I am worried and sad for all involved, but I am especially concerned for the wellbeing and prospects of the ~millions of people—often vulnerable retail investors—who may have taken on too much exposure to crypto in general.
Many people like this must be extremely stressed right now. As with many financial meltdowns, some individuals and families will endure severe hardship, such as the breakdown of relationships, the loss of life savings, even the death of loved ones.
I don’t really follow crypto so I know roughly nothing about the role SBF, FTX and Alameda have played in this ecosystem. My impression is that they’ve been ok/good on at least some dimensions of protecting vulnerable investors. But—let’s see how things look, overall, when the dust settles.
At this point, it is very clear that they have not been “good” and it is in fact the exact opposite. It is very likely that billions of dollars of user deposits are now zeroed and the equity investments of all their investors in FTX are likely worth zero as well, and it isn’t because of a mistake but because of wildly irresponsible and most likely fraudulent and criminal actions on behalf of FTX, Alameda, and Sam. They are being investigated by both the SEC , the CFTC and the DOJ; Binance is walking away from any sort of takeover. My heart goes out to the users and the teams of these companies but this is egregious and one of the worst events to transpire within crypto ever.
I sort of suspect that they were not, in fact, exemplary on any definitions of protecting retail investors at any point. The whole point of FTX was to offer leverage to its users! It was the derivatives exchange where you could get margin! This is generally bad for retail! (and then maybe had Alameda trading against you, but hey).
This is all before their exchange suffered huge outflows and it turned out they didn’t have customer funds protected at all. So no, at no point was this good for retail, it was incredibly predatory from beginning to end!
I am worried and sad for all involved, but I am especially concerned for the wellbeing and prospects of the ~millions of people—often vulnerable retail investors—who may have taken on too much exposure to crypto in general.
Many people like this must be extremely stressed right now. As with many financial meltdowns, some individuals and families will endure severe hardship, such as the breakdown of relationships, the loss of life savings, even the death of loved ones.
I don’t really follow crypto so I know roughly nothing about the role SBF, FTX and Alameda have played in this ecosystem. My impression is that they’ve been ok/good on at least some dimensions of protecting vulnerable investors. But—let’s see how things look, overall, when the dust settles.
At this point, it is very clear that they have not been “good” and it is in fact the exact opposite. It is very likely that billions of dollars of user deposits are now zeroed and the equity investments of all their investors in FTX are likely worth zero as well, and it isn’t because of a mistake but because of wildly irresponsible and most likely fraudulent and criminal actions on behalf of FTX, Alameda, and Sam. They are being investigated by both the SEC , the CFTC and the DOJ; Binance is walking away from any sort of takeover. My heart goes out to the users and the teams of these companies but this is egregious and one of the worst events to transpire within crypto ever.
I sort of suspect that they were not, in fact, exemplary on any definitions of protecting retail investors at any point. The whole point of FTX was to offer leverage to its users! It was the derivatives exchange where you could get margin! This is generally bad for retail! (and then maybe had Alameda trading against you, but hey).
This is all before their exchange suffered huge outflows and it turned out they didn’t have customer funds protected at all. So no, at no point was this good for retail, it was incredibly predatory from beginning to end!
Thanks. I’ve changed “exemplary” to “ok/good” for a couple of reasons, partly due to your comment.
I don’t understand the space well enough to properly engage this debate at the moment.
Peter, get back to work ;) (I know I should too!)
Haha, yep.