Hacker News Reader

Comment by bhouston | Hacker News Reader

Honestly, if I was knowingly running a $10B scam, buying into the mastermind criminal lifestyle, and it was obviously collapsing, the first thing I would do would be to flee the country to a place without an extradition treaty.

Why did they stick around? Incompetence?

View on HN

When you tell a lie so many times, you start to forget that it is a lie and you live it as truth.

Yeap. That’s probably what happened here.

You’re assuming an intentional scam frame of mind instead of increasing “i know this is wrong but it’ll save things” frame of mind. Criminals are stupid and rarely think of themselves as openly malicious.

Making a competent escape plan is admitting to yourself that there’s a good chance of getting caught and jailed. People in this situation are more likely to be of a mind to think they can save things and get away with it.

Well it's not clear how much customer funds were diverted to SBF & co if any at all (though the recent "hack" makes me incredibly suspicious). If that Coindesk article never was released Alameda could've eventually paid back the loan to FTX and no one on the outside would've been the wiser. If they wanted to just exit scam the customer funds there would've been a much cleaner way to do it where by the time anyone found out they'd already be in some GCC country or Moscow.

> If that Coindesk article never was released Alameda could've eventually paid back the loan to FTX and no one on the outside would've been the wiser.

I don't know about that, the loans were huge. Billions of dollars. It's extremely unlikely that a (unprofitable) hedge fund can turn around its business and make that money back in a short time frame. Not impossible, but very unlikely. It must've been obvious to the insiders that the probability they'll get away with this is very low. Hard to believe they'd gamble their lives on that small chance.

I'm wondering how exactly Alameda managed to be so unprofitable. They literally had the easiest trading job in the world: Market make on their own exchange while seeing all order flow and being able to front-run anyone they want.

I think everyone else thought this too:

> I'm wondering how exactly Alameda managed to be so unprofitable. They literally had the easiest trading job in the world: Market make on their own exchange while seeing all order flow and being able to front-run anyone they want.

This is why FTX imploding was a surprise. We thought they were profiting from their own order flow. No need for a true scam.

Yeah very few things that are that copacetic are actually "coincidences" so I suspect you are right. The only other thing I could come up with were Russian/Chinese/North Korean hackers had a back door, read Bloomberg, and drained it while they could.

> If that Coindesk article never was released Alameda could've eventually paid back the loan to FTX and no one on the outside would've been the wiser.

Alameda needed the loan because they were losing money.

Why did you assume they would have been able to suddenly make the required billions?

I'm wondering the same thing. He must've known for a long time it'll come crashing down eventually and made proper arrangements. Perhaps the sources are fake and he has already fled.

If I were to find myself in the middle of running such a scam and was a billionaire I would spend all my waking hours preparing ways to get out of it.

I think this kind of reasoning comes from ‘you’ as you are now imagining yourself suddenly ‘finding yourself’ in that situation - a bit like the character in Quantum Leap.

SBF seems like Evel Knievel - i.e. he became identified with being SBF. It wasn’t a heist as such. Just the byproduct of him playing this fictional ‘genius’ character, and then getting so into it that he forgot it was just a role play.

Yeah I get what you're saying and there's something to it. It's just difficult to imagine to become disillusioned to the point where you're not realizing your criminal actions.

I think something like Theranos is a different story. In that case it would've been much harder to escape for the founder. But for someone in crypto like SBF...

I am think he knew something was wrong, but probably was in denial about it, and held on to the idea that as a genius he’d be able to get out of it.

Absence of an extradition treaty is usually not enough. Especially in a dictatorship like the UAE.

Reply on news.ycombinator.com