Likelihood of FTX Honouring Deposits and Surviving?

Likelihood of FTX Honouring Deposits and Surviving?

  • Less than 0%

  • 0% to 20%

  • 20% to 50%

  • 50% to 80%

  • 80% to 100%

  • Unknnown


Results are only viewable after voting.
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khinkali

Silver Member
Being this a binary question, isn't a 50% likelihood the same as "unknown"?

Well @JohnnyDoe, you are quite the philosopher today. I approve. :)

I chose not to have a 50-50 option because it allows people who are 49-51 or 51-49 to bottle out. You are not exactly a shrinking violet so of course I appreciate your answer.

If the correct answer is 50%, then we can make some high expectation bets!
 

void

Entrepreneur
are there any (serious) examples of recovery in this sector? hardly

there are so many alternatives to choose from that it makes no sense to trust someone who's reputation got compromised

it must be hard to lose money with FTX (I presume many people here did) but it's a great thing in general, the market is cleaning, more people will understand that gambling is gambling and will hopefully move towards really trustless asset, self custody and p2p exchange

I'm still surprised how much BTC price is influenced by these unpleasant yet minor events, but at least one can buy with discount
 

khinkali

Silver Member
@void I am willing to be eviscerated for this statement, but.... we don't actually know that SBF's empire can't honour the deposits. I'm not talking about FTX or Alameda investors, but consumer deposits. He has a duty to honour those deposits and if he can't then bad things will follow from it.

But...if the problem is timing, if he has the net assets, if people get paid out a little late, then that is not the worst thing. It sucks at the time. But it's not the same as not paying.

There is a big difference between being late to honour a debt because it takes time to liquidate your assets, and not being able to honour that debt because you didn't have the assets.

I doubt that he can set things right now. I'm only 30% confident that he can. If the market were to price him a 1% chance then I'd bet on him in an instant. I don't back winners, I look for mispricing.
 

369

Entrepreneur
just a big show for the naive who think the market is being moved not by banks algos
its a simple transfer of coins from retailers to them
 

JackAlabama

Entrepreneur
@void I am willing to be eviscerated for this statement, but.... we don't actually know that SBF's empire can't honour the deposits. I'm not talking about FTX or Alameda investors, but consumer deposits. He has a duty to honour those deposits and if he can't then bad things will follow from it.

But...if the problem is timing, if he has the net assets, if people get paid out a little late, then that is not the worst thing. It sucks at the time. But it's not the same as not paying.

There is a big difference between being late to honour a debt because it takes time to liquidate your assets, and not being able to honour that debt because you didn't have the assets.

I doubt that he can set things right now. I'm only 30% confident that he can. If the market were to price him a 1% chance then I'd bet on him in an instant. I don't back winners, I look for mispricing.
Most probably, there funds are not available for the forseeable future. Mt gox serves as an example.
 

Offshr

New member
@void I am willing to be eviscerated for this statement, but.... we don't actually know that SBF's empire can't honour the deposits. I'm not talking about FTX or Alameda investors, but consumer deposits. He has a duty to honour those deposits and if he can't then bad things will follow from it.

But...if the problem is timing, if he has the net assets, if people get paid out a little late, then that is not the worst thing. It sucks at the time. But it's not the same as not paying.

There is a big difference between being late to honour a debt because it takes time to liquidate your assets, and not being able to honour that debt because you didn't have the assets.

I doubt that he can set things right now. I'm only 30% confident that he can. If the market were to price him a 1% chance then I'd bet on him in an instant. I don't back winners, I look for mispricing.
Apologies, but you are living rich fantasy life. The institutional investors had written of their balances to 0 after they found out the news. There were a few very clever persons who saw the FTX books and said that it is beyond fixing.

The guy lost investors' deposits that he was not supposed to touch. It is a classic scenario. He would end up in jail.
 

khinkali

Silver Member
Most probably, there funds are not available for the forseeable future. Mt gox serves as an example.

Foreseeable future, I agree. What I was asking is whether customer deposits can be honoured, once everything that can be unwound. FTX+Alameda had a wider variety of assets than Mt gox had.

How long would it take to unwind, and then how much of deposits could be covered? 10%? 90%?

Also people will be interested to see outflows from FTX+Alameda once things went bad, and recently before.

The guy lost investors' deposits that he was not supposed to touch.

