FTX is just one input. Seeing that Crypto.com has 20% of their reserves stored in a pointless sh-tcoin (SHIB) is just further proof that people running cryptocurrency exchanges are idiots or greedy fools.
One or another variation of this story has played out many times already. Then the whole sand castle crumbles, and a lot of fake money gets wiped away.
The entire cryptocurrency space is just an unregulated gambling arena. There may be some solid, well-intentioned efforts within it, but they are completely overshadowed (and overcapitalized) by the purely insane gambling ones.
My view is that folks lost their life savings on crypto on FTX is only a more extreme version of those who lost their live savings on crypto on some other exchange. The fraud is terrible, but only exasperates the problems of those gambling with limited resources to absorb loses.
Huh. That makes it even worse. Every cryptocurrency exchange I've ever seen offers literal savings accounts, it's obvious to anyone who knows how banks work they're loaning out customer funds. You're saying FTX didn't do that? That's even worse...
FTX WAS a corrupt bank/betting parlor. Cryptocurrency is about self custody and full transparency. This is what blockchains allow. FTX was people depositing money in SBF's personal piggy bank. FTX has nothing to do with crypto, other than the fact that it allowed people to bet on crypto prices.
Any investor who believes any exchange has the assets they say it does deserves to lose their money.
It takes a special kind of ignorant blindness not to see that "reserves" are all based on fake, wash-trade inflated cryptocurrency valuation, and it's all a house of cards. Like FTX. Like all of them.
Its just pretentious BS used as a smokescreen for _gambling with your money_.
What has happened with FTX is a demonstration of the value of a block chain and the concept of user-controlled wallets versus banks. FTX did what banks do, which is to take a cut of transactions, and especially use customer funds to make bets (that eventually they could not cover, even with all of your funds).
Using centralized exchanges to speculate is a ridiculous perversion of the concepts in cryptocurrency.
The basic advances of cryptocurrency are:
1) digital signatures used in transactions rather than disclosing secrets such as credit card numbers
and
2) a public ledger that is cryptographically verified with chains of blocks
Decentralized exchanges are probably usually also often nonsense speculation, but if done right they can at least benefit from 2 which means you can see what they are doing and not be surprised at the last second about some secret "over-leveraging".
Cryptocurrencies are working just fine. FTX users didn't actually own any crypto. This is people giving away their money to a criminal business. The whole point of cryptocurrencies is that you don't need to trust a third party.
Not sure about that. I didn't even knew FTX existed. Alt coins the drama surrounding them are too high volume low impact. But I always thought of crypto as gambling with extra steps. I think that most people in crypto know the ropes by now.
FTX was really obvious. I saw it before and lumped it in with the half dozen other scams I see every time I mess with crypto. The people scammed fall into two categories:
1) People who shouldn't have been using crypto at all because they can't handle it.
2) People deliberately misusing other people's money who did actually know better.
I think a large amount of the stolen funds fall into the second category.
Indeed. Beyond the failure of human greed in the crypto Ponzi schemes, FTX is also a massive regulatory failure. These firms have been allowed to play with people’s money for too long.
FTX is really no separate phenomenon than the underlying crypto industry itself.
The entire space rests on the metrics generated at the whim of perhaps a hundred or two extremely (crypto-)influential individuals who are all affiliated with one another and whose incentives and behaviors are highly correlated even when that affiliation is weak or antagonistic. I'm referring here to the large established miners, both public and dark (i.e. bot farm based, corrupting gov. officials, etc.) As well as the pools that they pretend not to control, and to a lesser extent the operators of the larger exchanges - although they are not nearly as free to move in recent years as the miners still are. It's no accident in miners are extremely publicity shy.
This group, which behaves like a cartel so it's reasonable to think about it as one, self-generates nearly every metric used to determine the size and depth of the entire industry. The fees and other costs to create fraudulent statistics would be impossible for anyone who is not a miner to swallow, but if you're mining at scale there is an enormous discount - because an inverse scale fraction of those fees are paid to yourselves.
Transaction volume, price, number of nodes, number of accounts, velocity of funds, everything that is used to construct a picture of the real human interest in this market via the lens of virtual numbers that describe it is completely under the control of a few people. Although some of them are more regulated today than they were in the past, for a good part of a decade there was effectively no oversight into how any of these operations worked, and they were free to openly front run the market, buy electricity at substantially corruption-reduced cost or just outright steal it- and again in the early days this paid off extraordinarily well because early large block rewards could be sat on and held until they bubble-appreciate several thousand of percent above acquisition cost.
when you're paying reduced (or nearly zero) cost for your production infrastructure you don't need to sell all of your product right away, and you thereby accumulate a future war chest to create a market 'bottom' anytime liquidity gets a little bit too loose for your liking: simply slow-roll selling new block rewards and voila, price stabilizes. Your carefully managed low public profile lets the media and public fill in their own self-serving explanation, which is that the public must be crazy about this stuff it cant stop buying it.
So what? FTX was a crypto company in the crypto economy, trading crypto products. this is some sort of no true scottsman crypto bullshit. the crypto economy clearly exists well beyond DEX's and its also pretty clear that the vast majority of the money is on CEX's so what's your point??
It's still a scam even if bitcoin is currently benefiting from the creation of institutional ETFs. FTX was one of the largest financial frauds in history and the founder was disgraced and convicted. There's clearly a large amount of appetite for regulatory action in government right now and afaik the funding in the space has completely dried up. What did we get for all that trouble? A really inefficiet payments system? "Digital Gold"? A fun way to fund terrorists and drug running? Crypto proponents are delusional if they think they can just shake off the reputational damage they brought onto themselves in the past several years.
FTX were definitely the most polished fraudsters and hucksters in the crypto community. That's saying a lot, given that the finest fraudsters and hucksters in the world competed to out-swindle, out-cheat, and out-hoodwink each other daily in the crypto community
But that has nothing to do with cryptocurrency. Cryptocurrency is math, code, and gigawatts
This has nothing to do with the technology of cryptocurrency. In fact, it's the complete opposite.
What people are doing with FTX is taking their money off of public blockchains and giving them to something like a bank or stock exchange where ultimately customer funds are accessed in secret. This is again, antithetical to cryptocurrency which has the main features of avoiding the necessity of banks for operating with digital money and having a public, mathematically verifiable ledger.
All of this nonsense is people using the interest around cryptocurrency to promote what is essentially gambling.
Some people have even theorized that they were intentionally trying to sully the reputation of the technology since it makes old fashioned financial institutions obsolete, and the family has strong ties to the establishment (with massive investments in old-fashioned financial schemes).
One or another variation of this story has played out many times already. Then the whole sand castle crumbles, and a lot of fake money gets wiped away.
The entire cryptocurrency space is just an unregulated gambling arena. There may be some solid, well-intentioned efforts within it, but they are completely overshadowed (and overcapitalized) by the purely insane gambling ones.
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