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Comment by TacticalCoder | Hacker News Reader

The NY Times just ran an article on SBF and doesn't mention the word "fraud" or "crime" once. It looks like daddy and mommy's friends are hard at work here. It's completely surreal.

https://www.nytimes.com/2022/11/14/technology/ftx-sam-bankma...

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I don't understand this take at all. It's like we're reading different articles.

This is the title page of the article:

> How Sam Bankman-Fried’s Crypto Empire Collapsed

> Mr . Bankman-Fried said in an interview that he had expanded too fast and failed to see warning signs. But he shared few details about his handling of FTX customers’ funds."

And there's this:

"But he would offer only limited details about the central questions swirling around him: whether FTX improperly used billions of dollars of customer funds to prop up a trading firm that he also founded, Alameda Research. The Justice Department and the S.E.C. are examining that relationship."

Of course the New York Times can't accuse him of committing fraud. That hasn't been proven. But I don't see how anyone could miss the implication of this article that something shady may have happened.

Some people don’t seem to understand there’s a difference between a comment thread and a newspaper article. One isn’t better than the other, but they serve different purposes. You see this in political discourse especially, with everyone from the left to the right complaining that the media took a neutral POV towards something that they consider (and probably even is) egregious.

The way they're wording it makes it seem like FTX committed a procedural error. And there's no way to word their actions without making it seem dodgy, because it is.

The Justice Department and SEC are investigating FTX and Alameda Research for committing fraud. That's entirely true. You can say that. Deliberately not saying some variation of that is shady in and of itself.

Have the Justice Department and SEC publicly named that they are “investigating FTX and Alameda Research for committing fraud”?

They don't publicly comment on on-going investigations. But places like the WSJ isn't afraid to link the word fraud to the investigation. Because, that's what the Justice Department does, investigate crimes.

https://archive.ph/MZfR1

Right. Naming fraud is a speculation, but I don’t disagree that an editorial decision has been made here (and questioning why is appropriate).

I don't understand the magic of using the word "fraud." Personally, I find this description of the actual alleged offense much more enlightening and equally damning: "FTX improperly used billions of dollars of customer funds to prop up a trading firm that he also founded."

In any case, I'm not really here to argue about whether The NY Times used exactly the right language in describing the situation. I'm reacting more to the claim that The NY Times is somehow covering for SBF here ("daddy and mommy's friends are hard at work") which strikes me as baseless.

From the article:

"His management of FTX is now the subject of an inquiry by federal prosecutors in New York, who have begun contacting possible witnesses, according to a person familiar with the matter. Others associated with FTX have started reaching out to lawyers for potential representation, said several people briefed on the matter. FTX is being represented in the investigations and the bankruptcy by the law firm Sullivan & Cromwell, while lawyers from Paul Weiss are representing Mr. Bankman-Fried.

In the interview, Mr. Bankman-Fried declined to discuss the prospect of prison time."

I realize it's counter to your narrative so you won't be able to accept it, but there it is.

If you want to understand you could have a look at any of the stories about Trump, about anything he's been accused of over the years. Take note of the difference in language used, the choice of words etc.

Well, that's different, because in Trump's case it was obvious he did it all. After all, the NYT told us. Or at least, they heavily implied it, even though nothing was proven. Waaaait a minute.

In fairness, they're heavily implying it here as well. Which is also a problem.

In none of these incidents are any of these investigations complete. So even if it is obvious SBF is a crook, or Trump is a crook, it's not right to be out "heavily implying" guilt. Used to be we only did that kind of thing to street criminals on the local news, (and I had a problem with it then). Now we're doing it all the way up to people like DSK and the President of the US. This is bad. CNN/FOX/WSJ/NYTimes/BBC etc are so irresponsible that people have begun to believe this is appropriate journalistic behavior.

It's not.

Care to provide any actual examples?

You might see the issue if you're familiar with the case of Scott Alexander or how hard they went after the CEOs of Coinbase and Kraken. Why did they get the hit piece treatment but SBF didn't, even now.

