SBF scheduled to testify tomorrow at US House hearing on FTX collapse | Hacker News Reader

SBF scheduled to testify tomorrow at US House hearing on FTX collapse

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Having followed a lot of the SBF discussion since he keeps giving interviews, here's the FAQ--

1) How did you lose $5ish billion of customer deposits?

- They were deposited to Alameda, a totally independent hedge fund run by an unrelated party (my ex-girlfriend who lives with me). We credited Alameda without properly debiting Alameda on FTX.

2) Why didn't you track them?

- There was a bug in the dashboard. I made a boneheaded mistake. Oopsies.

3) What happened in the days leading up to the collapse?

- It was an attack from Binance, they're the bad guys. They cashed out and broke FTX.

4) Wait but they cashed out their assets, how would that effect people who had cash and other assets at FTX?

- Well we didn't comingle margin and non-margin customer accounts/assets if that's what you mean. It's more that we had this terms of service that was really complicated. Yes there's a part of the terms of service that says we won't lend out your assets, but there's this other part somewhere that says we will that applies to everyone even though it says it only applies to margin accounts. It's because of complex accounting. This is all actually just really complex and I don't remember all of it.

> This is all actually just really complex and I don't remember all of it.

Saving that one for future use.

It'll be interesting to see if anything blows back on binance here. If politicians see CZ as having blown up the business of one of their big donors, they may be unhappy enough to do something really dumb.

Yea, like destroying 100s of thousands of small account owners on Binance. Because the guy looks “Chinese” (but he multiple times publicly stated he is not Chinese).

To be fair, CZ was born in China and may have some ties to the Chinese government. He really is Canadian, though.

He wasn’t raised in China nor does he currently live there, but he was literally born in China and is ethnically Chinese. He doesn’t “look” Chinese, he “is” Chinese.

I could see this maybe happening if SBF hadn't already done a media circuit where it was painfully clear he didn't know what he was doing. It would be hard to pin significant blame on Binance at this point. Whatever CZ did or didn't do the perception is that FTX was already doomed.

Having also followed this unfolding drama, I can say this is sadly a reasonably accurate take.

I'll add my own opinion which is that he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once. I say this because I otherwise can't come up with any reason why he would continue to give multiple interviews except that the man actually thinks that his ideas were brilliant and sound, but he just made some understandable mistakes and that if people could understand where he's coming from they'd see that he's a sympathetic victim here and not some idiot that was very obviously going to lose everyone's money from the get-go.

Of course the reality is that he's some idiot that was very obviously going to lose everyone's money from the get-go. None of this is very complicated to anyone who's ever worked in finance (admittedly not me). And absolutely fundamental basic controls were never put into place. These controls were skipped because SBF was convinced he was doing something extremely novel and complicated and such old-school concepts would only hinder his ability to execute on his brilliant ideas. Except these ideas weren't all that brilliant, they just involved doing things the likes of which you wouldn't even imagine attempting in traditional finance because… gestures wildly at the ongoing FTX debacle.

> These controls were skipped because SBF was convinced he was doing something extremely novel and complicated and such old-school concepts would only hinder his ability to execute on his brilliant ideas.

Don't let him sell the story that it was all very complex and he made a bunch of mistakes and he should have done better. They used Snapchat for company messaging so there wound't be records. This wasn't a mistake due to complexity. He knew he was risking customer funds with an extreme Alameda margin position. He just hoped the market would go up and he'd get away with it and come out with tens of billions in profit. His bet, that he illegally made with customer funds, did not pan out, and he ended up without the money to pay everyone back. His terms of service said he would not make such a bet, yet he did it anyway. He took extreme, fraudulent risk with other people's money. He knows that, but he's playing dumb and trying to sell the narrative that it was all a big mistake.

I agree. It wasn't very complex, he made a bunch of basic mistakes that nobody with even a passing familiarity with finance should have made, and to say that he should have done better is an understatement of almost comical proportions.

I just also think that these things were (at least initially) due to absurd levels of hubris and incompetence rather than outright malicious intent. The guy thought his shit didn't stink but anyone even vaguely paying attention could smell what was up from miles away. He still doesn't think he did anything wrong other than making some justifiable mistakes in his rush to build something great and surely anyone can see that if he just explains himself for the thousandth time.

It is complex, but that doesn't mean it's not malicious. Let's use a simpler example.

Sam runs a horse racing operation and allows you to place bets on horses. Before the race begins, Sam collects $1,000,000 from various people placing bets on the race. During the race, Sam runs across the street to the casino and puts the $1,000,000 he's holding on black at the roulette table. If he wins the bet, Sam plans to take the $2,000,000 back, pay off customers at his race track, and then walk away with an extra $1,000,000 in his pocket.

