You can give me anonymous feedback here: https://forms.gle/q65w9Nauaw5e7t2Z9
Charles He
Karma: 2,579
Yes, I think we’re agreed.
it’s misleading to think of FTT price dropping as “the thing that was life or death for them.” (Or maybe it was in a “proximate cause” kind of way, but the real problem was the reliance on FTT in the first place.)
It’s more like FTT was a quasi peg, they needed to keep it up at $>20. The fight that was life and death was keeping it that high with their resources.
Those are Alameda balance sheets.
Yes, as you say, the FTT token wasn’t worth anything even before the crash, the FTX/Alameda money to prop it up is what was operative, and is gone now.
We haven’t discussed anything that would contradict the overwhelming evidence that FTX has a gap of $4B or more.
Low information threads seem undesirable if there are people who are less informed and had very high/trust in SBF, partially due to EA associations.
Are you saying you have the balance sheets for FTX? Can you link?
Unfortunately, I think what you’re saying is omitting liabilities, and that makes it very uninformative.
For Alameda, other “coins” were covered in the link in my first post, it’s pretty clear that they aren’t worth anything, even if there was no crisis.
https://dirtybubblemedia.substack.com/p/is-alameda-research-insolvent
This is probably true of any “projects” on FTX that the entities control.
No, not at all. This “sale” already happened.
Right now, the tokens are “illiquid” in the same sense that “Charles He token” is illiquid, “depending on price”.
In theory, FTT at >$20 would support the whole endeavor. Whatever happened was life and death and happened two days ago.
This is very sad and terrible, but I think the relevant companies are bankrupt and rescue seems unlikely. Maybe if it’s helpful in some way, the newspapers Reuters and NYT contain information, if you want to read it.
Onlookers: Guys, it’s a highschooler, I think there might be special duties here to people of different ages and backgrounds.
For onlookers:
Basically the tweets promote the narrative that it is a short term liquidity crisis and there is a future for FTX.
As someone who strongly supports SBF, it’s perfectly clear that FTX, and Alameda is in the beyond dire position of insolvency as reported. This tweet is performative and misleading but is the best narrative the CEO can do, this fact is also is expected and normal at the same time.
What I think: I think that FTX was insolvent such that even if FTT price was steady, user funds were not fully backed.
Yes you are right, I disagree. I think this collapse happened because of the FTT “attack” (or honestly, huge vulnerability) and Alameda was forced to defend. Without this depletion, SBF or FTX could cover these funds in a routine sense and we wouldn’t hear about this.
That is, they literally bet the money on a speculative investment and lost it, and this caused a multibillion dollar financial hole. It is also possible that some or all of the assets—liabilities deficit was caused by a hack that happened months ago that they did not report.
This was very crisp and helpful, yes, you are correct, we definitely disagree here, I don’t think there was a major gaping hole like a major speculation or hack that was being concealed.
Is there any bet you’d take, that doesn’t rely on a legal system (which I agree adds a lot of confounders, not to mention delay), on the above claim? Could we bet on “By April 2023, evidence arises that FTX user funds were not even 95% backed before Binance’s FTT selloff?” Or maybe we could bet on Nuno’s belief on the backing?
Thank you for thinking about this! I agree with this bet! With the addition that includes any major selloff/attack on FTT (it’s possible Binance actually was in the minority of sales on this week’s events). I will accept this bet very happily at 50⁄50 that no such evidence will merge that is substantiated (e.g. not a rumor).
(This can still be hard to operationalize, because the forensics or seeing what happened can be difficult, especially if FTX is restructured in some way. E.g., it could have happened but we don’t hear about it. This is to your disadvantage.)
So FYI the most likely outcome is that I wake up tomorrow and pretend it was all just a dream. Sorry to disappoint and thanks for indulging me a bit in the end.
I will only accept bets on escrow, so we’re both clear that it’s active. I will honor any bets discussed, if you want, and you can leave it or not mention it again, if you don’t want to take them.
You are extremely thoughtful and helpful. Have a good night! Thank you and sorry again.
I’ll escrow with Nuno at any time, you can reach out to me by PM or Nuno can reach out to me.
Given that you think it’s likely FTX “gambled” user funds I am really not sure we disagree on anything interesting to begin with :-[
I think this is true, but sort of productive to clarify this.
Maybe you think it’s only 70% likely and I think it’s a lot more than that?
I’m >90% sure FTT was collateralized in a way that had “a major role” in FTX’s collapse, but like, I’m not sure exactly what that means in a causal way, and how severe it is in a moral sense. Financial engineering is complicated and I don’t know much about it.
Maybe we disagree on just how big FTX’s financial hole is? Could we bet on “as of today, FTX liabilities—FTX liabilites >= 4bn”? I’d go positive on that one.
It’s hard to say, 4B is the ask but 8B was mentioned as a figure too. They could mean the ability to deploy some latent funds in some complex way. Honestly, this doesn’t seem that meaningful.
Dunno… Really can’t tell what you believe. You commented that folks are being too negative yet seem to also think that FTX “gambled” user deposits, which sounds pretty negative to me (though we can disagree about whether it was good to have done this). Oh wellz.
The crux here is what “collateralization” or “gambling”.
Boiled down, I believe that you can’t absolutely prevent all failures, not even real brokerages can.
Instead, you have a sliding scale of risk that has probabilities of failure, and none of these are truly zero risk unless you basically not have a business at all. Given this, it’s not clear to me that a failure indicates “gambling”.
