Why do you think there will be lawsuits? Have other crypto exchanges that went under resulted in lawsuits? Not disagreeing, just not up to date on this stuff.
There have not actually been many exchanges that went under, but there’s been lawsuits re: Luna and 3AC, the two other big crypto stories this year (this one trumps both by a long shot). The only other example of a big exchange scandal I know is BitMEX , and while I don’t know of any civil lawsuits the founders, one of them a major EA funder, were criminally indicted in the US.
yeah the crypto lending platforms that went under, well, they lent badly. But an exchange is not supposed to be lending out customer funds at all! Ergo I think there’s a lot more lawsuit potential. And ofc FTX is way bigger.
fwiw I think it’s no better than a coinflip that CZ/Binance actually buys; it very much depends on just how big the hole in the FTX/Alameda balance sheet is. When Full Tilt Poker went under and it turned out they also had not segregated customer funds, Pokerstars came in to make FTP depositors whole. But Pokerstars did this because they were getting kicked out of the US, wanted to come back to the US one day when regulations changed, and wanted to buy themselves some credit with US regulators by buying FTP and assuming its liabilities. But CZ/Binance have never really acted like the sort of people who care all that much about what regulators think.
What’s not even being discussed yet is ties to Tether of both Binance and FTX. Tether seem shady/criminal, but both FTX and Binance have stated they think tether ‘FUD’ is wrong. In a worst-case scenario where FTX is insolvent and billions in the hole, maybe one reason for Binance to step in at a loss could be that Binance wants to prevent info about tether dealings from leaking. (I’m completely speculating here!)
Yes agreed the litigation potential could be much higher here, but depends very much on details we don’t know yet and what’s to come. Withdrawals continued to go forward and deposits are safe, the only significant damages so far it seems is the drop in FTT, but that keeps us in typical crypto-implosion territory, my understanding is trading volume in FTT is not high.
Also, this would only matter for SBF’s wealth if they were able to go after him personally at this point assuming he is 100% out of FTX, which unless things were extremely shady and bad under the hood will not happen. If they go after FTX (and sale goes through), that’s Binance’s problem now.
Withdrawals are definitely not going through on FTX itself—only on FTX US afaik.Very much doubt deposits on FTX itself are safe in the slightest—depositors there are basically 100% reliant on the Binance deal going through.
Why do you think there will be lawsuits? Have other crypto exchanges that went under resulted in lawsuits? Not disagreeing, just not up to date on this stuff.
There have not actually been many exchanges that went under, but there’s been lawsuits re: Luna and 3AC, the two other big crypto stories this year (this one trumps both by a long shot). The only other example of a big exchange scandal I know is BitMEX , and while I don’t know of any civil lawsuits the founders, one of them a major EA funder, were criminally indicted in the US.
yeah the crypto lending platforms that went under, well, they lent badly. But an exchange is not supposed to be lending out customer funds at all! Ergo I think there’s a lot more lawsuit potential. And ofc FTX is way bigger.
fwiw I think it’s no better than a coinflip that CZ/Binance actually buys; it very much depends on just how big the hole in the FTX/Alameda balance sheet is. When Full Tilt Poker went under and it turned out they also had not segregated customer funds, Pokerstars came in to make FTP depositors whole. But Pokerstars did this because they were getting kicked out of the US, wanted to come back to the US one day when regulations changed, and wanted to buy themselves some credit with US regulators by buying FTP and assuming its liabilities. But CZ/Binance have never really acted like the sort of people who care all that much about what regulators think.
What’s not even being discussed yet is ties to Tether of both Binance and FTX. Tether seem shady/criminal, but both FTX and Binance have stated they think tether ‘FUD’ is wrong. In a worst-case scenario where FTX is insolvent and billions in the hole, maybe one reason for Binance to step in at a loss could be that Binance wants to prevent info about tether dealings from leaking. (I’m completely speculating here!)
Yes agreed the litigation potential could be much higher here, but depends very much on details we don’t know yet and what’s to come. Withdrawals continued to go forward and deposits are safe, the only significant damages so far it seems is the drop in FTT, but that keeps us in typical crypto-implosion territory, my understanding is trading volume in FTT is not high.
Also, this would only matter for SBF’s wealth if they were able to go after him personally at this point assuming he is 100% out of FTX, which unless things were extremely shady and bad under the hood will not happen. If they go after FTX (and sale goes through), that’s Binance’s problem now.
Withdrawals are definitely not going through on FTX itself—only on FTX US afaik.Very much doubt deposits on FTX itself are safe in the slightest—depositors there are basically 100% reliant on the Binance deal going through.