What Happened at Alameda Research

Re:What Happened at Alameda Research by matthewdgreen on Tuesday November 15, 2022 @09:07AM (#33609310)

I wonder how much of those $16B in customer deposits were actually lightly-traded altcoins that could never have been liquidated at anything close to that value? There is no doubt they defrauded people of a lot of (real!) money, but my guess is a huge chunk of that $16B top-line figure is fantasyland dog-coin nonsense. Whereas the LTCM and Enron investors at least started with real cash.

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Re:What Happened at Alameda Research by tommica on Tuesday November 15, 2022 @10:09AM (#33610039)

But those coins were most likely purchased with real money?

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Re:What Happened at Alameda Research by matthewdgreen on Tuesday November 15, 2022 @10:48AM (#33610631)

Yes, but how much real money is the question. I'm not doubting that real money was lost, just wondering if $16B of actual customer dollars ever flowed into the exchange.

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Re:What Happened at Alameda Research by scottyah on Tuesday November 15, 2022 @11:38AM (#33611425)

Exactly, I always wondered what the real numbers looked like. It's so easy to mint 100 coins, get a friend to buy one at $100, and say you "have" $9,900.

I wouldn't be surprised if the number of actual dollars was less than $100 million.

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Re:What Happened at Alameda Research by bushbaba on Tuesday November 15, 2022 @11:31PM (#33618867)

It’s more than 100M. I know someone who moved 2-300M of btc/eth to ftx and lost all of it

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Re:What Happened at Alameda Research by lazide on Wednesday November 16, 2022 @01:16AM (#33619538)

That’s gotta sting. Hopefully only a small portion of their portfolio?

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Re:What Happened at Alameda Research by tfehring on Tuesday November 15, 2022 @03:49PM (#33614828)

It's easy to see how FTX's assets could be "worth" $16B in the absence of any real money coming into play, but I don't see how they could get to $16B in liabilities that way. The most obvious possibility would be if their liabilities were also denominated in thinly-traded shitcoins, but at this point it seems clear that that wasn't the case.

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Re:What Happened at Alameda Research by bena on Tuesday November 15, 2022 @11:09AM (#33610970)

I think his point is that while it was bought with real money, it couldn't be sold for real money.

If I buy 50 RandoCoins for $1 today, tomorrow it shows that it's now valued at $2, and then the next day RandoCoin is hacked and all the coins are stolen, I didn't really lose $100, I only lost $50.

So he's wondering if the value of loss is being expressed as the money used the purchase the coins or the perceived value of the coins.

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Re:What Happened at Alameda Research by tommica on Wednesday November 16, 2022 @09:05AM (#33623087)

Fair enough, that makes sense.

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Re:What Happened at Alameda Research by TrapLord_Rhodo on Tuesday November 15, 2022 @12:57PM (#33612634)

Dog-coin nonsense has a 24hr trading volume of $669M. There's actually quite a bit of liquidity in crypto since it lends itself to HFT.

BTC for instance has a 24hr TV of $37B, making it one of the most exchanged assets in the world.

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Re:What Happened at Alameda Research by lern_too_spel on Wednesday November 16, 2022 @01:37AM (#33619676)

Exchanged for other crypto. The inflow and outflow of real money is on a much smaller scale, about $200 million per day for BTC.

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Re:What Happened at Alameda Research by TrapLord_Rhodo on Thursday November 17, 2022 @11:34AM (#33641359)

citation?

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Re:What Happened at Alameda Research by anonymoushn on Tuesday November 15, 2022 @04:20PM (#33615173)

You can just look at SBF's excel spreadsheet describing his own liabilities, they are mostly in dollars

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Re:What Happened at Alameda Research by nullc on Wednesday November 16, 2022 @04:17AM (#33620636)

I think it's likely that a significant portion of those liabilities were generated from magic beans and ought to be ignored when comparing the size of the collapse with other things.

To give a hypothetical example: Alameda, as a customer, deposits magic beans with a mark to market value of a billion dollars. Then Alameda trades the magic beans for a billion dollars of BTC-perp (FTX paper bitcoin), with FTX acting as the counterparty (which I believe they typically were for trades of the perpetuals). Now FTX's balance sheet reflects $1 billion in Bitcoin liability (plus being long $1 billion worth of magic beans)-- but in this example no bitcoin had been deposited at all-- just magic beans.

When sizing up the losses, all liability ultimately resulting from magic beans ought to be backed out. This is exit complicated because some of the magic-bean derived paper assets have presumably been withdrawn using customer deposits, and those funds are actually lost even if the depositors that brought them in never traded (and simply deposited in FTX because of the ponzi-scheme grade yields they were paying depositors).

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