A major consideration is that the norms of crypto are insane—like actually hard to communicate to normal people and sound normal. FTX’s main business is basically clients trading leveraged sh*t coins, which is absolutely crazy for 99.9% of people. Collateralizing with FTT was the issue, but it’s unclear if the current exchanges would survive a similar run on their tokens—should they shut down now? Are their CEOs guilty now?
People literally believed Tether might unpeg several in the last year, which is crazy, like thinking the USD might crash. It’s still a mystery how the main fiat instrument in crypto has value.
As I type this, I think people think USDD is literally unpegging?
So hanging this on one person’s neck is pretty unfair if he just pushed the “risk slider” a bit farther than other people, in this surreal space, where “NFTs” were a primary product. There’s other issues that undermined him that aren’t his fault, but explaining this to EAs would just make everyone sad.
If that sounds like mumbo jumbo and insanity with extra steps, well it might be, but is actually how sort of how capitalism and finance actually work. This literally happened with Bear Sterns and caused the 2008 crash.
To “resolve” the above, and what is “true”, I think what is used here is “social constructionism”, like Foucault, as opposed to the “rationalist” “positivist” view.
Relevant to our bet, as I mentioned, I’m not sure how this is resolved or communicated by me or you winning money in a bet. Also, I’m pretty sure that the social/political/legal things are going to drive this far more than the actual “crime” or “not crime”. I’m sort of worried but I’ll go through with it.
Wait...(the experience of actually putting real money seemed appalling and sort of scary, so I was looking through your profile to see if I would wiggle out of it.)
You’re Agrippa! The guy with very short timelines, is Berkeley adjacent and knows that cool DxE person.
No, I do care about you! I respect you quite a bit. I was wrong and I retract what I said before in at least a few comments, and I apologize for my behavior. I upvoted every comment in this chain of yours. Also, I’ll be happy to take any negative repercussions.
For the bet, I’ll do $500? Is that acceptable or do you want more? Can we give money to a trusted person, do you know of someone in real life?
Hey, just to be clear, note that “pays a fine” — this reads to me as SBF personally paying a fine versus FTX or Alameda, that’s quite a big difference IMO and that favors me. Also, Jan 1st 2024 I assume is the date.
I’ll announce here that I’ll take positive, will resolve affirmatively, 50⁄50 on both of those, under the protest that “gambling” actually means “any collateralization strategy that failed”.I’ll announce, for 50⁄50, I’ll take positive, will result affirmatively on:
By April 2023, will evidence come out that FTX gambled deposits rather than keeping it in reserves?”,
Under the protest that “gambling” actually means “any collateralization strategy involving FTT that failed”.
For 50⁄50, I’ll take negative, will not resolve affirmatively on:
“SBF found guilty of literally anything / pays a fine of over 1M for literally any reason, by Jan 1, 2024”.
As explained in my top level comment, this is sort of not very interesting.
(As mentioned, starting the “prediction market thing”). As a deeper comment, this shows the defect of prediction markets itself—that this truly adds value in limited ways, that is abusable and culture dependent, often making itself redundant, especially if competent discourse is available. This directs arguments, theories, discourse and through limited channels that are stilted and performative, in a general sense, inadequate sort of like how social media is.
The reason that for that experience is because I don’t really think about you at all.There’s basically billions of people on Earth that could be EAs, and the idea that this process selected and funded your kind instead of others is more troubling.Edit: This was a bad comment with malice.
[ EDITED: You probably downvoted me because my comment about this person sounded like something else that was highly offensive, complaining about improper selection into EA is different. ]
You still haven’t given an operationalization and at this point, we both know why.
I’ll take a bet when Nuno or someone with a real name comes along.
“Such a long time”? One of your first comments suggested a 4 year term.
“lied” “fraud”, are inadequate because they are inflammatory , loaded terms, which you don’t expect me to agree on, and this feature is being used as a wedge, for rhetorical reasons. I will take a bet like “found guilty for X/paid a fine of X”, which are actual events that happen.
For the fifth time, you fail to give a concrete bet.
The real product of this interaction for you is not a bet, but a remarkably hostile attempt at aggression and embarrassing someone with different beliefs than you.This is what all your EA rhetoric really masks. It’s sad that Sam might have surrounded himself with people like you.Edit: Deleted part is bad and has malice.
“FTX committed fraud that caused >1bn loss of user funds”
We, and really, every prediction person here, know that’s not an adequate operationalization.
You’ve been asked 4 times already to give an operationalization and number for me to take, which we both know you are fully able to do.
I suspect you are an FTX grantee. Since you are using EA money (well until you decide it’s not convenient to call it this) do you mind sharing who you are or what your project is?
I literally explained why I don’t want to give probabilities. I like, literally spent my time writing out a good faith reply to you, assuming a good faith comment.
Since you actively disagree, and you actively want to make a bet on this, you are perfectly able to do the work to set probabilities and I can take them.
As we both know, the construction of the probabilities, is entirely distinct from willing to put up money for the beliefs.
No, don’t try to walk this back, you know what you did. Give the probabilities.
Hello, if you plan on making further interactions on the forum, you might consider it useful to add your role to your profile, this would make your interactions more clear to a wider audience.
The link is probably here: https://forum.effectivealtruism.org/profile/molly/edit (this only works for you obviously).