Dirty Bubble Media

People should be watching this very closely. The series of events is quite worrying, I won't say anything is certain. What it looks like is someone leaked (possibly fake) Alameda's balance sheet.[1] Basically it said that Alameda has a bunch of incredibly illiquid tokens that are part of the FTX ecosystem (specifically FTT and some other shitcoins) and they have massive liabilities in FTT.

Now, lots of people say "Oh that's fine if FTT crashes, it'll probably wipe out Alameda's creditors not Alameda because those loans will be secured against the worthless FTT anyway". But the real concern is if those loans are actually provided by FTX. So if FTT collapses Alameda's creditor gets wiped out... which is FTX, and who knows how protected your FTX deposits are if FTX gets rekt. So that's the concern, but up until now there was no indication that Alameda could have any reason to liquidate. But now comes this.

What looks like the only other holder of FTT in any real volume is now going to dump. So now Alameda and FTX have to either find half a billion dollars to step in and support the price of FTT while Binance exits, or they don't at which point FTT will fall through the floor.

If FTT falls through the floor most likely Alameda is underwater and therefore their creditors are in trouble too, and who is the least secured creditor? Anyone holding stable coins or cash on FTX. So what happens? People panic, they start transferring massive holdings out of FTX because they're…

This is the same reporter who warned investors about Alameda/FTX right before they collapsed. [0] [1]

They also brought attention to Celsius two months ahead of their collapse. [2]

A lot of crypto ponzi schemes have been covered up with "Oh, that was just us doing arbitrage."

Celsius founder in 2020:

"We lend financial assets to players that can transact and generate income for themselves through arbitrage, market making or shorting certain stocks or digital assets."

Almost every brilliant arbitrage has blown up in the faces of high-risk entities or never happened to begin with (SBF's Japanese arbitrage trade looking pretty suspicious right now, with a $9B hole in his balance sheet).

The confidence of your remarks also strikes me as strange, seeing as we've now experienced one domino after another of "we're perfectly solvent and not doing anything bad" to "we're closing withdrawals and all the money's gone" (LUNA/UST, Celsius, 3AC, Voyager Digital, BlockFi, Genesis, FTX... all just in the last year.)

How can you have so much confidence these trades aren't suspicious?

[0] https://dirtybubblemedia.substack.com/p/ftxed-the-tangled-ties-of-celsius
[1] https://dirtybubblemedia.substack.com/p/is-alameda-research-insolvent
[2] https://dirtybubblemedia.substack.com/p/celsius-networks-unsustainable-defi

Pretty unfair to CZ. FTX was using FTT as an infinite money glitch. Why would CZ hold a coin that has a strong likelihood of going to 0?
https://dirtybubblemedia.substack.com/p/is-alameda-research-insolvent

The balance sheet showed billions of dollars in assets for coins that had tens of millions in liquidity. There's an 8 billion dollar hole in the balance sheet. It's pretty clear they used customer deposits to pay back lenders. Why would CZ buy a company that's nearly an Enron level fraud, and due for a criminal investigation.
https://www.visualcapitalist.com/ftx-leaked-balance-sheet-visualized/

SBF describes coins like a ponzi with no shame
https://www.youtube.com/watch?v=C6nAxiym9oc

This was Alameda CEO
https://www.youtube.com/shorts/qvURq4jaUcA

https://twitter.com/carolinecapital/status/1379036346300305408

Meanwhile, after 1 - 2bn in customer funds are missing. Everyone is asking Sam to say what happened. Sam proceeds to troll by writing the words "What happened" one letter at a time, with an Elizabeth Holmes-like legal disclaimer that he's not going to recall any of the details.

There was this article [0] from a week ago. It was based on this [1] information which apparently was a leak of a private balance sheet.

I don't think any of this was related to using customer funds though, that's a separate issue. Nobody other than insiders could've known that, and they are probably highly incentivized to keep it that way.

[0] https://dirtybubblemedia.substack.com/p/is-alameda-research-insolvent

[1] https://www.coindesk.com/business/2022/11/02/divisions-in-sam-bankman-frieds-crypto-empire-blur-on-his-trading-titan-alamedas-balance-sheet/

I agree that "Ponzi" is probably technically incorrect. This piece by dirty bubble media has a more nuanced definition and calls it a "flywheel scheme": https://dirtybubblemedia.substack.com/p/is-alameda-research-insolvent

IMHO, the moral failing is simply being too credulous of SBF's claims and not digging deeper. A lot of the stuff getting posted in the aftermath was content already available before FTX collapsed. In particular, the conversation with Matt Levine where SBF basically describes a Ponzi scheme comes to mind.