[throwup]

The interesting thing is that FTX had almost no retail customers in the US[1], yet most of the coverage has been US-focused, due to the VC investors and US political donations. It really was just investors (in the company itself) that got hit the hardest. It just goes to show how easy it is to buy media coverage. If the media talked about things that affected their readers rather than their owners, the FTX news cycle wouldn't have lasted one day before everybody moved on.

[1]: https://cdn.i-scmp.com/sites/default/files/d8/images/canvas/...

[ac29]

> The interesting thing is that FTX had almost no retail customers in the US[1]

This is only true if you believe the massive amounts of customers in the Cayman Islands, Virgin Islands, etc were not just US persons' shell companies.

[luckylion]

Is it common for retail investors in the US to create shell companies in the Cayman Islands etc? Is that a service offered at low cost that everybody uses to get around so regulatory hurdle, like using a VPN to get around simple geofencing on streaming platforms?

[mikeyouse]

It's very common for investment firms and other tax-dodging entities, very uncommon for the everyday wealthy person. Much of the privacy benefit to Caymen shell corps is readily available in Delaware or e.g. Montana, so only more exotic tax schemes require international companies.

[ac29]

> Much of the privacy benefit to Caymen shell corps is readily available in Delaware or e.g. Montana, so only more exotic tax schemes require international companies.

FTX.com was unavailable to US persons or companies, so being legally based in Delaware/Montana/etc wouldnt have helped.

[kolencherry]

It’s around $4-5k USD to set up a exempted company and get a bank account for said company in the Caymans, with annual costs being in the $2-3k USD range. Can be cheaper or more expensive, depending on the service provider. Not uncommon for more savvy investors.

[Cullinet]

Yes. Sub $10k pa for nominee management of companies. Used to have Mossack Fonseca as a customer.

[insane_dreamer]

No

[HDThoreaun]

Those wouldn't be retail customers in the US though, they'd be customers in the Cayman Islands...

[ac29]

They aren't "in the Cayman Islands" any more than a VPN user is in the country of their VPN server though. In this case, setting up a shell company in the Caribbean was a convenient way to get around US regulation (or taxes, or both).

[HDThoreaun]

FTX was transacting with a user in the Cayman's not the us.

[jandrese]

It's pretty hard to feel bad for tax dodging fat cats getting bitten by a con man though.

[skorpeon87]

Who cares if you feel bad for them? Who even asked? Crime isn't supposed to be legal when you victimize other unsympathetic criminals.

[skybrian]

This is kind of a weird argument. There's no reason US reporters or commenters shouldn't write about things that happen in other countries, if they find it interesting. The FTX scandal is fascinating for lots of reasons.

(I've also seen coverage about how it affected the Bahamas.)

[benjaminwootton]

As I post on many threads, I have barely heard a single story about retail losing money on FTX, whereas I personally knew a handful who lost money with LUNA. I assume institutions are holding the vast majority of the bags here.

[hi5eyes]

common joke amongst ct natives is that left curves got rekt in luna, while right curves got rekt in ftx. interesting to see it commonly admitted by corresponding market participants

[pavlov]

Fascinatingly cryptic comment. My best guesses don’t map to anything intelligible. Connecticut natives? Left curve of the what exactly?

[v64]

CT = Crypto Twitter, and it's referencing the midwit meme [1] [2].

[1] https://knowyourmeme.com/memes/iq-bell-curve-midwit

[2] https://twitter.com/notfrydoteth/status/1590386451027746817

[andremendes]

Not sure if you are being sarcastic but I will post my guesses:

ct => crypto traders

left and right => each person political leaning tendency

[scatters]

Think it's left/right of the bell curve (as in the meme), i.e. dumb money (retail) vs. smart money (industry).

[pavlov]

That does make sense, but I’m oddly reluctant to give up on the mental image of a Connecticut locker room where crypto investment preferences are revealed by the individual curve direction.

[NameError]

What are "ct natives", "left curves" and "right curves"?

[Thetawaves]

I interpreted left/right to be corresponding curves of wealth distribution.

[makestuff]

So FTX was just a bunch of institutional traders trading against each other? Sounds a lot like a dark pool.

[chollida1]

> So FTX was just a bunch of institutional traders trading against each other? Sounds a lot like a dark pool.

A dark pool has nothing to do with who trades in it. As GME made famous, alot of GME retail orders got sent to dark pools to trade on.

What distinguishes a dark pool from a lit exchange is that orders are hidden and often trade at the midpoint(half penny) and not on the penny.

Who is on the exchange has nothing to do with dark vs lit.

[fasthands9]

This is what has befuddled me.

I still wager the main con was more similar to classic VC frauds where you pump up your user numbers and trade volume in order to get more investment dollars (which you can then spend on anything). Advertising on sports arenas and stuff gave them a lot of plausibility as the "big player" to people (like me) who dont trade crypto at all.

[itronitron]

Yeah, I wonder if the investors bought the media coverage in addition to paying for it (intentionally or not.)

[basch]

I believe it is more "give the people what they want." This story is getting clicks because the numbers are so big it has everybody daydreaming about having lived through this from the inside. People want details to fill in the cracks of their fantasies.

This is like Nightcrawler, and the press is satisfying the bloodlust of its readers who like The Social Network like drama and Big Shortesque scandals.

We arent living in the right reality if Adam McKay/Charles Randolph/Michael Lewis and Aaron Sorkin/David Fincher/Ben Mezrich dont have dueling FTX movies coming out on opposite streaming services the same week. (Probably Apple and Disney, who then happen to announce a merger, because of course thats how the world works now.)

[pavlov]

The Apple-Disney merger is a rumor of genuine vintage.

It was first rumored around 1996-97 when Apple was in enormous trouble. Potential acquirers according to the rumor mill included Oracle, Sun and Disney. (Somehow the “Network Computer” was a cornerstone of these speculations, but I forget what Disney had to do with any of it.)

After Jobs firmly established himself at Apple, the Pixar-Disney connection ensured this speculation regularly resurfaced. Sometime around 2007 Apple passed Disney in market cap and the rumor flipped from a merger of equals to “Apple buys Disney”.

[basch]

That was a silly tangent. My point was, the press isnt being forced upon society by puppetmasters who lost money in FTX. Thats a silly silly conspiracy theory.

The story is just generating clicks with the home investor crowd, who has no skin in the game.

[dmix]

All media is super US focused.

“World news” is code word for “non-US news” since US is the default, which makes sense.

[tsimionescu]

In every country, world news very explicitly means news about what's happening outside that country.