The Crypto Geniuses Who Vaporized a Trillion Dollars

[schizo]

The difference is that in TradFi, they have a bail out big daddy Fed bank lender of last resort saved everyone's ass in the 2008 global financial collapse

Don't kid yourself, the TradFi firms need a fucking nuclear spanking but nope, they get bonuses and no one goes to jail and they continue to fleece everyone

Are you bit challenged when it comes to reading comprehension? I ain't talking about investment firms or brokerages. I'm specifically talking about clearing houses, aka "THE EXCHANGE".

Exchanges should NOT be in a loan business. That alone creates a conflict of interest.

 

[The_Krakenite]

There was a time, not too long ago, to trade this dumb you had to work at Amaranth and trade very volatile commodities that are known to go through rapid 7-standard deviation swings. And you had to leverage up to the TITS to do so (using pension investor's money).



And this... USED to be Amaranth:

And... it's GONE! Trading one day, gone the next...

 

[SunTrader]

Pekelo you're a consistently dedicated advocate
of detailing crypto failures.

Imagine the thought of showcasing some crypto
success stories.

Yup, wonder what Vegas over/under numbers would be for how many hours a day peke'r searches for any and all crypto negative stories, if there was such a category?

 

[johnarb]

Are you bit challenged when it comes to reading comprehension? I ain't talking about investment firms or brokerages. I'm specifically talking about clearing houses, aka "THE EXCHANGE".

Exchanges should NOT be in a loan business. That alone creates a conflict of interest.

No need to get schizo, dude

Crypto assets are bearer instruments

Voyager is considered an exchange and a broker. They source crypto assets from other exchanges for best prices on their trading platform in addition to their customer deposits

Gemini is an exchange with a trading platform and had deposit/lend offering. Coinbase was prevented

Tomahtoe, tomeytoe

Look at Robinhood lending out GME and AMC shares that don't belong to them, they charged interest

Did the owners of those shares get any yield but took the risk of Robindhood blowing up (they did got saved by cheating)?

 

[HeSaidSheSaid]

the implosion of some crypto institutions is just like some of the ponzi-scheme storylines on the American Greed show. the scheme and idea are still the same, just copied and executed with crypto crap.
perhaps, some of these "geniuses" saw the scheme on the show, and they though they'd just replicate it with crypto currencies. Basically, they were con men who exploited on the greed of gullible people.

 

[maxinger]

I am sure those crypto Geniuses are Geniuses.

Who knows, they are billionaires now with wealth in
somewhere / virtual space

 

[Pekelo]

I am sure those crypto Geniuses are Geniuses.

Who knows, they are billionaires now with wealth in
somewhere / virtual space

They were legit smart people, the title was not sarcasm. So were the LTCM guys. But they do not have billions left. Even the AUM wasn't that big and they either lost most of it or gave it back to some not so legit players who could easily hunt them down. It is hard to be on the lam with a family.

Sure they have a few 20-30 MM houses here and there, but some of those can be taken away by authorities (like Canada did with the widow of the dead broker). All in all, I bet they would have been happier just sticking to boring bank jobs.

 

[Pekelo]

the scheme and idea are still the same, just copied and executed with crypto crap.

Most of these broker ponzis start out as legit trading HFs.(Madoff) Then their trading idea goes sour and they start to run a ponzi.

The GBTC bitcoin premium did exist and was a legit trading idea. The problem was that it was a illiquid position (6 months lock down) and when the opportunity went away ( the premium turned negative) they didn't get out with a small loss.

 

[Pekelo]

No. The value of money can evaporate into thin air.

The cashed that flew in has to fly out. So money doesn't evaporate, the value of the positions do. That is why market caps are imaginary.

 

[gwb-trading]

I think the title is a bit exaggerating, but fun article about hubris:

https://nymag.com/intelligencer/article/three-arrows-capital-kyle-davies-su-zhu-crash.html

"... as Three Arrows Capital, once perhaps the most highly regarded investment fund in a burgeoning global financial sector, collapsed in excruciating and embarrassing fashion. The firm’s implosion, a result of both recklessness and likely criminal misconduct, set off a contagion that not only forced a historic sell-off in bitcoin and its ilk but also wiped out a wide swath of the cryptocurrency industry.

Voyager Digital, a publicly traded crypto exchange based in New York that once had a multibillion-dollar valuation, filed for Chapter 11 in July, reporting that Three Arrows owed it more than $650 million. Genesis Global Trading, headquartered on Park Avenue, had lent Three Arrows $2.3 billion. Blockchain.com, an early crypto company that provided digital wallets and evolved into a major exchange, faces $270 million in unpaid loans from 3AC and has laid off a quarter of its staff.

Among crypto’s smartest observers, there is a widely held view that Three Arrows is meaningfully responsible for the larger crypto crash of 2022, as market chaos and forced selling sent bitcoin and other digital assets plunging 70 percent or more, erasing more than a trillion dollars in value.

Meanwhile, the unclaimed yacht looms as a slightly ridiculous avatar of the hubris, greed, and recklessness of the firm’s 35-year-old co-founders. With their hedge fund in the midst of chaotic liquidation proceedings, Zhu and Davies are currently believed to be in hiding. "

$150 million ‘Much Wow’ yacht left behind by crypto hedge fund’s collapse
The 3AC founders reportedly failed at forex before switching to crypto
https://www.theverge.com/2022/8/15/...ac-collapse-kyle-davies-su-zhu-cryptocurrency