At this point you have to apply Occam's Razor... it's hard to imagine this is anyone but SBF trying to liquidate as much as he possibly can before moving to a country without an extradition treaty. He's allegedly also trying to sell his stake in RobinHood through back channels[0], which would support this.
And I mean, at this point he's so legally fucked it doesn't really matter if he gets caught doing this, so there's no need to be subtle about it. For him, sloppy is fine if it's quick.
This whole thing is so bizarre. It is almost like Brian Armstrong or Jesse Powell exit scamming their respective exchanges, or perhaps my impression of SBF has been completely wrong. If SBF does intend to be a fugitive, does he really think this is going to end up OK for him?
> If SBF does intend to be a fugitive, does he really think this is going to end up OK for him?
Honestly, if he manages to sneak to Laos or the Maldives, even with a mere $100m or so? Yeah he'd most likely be fine, especially if he lays low. A similar example at smaller scale is Sam Jain[0] who ran eFront in the early 00s; he defrauded businesses of tens of millions and ran off somewhere. He's been a fugitive for over a decade but still has multiple millions of dollars to life off of.
Biggest difference is Jain was mainly defrauding businesses, whereas SBF defrauded billionaires... wherever he goes, I'm sure 24/7 armed security is going to be on his shopping list.
He really thought FTX US was solvent less than 24 hours before declaring bankruptcy. Either he’s a fraud or he’s clueless. Either way, he’s not thinking, let alone whether he’ll end up ok.
I’m struggling to phrase this in a high brow way, but being the son of powerful parents might be a factor too. It’s possible that this is the first time in his life that anyone is telling him not to do X for an X he really wanted to do.
Him being the second largest donor to the Democratic Party will really test the rule of law. Does it apply to the powerful? We’ll see.
> Him being the second largest donor to the Democratic Party will really test the rule of law. Does it apply to the powerful? We’ll see.
Bernie Madoff was a large donor to the Democrats and it didn't help him one bit. I see no reason to believe that the situation will be any different regarding SBF, if he is indeed culpable.
While I also caught that wording mistake, the checksum in the next sentence--which includes "either he's a fraud"--indicates sillysaurusx does understand this and simply worded that first sentence awkwardly (so there's no need to get quite so intense).
I think jail is the most secure place to him, IMHO if he doesn't end up in jail someone will kill him, he screwed good and bad actors. It is not like Madoff screwing people who will not retaliate at the violent level.
The difference is that Epstein had dirt on them, some of which is also in a few little black books that the FBI has probably lost from their evidence locker.
Epstein and Maxwell are the only human traffickers ever to be convicted without anyone in the DoJ even questioning who they trafficked children to.
Epstein had every reason in the world to kill himself. But yes, in general, prison is not a secure place if there are people that want you dead. You're around plenty of people who wouldn't blink at stabbing you if it means they'll get some money in their commissary account or if a gang compels them to do it.
Interesting to discuss this. Assuming Epstein was killed, I think Epstein case is special for his strong connections with the US power AND knowledge about these people and organizations. I don't it is easy to work at the jail level (without leaving tracks) if you are not a US insider. I see the SBF case different: he has screwed people around the globe with multiple different ethics about how to solve the issue. I see his position comparable with Salman Rushdie situation but not related with religion.
BTW, where can someone learn about the Epstein story? In the surface it seems a very rare character, for me, at least, it is difficult to connect the pederastian and procurer with someone who made a lot of money from other unknown activities. It seems these two, are separate things and it is not clear why he don't just pursued one of these activities and why he and Maxwell were abusing people at the same time instead of separating their business with their personal sexual choices. Top drug dealers see drugs as a business because having an addiction will ruin it.
How many homicides happen in West Palm Beach or San Mateo?
People who think this guy won't come out still a millionaire out of this are delusional. As I said enough money to have a mansion in West Palm Beach or San Mateo, he'd only have to party at home for a while.
