards
| utilitarianism.) He hurt so many people and caused so much
| distrust that his overall impact is negative. It is therefore
| against the principles of EA. That's not the No True Scotsman
| fallacy.
| gilleain wrote:
| That's convenient. So when EA has a positive impact, it's
| EA.
|
| When it has a negative impact it's definitely NOT EA. Do I
| have that right?
| wmf wrote:
| Prominent EAers like McAskill have said (before this scandal)
| that EA is only valid if the money is earned honestly. They
| say that they never intended EA to be "steal to give".
| ohashi wrote:
| Sounds nice in theory, but when the outcome is people
| behaving like this and using it as a justification it rings
| hollow. The idea seems centered around making the most
| money possible as a core tenet. That alone is a pretty
| corrupting thing to build your whole ideology on judging
| from how we've seen humanity behave for thousands of years.
| chrchang523 wrote:
| Yeah. I see a fork in the road here:
|
| 1. They can band together to save the EA brand by
| demonstrating an unusually high commitment to
| accountability. The simplest way I see to do this is to
| contribute 2x what they received from FTX (as a group,
| it's impractical for them to do this on the individual
| level) to making the financial fraud victims whole.
|
| 2. They could "declare bankruptcy", switching to less
| ambitious but epistemically safer approaches to
| philanthropy. I wouldn't blame them for doing this, (1)
| is a big ask.
| spywaregorilla wrote:
| Those concepts seem obviously separate to me.
| KptMarchewa wrote:
| Definition of altruism requires selflessness. He was anything
| but.
| balozi wrote:
| Doesn't altruism literary mean selflessness-ism? Can you be
| selfless with stolen property?
| kingTug wrote:
| Yeah, that was the theme of Robinhood. Of course sbf is no
| robinhood.
| bradgessler wrote:
| Yeah, everything I've read about the corporate governance of
| Sam's enterprises seems like it should have been turned up
| pretty quickly under the most basic diligence.
|
| I can see how "Main Street" investors got completely screwed
| over, but what I don't understand is how any sort of
| institutional money flowed into FTX and propped it to the
| massive scale it achieved. That deserves closer examination.
| wahnfrieden wrote:
| be careful about portraying any time an EA practitioner shows
| up negatively as "well they weren't actually doing EA" /
| adopting that line of defense from the EA community. obviously
| that community now wants to distance themselves from bad press
| knorker wrote:
| It wouldn't be an indictment of DeFi/cryptocurrencies if it
| weren't for... you know... this being basically the main
| pattern used in all of DeFi/cryptocurrencies.
|
| https://web3isgoinggreat.com/
| p0pcult wrote:
| You're conflating coin count with their relative size.
|
| This is not the main pattern in either BTC or ETH.
| c7b wrote:
| The justifications in EA's long-termism are very similar to
| SBF's 'expected-value-reasoning', and the idea of buying out
| politicians to promote your cause is straight out of the EA
| playbook, fully justified by the philosophy. Just saying 'don't
| break laws while getting rich' is a band-aid, the problems
| exposed here run deeper.
| gruez wrote:
| >the idea of buying out politicians to promote your cause is
| straight out of the EA playbook, fully justified by the
| philosophy
|
| By "buying out", do you mean literal bribery, or just
| lobbying? If it's the latter, are you also against other
| organizations (eg. unions, environmental groups, activists)
| that try to fund raise/lobby for their preferred candidates?
| doesnotexist wrote:
| > The amount raised contained numerical references to marijuana
| and oral sex: $420.69 million raised from 69 investors. An
| article published by one of FTX's investors, Sequoia, called that
| fundraising a "meme round," referring to the embedded jokes.
|
| Is Sequoia going to need to rebrand itself after this? Sure does
| raise some questions about their judgement and professionalism.
| Hey Investors, we're raising a round of almost half a billion
| dollars and the theme is...
| jasonwatkinspdx wrote:
| That freakin novel of a fawning profile of SBF on their website
| sure hasn't aged well.
| jaspertheghost wrote:
| hmm is this effective altruism, seems like they used it to cover
| massive fraud.
| sillysaurusx wrote:
| > Three months earlier, in July 2021, Mr. Bankman-Fried bought
| out the roughly 15% stake owned by Binance, FTX's first outside
| investor. Binance CEO Changpeng Zhao tweeted this month that the
| amount totaled $2.1 billion, paid in a combination of FTT, FTX's
| in-house cryptocurrency, and BUSD, Binance's stablecoin, whose
| value is pegged to the U.S. dollar.
|
| Hmm. Binance triggered FTX's downfall by dumping FTT, causing the
| domino effect.
|
| Does this mean that Sam was the one who sold Binance the FTT
| which Binance subsequently used to cause FTT to collapse? I just
| assumed Binance bought a bunch of tokens themselves for some
| reason.
|
| That's quite the turn of events!
| wmf wrote:
| _Does this mean that Sam was the one who sold Binance the FTT
| which Binance subsequently used to cause FTT to collapse?_
|
| Yes exactly.
|
| _Binance triggered FTX 's downfall by dumping FTT_
|
| I don't know if they actually dumped; they just announced it.
| It doesn't matter now.
| sillysaurusx wrote:
| It matters! Because that'd be hilarious. Is that really true
| that an _announcement_ of a pending large sale (but no actual
| sale) was enough delta to topple the house of cards?
|
| Fascinating.
| kjs3 wrote:
| Well, of course it's true. How could it be otherwise. If
| you see an 'announcement' and you wait for consummation,
| you've already missed any market move you could have taken
| advantage of.
| KptMarchewa wrote:
| AFAIK they weren't able to sell everything before FTX
| collapsed, leaving them at a loss.
| wmf wrote:
| CZ announced that he was going to sell a certain amount of
| FTT and people could see that there wasn't that much
| liquidity on all the markets combined which implied that
| the price was going to near zero eventually, so other
| people completely rationally started selling FTT before CZ.
| [deleted]
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