SBF Profile picture
Jul 25 15 tweets 3 min read
1) Voyager lost customer assets, but it still has the majority left.

Why haven't those been returned to customers yet?

Sad facts from a bankruptcy process.
2) Let's say that Voyager has, remaining, 75% of assets (I don't know the exact number).

It seems like the first thing that should happen is that customers get back the 75%, and then later get back the rest if anything is recovered from 3AC.

But that hasn't happened yet. Why?
3) Well, the *traditional* process is that before customers get their assets back, they get fucked.

First, there's a long, drawn out process, during which funds are frozen. It can take years.

Remember Mt. Gox? That process is *still going on*.
4) Meanwhile, that entire time, various bankruptcy agents are slowly bleeding the customer's frozen assets dry with consulting fees.

This can cost customers hundreds of millions of dollars by the time all is said and done.

And, finally, there's an imbedded option.
5) See, if a customers had 1 BTC on the platform, and BTC was worth $30k...

and then it takes years to go through bankruptcy...

what do they get back? 1 BTC, or $30k?

Probably, whichever is worth less.

So the longer the process drags out, the more optionality customers lose.
6) So, what's going on with Voyager?

Well, lots of parties were trying to bid $0.10 on the dollar for the assets.

If a customer had $100 on the platform, a third party would pay $10 for it, get whatever funds remained (maybe $75), and then the customer... gets back $10.
7) And meanwhile, Voyager's consultants would be slowly draining the remaining funds by charging fees every month the bankruptcy process dragged on.

This didn't seem right to us. Customers already lost assets; we didn't want them to lose more.
8) So we submitted an offer:

If accepted, any customer who wanted could come and get back their share of everything that remained, as soon as possible.

So the customer above would get back $75 immediately, *and* retain their claim in case more was recovered from 3AC.
9) It would let customers--if they chose--get the remaining assets back right away, with no fees or additional haircut.
10) So, who's against our offer?

Well, it was voluntary--customers wouldn't have to use it!

But there are parties that *would* lose from it: third parties who want to take some of the customer assets as fees.
11) The consultants, for instance, likely want the bankruptcy process to drag out as long as possible maximizing their fees. Our offer would let people claim assets quickly.

Or people who wanted to submit a lower bid--taking a large share of customer assets in the middle.
12) As a disclaimer, I also have a stake in this process, but I'm pretty sure our offer hurts the stake; there's a chance equity in Voyager would be worth more (at the cost of customers) if the process drags out.

But equity holders aren't who matter right now; customers are.
13) Anyway: in the end, we think Voyager's customers should have the right to quickly claim their remaining assets if they want, without rent seeking in the middle.

They've been through enough already.
14 p.s. to clarify: our offer would give Voyager customers back 100% of the remaining assets that Voyager has, including claims on anything recovered in the future.
15) ...and the "please give us some excuse to charge more fees on the estate" parade begins:

Anyway we've made our offer, hopefully customers are allowed to choose it if they want. If not guess it's up to the consultants to ensure prompt liquidity...

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More from @SBF_FTX

Jul 16
1) To what end?

Some potential use-cases for crypto.

For the sake of this thread, I'm going to ignore uses like "you can buy tokens and maybe they'll go up".

Instead I'll focus on three:

a) payments
b) market structure
c) social media
3) Let's start with payments, both domestic and international.
Read 40 tweets
Jun 21
1) Today we’re injecting $250m into BlockFi and partnering with them so they can navigate the market from a position of strength.

2) BlockFi has careful risk management and great leadership.

So they successfully removed at-risk counterparties preemptively.

BlockFi customer assets are appropriately managed, with no debt/risk from 3AC, Celsius, etc.
3) Sometimes leadership means acting decisively and that’s what BlockFi did: removing troublesome counterparties _before_ they become a problem, and adding cash _before_ it was necessary.
Read 6 tweets
Jun 6
1) Zig Zag and hiring:

why FTX is going to keep growing as others cut jobs
2) A few months ago, when BTC was $44k, I wrote a document which lead with:

"Today, February 8th, 2022, I’m not announcing a hiring freeze.

Which, in many ways, makes it like every other day.

But I think it’s time for us to substantially slow down hiring for a bit."
3) But before we get there, let's start in 2018.

One of the first lessons I learned as a CEO:

Make sure your team can mentor employees as fast as you hire them.

Otherwise, as I learned the hard way, everything gets worse.
Read 19 tweets
May 25
1) some responses to comments at round table because there won’t be time to say them all:
2) capital is also present in direct systems; we’ve already put up $250m just for 2 contracts.

Also it’s only 8% of margin in traditional systems as stated by CME, so not the main piece.
3) “traditional model hasn’t had any problems” —CME

LOL nickel
Read 50 tweets
May 25
1)Since it’s been getting more attention recently… What are my views on politics and policy?
2)I want thoughtful policy makers and rational policy.

(Don’t we all?)
3)In the end, the issues I care about are those that are most important to the world we hand off to our children.

None have been more prominent, recently, than our bungled response to COVID. We have to prevent the next pandemic to make sure this doesn’t happen again.
Read 9 tweets
May 19
1) Beta for stocks on FTX US opening today!…
2) A small subset of customers who registered for the waitlist will get access today to test it out.

We're planning to expand it to the whole platform over the next month.
3) We're opening stock trading with no Payment for Orderflow and no fees.

So what do we make from it?

Nothing. And that's ok. Our goal is just to give customers a great experience.
Read 4 tweets

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