Between that tweet (completely bereft of detail) from SBF (who is now a confirmed fraud...), and the FTX bankruptcy filing, I think there's a simple explanation for it.
1. Only some of the silos/firms in the silos have been audited. The auditor, thus, has no idea if there are unrecorded liabilities (SBF didn't exactly keep notes about where the money was supposed to be) between different firms in the silo.
2. The WRS silo (FTX US, FTX US Derivatives, etc) has been audited by a real accounting firm. The auditor for the Dotcom Silo (FTX.com, other exchanges, etc) was Prager Metis[1], the "First-ever CPA firm to officialy open its Metaverse headquarters in the metaverse platform Decentraland." I have doubts that this one was a through GAAP audit.
3. There were no audits at all for the Alameda/Ventures silos.
4. Crypto crashed earlier this year, which probably wiped out most of the stupid investments FTX made. It's possible that they may been only half-a-billion-in-the-hole in 2021, as opposed to ten-billion-in-the-hole.
[2] “I don’t know anything about FTX,” said Jerry Eitel, the partner emeritus and chief metaverse officer at Prager Metis. “I’m retired,” Eitel added, before disconnecting on the phone. (Eitel is a one-time CoinDesk contributor.) The head of Prager Metis’ audit practice could not be reached for comment.
I completely agree that the audit, to the extent that there was one, must have been pretty crummy. But that they technically had one meant there wasn't a clear "this is an unaudited financial company" red flag.
AFAIK that was limited to the first $10k in deposits, so it seemed plausible as a some sort of customer acquisition cost. Also, 8% was around the going rate for decentralized lending protocols, so it only seemed high in comparison to FDIC protected savings accounts.
> AFAIK that was limited to the first $10k in deposits, so it seemed plausible as a some sort of customer acquisition cost
$800 per year per customer? Ehh. Also, above $10k and up to $10m it was 5%/yr... which I think breaks that explanation as no one is going to argue that a half million dollars a year is a reasonable customer acquisition cost! :)
> going rate for decentralized lending protocols,
Don't use euphemisms here, the term is ponzi schemes. These yield programs were across the board ponzi schemes with no substantial source of income other than the deposits of other users.
(and don't let the fact that Bitcoin critics have called it a ponzi scheme in the past confuse you: Bitcoin has never promised a yield, it doesn't need a source of income. The fact that bogus criticism uses a word doesn't make it less legitimate where it applies.)
Yes, 8% only seems high in comparison to companies that are ran by adults that don't evaporate with your money every few years.
No financial company in the world that isn't a fraud is going to pay me a $800/year for parking $10,000 in their bank account, once all risks are taken into account.
The first six months of this year it was possible! All that would be needed would be a parent company that creates child LLC’s, one per customer, and then purchases $10,000 of I Series bonds using the child LLC tax ids.
The rate was 9.6% so you would have been pocketing a 1.6% spread on the customer deposits.
Of course, neither have 90% of their competitors.
8% yield for customer deposits is another one.