Neither of them misused and lost billions of dollars of customer funds.

SBF unambiguously did.

He was even lying about it all the way up until last week, saying that a competitor was going after them with false rumors. Saying FTX is fine. Assets are fine. https://cointelegraph.com/news/ftx-founder-sam-bankman-fried...

Yet they are treating him with kid gloves and using a sympathetic lens.

"his ambitions exceeded his grasp"

My guess is that SBF would also not be treated with kid gloves if he professed a belief that white people were biologically intellectually superior to black people, re: Scott Alexander.

Definitely agree that he is being treated nicely (likely due to being a democratic donor) compared to other crypto folks.

Do you have a pointer to where Scott Alexander told so?

It's pretty clear to me reading what he says that there is sort of a wink, wink nudge nudge black people are intellectually inferior.

I think there are screenshots of his emails out there saying it much more explicitly though, don't have them offhand.

His latest words on that type of topic speak for themselves:

"This is far enough from my field that I would usually defer to expert consensus, but all the studies I can find which try to assess expert consensus seem crazy. A while ago, I freaked out upon finding a study that seemed to show most expert scientists in the field agreed with Murray's thesis in 1987 - about three times as many said the gap was due to a combination of genetics and environment as said it was just environment. Then I freaked out again when I found another study (here is the most recent version, from 2020) showing basically the same thing (about four times as many say it’s a combination of genetics and environment compared to just environment). I can't find any expert surveys giving the expected result that they all agree this is dumb and definitely 100% environment and we can move on (I'd be very relieved if anybody could find those, or if they could explain why the ones I found were fake studies or fake experts or a biased sample, or explain how I'm misreading them or that they otherwise shouldn't be trusted. If you have thoughts on this, please send me an email). I've vacillated back and forth on how to think about this question so many times, and right now my personal probability estimate is "I am still freaking out about this, go away go away go away". And I understand I have at least two potentially irresolveable biases on this question: one, I'm a white person in a country with a long history of promoting white supremacy; and two, if I lean in favor then everyone will hate me, and use it as a bludgeon against anyone I have ever associated with, and I will die alone in a ditch and maybe deserve it. So the best I can do is try to route around this issue when considering important questions. This is sometimes hard, but the basic principle is that I'm far less sure of any of it than I am sure that all human beings are morally equal and deserve to have a good life and get treated with respect regardless of academic achievement."

https://astralcodexten.substack.com/p/book-review-the-cult-o...

'Kid gloves' are fine gloves made from the skin of a baby goat. Not from … whatever you thought.

Haha not sure what I thought - I guess that you would treat children more carefully/kindly than they might deserve. (and you would have special gloves to do so??)

To "treat someone with kid gloves" means to treat them gently or with special consideration.

I originally had a typo that said "kiddy gloves", which doesn't make any sense

Even assuming your slander and its presuppositions, professing a racist belief is worse than stealing billions in NYT’s books.

It's not slander unless it is false, and it is not false.

And yes, the second part of your comment was what my comment was alluding to. My guess is that they will treat someone who stole billions of dollars less poorly than they do someone espousing beliefs in the biological intellectual superiority of white people over black people.

You are reading a value judgement into my comment that I never made, my comment is entirely descriptive and non-normative.

The article does appear to have a bizarrely light-hearted tone given the magnitude of what transpired:

>"But in a wide-ranging interview on Sunday that stretched past midnight, he sounded surprisingly calm. “You would’ve thought that I’d be getting no sleep right now, and instead I’m getting some,” he said. “It could be worse."

For a self-professed "wide-ranging interview" it actually provides scant if any meaningful details to support the headline of "How Sam Bankman-Fried’s Crypto Empire Collapsed."

Of the few details the editor and author chose to include:

>“You would’ve thought that I’d be getting no sleep right now, and instead I’m getting some,” he said. “It could be worse.”

>“Had I been a bit more concentrated on what I was doing, I would have been able to be more thorough,” he said. “That would have allowed me to catch what was going on on the risk side.”