Which prison gang would take him in, though? Most prison gangs are race/ethnicity based and I don't think the Aryan Brotherhood would be too keen to take in a Jew who donated billions to leftist political causes.
The U.S. law enforcement really starts the Consequence Train up if the wrong people get screwed. Ironically, the billionaires who seek justice for their scammers are the ones who also spend a ton of money gutting the government of its power of prosecution and oversight.
He’s probably in the panic/negotiation phase of it all. He knows he’s cooked but possibly he can escape with enough money to pay the right people in the right places what they need to secure passage for himself.
In a scenario like this and say you’re an employee with your own money in the system. Is it illegal to take out exactly what you’re owed on the way out and before proceedings prevent such action?
Yes, because they're company funds, not yours. By definition, a bankrupt company has less assets than liabilities, so the liquidation process is about splitting them up equitably.
That makes sense. What I was thinking though is that the company turned off withdrawals. Are they required to do that? What’s the threshold? Because couldn’t an employee just flip the switch back on and withdraw like any other customer? (That clearly didn’t happen here though.)
It’s a curiosity to me about how these things all go down in a broader sense. Because clearly something went way wrong at FTX. But are authorities swooping in, as in literally and physically, at this point? It seems all sorts of shenanigans could be happening in the offices, which to my understanding is also where they live or close to it (at least some of the offices).
It’s like authorities know a figurative bloodbath is going on, but for these financial crimes, the response is a bit slower than a literal bloodbath.
You could flip all kind of switches as employee. This are not technical constraints, but legal ones.
Going by the twitter accounts of some (ex)FTX employees, they have not yet realized what might be coming their way. I.e it doesn't matter if authorities are busting down your door right now, whatever you say or do now can have implications.
> Going by the twitter accounts of some (ex)FTX employees, they have not yet realized what might be coming their way. I.e it doesn't matter if authorities are busting down your door right now, whatever you say or do now can have implications.
Certainly anyone in their situation should have personally lawyered up days ago, no matter what level of employee. Even if I was a low-level employee with absolutely no proper knowledge of this stuff, I would lawyer up because the people at the top will look for any scapegoat.
There’s a nagging curiosity, that likely everyone shares, about having a play by play of what actually happened during this week (after the downfall) and what should have happened.
Yes, spoke with a lawyer about legality of getting funds if the exchange in one way or another (not hacking in this case). The tldr is that once the insolvency is known, if you take your entire “share” you’re really taking some share that belongs to the rest of the folks ftx can’t serve and there might be clawbacks.
Doing so via unauthorized withdrawals almost certainly adds a layer of actual crime?
If you’re a company insider technically speaking you’re not allowed to take a dime out of a company for personal gain/reimbursement starting the moment you become aware of the company’s insolvency.
I see what you mean, but is it insider information in this case? From my understanding, many (most?) employees found out about it via published news articles.
I am making no reference to insider information at all.
The relevant fact is the company’s insolvency.
If you’re in an executive position at a company, and you know the company is insolvent, and you’re appropriating company funds for yourself, you’re breaking the law. It doesn’t matter if the company owes you that money.
There’s a little subtlety here of course but this wouldn’t be an example of that.
He shouldn't bother. Soon he'll be offered a book deal, a movie deal and an exclusive interview deal that will net him enough money to live comfortably for at least a few decades. Not to mention that after his not-so-significant prison term he'll become a motivational speaker at 50 grand a pop.
Shkreli got 7 years, for crimes where it's debatable how much, if any, money his investors lost. I think 7 years in prison is pretty significant.
Belfort got 2 years, another exec at his company got 3 years. That doesn't seem significant. On the other hand, they got a deal because they cooperated, leading to 24 people at another fraud company being charged, one of whom got 22 years.
(The fellow who got 22 years is now out. He's on Twitter at @TheReal_Wolf_, and is involved in NFTs. Hmm.)
I don't think SBF would qualify for Shkreli's treatment, because people were significantly harmed. Would he get Belfort's treatment? Maybe, if he has the goods to bring down a bunch of other people.
