Sam Bankman-Fried Has a Savior Complex—And Maybe You Should Too
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These are the monied investment class showing their true skillset, which is mostly limited to "being rich".
Which is what matters most in that equation (see Bezos, Musk, Zuckerburg et al), I mentioned to some people in our circles that I honestly thought this guy was going to end up in rendition black-site when he announced he was going to start getting into political donations/lobbying.
The State doesn't take this kind of stuff lightly, and using his distorted perception of alturism made him a massive target, but when someone listed all his family connections and links to academia and government I realized that he was just another insider cosplaying at being a 'disruptor' like most of the valley does.
Honestly, he should be rotting in a cell working manual labour next to the woman's prison Elizabeth Holmes will be and sharing a cell with Sunny if there is any justice, but I fear they will get a light sentence and some years on house arrest and will end with early releases and probation given how things turn out for their tier of the legal system. One of the guys on his board from complianace ran a scam on online poker a decade before [0] and this was all kosher.
0: https://www.poker.org/ftx-collapse-tether-operations-have-li...
SBF isn't alone in this. In school, while interning for a competing hedge fund, I met a drove of Jane Street interns who thought exactly the same way, in terms of "EV" or expected value -- the mean outcome from a random event. For example, whenever we would go out for ice cream, they would try to flip a coin to see who pays, given the "expected cost" was same. This behavior is fine if you're a market maker betting 0.001% of your worth on a toss that you win 51% of the time, and I imagine this is why Jane Street tries to cultivate it. But unfortunately, in this hyperfocus on returns, they forgot that "risk"/"variance" exists, and sometimes flipping a coin will land you in such a deep hole that you can't continue to play the game long enough to dig yourself out of there.
Having been involved with environmental activism and Bitcoin stuff for over a decade you see these types show up every now and then, often just for photo-ops and a self-gratifying projection of themselves in whatever will satisfy thier own ego trip. Honestly, these types are one of the biggest impediments to progress in these movements, they're so disillusional and siphon off much needed capital into these projects that ultimately leave everyone who might have cared at one point entirely apathetic (like you) to the plights and causes because they got burned from one of them.
I think true altruism is an incredibly rare virtue, and subsequently a much needed one in the World at that, but it's often from a source of genuine personal pain and suffering that allows you to recall and thus empathize with someone who is/has gone through similar difficulties you've been through. To that end, I find it impossible for SBF to truly have a sense of self-awareness to realize how toxic and blatantly counter-productive he is and will likely be remembered as in both EA and in The Crypto community.
Karpales was persona non-grata for nearly decade for MTGOX, but at least he did a mea culpa and served time in prison and sadly had his personal life destroyed as a result of his scam. I fear SBF will not face much given his connections and involvement in US politics via donations as well as his family, and THAT shows the hypocrisy of these sorts of people.
It's interesting that you say that. When I read the article claiming that a trader should be neutral between $50 and $100 with 50%, I saw that as an oversimplification for dramatic effect. But what you describe seems like they actually thought like that, which strikes me as bizarre. If you lose your entire budget, it doesn't matter that your winning probability was >50%, so you should always adjust the size of your bets to the size of your budget. While it practically doesn't matter, of course, when people on 6-digit salaries gamble over $10 ice cream, it makes a difference in principle (and the whole purpose of the exercise seems to have been to instil a principle). I'd have expected them to drill their interns on some variation of a Kelly criterion.
Good to remember that the business that blew up in SBF's face was Alameda the prop trading desk, and not FTX, the exchange and the market maker. Seems like he did learn his lessons in EV well, it just wasn't good enough for bets over a certain size.
That was really insightful, thanks for sharing that anecdote! The whole story would be worthy of a Greek tragedy - rise and fall of a kid blessed with an almost supernatural gift, with just a tiny yet catastrophic flaw - the proverbial Achilles heel.
If I was a financial regulator, I would be looking into the full nature of Sequoia’s relationship with FTX and Bankman-Fried’s other ventures. It’s hard to fathom such a massive evaporation in estimated value escaping the attention of one of his few hard cash investors.
It appears he may have been a little too altruistic with the deposits of his customers.
and yes, i was playing league of legends while typing this monunmental reply
The part about the effective altruists nerd sniping in “tennis whites” shouldn’t be missed.
> SBF needed to find a path on which he’d be a coin toss away from going totally bust.