FTX investor Sequoia removed its glowing profile of Sam Bankman-Fried
businessinsider.com
businessinsider.com
It appears to have been a smoke screen, given the financial fragility of his multiple companies, he could not have been looking for more scrutiny and regulation, he was playing Poker with politicians and his competitors.
Same with his stance about charity and altruism, all PR, likely nothing in good faith.
All of this is not surprising or unusual in business, deception is part of the game, but the part I find disappointing is that almost everyone believed it until it crashed.
Why? This is not the first time.
Enron, Worldcom, Theranos, Madoff, Nikola, to name a few...
Someone I know joined a rather large investment firm and this happened. I only knew about the mess because I'm friends with him, but oh boy it was a mess. Guy moved on, doesn't mention it anymore, but will tell you if you know him.
Similar story with a major international bank. Friend goes in, sees a load of bodies (board members doing shady things), leaves. Nothing to report.
When the RIAA went started suing mp3 downloaders, the CEO left for “family reasons”, but a few decades later it came out that they saw downloading music off the internet as their future business model. Napster was a representation of her vision of a virtual jukebox that could play any song ever made.
(Can’t remember for the life of me which documentary she was filmed describing that)
Perhaps he was envisioning a GFC style bailout in case one of his martingale bets increased beyond the size of M2.
Will be interesting to find out what his personal assets are and how much he gets to keep.
If he was smart, he bought everyone in his family a nice house at least a year ago.
Then not smart enough to realize all that can be clawed back.
Lawyers will do very well for a while, I'm sure of that.
SBF's parents are Stanford lawyers who specialize in compliance and ethics. Alameda CEO's dad runs the economics department at MIT, where the current head of the SEC was a professor.
"I'm a big advocate for Sam because he has two parents that are compliance lawyers. If there's ever a place I can be where I'm not going to get in trouble, it's gonna be FTX" https://twitter.com/Guruleaks1/status/1591086077489844224
FBX's chief lobbyist is a former CFTC commissioner, who is now distancing himself. https://twitter.com/EpsilonTheory/status/1591194581843836928
Senators are still going forward with an SBF-backed bill https://www.theblock.co/post/185746/senators-moving-forward-...
When authority bias hits too hard.
The key question to ask here is how is this possible in a nation governed by rule of law? And, what is the impediment that permits this "bold faced" corruption. And finally, what needs to be done to remove this impediment.
This is every small tech company.
With his competitors certainly. And Binance, which may or may not be as corrupt as FTX, called FTX's bluff. If CZ is a scammer too (I don't know about that [1]), he wouldn't go down while handling the market to another scammer. So poker with Binance: I agree.
Poker with Coinbase (which I think and hope are legit) too, who patiently waited, with higher fees and way less promises, while the Luna/Terra/BlockFi were offering 8% APY returns "because geniuses".
But saying: "playing poker with politicians" while they received $40 m is a very gentle way to put it. He was very likely downright bribing politicians and several people at the SEC and (ex-)CTFC (which a US congressman is saying allegedly happened).
These "elites" should be behind bars.
That's the real story here.
> Why? This is not the first time. > > Enron, Worldcom, Theranos, Madoff, Nikola, to name a few...
Exactly. It's not about cryptocurrencies. It's not something Satoshi Nakamoto planned.
A thousand years ago these politicians and SEC officials would have been hanged, drawn and quartered for high treason towards the state. Nowadays, because we live in in a modern society were justice reigns, these politicans and SEC officials are going behind bars.
Except it's not going to happen.
In french there's an old saying: "En prison, en prison pour incompetence".
Which means: "In jail, in jail for incompetence".
Even if these politicians and officials play the "I didn't know" card, I still think they should be behind bars for their sheer ineptitude.
It's an impossible task to be ruled by such dumbasses.
https://twitter.com/The_Prologuist/status/158967849854920704...
> he was playing Poker with politicians and his competitors ..
https://nationalfile.com/wp-content/uploads/2022/11/clinton-...
I have a bridge over Dneiper (solid soviet construction) to sell. Wanna buy?
- The minute details of a startup 5 year out business plan, cash-flow previsions, the impact of currency fluctuations of their profitable horizon...but ...
- Would allow him to get his girlfriend as the CEO?
Ellison was CEO of the hedge fund, Alameda Research, not FTX.
Also, while the descriptions of her in this and other threads as a "Harry Potter fan" and "his girlfriend" dovetail with the erstwhile HN tendency toward "it's so simple, everybody is an idiot except for me," I don't think their relationship was public knowledge until quite recently and until that point she was probably more likely viewed through the lens of "Jane Street alum and Stanford grad."
