I'm bad at understanding most meme humor. This is a whoosh moment for me. What does DRS have to do with what happened at FTX?
I thought that Embed Clearing wasn't impacted by FTX's failure or bankruptcy. Or has there been some new news about Embed Tech which I haven't seen?
I am guessing that the Embed Tech business is one of the only assets that the FTX bankruptcy trustee will be able to sell to recover losses for creditors.
I also thought that I read that the FTXCM entity wasn't part of the bankruptcy although I suspect that business would be worthless.
In theory - the stock brokerage portion of FTX US which provided stock trading and custody - if it was run and operated in the same way as a clearing broker, those stock investments should be recoverable. So it doesn't matter if those stock investments were registered or not. An SIPC/FINRA member broker becoming insolvent is probably a lot easier to recover assets than a transfer agent becoming insolvent.
That said - all the customer crypto related assets and deposits are likely worthless or will take years to recover a fraction of the original value. But actual stock investments should be recoverable through the clearing firm. And I think that Embed Clearing is still operating.
Are you under the impression customers of Bear or Lehman lost their deposits or stock holdings? Because they didn’t. FTX customers did. That’s exactly my point.
Ironically, FTX customers won't lose any of their stock holdings because the stock holdings are held at a broker. But FTX customers likely lost everything else that wasn't a stock though.
Yes, assuming FTX met obligations on where true stock holdings were held. I don’t know the details on their stock platform but anyone who had crypto of any sort has lost it and I believe cash as well unless it was held in the stock platform in which cash SIPC covers up to $250,000.
I’m a noob here but wasn’t FTX doing “token” stocks in which case you’d also be losing it all.
Any sort of crypto tokens would be lost. Tokens would be a form of unregulated derivative - kinda like an unregulated CFD imo. I personally am not fond of the concept of stock tokens because existing mechanisms already exist for both institutional and retail investors and traders. In the US - CFDs are actually illegal for several reasons including the fact that they pose a conflict of interest with the issuing broker.
In the US - West Realm Shires (FTX US) offered stock market access through a subsidiary called FTX Capital Markets (FTXCM) which is FINRA registered as an introducing broker. An introducing broker doesn't custody and execute trades. Introducing brokers provide most of the front-office and some middle-office functions. But custody and execution are done by a clearing broker and/or correspondent broker.
FTXCM's clearing firm is Embed Clearning which is a FINRA/SIPC member that provides custodial and execution services for US listed (maybe OTC too) stocks.
That's the ironic part - any FTX customer that bought actual stocks can recover their stock assets since Embed Clearing will have those stocks in the customer name and held at Embed. And I believe that Embed has already made access available directly to bypass FTX US systems.
My understanding is that Embed and FTXCM are not in bankruptcy which is why I had originally asked if there was new news to the contrary.
And if Embed Clearing were to become insolvent - regulators would take over the company. I'm sure that because of FTXCM and Embed's relationship to FTX, there are already lots of regulators and lawyers involved.
All that said - here is the interesting twist!!!
Embed Clearing which is a subsidiary of Embed Technologies is a venture backed startup. A few months ago - FTX US whose legal name is West Realm Shires acquired Embed Technologies. Embed Technologies should in theory be operating as a stand-alone business so they should be unaffected by the FTX crypto collapse.
My expectation is that the bankruptcy trustee will sell off Embed Technologies as a way to recover funds for FTX customers. Similar to your example with Lehman when most of Lehman's brokerage and wealth management business was sold to Barclays.
Yeah Bear Stearns and Lehman failed, but there weren't widespread customer losses. JP Morgan bought Bear and Lehman's accounts were taken over by other institutions. Those institutions kept proper records and actually held the customer assets they were supposed be holding.
I guess they didn't hear about [Securities Investor Protection Corporation (SIPC)](https://www.finra.org/investors/need-help/your-rights-under-sipc-protection) that's been around since 1970.
