Some people like me did put cash equivalent (usdc) in just before they froze, so I guess I'm making 18%. Though there's an opportunity cost.

There's definitely a pattern, but I don't want to assume motive. I doubt SBF will get his retrial, but still, it's good PR for a lot of people -- for Effective Altruism, for Stanford, for Sequoia -- whose reputations took a hit here. It's even good PR for the bankruptcy team to say that they got full restitution. And for the journalists, of course, it's a headline that really pops.

But sitting here, we can't really know why we're being lied to. All we can do is take note of the lies, and of who's repeating them.

I think it has to do with the incredible and increasing amounts of competition for people's attention. And of course human nature in what titles people click on.

During sentencing, SBF attempted to argue that creditors had experienced "zero harm" as even then it was apparent FTX would be able to pay them back. John Ray himself rebutted that argument: https://www.courtlistener.com/docket/66631292/415/united-sta....

> And even taking into account the potential for achieving anticipated recovery levels, which is by no means assured, customers still will never be in the same position they would have been had they not crossed paths with Mr. Bankman-Fried and his so-called brand of “altruism.”

The opportunity cost is real and cannot be ignored.

I don't know how bankruptcy documents work, but this is not a filling, it's a general-audience article.

The truth is if you had one Bitcoin in FTX, that was worth 20k. You might have bought for more or less than that. Now it's worth 60k. You didn't get the 20k back immediately (in which case you could have repurchased the Bitcoin immediately and not lose anything).

- If you bought Bitcoin above 20k, you lost money, whereas you wouldn't have otherwise. - If you would have kept your Bitcoin, you would have 60k now. You didn't get a choice in the matter.

The problem if of course "what is money" — the thing you owned was a Bitcoin, and now you're getting back its value from back then in dollar terms. This value changed meanwhile, shocking! But quite clearly, most people would have had more money now if that hadn't happened.

So while it's possible that some people would have sold lower than 24k (it didn't stay that low very long), most people wouldn't have, and so they lost money, in the commonly accepted undertanding.

Imagine the government seized your house 10 years ago, then paid you back today its price from 10 years ago +20%. Did you not lose money?

FTX invested $500M in Anthropic for 8% (at the time) and the bankruptcy estate sold 2/3rds of that for $884M, while it is tidy sum, it doesn't move the needle much in the overall money owed to creditors of $11.2B .

The estate has recovered around $16B of the money, or basically close to half of the assets at the time, the bulk of the money is coming from bitcoin tripling in value, to put it another way if Bitcoin was same prices as 2022, then they would have only recovered ~ $5B or FTX continued operating without being frozen by the courts, they would need come with $33B to make their depositors whole in Bitcoin.

The FTX stake in Anthropic was liquidated at a very high return back in ~May.

The article mentions a stake in Anthropic that was sold for $900m, while it owes creditors $11.2b, so nah it wasn't enough to make a dent unless there were MANY other smaller investments that collectively added up to $3b on top of that.

I am not sure. I don't think so but I haven't had time to read how the equities will get liquidated.

As big of a piece of shit SBF is, he was technically not lying about FTX having the money. It's just that those tweets by CZ triggered a run on the assets at the worst time, which combined with mismanagement/fraud on SFB's part, did not help.

Worth noting, for people not familiar, that Nick Leeson got massively less time in prison than SBF.

A couple differences between them but the biggest one may be how hard the USA goes on financial crimes.

or crypto is regular finance

its just a bankruptcy case being handled well, and far faster because of the blockchain records showing where things went.

Not really. You owned a claim to the very specific asset you deposited in an exchange, which is how segregated accounts work.

Why US Dollars? FTX.us was domiciled in the US but FTX.com was in Bahamas. Why not some other arbitrary currency? Why not Bahamian dollar? Why not in Bitcoin?

FTX has paid close to 1 billion dollars in fees to army of lawyers, consultants, bankers etc. in what was even at the time an 8 billion dollar bankruptcy. Even if FTX froze in time and did nothing at all, its assets would've recovered completely that 8 billion gap in its funding. It's been a boon to everyone involved and they're taking full advantage.

I have no sympathy for FTX. It was a clear case of theft. However the creditors are getting robbed twice. Once by FTX, once by the bankruptcy proceedings.

looking at individual investments is fallacious, need to look always at your entire portfolio (i.e. not just winning lottery tickets)

> Yeah, SBF was not lying about FTX having the money.

Yes, he was.

The reason people are being made whole now is that a couple of years down the line, some of his investments and acquisitions are now worth considerably more than they were at the time of bankruptcy. But at that point t FTX was insolvent and SBF was telling lies all over the place.

