EA and the FTX collapse

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 EA and the state of FTX 

EAGxBerkeley, Dec 2-4th, 2022

- #1 rule in cryptocurrency--- never let customers trade collateral 

- ensuring no gambling

- Alameda Research was a customer that was allowed to do gambling during the 2021 bull market 

- Alameda was short about 8 billion (not known at the time) which resulted in liabilities superseding assets, committing one of the greatest accounting errors in history 


So what can we say about FTX liquidation in general? 

Perhaps the fact that it was not handling risk management well, fraudulent accounting and risky derivatives caused domino effects 

1. misconduct in statements from SBF was not publicly known

2. depositors are victims (virtue ethics...)


What can we learn from this mistake? 

1. make sure future EA know how smart oversights work 

2. more governance, and sloppy accounting because of agent/CEO demanding sloppy accounting can not be perpetuated further 

3. Creating more "firewalls"


What are some of the persistent problems? 

1. Billionaires don't really listen to EA organizations 

2. scaling a business is difficult

3. The cryptocurrency industry is speed-running in the finance industry, so poor and little capital control 

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