FTX Lawyer Calls the Case 'Different Sort of Animal' in First Bankruptcy Hearing (cnbc.com) 38
Lawyers for collapsed crypto exchange FTX said on Tuesday, in the company's first bankruptcy hearing, that regulators from the Bahamas, where FTX was headquartered, have agreed to consolidate proceedings in Delaware. From a report: FTX's lawyers, who were brought in by new leadership to handle restructuring, filed an emergency motion last week to secure the move to the U.S. The hearing on Tuesday was the initial step in the resolution of the largest cryptocurrency bankruptcy on record.
"What we are dealing with is a different sort of animal," said FTX counsel James Bromley. "Unfortunately, the FTX debtors were not particularly well run, and that is an understatement." Regarding FTX's founder, this was an organization that was "effectively run as a personal fiefdom of Sam Bankman-Fried," an FTX attorney told the court. [...] Bankman-Fried exercised a level of control over the business that "none of us have ever seen," Bromley said, referring to the bankruptcy experts and attorneys the company has employed as part of the restucturing process. "The FTX situation is the latest and the largest failure in this space," Bromley said. "There was effectively a run on the bank, both with respect to the international exchange [...] as well as the U.S. exchange. At the same time that the run on the bank was occurring, there was a leadership crisis [...] The FTX companies were controlled by a very small group of people, led by Mr. Sam-Bankman-Fried. During the run on the bank, Mr. Fried's leadership frayed, and that led to resignations."
"What we are dealing with is a different sort of animal," said FTX counsel James Bromley. "Unfortunately, the FTX debtors were not particularly well run, and that is an understatement." Regarding FTX's founder, this was an organization that was "effectively run as a personal fiefdom of Sam Bankman-Fried," an FTX attorney told the court. [...] Bankman-Fried exercised a level of control over the business that "none of us have ever seen," Bromley said, referring to the bankruptcy experts and attorneys the company has employed as part of the restucturing process. "The FTX situation is the latest and the largest failure in this space," Bromley said. "There was effectively a run on the bank, both with respect to the international exchange [...] as well as the U.S. exchange. At the same time that the run on the bank was occurring, there was a leadership crisis [...] The FTX companies were controlled by a very small group of people, led by Mr. Sam-Bankman-Fried. During the run on the bank, Mr. Fried's leadership frayed, and that led to resignations."
'Different Sort of Animal' = Weasel Words (Score:5, Insightful)
In the English language it's called FRAUD.
$1B of clients funds are still missing at FTX
$70M was traced to political campaign donations
$300M was cashed out by Sam himself
$121M now traced to his parent's property
https://t.co/klXFlrtUSk [t.co]
Re:'Different Sort of Animal' = Weasel Words (Score:5, Insightful)
They're not his lawyers. They're lawyers for FTX, which is now under new management.
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American "Innovation" (Score:2)
= cutting edge crime.
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I read your work. Have you built anything using your tabilized AI approach?
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Nothing I can present. It's too hacky, as in trial and error fiddle coding, to publish, even informally. I plan to clean it up & factor, but haven't got around to it. I confess I'm a procrastinator.
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Totally different (Score:4, Funny)
It's not one of those shady pyramid schemes, our model is the trapezoid!
The "Trap" (Score:2)
Yes, different all right! (Score:5, Insightful)
We start out with a product, the tokens, which are worthless in the same sense that hand dug up rocks from 30 feet underground but having no other distinguishing factors are worthless.
They are difficult to manufacture, limited in quantity, but of no use to man nor beast. There is no reason they should sell for anything. But it gradually turns out that rocks with a guaranteed provenance of being hand dug sell for bigger and bigger amounts. People who ask why are told they are on the wrong side of history, these rocks are the future. Of something. Maybe they will replace gold? Or perhaps dollars?
We then have a whole bunch of companies trading on services and products around this worthless stuff. Some are making shovels, some are offering trading platforms and exchanges.
The whole mess is referred to in otherwise respectable publications and by otherwise respectable people as an 'industry'.
Its ridiculous and the whole thing is a mixture of scams and great popular delusions. The whole industry is based on the pretence that the tokens have value, when they are no use to anyone other than the possibility that a fool will buy them off you at a higher price than you paid.
In the end bitcoin etc will fall to zero. The associated businesses around it will all vanish. Graphics card makers will go back to selling them to people who want to use them for gaming or design or whatever.