I agree. Their own terms were clear:
(A) Title to your Digital Assets shall at all times remain with you and shall not transfer to FTX Trading. As the owner of Digital Assets in your Account, you shall bear all risk of loss of such Digital Assets. FTX Trading shall have no liability for fluctuations in the fiat currency value of Digital Assets held in your Account.

(B) None of the Digital Assets in your Account are the property of, or shall or may be loaned to, FTX Trading; FTX Trading does not represent or treat Digital Assets in User’s Accounts as belonging to FTX Trading.

(C) You control the Digital Assets held in your Account. At any time, subject to outages, downtime, and other applicable policies (including the Terms), you may withdraw your Digital Assets by sending them to a different blockchain address controlled by you or a third party.”

Let's see how well other exchanges put into action their recent claims to be transparent about deposits.

The institutional investors had written of their balances to 0 after they found out the news.

Yes. There are different types of liabilities. Investors in FTX and investors in Alameda invested in businesses that failed and should expect to lose up to 100%. Then there are customer deposits.

Deposits should not have been used (see text above from FTX Website). Will bankruptcy and other proceedings prioritise customer deposits over other creditors?

There remains a serious legal problem, highlighted by Coinbase' disclosure in May 2022.
Moreover, because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors.

There needs to be a better way to segregate user deposits.

If you put 1 ETH into an exchange and exchange it for 21 LTC, those 21 LTC should already exist on blockchain, ready for you to withdraw. Someone else now gets to withdraw your ETH that you sold them. No other creditor should have anything to do with your deposits.

Perpetuals are different. Presumably that is where FTX and Alameda got it so wrong. It looks like those who didn't agree with SBF's campaigning for CME style regulation for exchanges have been vindicated.
 

JackAlabama

Entrepreneur
Foreseeable future, I agree. What I was asking is whether customer deposits can be honoured, once everything that can be unwound. FTX+Alameda had a wider variety of assets than Mt gox had.

How long would it take to unwind, and then how much of deposits could be covered? 10%? 90%?

Also people will be interested to see outflows from FTX+Alameda once things went bad, and recently before.



I agree. Their own terms were clear:


Let's see how well other exchanges put into action their recent claims to be transparent about deposits.



Yes. There are different types of liabilities. Investors in FTX and investors in Alameda invested in businesses that failed and should expect to lose up to 100%. Then there are customer deposits.

Deposits should not have been used (see text above from FTX Website). Will bankruptcy and other proceedings prioritise customer deposits over other creditors?

There remains a serious legal problem, highlighted by Coinbase' disclosure in May 2022.


There needs to be a better way to segregate user deposits.

If you put 1 ETH into an exchange and exchange it for 21 LTC, those 21 LTC should already exist on blockchain, ready for you to withdraw. Someone else now gets to withdraw your ETH that you sold them. No other creditor should have anything to do with your deposits.

Perpetuals are different. Presumably that is where FTX and Alameda got it so wrong. It looks like those who didn't agree with SBF's campaigning for CME style regulation for exchanges have been vindicated.
There are rumors they drain it all. So everything might be gone. Well the boy is losing his mind.
 

Offshr

New member
Foreseeable future, I agree. What I was asking is whether customer deposits can be honoured, once everything that can be unwound. FTX+Alameda had a wider variety of assets than Mt gox had.

How long would it take to unwind, and then how much of deposits could be covered? 10%? 90%?
In bankruptcy procedure of any jurisdiction (insolvent liquidation) the creditors are always divided by a few levels of priorities. The first in line are creditors whose demands are guaranteed by the collateral, i.e. institutional investors. Thank government. Then employees. And then it will be someone like myself who was idiotic enough to lose 7.5k with FTX.
 

FantomOffshore

New member
It was all fake, I think 5/10% at the very very best. Most likely you will receive nothing. This was a scam almost from the get-go.

Most of the money that went in went straight to corporate to draw more people in.
 

khinkali

Silver Member
@Offshr this very bad approach to prioritising debts is something that has bothered people since the Coinbase disclosure shone a light on it. It is worrying that SBF was ousted after committing to prioritise customer deposits.

I wonder what structures and legal frameworks could support a better model and which jurisdictions, if any, already support a better model.
 

bibing

Active Member

Less than 0%​


Calm down. this is a real number also known as "the chances bibing has to sleep with Salma Hayek at least once in his (or her) life time"
 

myhand

Rothschild family member
Mentor Group Gold
That is not going to happen, they will not pay any money out.
 
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