ftx u.s. derivatives, all of these contracts are fully collateralized was that true? >> yes and again, ftx u.s. to my knowledge totally solvent. derivatives, totally solvent and in fact, i believe ftx derivatives may be up and running right now. i'm confused why an ftx u.s. is not processing customer withdrawals right now. i would think it should be because i believed to my knowledge that it could be and could make all americans 100% whole from this. and ftx u.s. derivatives as i said there, doesn't even allow leverage of any sort it was close to a spot trading platform and so to my knowledge, all american customers and all american regulated businesses and exchanges here are i think at least in terms of finances, are okay obviously i don't know what's happened with you know, make your own judgments about the enterprise value >> over the summer, you paid a $2.5 billion loan to genesis this was in august i was just trying to think through the dynamics of what might have been happening at your firm and was wondering where did the money come from. >> i presume that's alam

what happened was last year, ftx bought this derivatives exchange. some people in the industry really pushed back. this would have given them awkward unilateral authority. this isn't a great idea. the proposal wasn't approved but they came scarily close to being further embedded into the financial machinery of the rest of more traditional financial markets. >> we are seeing all of the chaos of the last seven days. it is astonishing to relive it. we learned a lot about ftx possible in the system. how did it run itself as a business? >> spf was known for coming out and saying they have very sophisticated systems to manage risk. what has really exploded into the public eye in the past week is there was no division at all to his proprietary trading firm. this took in customer deposits. basically you have this co-mingling of funds that anyone international financial markets would say is a huge red flag and can't lead to all kinds of inherent risks of implosion's. that is exactly what we have seen happen. now the chaos is kind of spreading. >> there is a h

ftx, what happened was last year ftx bought this derivatives exchange called ledger x, and it had a proposal that was going to change routers clear and. some people in the industry pushed back and said it would add a lot of risk the way ftx had laid it out, which would have given them a lot more unilateral authority on the backend. some industry veterans said this is not a great idea. it was not approved, but they came scarily close to being even further embedded into the financial machinery of the rest of more traditional financial markets. there was ambition. ed: we're just seeing on our screen the chaos of the last seven days. it is astonishing to relive it because it has been so quick. we have learned a lot about sbf, about ftx's role in the system. i don't know how it ran itself as a business. annie: the way it ran as a business is kind of surprising a lot of people. it was known for really coming out and saying that they had very sophisticated systems to manage risk, but at the same time, what really kind of exploded into the public eye in the past week is that there was really no divi

guy: just before ftx blew up, the cftc was giving serious consideration to and ftx proposal of direct crypto derivativeshink any of the regulators understood what was happening here and if not, why not? kristin: in the immediate moment, you hit the nail on the head. one of the biggest issues at the core of this cascading collapse of pharma is the market structure. it is the regulatory gap that is inevitable. in light of the fact that federal congressional action that explicitly directs the ftc and the fcc as how congress would like for us to proactively regulate in cash or spot market for cryptocurrency. that is a relevant fact. you raised a second point that should not be missed. that is with respect to direct clarity. the ledger x platform i mentioned earlier is a direct entity. something i am watching my fellow commissioners to support me in which complements the possibility of federal legislation in the digital aspect of cryptocurrency space. it is a set of former rules governing. contracts were lateral lysed mitigating the possibility of risk and containing the likelihood of any contagion in the ev

been way more profitable because ftx has been able to do arguably some of the riskier trading strategies that are not approved in the u.s. they don't do as much derivativesom at least 2021, it's by far the least profitable side of the business it's a slower play, and they're going to have to really operate within the guardrails in the same way coinbase has. >> right >> kate, i hear you. i want to bring sam back into this, if we still have him what this raises for me, again, is a question of maybe it's not different this time. right? maybe crypto, at least in the near term, is not just this entirely different world of money. it's a risk asset just like all kinds of risk assets, and in this case, we don't have a lot of visibility under the hood in various tokens and even various exchanges into exactly how this works. even when it comes to coinbase, yes, they're a public company. we can see what they're reporting, but the fluctuations in crypto overall and people's faith in individual coins and even the regulatory rules that come out as it applies to individual coins are going to have sometimes a very quick impact, sam, won't they? >> yeah. one thing that w

