FTX Bailout BlockFI - User Funds Safu or not?

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(Edited)

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In super short, FTX wants to bailout BlockFI with 250M Credit. This would be "zero" the equity holders.

What happens in this case with Customer funds? I don't know.

My opinion is customer Funds must be protected at all costs. But who knows what happens and what the plan is.

be really careful to those crypto lenders. They pay you 8% APY and give your money away to people like 3AC that burn 18 BIllion in this market.

https://twitter.com/CoinDesk/status/1540806206456864769

SCOOP:
@APompliano
and
@MarkYusko
’s Morgan Creek Digital are trying to put together an alternative rescue package for
@BlockFi
.

Why?
@FTX_Official
’s $250M credit line stood to wipe out BlockFi shareholders, including Morgan Creek.

But is this not what happens? Bussines failed and if someone buys it / bails it out equities go to zero?

Normal way?

FTX bailout Voyager too.

One last question

How much leverage is in this market? 110k Bitcoins are on margin longs on Bitfinex alone.

How much are the stable coins leveraged? FTX can not bailout unlimited.

What i mean with leverage?

this:

1000 Tether ---->into 8% APY ----> into ETH ---->into lending into more tether and repeat.

Or 1 Bitcoin ----> loan with it ----> Tether ----> ETH ----> loan ----> Tether -----> Stablecoin farm.

Funds can be easily leveraged massive if this is spread to all protocols.

Liquidations end up in cascades.

Ponzi market.

leofinance neoxian proofofbrain hive-engine vyb bailout ftx blockfi archon cent
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25 comments
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We should be careful because customer money can be lost

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i have no funds there. Lending is a big risk factor, because of the third party.

Total loss for x%? no thanks :D

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(Edited)

It’s probably not that bad after all, lending in crypto has had big collateral requirements all the time. We talk about 3-5x and that cascades as well, shrinking the actual level of leverage compared to the initial deposited collateral.

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not all. some are 150%. The point is more you can ride the wave with leverage. What funds have done :P

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