Had I been a bit more concentrated on what I was doing? This reads like "aw shucks, the phone rang and I got distracted." This can not be taken seriously. Is this meant to answer the "How" in the article's title?

>"Mr. Bankman-Fried’s circle of colleagues was bound by a commitment to effective altruism, a charitable movement that urges adherents to give away their wealth in efficient and logical ways."

So he was a charitable man? Just with other people's money?

And then of course this important bit:

>"He has also found other ways to occupy his time in recent days, playing the video game Storybook Brawl, though less than he usually does, he said. “It helps me unwind a bit,” he said. “It clears my mind.”

Yes the NYTimes included the line about DOJ and SEC, but it fails to mention why these two department are "examining" this man's now "crumbled empire."

This is literally just describing him, and none of it is generous. I'm not sure why you don't see that but okay. He sounds like a complete idiot according to every single thing you quoted. Is the Times supposed to say "SBF, a complete idiot, thought he would have trouble sleeping, but doesn't"

>"This is literally just describing him, and none of it is generous."

Yes this is literally "just describing him" which is what makes the article so glaringly bad. Exactly none of these trite details have anything to do with the article's title of "How Sam Bankman-Fried’s Crypto Empire Collapsed."

I would argue that the amount of attention spent on such trivial details about "him" instead of actually talking about the "How" of his spectacular failure is quite generous indeed.

It's also worth nothing that this piece is in the Technology section of the NYTimes by a journalist who according to his byline "writes about the crypto markets and financial technology." Yet so much of this article would not be out of place in a profile in the Style section.

The article quite literally allows Sam to hang himself, I think you are completely misreading it and are counting on NYT to editorialize (which I assume you will of course complain about if they did it to someone else).

It seems as though you might not understand what "literally" means. "To hang oneself" is a figurative expression. It is actually the polar opposite of "literally." Your comment about me "counting on the NYTimes to editorialize" is equally bizarre and makes me think you might not understand what that means either. At any rate your ad-hominem attack is uncalled for. I expect better journalism from the NYTimes as it is newspaper of record in the US. I also clearly articulated my reasons for believing why this article did not constitute good journalism in my previous comments.

Literally is used quite frequently in informal communication for emphasis or to express a strong feeling while not being literally true.

We both know you know this. And I didn't ad hom you. Get a grip.

They are acting like Maggie Haberman with Trump, letting SBF hang himself.

This could work and is 100% reporting "news":

Who are "some"?

That's first thing that jumps out. You have to list all the organizations willing to go on the record calling it fraud.

Your added statement doesn't provide any information about additional organizations that consider FTX-Alameda a fraud. It just puts out a nebulous implication that there exist some organizations, somewhere, that are calling it a fraud. In fact, your statement doesn't clarify whether or not these organizations are engaged in investigations. Nor does your statement even make mention of the evidence these organizations gave you to back up their assertions. Only that these, hopefully not totally hypothetical, organizations "question" a narrative.

I have to say, this addition by you is actually worse than the statement that NYTimes printed in terms of journalistic quality.

I actually hate NYTimes/FOX/CNN/BBC etc for reasons that should be obvious. But what you're doing is going in the opposite direction of where we need to be headed with responsible journalism.

Disagree.

Even in the space of crypto, the community, there are people openly calling this a fraud. That is news. To omit to mention that the crypto community itself is making these claims is to suppress information.

If you just read The New York Times on this topic, would you have a clue that there is a storm of controversy and very pointed questions regarding this affair and other 'important people' associated with this affair?

Again, you're saying "the crypto community".

So who?

"Who?" "What?" "When?" "Where?" "How?"

Here's a thought, "Why?"

Who specifically? What evidence did they give you? How are they communicating that it's a fraud? Why do they think it's a fraud?

Journalistic quality requires you to answer questions. Some answers can be "it's under investigation", but you have to have an answer.

You've, again, made a vague reference to something as nebulous as a "community" and you want it to be taken as equally authoritative in nature to the NYTimes' reference to the SEC and the SEC's investigation.