As far as I know, Shkreli and Belfort only affected a small number of investors in the US.
SBF operated in MANY jurisdictions worldwide, and had a (now embarrassing) association with government officials. It's likely more governments will go after him than the other two. It's possible his situation results in more prison time than even Do Kwon, founder of Luna/Terra.
Yeah, I think the question "Does Marc Andreesen associate with scam artists" has been quite conclusively answered by now. I can just see it now "Well he built an amazing business last time..."
In some states like NY, the money you make from writing/talking about your crimes go to the victims of your crime. That's why Inventing Anna (Netflix series inspired by true events) didn't make any money for the real (but not so real) Anna Delvey.
Those laws have mostly been ruled out: https://en.wikipedia.org/wiki/Son_of_Sam_law Per that article, the present version of the NY law allows extended time to sue for damages.
Could we avoid insulting poly people? I know it’s a little strange, but there’s nothing wrong with being strange.
Imagine how it would sound if one were to s/polyamorous/gay for example.
(Trying hard to keep my comment substantive. I’ll stop doing this if it leads to a poor discussion though.)
The poly movement is pretty interesting in general: https://www.tiktok.com/t/ZTRxcxftQ/ There’s an ongoing TikTok series that’s witty and fun. I’ve found myself drawn in by it.
This is not about being poly per se. This is about a bunch of hedonistic kids running a company to the ground and likely committing crimes that could fill a textbook. Being poly does not normalize multiple execs fucking each other in a billion dollar company.
>Imagine how it would sound if one were to s/polyamorous/gay for example
Unfair comparison, if gay was used that would be highlighting their sexual orientation, not the nature of the relationship between each other which is relevant in context.
I see how it seems that way, but being poly isn’t a choice, in a specific sense: you feel attraction and emotional love for others, even while you’re in a relationship. And it happens repeatedly throughout your life.
You can say “well, stop doing that.” But the comparison with being gay is all the more valid here. It’s like saying just don’t be gay.
In other words, being poly isn’t merely an agreement between three or more partners. That’s a necessary component (otherwise it would just be cheating), but it’s not sufficient. Some of the people in those three can’t help but feel that way, regardless if they used to be exclusive.
It’s doubly hard in the current social climate, because since it’s so new, there isn’t really a way to meet likeminded people yet. The app Open is the closest I’ve seen. So societal normalization is a necessary step before the movement can start flourishing.
The topic is incredibly nuanced, and thus quite hard to have a substantive conversation about. But I’m hoping one day to see the phenomenon pop up on HN so that we can have an open discussion about the merits and downsides. (There are plenty of both.)
SBF made the 2nd biggest donation to Biden's campaign so I doubt he'll ever see the inside of a prison cell.
The whole story would ring a few bells if it wasn't that being seen as a "conspiracy theory" person is worse than being a murderer today: how Arthur Hayes was prosecuted and forced to resign and sued for refusing to share US custommer data, but really they sold it as him controlling the crypto leverage trading market which was dangerous for people, then right aftee the election campaign started (13 days after Biden announced he's running) SBF appeared out of nowhere (well his mom had just cofounded a couple campaign fundraising organizations), with an exchange that somehow was ok to use in the US while offering absurd amounts of leverage to trade anything, even stocks and commodities. Then they supposedly lost some huge amount of bitcoin in a hack, which no one mentions now, backed Solana which is just a centralized db they turned off whenever they wanted, etc.
Add to this the fact he legit met with the SEC to discuss regulating self custody of crypto assets (SEC file S7-25-20) while his own exchange just gave away people's money and lied about it.
His father wrote papers on how the cash economy is bad for tax collection and testified in front of congress on this.
His mom wrote papers on taxes too, oh and the organization she co founded "Mind the Gap" was involved in a scandal in 2020 where she funneled 20 million $ to a political party.
His aunt is a member of the wef and she created the first college program about climate and health.