Selling your claim, or a portion of your claim, might also make sense from a risk tolerance / declining marginal utility of money point of view, if it represented a large enough portion of your net worth.

Or put another way - if there were an investment opportunity that that had an 80% chance of 3x-4x returns in the next 2-3 years, I might consider investing 25% or even 50% of my net worth in that opportunity. But I certainly wouldn't invest 95% of my net worth.

> Those were some expensive words.

I find it weird that you condemn that decision based on perfect hindsight.

> Selling your claim is only a good deal if the hedge funds are drunkenly stupid, you have no other assets/lending sources and are going to die soon or have debt at payday loan rates.

Selling your claim reduces your exposure and eliminates the risk that you'd get even less after the bankruptcy process concludes. It also lets you book the loss now and move on. That's valuable to some people. Consider that people have different motivations and needs than you do.

I fail to see how the decision was anything less than decisive prudence.

Your cited article makes it abundantly clear that the provenance of said $17 million claim was a default clause entitling Miami-Dade County to three years worth of naming-rights fees.

They sold that speculative claim for $5 million cash---effectively recovering that year's otherwise uncollectible receivables---then immediately turned around and locked in a 17-year, $117.4 million agreement with Kaseya[1]; back-of-the-envelope says that's an implied ~$5.4 million (2023 dollars) per year with 3% annual inflation adjustment baked in.

Call me naive, but I imagine that if you're in the business of running a multi-purpose arena with real opex, you've gotta be the dumbest risk manager in South Florida to allocate expensive legal resources in chase of speculative claims when a mutual opportunity to repair a gapping hole in your balance sheet presents itself and you have a willing long-term replacement suitor lined up.

[1] https://www.miamidade.gov/global/news-item.page?Mduid_news=n...

[flagged]

The creditors are only "earning" 19%. The first 100% is their own investment. The comparison you are trying to make is 260% vs 19%, not 119%.

Yeah, this is not creditors "making money". Anyone who had 1 bitcoin in FTX is not getting their 1 bitcoin back, which is massively more valuable.

Instead, they are getting 119% of the USD value of a bitcoin in late 2022. They are massively losing out. They are effectively getting back 33% of their assets.

FTX didn’t have their BTC though. That’s part of the problem.

But this assumes the person wouldn’t have withdrawn their funds, during that period of time.

Thankfully for the investor, the non-cryptocurrency assets generated enough return to make them whole and even give them a profit.

but they aren't

The deadline has passed but the ftx site says:

>Can I still file a claim?

>The Kroll Portal will remain accessible after the Bar Date to amend or file a claim. Absent order from the U.S. Bankruptcy Court for the District of Delaware, any claims filed after the bar date may be disputed.

So it might still be worth filling out the form - who knows.

I dunno. $1? I paid like $200. I just kind of want the picture back. I didn't have a Solana wallet when FTX was crashing and didn't want to go through the hassle of making one. I got all my other stuff off there that was actually worth something

Ah I see, so they didn't recover the actual crypto that was owed, just the estimated USD value at the moment of bankruptcy? By the way, I didn't mean to imply SBF wasn't guilty, simply that he might have been able to cover up the fraud if he had been given a bit more time.

I see a disturbing trend in your posts: you seem to want to place the blame anywhere but on SBF's shoulders, where it rightfully belongs.

Exchanges shouldn't be like banks. FTX should have had customer assets on hand to return, no matter what. That's how regulated exchanges are supposed to work. But this is crypto-land, where nobody does the right thing.

This wouldn't help because it would still not have enough Bitcoins to pay its customers.

That is, coincidentally, how we still have FedEx.

Fred Smith taking the company's last $5K to Vegas and luckily winning $27,000.

Mind you at that point, pilots were putting fuel on their personal credit cards, payroll had been bouncing for weeks.

(Funnily, some people here think he did the right thing.)

> That's not how any of this works. If you steal money from the cash register to bet it all on black in Vegas, you're still going to jail.

But, if the investments hadn't hadn't gone bad and FTX hadn't run out of money, it's probable that no one would have known that he had stolen/borrowed customer money. The same probably goes for Elizabeth Holmes/Theranos and Nick Leeson/Barings Bank - its only when things go wrong that misdeeds are found.

Well if you observe me just for the moment I have on hand 1B, my net worth is 1B and JP Morgan will be willing to lend me 10B.

Worst comes to worst tax payer bails again the banks out.

Yeah but what if you return 119% of what you took?