It's just not.

You have to name the organizations, and layout the actions they're taking.

I liked this thread. It collects how the media is portraying SBF. We're now officially living in a B movie.

https://nitter.net/r2remeta/status/1592662692627877888#m

I really liked this one! SBF the Alpha-Male. Will there be Caroline & the rise of Alpha-Venus articles to come?

https://www.bloomberg.com/news/articles/2022-11-12/bankman-f...

> Who are "some"?

"sources familiar with the matter," obviously. this is the NYT after all.

Here are some of the "some":

https://decrypt.co/114826/ftx-lawsuit-takes-aim-larry-david-...

> There are some

Some politicians like that wording a lot - "People are saying...", "I am hearing..."

It's not verifiable and doesn't belong in a news story.

The author [1] is a self-identified crypto journalist. Blown away the Times' didn't add investigative muscle or ask real questions.

[1] https://www.nytimes.com/by/david-yaffe-bellany

Contrast that with their hit pieces on Brian Armstrong and Coinbase.

It's a great injustice that they didn't apply even 1% of the scrutiny with FBX and SBF, an actual, literal fraud. That NYT piece even lets SBF plug the game that FBX acquired, in a sympathetic way no less.

> He has also found other ways to occupy his time in recent days, playing the video game Storybook Brawl, though less than he usually does, he said. “It helps me unwind a bit,” he said. “It clears my mind.”

Yeah. A developer working on Tornado Cash in the Netherlands gets arrested nearly immediately for writing code. A rich boy playing with crypto and defrauding people to the tune of billions, nope, not gonna even mention “crime” here.

> developer working on Tornado Cash in the Netherlands gets arrested nearly immediately

Authorities publicly mooted Tornado Cash's complicity in money laundering January [1]. It was sanctioned in August after being used to launder millions in proceeds from hacks on 24 June and 2 August [2]. Two days later, Semenov was arrested [3].

Eight months is far from "nearly immediately."

[1] https://www.coindesk.com/business/2022/01/21/is-tornado-cash...

[2] https://home.treasury.gov/news/press-releases/jy0916

[3] https://www.fiod.nl/arrest-of-suspected-developer-of-tornado...

Tornado Cash was re-designated recently, a capitulation that the arguments from the Coin Center lawsuit have merit.

https://home.treasury.gov/news/press-releases/jy1087

Treasury acknowledges it is legal to access the website, view the source code, and none of the developers, DAO members, or users of the application are currently sanctioned by OFAC. The only thing that remains illegal is interacting as a US citizen with the deployed contracts on Ethereum since the time of the designation.

The developer was arrested by Dutch authorities and is currently on remand until December and has not been charged. It's incredible that you can be arrested and held without charge for 90 days by Dutch authorities, but hey that's Europe.

From the official Treasury FAQ:

> OFAC has not designated Tornado Cash’s individual founders, developers, members of the DAO, or users, or other persons involved in supporting Tornado Cash at this time. However, all Tornado Cash property and interests in property are blocked, and U.S. persons cannot transact with Tornado Cash or deal in its property and interests in property, absent authorization from OFAC.

https://home.treasury.gov/policy-issues/financial-sanctions/...

> While engaging in any transaction with Tornado Cash or its blocked property or interests in property is prohibited for U.S. persons, interacting with open-source code itself, in a way that does not involve a prohibited transaction with Tornado Cash, is not prohibited. For example, U.S. persons would not be prohibited by U.S. sanctions regulations from copying the open-source code and making it available online for others to view, as well as discussing, teaching about, or including open-source code in written publications, such as textbooks, absent additional facts. Similarly, U.S. persons would not be prohibited by U.S. sanctions regulations from visiting the Internet archives for the Tornado Cash historical website, nor would they be prohibited from visiting the Tornado Cash website if it again becomes active on the Internet.

https://home.treasury.gov/policy-issues/financial-sanctions/...