Oh and his mom taught Caroline Ellison from Alameda, and her parents are friends with the Bankman-Fried's. Her father is head of the dept of economy at MIT so he worked with Gensler before he was appointed to the SEC, so these people are very well connected, although only a crazy person would believe it's because of their connections that they did what they did while Arthur Hayes was stopped.
Oh and he got to meet Bill Clinton and Tony Blair in a crypto conference in the bahamas and sit with them and talk, as you do of course...
Personally I didn't even need to research the guy, just a look at him and how dishonnest he looks when he talks made me delete Blockfolio right after it was bought up by FTX let alone trust this guy enough to send money to his exchange.
But let's say I was a crazy person, then as a crazy person I can't stop but notice how certain logos they use for both alameda research and ftx resemble (a little too much) some logos you can see on an FBI report on Epstein.
And as a crazy person who saw this I couldn't help but dig deeper on his family, and lo and behold the connections in banking they have are too similar to those Epstein had, and of course right after this whole ftx problem the website gets hacked and all the money that was still there was stolen and he hops on a plane and flies to Israel.
Then you get the co founder of Maker DAO tweeting about FTX insolvency and how Alameda's logo is a direct copy of a pedo ring, then a day later his body washes up on shore dead.
I wouldn't be surprised if they use this to pass severe regulations on crypto, before making owning gold illegal like they did in 1933, even J Powell said it the other day, they don't know if raising interest rates will curb inflation or not, and if it starts going haywire then people jumping ship to other commodities will only make it worse.
But hey soon enough I'll have to go the deepweb and transmit over radio to write a crazy comment like this.
If there were some shady connections between my trading firm and a paedophile ring, why do you think I would sneakily advertise that by using a similar logo?
>But let's say I was a crazy person, then as a crazy person I can't stop but notice how certain logos they use for both alameda research and ftx resemble (a little too much) some logos you can see on an FBI report on Epstein.
I'm not a crazy person, I said if I was crazy I would make the connection, good thing you're not crazy either.
This is actually “an announcement of an announcement.” It’s not publicly known who the F the FTX hacker is.
It’s good to see them making so many mistakes. It’ll really test the theory that if you commit a huge crime and get a 15 year prison sentence, will it be worth it if you lock your millions away where no one can find them but you?
I don’t think so. Even a brain wallet would be hard to siphon from afterwards without anyone noticing.
Maybe I'm just a cynic, but I find the community's pursuit of this individual's identity pretty interesting given the pro-privacy stance of crypto.
Everyone cares about privacy until a crime is committed, and then we all want to know. And we leave it up to folks at companies like Kraken to tell us what they find.
> Maybe I'm just a cynic, but I find the community's pursuit of this individual's identity pretty interesting given the pro-privacy stance of crypto.
This seems like a strawman to me. Are there any privacy advocates out there who don't believe investigations should happen after a crime has been committed, because investigations are anti-privacy?
The stated goal of privacy in money exchange is that we should not know who makes a transaction. The assumption is that people should themselves policy their money matters, independent of banks or governments. However, when a scam occurs everybody is asking police to to figure out who made these transactions, effectively supporting the identification of the people behind the funds.
Right, but the idea is that sensible people should want to willingly give up some of their privacy to participate in a transparent market. When you don't, and the crime is 10,000x harder (if not impossible by design) to solve (and more likely due to the moral hazard this brings), the sensibility of operating in a less private marketplace becomes apparent.
Typically the markets can afford to compensate people on a day-to-day basis for small crime, but the entire reason bizarre concepts like clearing houses exist is that, from time to time, once every 10-30 years, an entire market can be destroyed overnight because of liquidity or counter-party risk or a combination, or some other situation like fraud. These things happen, and will continue to happen, which is why we should always look to the past when designing markets, and not fall for the folks telling about the wonders of their utopian future.
1. I'm not sure why you're talking about fraud in markets, when that's not what happened here. This isn't a case of market participant A ripping market participant B off, it's some insider abusing his trust to enrich himself.