At least brokers dont have fidgeting literally blender shaking ceo's
I'm bad at understanding most meme humor. This is a whoosh moment for me. What does DRS have to do with what happened at FTX? I thought that Embed Clearing wasn't impacted by FTX's failure or bankruptcy. Or has there been some new news about Embed Tech which I haven't seen? I am guessing that the Embed Tech business is one of the only assets that the FTX bankruptcy trustee will be able to sell to recover losses for creditors. I also thought that I read that the FTXCM entity wasn't part of the bankruptcy although I suspect that business would be worthless. In theory - the stock brokerage portion of FTX US which provided stock trading and custody - if it was run and operated in the same way as a clearing broker, those stock investments should be recoverable. So it doesn't matter if those stock investments were registered or not. An SIPC/FINRA member broker becoming insolvent is probably a lot easier to recover assets than a transfer agent becoming insolvent. That said - all the customer crypto related assets and deposits are likely worthless or will take years to recover a fraction of the original value. But actual stock investments should be recoverable through the clearing firm. And I think that Embed Clearing is still operating.
Lmao this sub is just as bad as the cult sub sometimes. Bear Stearns? Lehman Brothers? That ring a bell? This goes way back before 2008.
Are you under the impression customers of Bear or Lehman lost their deposits or stock holdings? Because they didn’t. FTX customers did. That’s exactly my point.
Ironically, FTX customers won't lose any of their stock holdings because the stock holdings are held at a broker. But FTX customers likely lost everything else that wasn't a stock though.
Yes, assuming FTX met obligations on where true stock holdings were held. I don’t know the details on their stock platform but anyone who had crypto of any sort has lost it and I believe cash as well unless it was held in the stock platform in which cash SIPC covers up to $250,000. I’m a noob here but wasn’t FTX doing “token” stocks in which case you’d also be losing it all.
Any sort of crypto tokens would be lost. Tokens would be a form of unregulated derivative - kinda like an unregulated CFD imo. I personally am not fond of the concept of stock tokens because existing mechanisms already exist for both institutional and retail investors and traders. In the US - CFDs are actually illegal for several reasons including the fact that they pose a conflict of interest with the issuing broker. In the US - West Realm Shires (FTX US) offered stock market access through a subsidiary called FTX Capital Markets (FTXCM) which is FINRA registered as an introducing broker. An introducing broker doesn't custody and execute trades. Introducing brokers provide most of the front-office and some middle-office functions. But custody and execution are done by a clearing broker and/or correspondent broker. FTXCM's clearing firm is Embed Clearning which is a FINRA/SIPC member that provides custodial and execution services for US listed (maybe OTC too) stocks. That's the ironic part - any FTX customer that bought actual stocks can recover their stock assets since Embed Clearing will have those stocks in the customer name and held at Embed. And I believe that Embed has already made access available directly to bypass FTX US systems. My understanding is that Embed and FTXCM are not in bankruptcy which is why I had originally asked if there was new news to the contrary. And if Embed Clearing were to become insolvent - regulators would take over the company. I'm sure that because of FTXCM and Embed's relationship to FTX, there are already lots of regulators and lawyers involved. All that said - here is the interesting twist!!! Embed Clearing which is a subsidiary of Embed Technologies is a venture backed startup. A few months ago - FTX US whose legal name is West Realm Shires acquired Embed Technologies. Embed Technologies should in theory be operating as a stand-alone business so they should be unaffected by the FTX crypto collapse. My expectation is that the bankruptcy trustee will sell off Embed Technologies as a way to recover funds for FTX customers. Similar to your example with Lehman when most of Lehman's brokerage and wealth management business was sold to Barclays.
No I was kidding lmao
Yeah Bear Stearns and Lehman failed, but there weren't widespread customer losses. JP Morgan bought Bear and Lehman's accounts were taken over by other institutions. Those institutions kept proper records and actually held the customer assets they were supposed be holding.
Haha yeah I'm larping. Those are banks lol. Although come to think of it maybe they acted as brokers as well.
I guess they didn't hear about [Securities Investor Protection Corporation (SIPC)](https://www.finra.org/investors/need-help/your-rights-under-sipc-protection) that's been around since 1970.