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Comment by koolba | Hacker News Reader

I'm specifically asking how they're holding on to the massive amount of funding they raised.

A traditional funding raise would be in USD and the startup may receive in a number of tranches tied to milestones. In the case of Filecoin I think they received a large chunk of it in crypto, specifically Ether, which has grown significantly since then. If they didn't convert it to fiat shortly after the funding round they could be sitting on a (paper) value of over $1 billion.

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I doubt they converted it all in USD. Maybe they invested in other crypto, and maybe somewhere between $257m and $1b might be their bank acct balance. Imagine having at least $250,000,000 and as much to hire employees! Of course they can keep 5 employees and pay "managers" xx $millions a year...no law against that, "that's how they decided their company should be run"

How is that different from embezzlement?

Because in that situation you're just paying with their own money for employees for their work. Usually, in a normal company, you will have a board of directors or ombudsman or somebody with some kind of incentive to prevent massive overpaying that essentially becomes a gift(unless, of course, we're talking about the CEO, then pay away until the cows come home) - I don't know, does FileCoin or the parent company have that kind of set up?

That would piss off many investors and you don't want to do that. The most recent example is Martin Shkreli [1].

What they could get away with is spend 20-50% of the funds on hiring a large well-looking diverse team, spend the rest on consultancy fees from world-class experts in XXX and YYY and eventually quietly shut down. In the current investment climate this won't be taken as a questionable spending, at least not enough to bother investigating possible affiliation between you and the experts (e.g. Juicero and Ottolock).

[1] https://en.wikipedia.org/wiki/Martin_Shkreli

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