Alameda took 1B hit in mobileCoin trade to prop up FTX

It seems to me that whomever was making these trades knew (suspected/or had actual inside operational information-but possibly from prior trades) that Alameda would buy the position and he would not be liable for the subsequent deflation of price.

If you knew that Alameda were going to backstop at 1% under the market price, this seems like an obvious trade to make. But how would you know that Alameda were going to do that without inside information?

It isn't possible to go full-FTX with a long-only fund...but there is further downside.

This is like Nightcrawler, and the press is satisfying the bloodlust of its readers who like The Social Network like drama and Big Shortesque scandals.

We arent living in the right reality if Adam McKay/Charles Randolph/Michael Lewis and Aaron Sorkin/David Fincher/Ben Mezrich dont have dueling FTX movies coming out on opposite streaming services the same week. (Probably Apple and Disney, who then happen to announce a merger, because of course thats how the world works now.)

A dark pool has nothing to do with who trades in it. As GME made famous, alot of GME retail orders got sent to dark pools to trade on.

What distinguishes a dark pool from a lit exchange is that orders are hidden and often trade at the midpoint(half penny) and not on the penny.

Who is on the exchange has nothing to do with dark vs lit.

Or just Google "what sets bitcoin apart to other cryptos".

https://bitcoinmagazine.com/culture/what-makes-bitcoin-diffe...

we should still scrutinize and perform due diligence on all businesses, though, including crypto businesses.

When one has a king-high full house, they should call every raise. But that but no one knows if that's the winning hand until everyone shows their cards.

Investigations like this take time. The old saying is the wheels of justice grind slowly, but they grind exceedingly fine.

The new CEO can't even make sense of what happened, and he has access to all internal information. It's going to take a long time to sort out what exactly happened.

Once he is indicted, I'm sure SBF will be well defended. A smart prosecutor will take their time in order to build an iron clad case. If he gets off on a technicality you run the risk of not being able to prosecute again due to double jeopardy. If you want a conviction, you really need your ducks in a row ahead of time.

> but by constantly talking about the case I think he's undercutting himself

Absolutely. The FBI doesn't usually announce investigations, as that puts the person being investigated on notice. Let him talk freely, it's all potential evidence to be used against him later.

Once the FBI announces an investigation, it often means that they have more than enough evidence and are mostly ready to prosecute. By announcing it, they hope to pull in little more information from those in the know, who might not have come forward.

These frauds seem to take place at the speed of light, while it takes forever for justice to show up. But it will show up. The slow speed of investigations is a feature of justice, not a bug.

At this point I think the DOJ is just sitting in stunned silence, quietly hoovering up all the data they can and waiting for him to finish adding more evidence to that pile. This will be a blockbuster of a legal case and I expect they're working to get everything lined up before they open fire.

I would predict SBF will spend the rest of his life in a US prison, but OTOH many people reading the statutes had good arguments why Elizabeth Holmes was going to get what amounted to a life sentence, but look what actually happened.

How much money did he steal?

Answer that. Not prove he wasn't in legal compliance in tricky TOS people signed without reading. Not prove that it wasn't all honest inept code. Not even prove that it turns out an unnamed hacker was not behind it all.

The prosecutor is going into a US court and say he stole how much money in the US?

Keep in mind that the CEO who unraveled Enron among other things has said it's going to take months to figure out how much money still in valid investments owned by FTX and is legitimately not stolen.

(I'm using stole, but lawyers probably would have a different set of terms)

This is part of the problem, is it not? There are tiers of justice. Law and order types shriek about how none of us are safe because presumptively innocent people who shoplift or jump turnstiles are not kept in cages before their trial. Meanwhile, you can steal billions of dollars or forge medical data and you're not only walking free, but invited to speak at glamorous conferences.

My memory is a little hazy, but the fast prosecution was motivated by covering up structural inefficiencies in CA energy trading created knowingly against considerable objections by politicians, that Enron abused, and not the a priori fraud of propping up their stock for dozens of quarters to be able to trade so massively in the first place.

Edit : to clarify, politicians created structural inefficiency in the California grid, in the name of deregulation, specifically Govenor Pete Wilson and California Legislature AB 1890 of 1996.

[1] - https://web.archive.org/web/20220613111008/https://www.wefor...

Matt seems to have said the same thing:

>"Signal sold out their user base by creating and marketing a cryptocurrency based solely on their ability to sell the future tokens to a captive audience,” said Bitcoin Core developer Matt Corallo, who also used to contribute to Signal’s open-source software.

But here is the thing; we've both have enough time in BTC to have seen some variation of this already; I was and remain a big proponent of Mycelium and I couldn't have done what I did with my startup without them, but there was no way in hell I was going buy their token and instead donated directly to the team. Nor would I purchase any of the exchange coins, I'm looking at SBF and CZ; so a level of due diligence is required so with the aftermath of the ICO-mania back in 2017 firmly in mind I think this should be a precursor.

I don't deny that Mobilecoin may have been in done in bad faith, but ultimately the consumer has to bear some responsibility; I was at hackathon at a major tech University, where the 1st-3rd prize was some small sum of cash and getting 1st round of interviews at some local tech companies and some recognition in media, but the rest were pointless things like Rokus or whatever.

I wasn't selected as a mentor for that event, I just crashed the event in the last 5 hours as I got out of work early, but after encountering a team from Stanford that created a proof of concept used to solve a major issue and creating transparency in donations for charities and non-profits using a blockchain to track, monitor and distribute the funds with real time tagging (like how we used to embed messages on mainchain).

Long story short is I managed to get them a pitch and demo with the guys from Tron and they won $10k worth of it, far exceeding the formal prizes, and I told them to split it 50/50 between them and to to keep most of it in BTC for obvious reasons. I hope they listened because Tron ended up being kind of a joke as were mos ERC tokens. I ope they listened but if they kept it in Tron they lost 66% since ATH and they only have themselves to blame.

Definitely not zero.

Legally, they aren’t mutually exclusive, and a part of what is probably making the criminal side take longer than people like is investigating the wide array of crimes that appear to have been committed and deciding how best to charge them.

But the billion dollars transferred into the pockets of this mobileCoin trader on the other hand...

I think the stuff going on with Alameda is a bit more spicy because he, and others, made several very explicit lies about that relationship. The stuff with the houses was unbelievable but the finger should really point at the shareholders who allowed it to happen.

*Formerly said Grapes of Wrath.