Which is not that different from SBF's VC friendly pedigree of "Jane Street alum and MIT grad," so given their relationship wasn't public, it's a bit unreasonable to claim she should have been the red flag.
And why did she accept?? She had 18 months at Jane Street and by her own admission knew very little about trading.
And really, WHAT were the VCs thinking ??!
The hubris.
(Quoted from Stephen Spielberg but I don't know where he got it from)
Normally attributed to Galeazzo Ciano, son-in-law of Benito Mussolini.
Or he just lied yeah
Does anyone have evidence that would contradict this?
There are some things that are automatically [dead], though. Here's a post by Dan from earlier this year explaining some of the inner-workings: https://news.ycombinator.com/item?id=30273707
https://news.ycombinator.com/from?site=archive.org
Plenty archive links not flagged. I think the hypothesis that archive links are auto-flagged is likely incorrect
https://news.ycombinator.com/item?id=33549059
and is now on the front page twice. Flaggers had it right as is usually the case.
Un fucking believable.
Women's stories as told in the media often come with a "unrecognized in her time" narrative that isn't quite as gripping.
Combine that with the hero worship common among the "college is a scam / audit the Fed" demographic AND their Dunning-Krueger multiplier effect of social media-based marketing, and you've got yourself a very distorted picture of reality.
I don’t particularly care about what he gets up to but I don’t think he has any bad intentions behind what he does.
On the other hand, having an adversity to risk might be a positive thing if you’re illegally investing other peoples’ money.
It turned out that FTX itself was just one giant leveraged trade, not the legitimate exchange business we all thought.
SBF did the kimchi arbitrage back in 2017, which also shows an immense tolerance for risk and a disregard for the exact definitions of rules.
By the way, expanding on the arbitrage I mentioned, the Kimchi arbitrage was a well-known trade and the big players in cryptocurrency weren't doing it for good reasons. South Korea's capital controls and anti-money laundering laws would make it very difficult to do legally without risking your other trading operations in the country. SBF was brazen enough to go for it (and risk-tolerant enough to carry a huge number of Bitcoins on his balance sheet for the ~week it takes for them to actually move) and it worked out well for him. In retrospect, it revealed a lot about his personality.
https://twitter.com/The_Prologuist/status/158967849854920704...
But also there was material interest. Even though SBF was investing in Sequoia, he also raised from them, and part of the logic there would be it lends Sequoia's reputation to his venture. So they'd be quite happy if this fawning article triggered some media coverage of their crypto boy genius.
https://twitter.com/AltcoinPsycho/status/1591312517049257984
But apparently both FTX and FTX US were both hacked meaning the probability of this being an insider job just increased an order of magnitude or two.
(Just to be clear, I am not on his side. I'm just pedantic.)
If his Twitter deception is anything to go by, he liked lied to investors about pilfering customer funds to bail out failed Alameda Research. Forget about lying, it's illegal to even withhold pertinent information when pitching to US investors.
The Bahamas is no safe haven. They will extradite. After all, his investors are in the US and those transactions are covered by SEC rules. Given the scale of the fraud here, this is serious jail time.
He could be saved by his political bribes, though, considering he's greased the palms of the current administration (#2 Democrat donator in the recent cycle) ;)
Do you come up with an escape plan when you start doing the thing you know is probably illegal and will definitely get you in serious trouble if it doesn't work?
Or do you just convince yourself it's gonna work, because it worked for long enough to convince you that you're too smart to fail?
I think I'd get me an extradition-proof mountaintop lair if I had even tens of millions and they were squeaky clean. Because you never know, right?
(Or, maybe I watch too many movies.)
There's tweets that say that CZ wasn't trying to tank FTX with his "I'm selling FTT" announcement but rather just wanted to fire a shot across the bow. And we should believe him when he says that this isn't good for him or the industry - because it really isn't.
And so in this case you have a few days to make a simple binary decision. Do you steal a few hundred million, bail to some country and hope you can live the next 50+ years without being extradited or risk staying in the US, being poor and spending the next 20+ years in jail.
Many people would happily roll the dice and pick the former option.
It’s the altruistic choice.
Getting away is easy if he walks of the usa. If you keep a low profile in south america, pretty much no one will recognize him.
But what we do know is that they had no Board of Directors and the level of independent oversight was completely inadequate given the sums of money involved.
