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mishap1 t1_j29sq8f wrote

Reply to comment by terremoto25 in Bahamian regulator says it seized $3.5 billion of FTX crypto assets for ‘safekeeping’ by cloud_coder

It's crypto. Try to liquidate into cash and the value falls to zero.

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USFederalReserve t1_j29ukkh wrote

You'd never sell it into FIAT to garner returns. You'd collateralize it for liquidity at an interest rate that still nets you a return based on whatever your strategy is. The same idea is at play when CEOs use their company shares as collateral for liquidity.

3.5 billion is a lot of money and I'd suck a million miles of dick and cup a hundred million balls for 480k. There's a financial instrument for every risk profile so in the event that these seized funds were used for passive income while being held (they aren't and won't) there would definitely be someone willing to provide liquidity on that crypto, even with consideration for it's volatility.

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fockyou t1_j29uywd wrote

>I'd suck a million miles of dick and cup a hundred million balls for 480k.

Everyone's got a price

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grain_delay t1_j29vthl wrote

Bro would really suck a million miles of dick over going to med or law school

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SharpieBass t1_j2a24vf wrote

Maybe he just really likes fellas and miles of weiner?

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Jlt42000 t1_j2a2sf5 wrote

Not even that, it’s gonna take decades to suck all that dick. I’ll just get a reasonable job making 48k a year and make that in a single decade.

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doubleboinger t1_j2a395l wrote

5280 x 2 = 10562 dicks per mile, assuming each dick is 6”. I’m going to pass on the 480k.

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Detachabl_e t1_j2a6ypa wrote

So 10,562,000,000 dicks in a million miles of dicks for ::checks notes:: $480,000. Seems like a) he'd be dead well before getting to the end of those dicks and b) that just seems like a terrible pay rate for giving blowjobs. This guy needs a business manager...or a pimp.

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creggieb t1_j2cgri0 wrote

Its only wrong to arrange work and payment for a tradesperson is when its sex

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hey-look-over-there t1_j2a7loh wrote

The good news is that there's a never ending line behind the Wendy's. Business is booming!

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gravescd t1_j2aby9w wrote

But it's not collateral if nobody wants to conduct transactions in it.

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USFederalReserve t1_j2acfvv wrote

It's a 3.5 billion dollars in the form of a volatile asset...I guarantee you there are countless individuals who would accept that crypto as collateral in exchange for liquid FIAT.

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gravescd t1_j2akrpw wrote

But IS it $3.5 billion? Was that the value today or when it was seized? Will that be its value tomorrow? Collateral is collateral because it has definable value. If the value is uncertain, then its value as collateral would be the likely minimum liquidated dollar value. When it comes to crypto, that minimum is getting closer to $0 by the day.

It just doesn't make sense to borrow against something that's losing value continuously, that's a recipe for a margin call.

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USFederalReserve t1_j2alq3n wrote

> But IS it $3.5 billion? Was that the value today or when it was seized? Will that be its value tomorrow?

This is why I called it volatile. The price fluctuates within an expected range.

> Collateral is collateral because it has definable value.

Not true. The lender of the FIAT will undoubtedly charge a risk premium-- that is how they will make money when the owner of the crypto hypothetically pays them back. It would likely be negotiated in such a way that the wallet is moved to escrow which would allow the lender of the FIAT to recoup whatever they are owed from the wallet itself before returning the difference to the owner of the crytpo.

The more volatility, the larger the risk, the more risk premium that can be charged. Say you are a billionaire investor who wants to take on a billion dollars in crypto-- you would definitely be willing to lend your FIAT with the crypto as collateral. Best case, you make free money when the crypto owner pays you back up. Worst case, you can obtain a large quantity of crypto in bulk off exchange via the middle man.

That's just the birdseye view. One man's risk is another man's opportunity.

> When it comes to crypto, that minimum is getting closer to $0 by the day.

Crypto may be overvalued but its definitely not going to 0 anytime soon.

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gravescd t1_j2b3xga wrote

Collateral IS the risk premium. It defeats the purpose of asking for collateral if the collateral is itself so risky it has to be offset with higher interest or can only reliably back a tiny percentage of its nominal value.

We literally just witnessed one of the most spectacular financial implosions since Lehman Bros because of this magical thinking that Crypto is stable enough to back real financial assets.

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USFederalReserve t1_j2b5b0r wrote

> Collateral IS the risk premium. It defeats the purpose of asking for collateral if the collateral is itself so risky it has to be offset with higher interest or can only reliably back a tiny percentage of its nominal value.

First, let me remind you that this is a hypothetical that we are discussing. That being said, the volatility is not this needle that moves from $0 and Current VAL.

If I have 3.5 billion dollars worth of BTC or 3.5 billion dollars worth of TSLA shares and I want to have 500 million dollars of liquid FIAT, I'm not going to sell 500 million in BTC on the open market nor am I going to sell 500 million in TSLA shares on the open market. I'm going to find a market maker and use the assets as collateral for a loan from a market maker. I'm going to pay them interest and likely negotiate a deal which specifies how obligations are to be paid by X date if there is not Y payments made or if the BTC/TSLA shares drop Z%.

This isn't a rare or unusual thing and it depends entirely on what the assets are, the size of transaction, as well as the private individuals involved in the deal, along with their perceived capabilities of repayment.

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gravescd t1_j2bi8gf wrote

I understand how this works, but you're missing the point here that is specific to crypto: that its value is too volatile (and in the wrong direction) to be effective as collateral. It's like trying to get a HELOC while your house is on fire.

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Bob_Sconce t1_j2add85 wrote

>I'd suck a million miles of dick and cup a hundred million balls for 480k.

That's around 1/20th of a cent per dick. I've got a couple of extra bucks. What are you doing for the entirety of February?

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WigginLSU t1_j2aod9e wrote

A million miles of dick for less than a million bucks? You're a 50 cent a mile of dick guy? Why go with 480k after just talking about $3.5B?

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ggtsu_00 t1_j2bmb49 wrote

Same scheme is used to avoid paying massive income taxes while still having near unlimited cash on hand. Loans aren't considered income, even if you never pay them off.

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imaginary_num6er t1_j2ac82g wrote

>It's crypto. Try to liquidate into cash and the value falls to zero.

More like it's zero

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