2. You talk about markets "can afford to compensate people [...] for small crime", but I see no reason why that would be applicable to exchanges. Given that both sides of a trade has to put up money before they can make the trade, the risk that either side can commit any sort of fraud/crime is virtually zero. You can still get hacked/scammed by the exchange itself, I'm not aware of any crypto privacy advocates who think that centralized exchanges should have the right to be anonymous.
3. You talk as if the "utopian future" is vaporware or something, but it does exist in the form of decentralized exchanges. Sure, they're not as good as centralized exchanges when it comes to fees/spreads/execution time, but they do exist and allow you to transact anonymously.
>I'm not sure why you're talking about fraud in markets, when that's not what happened here. This isn't a case of market participant A ripping market participant B off, it's some insider abusing his trust to enrich himself.
You're describing fraud in a market.
>I see no reason why that would be applicable to exchanges
Anomalous and/or suspicious trades are regularly undone by exchanges.
>You can still get hacked/scammed by the exchange itself, I'm not aware of any crypto privacy advocates who think that centralized exchanges should have the right to be anonymous.
what planet do you come from? you ask questions that seem like you have an interest in finance but cant accept the emergent capital markets structures that follow from the practice of finance?
My point is that a clearinghouse would seem archaic give defi and modern instruments, yet they still exist because history has shown they will survive times of crisis.
there is no difference between archaic and non-archaic methods of finance really. just structures that emerge from the prevalent economic, regulatory, religious, and cultural context.
islamic banking may seem weird to you if you are even aware of it, but its a timeless archetype of a certain pattern of relationships and rules that arose in response to a certain envrionment at the time ( which persists into modern day ). this system has probably more in common superficially with crypto than some other ways of organizing economic activity.
using words like archaic shows ignorance of the subject and of humanity. maybe when AI is doing everything and new underlying dynamics exists for the way machines relate, we can have this discussion but even then scarcity and physics exist and some methods of resource allocation have to be negotiated or emerge organically.
>Much of the crypto bros want "law is code" which basically means nothing is illegal.
As other commenters have mentioned, this isn't some DiFi smart contract hack, it's just a regular centralized exchange hack. "law is code" doesn't apply here, unless there's some other group of "crypto bros" that I'm not aware of who think that laws should only be enforced via the blockchain. The version of "law is code" that I'm aware of only applies insofar as smart contracts are concerned (eg. anything that a smart contract allows for is fair game).
Your use of the phrase "crypto bros" and stereotypical generalization suggest you have an agenda. You are not looking to have a "curious conversation" as the HN guidelines encourage.
This is not cynical. It's the reason I've been actively against cryptos like monero since the beginning. Everyone hates government regulations because politics is hard and people (reasonably) want to buy drugs, but in the end capital security is incredibly important, and a rising tide raises all frauds.
It's a dower subject. When everyone was making money nobody will listen. When everyone is losing money it's uncouth to told-you-so to people in serious pain. You can't get through to most people, full stop.
I was lucky enough to come of age during the dot-com bust, with family that clearly broke down the concepts of accounting and the history of market crashes. Nobody wants to hear it no matter what part of the mania you're in. Focus on your friends (many of which I was able to influence), and focus on fundamentals. Any public discussion of a mania during a mania will fail, and is literally the archetype/moral of the Cassandra myth.
This has almost nothing to do with crypto. There's no "hurr durr code is law" clever hacking involved, the money was straight up stolen from a centralized exchange in the digital equivalent of a bank robbery and is now being laundered in plain sight.
Can we please not No True Scotsman this? Crypto “the future of money” is completely unregulated and nothing but full of scams hitherto unseen since the days before banking regulations.
You’d be hard pressed find a bank that can execute a rug pull like this. While I’m no fan of Bank of America, I’ll keep my “dirty fiat” there and sleep soundly, just like I slept soundly in though the Great Recession.
Sure, we're on the same page, I'm just saying that the actual heist here could, from a technical point of view, been executed at Bank of America as well. (Although sneaking a backdoor in there and getting money out would be orders of magnitude harder.)