> Tornado Cash was re-designated recently, a capitulation that the arguments from the Coin Center lawsuit have merit

You're misreading an administrative action. The re-designation broadens Tornado Cash's alleged support for "North Korean hackers to the allegation that it supported the North Korean regime more generally" [1]. (Also, this entire discussion is a red herring.)

[1] https://www.reuters.com/business/finance/us-changes-sanction...

The scope of the original order was quite broad. While Treasury asserts Tornado Cash has been used by North Koreans, they have now narrowed what they are banning to interacting with the sanctioned smart contract addresses by US persons and entities.

The interesting argument at play is if they even have the authority to do that. Encrypted communications are also used by North Koreans, but we do not ban that for US people because, 1) it's math, and 2) there are valid reasons for privacy even if it assists North Korea.

It is an open question for the courts if this is within the authority of Treasury to ban interacting with self-executing smart contracts.

> Treasury asserts Tornado Cash has been used by North Koreans, they have now narrowed what they are banning

This is false. The scope of the sanctions was untouched by the re-designation. Justification was broadened.

> As part of the SDN List entry for Tornado Cash, OFAC included as identifiers certain virtual currency wallet addresses associated with Tornado Cash, as well as the URL address for Tornado Cash’s website.

Treasury says that originally the website itself was OFAC sanctioned.

With the redesignation:

> Similarly, U.S. persons would not be prohibited by U.S. sanctions regulations from visiting the Internet archives for the Tornado Cash historical website, nor would they be prohibited from visiting the Tornado Cash website if it again becomes active on the Internet.

Now, it is not illegal to access the website.

https://home.treasury.gov/policy-issues/financial-sanctions/...

The scope was narrowed in overt ways as clearly stated above, and for those of us closely following this story, there was a lot of worry that various people involved in Tornado Cash would have serious legal liability. That has been radically reduced.

> originally the website itself was OFAC sanctioned

Sure, the website was originally sanctioned [1] and now isn't [2]. That wasn't part of the re-designation. It also wasn't the part of the sanctions anyone objected to, OFAC's authority to sanction websites being long established.

[1] https://home.treasury.gov/policy-issues/financial-sanctions/...

[2] https://sanctionssearch.ofac.treas.gov/Details.aspx?id=39796

I doubt they have jurisdiction in the Bahamas's. The Netherlands is a country that really doesn't need all this crypto shit so this was a thinly veiled suggestion to Tornado and everyone else in this field to fuck off to Nassau and stop wasting regulators time.

It does say he's the subject of an inquiry by federal prosecutors and says Fried was asked about the prospect of jail.

And the article is hardly a defense of Fried.

(I think you're trying to find something in this article that isn't there.)

I am going to swim way against the tide on this one and say I for one am grateful for that piece - it is really an interview of SBF not a piece on SBF.

They have given SBF a chance to set the record straight - he went with the story as laid out in their piece - evidence supporting or contrary to these events will no doubt come out over time. I prefer to have the quotes (lies or truth) on record, and that is what they have delivered.

His father was, reportedly, in Nassau on Saturday. Day after, favourable interview with NYT. He was also, reportedly, questioned by police on Saturday too.

Even for the NYT, this is bad journalism.

What's in Nassau?

The funds were, from what I can understand, withdrawn from the Bahamas, of which Nassau is the capital city.

>What's in Nassau?

A complete lack of regulatory oversight, and a government conducive to facilitating international monetary crimes.

They [obviously must] have the a-OK to play this role from at least US (Monroe Doctrine) and UK (Commonwealth).

Make no mistake, if the US wanted to end money laundering in its backyard, it could do so. These jurisdictions exist because they provide value, especially to people with the influence to stop them, who see no reason to interfere in a system that benefits them without personally hurting any individual. Any negative externalities are sufficiently diffuse so the public can't pin the blame for the continued existence of the system on any individual beneficiary of it. So why would anyone stop it?

HQ of FTX's non-US entity.

This is standard for NYT since a long time back. It's the same owners now that it has been since 1851, and they have always used that power.

The media has been strangely blind to the rampant fraud in the crypto space up to now, but I think we're going to see a turning point now. This guy is going to have a lot of ink spilled on him in the coming days.

