Yeah.. I remember hearing from some other big HFT firms who wouldn't touch FTX (yet were active on other crypto exchanges). They didn't elaborate on why, but we had our own concerns about their preferential treatment of Alameda's orders.
I can't recount how many times I've read something along the lines of "FTX is more trustable/better insured/less risky" on HN. And I don't even blame anyone, because the fake numbers did look impressive. Built by people with a trading background and backed by famous VCs. It was also the largest exchange by volume for a while. They had enough money to rescue all the "illiquid" (read: scam) projects. And of course, effective altruism. I never significantly invested in crypto but I would've bought the lie, too.
Knowing what we know now of course it seems like an obvious fraud, and admittedly there are skeptics on any FTX thread (but so were there about any crypto exchange), but the comments who actually foresaw what happened (instead of just referring to a single SBF interview) did either not get traction or are partly even greyed out.
And if you ask people now, you have selection bias. Everyone who was even just a tiny bit distrusting will blow it out of proportion, and those who always believed it was legitimate will stay silent.
> It’s been pretty interesting watching YC backed Coinbase get absolutely crushed by FTX, which has a higher % of crypto trading volume despite having less than 10% of the headcount. [...] FTX was founded by traders which is valuable when the ultimate purpose of the crypto industry is to separate uninformed people from their money.
> FTX is interested in being a real business. I think a lot of people the past several years have failed to try to become a real sustainable business, and instead have been pawns in Benchmark's and Tiger Global's schemes to flip companies into the S&P or into a F500 acquisition.
> FTX people clearly know a lot more about market making and how exchanges work. Makes coinbase look like amateurs.
I do recall earlier this year that SVB was the most trusted bank for these VCs and the startups in Silicon Valley for decades and was one of the biggest bank failures since 2008.
Had the government not intervened (and bailed them out), the entire VCs and startups with their deposits would have been wiped out clean.