If I was the SEC I would do nothing and simply remind investors like Sequoia of their responsibility to do basic due diligence. Because I really don't know how you can class them as professional investors given the level of incompetence.
Best case scenario he was working with the cia and was helping them finance some of these donations or other stuff. Then they’ll arrange his disappearance in another country or the afterlife.
As far as I'm concerned they've got what they deserved. Hopefully Binance'll show them the empty bag as well and finnally the myth of centralised crypto is busted.
Basically as long as you haven't broken the law or the contracts, you're ok. It's no different from "I bought some stuff that lost money".
That's the defense. I don't know anything about that rather large caveat in this case, but for that old boss it was clear since everything was exchange listed and there were never any movements of money other than to the clearing houses.
Investments come with inherent and stated risks and if you lose money, well, you knew the risks.
Losing money is not SBF’s problem.
Stealing customer assets to cover for it, and then losing those, too, is.
And tweeting through it, providing confessions to that that will greatly complicate any defense.
https://fortune.com/2022/11/10/sam-bankman-fried-ftx-joe-bid...
"The Department of Justice recommendation, made in a court filing, came as Holmes prepares to be sentenced next week."
https://www.reuters.com/world/us/us-seeks-15-years-elizabeth...
For example, Sam's opinion on books:
“Oh, yeah?” says SBF. “I would never read a book.”
I’m not sure what to say. I’ve read a book a week for my entire adult life and have written three of my own.
“I’m very skeptical of books. I don’t want to say no book is ever worth reading, but I actually do believe something pretty close to that,” explains SBF. “I think, if you wrote a book, you fucked up, and it should have been a six-paragraph blog post.”
So there you have it: Books are for losers.
I guess that explains a lot.
His own mum wrote a seemingly well-received book, and Will MacAskill, who he claims is his moral hero, has written three books.
I get that many books these days are long winded (looking at you Nassim Taleb) ways to make a point, but someone absolutely needs to document all the thinking somewhere. Whether you read the whole book in detail is also optional.
But to generalize this much about all books is astonishing.
Plus he's a math/physics grad, aren't those books super dense with new lemmas on every page?
When people say "what use is the humanities" I just gawk at this new generation of tech billionaires who seemingly have developed very strongly held opinions about the social organization of people without looking at all at the prior work in this area.
If you look at 80,000 hours' list of 'most pressing problems', AI safety is first:
https://80000hours.org/problem-profiles/
Open Phil has donated $250m to AI safety according to its website:
https://www.openphilanthropy.org/focus/potential-risks-advan...
No explanation necessary. Anyone paying attention knew this was a scam. SBF used his well connected parents to start a scam company.
He created back doors in his accounting software to hide money flows.
He hired his girlfriend (Harry Potter fan in her 20s) to be CEO of Alameda trading and transferred $10 billion in client funds for her to trade like it was their own money.
Declared bankruptcy and resigned as CEO yesterday.
Late last night someone pushed out new versions of the FTX website and apps with malware in them and stole $600 million worth of cryptocurrency which may be all that’s left of assets.
Tom Brady was a big investor. Sequoia. Ontario Teacher’s Pension. So many more.
https://www.reuters.com/markets/currencies/exclusive-least-1...
https://www.reuters.com/technology/ftx-says-it-is-investigat...
https://www.efinancialcareers.com/news/2022/11/caroline-elli...
https://www.reddit.com/r/wallstreetbets/comments/ys4lmo/she_...
I didn't think it was genuinely an interview with the CEO of Alameda.
That doesn’t change the larger story of inexperienced people being given money far beyond their demonstrated ability to manage it, but not listing it makes your comment read as if you’re attacking her for some other reason than her professional choices — like describing Vitaly Buterin parenthetically as a former Workd of Warcraft player.
Either his three books are really short, or they're one of his several fuck ups.
But seems like even that wasn’t the case.
I don’t know if I’d go so far as to say beloved but he doesn’t really do anything that would make people dislike him.
Doesn't matter if that requires breaking laws(airbnb) or stealing from naive people(shitcoins) they will do it, full stop. Once you understand that VC funds are literally robber barons who grouped together and gave themselves a new name it all makes a lot more sense.
This reads like satire. It's amazing anyone would write this seriously. Money does really rot the mind; not just the money you have, or the money you don't have, but also simply being in the presence of money.
I wonder why it took more than a day to remove from their site.
I don't know what those numbers mean, but those investors probably thought it was the funniest thing on earth, and they created history.