And there will be another chapter in the long saga of great popular delusions and the madness of crowds. Tulip mania, the South Sea Bubble, the Mississippi scheme, the Darien Expedition... various pyramid and Ponzi schemes, 1929, the dot.com bubble. They happen every generation, the insistence on bidding up worthless items, and the springing up of whole sectors associated with furthering the mania. And then they end, and the only thing left is a chapter in a history book.
Diamonds and Gold (Score:1)
Or does that break your analogy?
To answer your objection, neither diamonds or gold are "really" valuable to anything like the level their "meme-supported" price would suggest. Sure, they're shiny. Sure, one is hard and non-conductive, and one is soft and conductive. So are many other cheap commodities.
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You make an interesting point: there are lots of things with no intrinsic use value which have been accepted by people as stores of value. And in some cases, like diamonds and gold, the value appears to be based on scarcity, which in turn is based on the amount of work it takes to produce the items.
So why is bitcoin different? Surely, the argument might go, it is certainly scarce and the coins require great amounts of electricity and computing power to manufacture or 'mine' as the saying goes.
There are s
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So if the first human moon landing (Score:1)
would you be on the same side of that story too as you are on this one? That it's a fraud, a wasteful, useless, speculation,
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Now I agree that FTX is very probably more than a little dodgy. Certainly what they did with that private token of theirs. And that zoo of companies. But the idea of an electronic token like bitcoin itself isn't automatically a scam...
But I don't see the concept of an electronic token as being inherently scammish. You are (or anyone else is) welcome to make that specific case. Please do convince me.
I do think that FTX was a scam. They were being trusted as a custodian of "stuff" that belonged to their customers and they basically stole it. The fact that the "stuff" was a digital token is, to a certain degree, irrelevant. It would have been just as illegal if they'd been using cash or gold or pokemon cards.
However, what I think is somewhat relevant is that they were able to get away with this behavior, at least in part, because the entire crypto space has tried its very best to structure itself in su
Linked to Musk/Twitter? (Score:1)
To keep the conspiracy theorists and trolls wound up, there are now allegations that Sam Bankman-Fried is part of Musk's consortium of investors in the Twitter takeover.
https://www.semafor.com/articl... [semafor.com]
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Any leader can be tarnished in reputation if they have one prominent tainted supporter (even if out of their thousands/millions of supporters).
Ah the wonderful world of conspiracy theories, where effect routinely precedes cause, and correlation always implies causation.
It's a chimera. (Score:2)
Theft, fraud, money laundering, influence peddling, etc.
So many heads to cut off on this one.
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A chimera is a hybrid creature (part lion, part, etc. like the manticore)
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No, I know what I said.
A chimera is a hybrid creature.
Which is my point.
And yes, chimera are generally shown as having multiple heads too.
Re: It's a chimera. (Score:2)
different sort of animal? (Score:2)
How did this even happen? (Score:5, Funny)
Crypto is notoriously for suckers, But surely even the biggest mark would hesitate to entrust his money to a guy named "Bankman-Fried". I mean it couldn't have been a bigger red flag if the guy had been called Ian Gotta-Clew or Hugh Schloss-Expected
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He cant help his name. His unprofessional conduct (playing video games during an investor call) leaves much to be desired.
However go take a look for a video interview with Caroline Ellison, the CEO of Alameda and SBFs off-on girlfriend. Puts up a cute nerd girl act but acts like a teenager. She actually claims which giggling that elementary school maths is most of what she needs. She really comes over as a very naive childish girl who does not have the maturity to run a major financial institution. Alone. W
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He cant help his name
Of course he can. If you're called Bankman-Fried and you start a financial institution, drop the fucking Fried. Or assume a pseudo. You have to be pretty dumb to keep that name.
FTFY (Score:3)
...the largest cryptocurrency bankruptcy on record so far .
Do "investors" have anything to complain about? (Score:1)
Cryptocurrency is a Ponzi scheme. It's just 1s and 0s in computer storage somewhere. No intrinsic vale. Cannot really be used as currency. You cannot go grocery shopping with it. Mostly crypto is used in money laundering, and ransomware scams, and the like.
If you get in, and out, at the right times you can make a lot of money. But it's like rolling the dice, or buying a lottery ticket. The only sure winners in the game are the people who run the game.