Crypto isn't about privacy, it's actually the opposite. All transactions on the blockchain are transparent as it's literally a distributed ledger. There is absolutely no secrecy or privacy when it comes to how Bitcoin works for instance. And it's by design. Bitcoin inventor(s) goal was for people not to have to trust the secrecy of banks but essentially be their own bank. Whether that goal was achieved or not is anybody's guess...
So I'm not sure what pro-privacy stance you are talking about.
It’s all open sure, but to imply that privacy isn’t a selling point of crypto is absurd. The privacy comes from the fact that it’s all pseudonymous with no real world identity verification at all.
To pretend that this isn’t a feature — nay, THE feature — of crypto is absurd. There’s a reason why Tornado cash exists, and why bitcoin is the choice of online criminals everywhere.
Pseudonymity is not privacy. If I publish your text messages online but omit the names, your conversations are no longer private, names or no names. And if you publish your transactions to a public ledger, even without names the transactions aren't private.
Darknet markets use monero, not bitcoin. Monero is one of the few currencies that does offer privacy, but it makes up a very small part of the ecosystem, less than 1% by market cap.
Or if that’s too hard to answer. Why do you call yourself after vomit instead of use your real name? (If you really are named after vomit, I apologize.)
Who am I? All you know is my pseudonym. You don't know my real name, yet here we are on a public forum having a public conversation. These messages are publicly readable.
Or are you trying to claim that because you have not verified my real-world identity, these are actually private messages?
Dude. You’ve avoided answering a simple question, and instead just keeping repeating the same attempt to distract from the topic at hand through repeated condescension. It doesn’t make you look smart. In fact, it does the exact opposite.
I’d like to think, you’d grow out of this, but we both know you won’t.
Privacy conscious people are against mass surveillance, where everybody privacy is invaded by default, even if they've done nothing wrong and aren't suspicious.
Privacy as we had before technology that allowed such things is what such group desire. Is there someone suspected of a crime? Sure, tailgate them, follow them, etc. This manual surveillance has a cost and max throughput that makes it you cant mass surveil.
It shouldn't matter how many people want to know who you are, the privacy part is the part that makes it harder for them to find out. You can be nosy and believe in privacy, and perhaps the awareness of your own tendencies to the former makes it easier to support the latter.
There's often a confusion between privacy and anonymity. Everyone should be entitled to financial privacy. Per the laws of the land (at least most developed countries), you are not entitled to financial anonymity.
There is still an important difference between giving information to the police for an investigation and sharing information publicly. Not at all the same thing.
But you would expect a mugshot to go public (at least in some American states) and the preparatory ultimately known to the public through records as a felon. To rat someone out is to dox them.
privacy in crypto is a joke particularly if you use a reputable exchange. FBI will tell you that. they are happy for you to use crypto as easy to trace
What’s more concerning, retrospectively, FTX US conducted a KYC protocol, which was a tad annoying, as it took me days ti meet compliance. I had to upload all sorts if documents, copies of my passport and IDs. The money, screw it. But what happens to once personal data? Whose property will this database become?
> 4. White House Monitoring FTX Collapse, Calls for Crypto Regulation
Officials were precisely busy receiving gigantic bribes (well, "donations", the biggest ever made from any sector after those made by George Soros) from SBF/FTX to draft legislation giving the CFTC jurisdiction over crypto exchanges. And who was the chief lobbyist of FTX? An ex-CFTC commissioner.
Let that sink in: the main FTX lobbyist was an ex-CFTC commissioner lobbying for a legislation giving... Full control of crypto exchanges (including the decentralized ones) to the CFTC.
You cannot make that shit up.
So crooks running scams have drafted a legislation that'd give them complete control over crypto exchanges.
The ongoing legislation, if it passes, is the one drafted by the very villains who were planning to execute the biggest scam ever (he was obviously after pension funds and sovereign wealth funds: there was no limit to his megalomania).