concerned are you about knock gone effects in terms of prop trading, firms that are exposed to ftx and derivativea massive systemic crisis of sorts, but more dominos to fall here >> when i think about the global financial crisis, andrew, we all knew, i guess in the end, that u.s. banks and european banks were inextricably linked through their agreements and through the various derivatives, counterparty facing agreements they had in this world, the crypto world is -- i don't want to say it is contained, but a lot of the big, as you know, our primary financial institutions have very little to nothing to do with crypto and so you have this scenario where there are a number of firms out there that may fail. there are a number of firms out there that will probably garner the balance of the business once the fraud and overleveraging plays out. but in the end, what is left why do these firms exist i'm not sure other than, you know, the technology and the blockchain is something that will live forever. and the web3 and i'm not a technologist, but when i look at the blockchain, there is so many practical

will just have to monitor over the coming days, but according to an ftx, they were well known for leveraged products and derivativesso there were a lot of hedge funds and trading firms that were counterparties to ftx, so again, we may see casualties in that area, and retail, of course, just as usual, got caught up in everything, and hopefully, they will have their assets received -- returned back to them. david: the next few days will tell us that. thank you very much, founder and managing partner at token bay capital. we will continue this conversation, by the way. later on in the show about an hour from now, circle's chief strategy officer will join us to talk exactly about these broad topics. stay tuned for that. there's plenty more ahead. this is bloomberg. ♪ rishaad: the stock is 4%. done to them wanting to cut jobs and perhaps wanting to shore up finances. looking also at about 10% of the workforce, it is not the only one, is it? we have seen a slave in the u.s. of companies doing the same. yvonne: just this week, it was meta-, all the way to apple. 1000 jobs according to people familiar with the matter. fami

australia and it's a completely different nature of the business versus ftx running a hedge fund and an offshore unregulated derivativess >> what allowed this to happen, and there has been blame casts on them, and there's an issue of whether these types of tokens are considered registered securities do you consider cron a security? >> no, i don't, and if you look at the theory, there's disinterested networks, and a number of developers could build on it and the transfer of value and secure a network, these are clearly not securities so we do not -- >> what about the tokens traded on your exchange >> again, we have a very strict process of selecting coins picked on our exchange as a company we take bride in compliance and security in the foundational core of our business, and that's how you build it, and we have more registrations and licenses around the world in tier one jurisdictions than any other business, so we feel quite confident with our policies and how we go about this having said that, i think that right now after this collapse, the liquidity in the market is poor and it may be that a number of the smaller c

talked about that were derivative or at least applied crypto trade and those are the ones weave shown on the screen it's going to be ugly. >> speaking of hood, we haven't seen ftx's stock trade, have we? what do they own, $56 million shares of -- >> of hood >> of hood you would think they have to liquidate whatever they can, right? >> right. >> they have to come up with whatever cash they can are they a deed holder you would think that we would have to see something something? >> sure. >> that's what's weighing on hood as well but we haven't seen that stock yet. >> coming up, all over the after-hours action in riffian. we'll bring you the details next job cuts take meta the company laying off several what all this means for the stock when we return ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunitie

derivative has filed for chapter 11 definitely two sides to these companies. >> how much risk is there within crypto from the sort of pancaking collapses that we've seen from stable coins to now ftxit at all clear how stable the existing sort of anchoring forces in the crypto ecosystem are, and what happens if either there's another run or if q4 turns out not to be so great in terms of holiday spending. how much is the ecosystem really at risk? >> i think there's a serious risk of broader contagion to the ecosystem itself, i think it's unlikely that contagion spreads towards broader financial markets, and that's mainly because of the size of the crypto space, which is only around $830 billion in comparison to the $43 trillion u.s. dollar equity market. but within crypto currency it's unclear as to how far and how deep this goes you know, contagion can last for a significant amount of time, and with the amount of companies that are involved and the amount of investments involved with ftx and following chapter 11 it could take a long time for this to resolve, which we have yet to find out about >> it's interesting, joseph, you know, a lot of people it's easy to throw around sort of

derivative up a little bit today, 16.5. >> i can't say you are surprised at any of the bankruptcies because these were the companies built-up by ftxthat was propped up by ftx, oh, no. >> the one i know about and believe in, i will be interested to see -- >> i wouldn't count them all equally. >> you know what we call the other coins? >> what? >> "schitt's creek" -- i am back to using dogs and tv shows to be able to say it >> i would never i was only quoting charlie munger >>> a tentative contract has been rejected by four of the 11 rail unions. and he wants to impose that agreement on more than 115,000 workers, and the president is reluctant to override the procedures, but a shutdown would have a severe impact on the nation american consumers in the meantime were not reluctant to spend on cyber monday. cyber monday spending came in at $11.2 billion to $11.6 billion anywhere in that range would be a record high. adobe says sales got a boost from wide-spread discounting >>> miami-dade county is suing to have the ftx removed from the arena. the cryptocurrency exchange that recently filed for bankruptcy ran a foul of laws governing fin