Crypto exchange FTX bails out lending platform BlockFi

[Hbruz0]

https://www.ft.com/content/69ab1469-df01-4ea2-a015-b0e9904af4cc

[dubswithus]

Usually it's the government bailing out financial companies? Breath of fresh air.

[JumpCrisscross → dubswithus]

> Usually it's the government bailing out financial companies?

Looks like crypto is crossing through free banking into late 19th [1] / early 20th century [2].

[1] https://en.wikipedia.org/wiki/Panic_of_1893#Effects

[2] https://en.wikipedia.org/wiki/Panic_of_1907#J._P._Morgan

[anders_p → JumpCrisscross]

Hah, yeah.

Can't remember where, but I read some comment that said:

"The crypto community's re-inventing modern banking, repeating every mistake along the way, and learning all the same lessons".

[genocidicbunny → anders_p]

The description I subscribe to is that the crypto community is doing a completionist speedrun of 19th/20th century banking.

[rekttrader → genocidicbunny]

In 6 years they’ve done the first 40 years of fuckups. By 2032 we’ll be doing totally new sorts of banking.

[favflam]

Blockfi promised interested bearing accounts. So they basically were running a bank.

They paid 100M US in fines as a result.

So, if they end up losing depositors money, who will be responsible?

I think regulators should either come out with a corporate death penalty to forcefully unwind illegal banks or rescind regulations on running a bank. I am not a fan of this gray zone business building where you have to break the law and pay a penalty later down the line.

If depositors lose money, do the executives go to jail?

[tornato7 → favflam]

What’s more, if the that fine bankrupts the bank, then the government literally caused the problem they were trying to avoid (consumers losing their money)