As Erik Vorhees just blogged:
“The complex derivatives and custody issues which froze financial flows in 2008, back when safe, regulated financial institutions had no idea who owned what and markets collapsed under the layers of counterparty risk... these would not (can not!) happen in DeFi."
"Have they even learned how to use it? How many of those drafting crypto laws have ever actually executed a DeFi loan?”
“Yes, DeFi removes some of your power as regulators... but it solves the problems you’ve been trying to regulate. Isn’t that more important?”
I do honestly think that the villains just got caught with their hands in the cookie jar.
The master evil plan was much bigger than that what actually happened but, thankfully, everything crashed, creating a run to safety and immense selling pressures everywhere and put a stop to the FTX/Alameda shitshow.
Crypto haters are going to hate, but here's Erik Vorhees' messages to the (both totally clueless and corrupted IMO) officials.
It would be nice if the crypto haters were to read the following with an open mind:
Remarkably amateur move. Either an inexperienced insider who doesn’t understand the implications of their moves, or an experienced hacker using someone’s compromised Kraken account to throw investigators off.
Or someone who just doesn’t care at this point and is going for broke on their way to a non-extradition country.
They don't. People just saw a G450 moving from Nassau and assumed it was SBF. Seems more likely to be Joe Lewis, who lives in the Bahamas but frequently travels to Argentina.
What if this was never about getting the money out of the crypto markets. Could it simply be about minimizing how many of the assets the bankruptcy could liquidate all at once?
It may take a long time to recover these funds. Remember seeing that slippage was as much as 50% on some of the transactions, a permanent loss.
No one still in crypto wanted to see the liquidation happen.
Kraken regularly publishes proof of reserves. I don't recommend keeping funds on exchanges as a rule, but I don't feel stressed out leaving a percentage of my holdings there for an extended duration.
I believe only Coinbase publishes total liabilities at the moment. In my opinion, Coinbase is the gold standard due to being a publicly traded company and Kraken carries more risk.
>Any client can independently verify that their balance was included in the Proof of Reserves audit by comparing select pieces of data with the Merkle root.
Kraken is based in SF and has various US regulatory attachments and thus auditing obligations. It is specifically not an offshore operation. It’s also been around for a long time.
Among crypto exchanges Kraken is definitely on the legitimate side of the spectrum.
Somebody should create a kind of credit rating for exchanges to rate their risk and legitimacy.
My dad pitched me this rating system months ago, I advised that it would be fairly game-able, my big points were that 1) look how easy it is to game reviews on almost any site, amazon, glassdoor, etc. 2) any enforceable credit system needs actual teeth, the reason that credit scores are useful to institutions is that there is the direct ability to reduce someones quality of life significantly using them, e.g. bad loans, can't get an apartment, etc. to me 2 seems to be the main reason a startup credit score rating doesn't work
FTX has always been a bit of a joke in the crypto community. I elaborated in a previous comment.
Kraken has been a bastion of sanity amidst the chaos for a decade now. No prop trading, no dizzying corporate structure, no "liquidity" issues, no stadium sponsorships. They're just chugging along in the background, keeping their site online, publishing regular audits, and running the business like adults. I intend on holding BTC indefinitely, but if anything happened to Kraken it would likely change my mind.
FTX was only a few years old and offered 8% interest on all deposits under $10k. I told my friends that if they use them be ready to pull their money at a moment's notice. That's what I did as soon as the Coindesk article came out about Alameda's balance sheet. I knew it was high risk so I kept about a quarter of my crypto holdings on there and had my Ledger addresses whitelisted.
FTX.us was a separate entity but still owned by the offshore entity and thus got included in the bankruptcy so no i wouldn’t have said the same. Add i understand it was still operating after the main site went down because it was separate but customer funds in crypto exchanges still aren’t protected like with banks. So don’t use an exchange that is in any way attached to unregulated offshore activities.
And I mean, at this point he's so legally fucked it doesn't really matter if he gets caught doing this, so there's no need to be subtle about it. For him, sloppy is fine if it's quick.
[0] https://twitter.com/Loopifyyy/status/1591489987459297282