This is patently untrue. search: `site:nytimes.com crypto`, it's overwhelmingly negative coverage. This specific article is either grossly uninformed reporting or politically motivated.

> This is patently untrue. search: `site:nytimes.com crypto`, it's overwhelmingly negative coverage.

What, like this about Celsius' collapse (by the same author as this piece):

https://archive.ph/kHMNN

Or this about the crypto soccer team?

https://archive.ph/dvSv6

Most of the negative coverage I see using your suggestion is very recent, or around specific events, or by op-ed contributors. But they have the "expert" David Yaffe-Bellany on staff to churn out feel-good crypto stories.

> This specific article is either grossly uninformed reporting or politically motivated.

I know people like to find conspiracies, but I think you can safely leave the politics out of it. To me it looks like they put a crypto bro in charge of reporting crucial crypto failures, rather than to default assuming that the entire space is full of fraudsters and crime and putting a real reporter on it.

Well they do say he’s being investigated by the DOJ, which is the same as saying he’s suspected of committing a crime. The reporter on the crypto beat at the Times doesn’t appear to be very technically or financially saavy, so I’m not surprised they are focusing more on the human interest angle.

>It looks like daddy and mommy's friends are hard at work here. It's completely surreal.

Yeah. All the "Bitcoin Jesus" articles leading up to the collapse almost had me feeling sympathetic for the guy, too. Amazing the mental hoops you can jump through to justify pure greed.

This. It's astonishing to see how they are cushioning the fall.

Given the scale of the fraud, public opinion or even legal consequences are probably not the greatest of worries for SBF et al.

He's still playing League. Seems like he feels he doesn't have worries, perhaps because he's so well connected.

No, he’s worried. Come on.

Is there any evidence of him being worried, or are you extrapolating this belief from the knowledge that you would be worried?

Remember that sociopaths don't think the same as the rest of us.

Is there any reason to think he’s not worried other than the fact he’s blown of steam with a few hours of gaming?

The fact that he's still talking to the media. The fact that he's a sociopath who's been running a scam for years. Normal people don't have the nerve to do things like this.

When you have a net worth of $26B as he did a month ago, even if it was mostly paper gains on shitcoins, you manage to get some of the money out of the system and hide it away. Even if FTX is bankrupt and his current paper net worth is $0 or negative, he almost certainly has $100M or so squirreled away in multiple accounts in multiple countries with lacking regulations, in the name of a shell companies that can't be tied to him.

He hasn't played in over a year it seems:

https://www.op.gg/summoners/jp/TSMFTX%20SBF is his account and

https://twitter.com/SBF_FTX/status/1407924282865246215?ref_s... has evidence

He is probably preparing for prison time. All jokes aside, he used to game a lot, I think it was always to distract himself from stress. Business going bad and only you know it >> excessive gaming. Engaging in fraud and being nervous about it >> more gaming. Looking at a lot of prison time and death threats(there have been many on reddit) >> more gaming.

It is a coping mechanism.

Considering the legal exposure SBF has and the (in my opinion high) likelihood of going to jail for a very long time, I was amazed that the NYT got SBF on the record at all. Every time he opens his mouth he is just giving the DOJ more rope. I'd agree that the Times was soft on him and FTX in general, considering the vast criminality of the organization, but the article is not going to change the inevitable criminal outcome here.

Bankman-Fried must think the fix is already in.

Molly White, David Gerard and a few other academics and researchers did a 'correction' of a recent NY Times fluff piece from March 2022 here.

https://www.mollywhite.net/annotations/latecomers-guide-to-c...

It seems as if NYT have a couple of relatively pro-crypto (or just naive) writers.

SBF is a huge donor to democrats and a friend of many powerful people. The NYT doesn't want him to look too bad.

It's going to be memory-holed like Epstein's client list.

I don't like Trump, but he sure for the 'fake news' thing right... How did NY Times and so many other journalists miss this or Theranos? It's almost like journalists aren't really that good at their job.

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