Unfortunately, it comes up red, and Sam walks out of the casino with nothing. Realizing he won't have money to pay his customers back, he tries to find someone who can buy his race track and take on the debt, but nobody wants to inherit a $1,000,000 debt.

This is malicious. Sam willfully defrauded customers. Yeah, it could have worked out, but it didn't, and nobody consented to risking their money on the roulette table.

Now change $1,000,000 to $10 billion and replace "race track" and "casino" with complex finance mumbo jumbo.

Sure. This is a reasonable analogy.

I simply think that he started from an a priori belief that a) he is brilliant, and therefore b) ideas he comes up with are similarly brilliant, thus c) this idea is brilliant.

It wasn't.

That said, I don't think it should matter whether or not he came into this plan with an intent to defraud or if he mistakenly thought this was a foolproof investment strategy. The man is guilty as all hell and ought to face consequences for the outcome regardless of intent. I just think it's amazing to watch him continually try and explain how brilliant and complicated this idea was and how a few small mistakes brought him down while it's actually pretty simple to understand at a high level what happened and this outcome was virtually guaranteed from the start.

You see the same thing with most con-men (and women) when someone finally pulls back the curtain. Most won’t admit they were doing anything wrong even once they are in prison.

Near as I can tell, it’s the rationalizing part of the mind trying to protect them by trying to convince themselves and everyone else they are actually not bad.

It’s why it is so important to ignore what people say, and look at what they are doing and the results of their actions over time.

I have to add a preface of this is my opinion, but -

I think it's impossible he didn't know he was committing fraud. Now he's playing dumb, but I've know at least two people in situations like this. One was doing super risky real estate stuff which blew up in a surprisingly similar way - maniacal plans for world domination, mansions, lots of cocaine and adderall, sex with the co-workers, tons of leveraging, the whole thing. He was absolutely thrilled by the schemes and knew they were illegal. Ways to increase and manipulate the leverage was the daily conversation!

I know it's just an example, but this is all SBF would be doing all day besides press - talking about the funds and what they're doing with them. People imagine CEO's as being insanely busy and it's true, but there wouldn't be a day that passed that he wouldn't be making decisions with the finances - where they're going, what to do, etc. He's lying about dashboards and not knowing.

Smart sociopaths will convince even themselves it didn't happen when caught. Don't buy it.

I just also think that these things were (at least initially) due to absurd levels of hubris and incompetence rather than outright malicious intent.

Is there really that much of a difference between these two in this financial context?

I don't think it matters from a justice perspective.

From the perspective of someone watching the crypto world discover failure by failure why the modern banking system is the way it is this particular situation is amazing to witness. Everyone believes they're a genius when line goes up. Line goes down and everything falls apart.

As has been said before, once you reach a certain level, the two often become empirically indistinguishable.

Woah source needed on the Snapchat for company messaging. I gotta see this.

> Ray said that “one of the most pervasive failures” at FTX’s main international exchange was the lack of records about decision-making. He said that Bankman-Fried often used messaging platforms with an auto-delete function “and encouraged employees to do the same.”

https://arstechnica.com/tech-policy/2022/11/new-ftx-chief-sl...

("Snapchat" - the specific brand - may be inaccurate. I've seen it reported as messages that "auto-delete" without a specific platform mentioned.)

prob Signal

I heard they used Signal, which can have disappearing messages

I think both interpretations are true. I think he did think they were so brilliant and novel that they could ignore the rules. I think it's reasonable and probably legally correct to interpret that as fraud (with self destructing messages being strong evidence of mens rea). I think he really didn't intend for things to go wrong. I think he probably thought "we're all gunnuh make it," or "(3,3)" as Levine describes it in today's Money Stuff. I think now that everything has collapsed, he's trying to weaponize his rationalizations to maneuver himself into a better position (nonspecifically, there's no plan he's just trying to see what kind of better position is possible. I provide some admittedly sparse evidence for that here [1]).

In order to lie convincingly, you must first lie to yourself. His method is a sort of "sincere bullshit." That excuses nothing but is necessary for a complete understanding of the story.

SBF wasn't an exit scammer, or he would left with the money much earlier. He wasn't a Madoff character, or he wouldn't have attracted so much attention. A better comparison is Holmes. They were both looking to build an empire and probably believed they would eventually make good on all or most of their promises. This is a really dangerous form of con artist, because they can take in everyone - the greedy who want to ride the hype, the optimists who want to implement the vision, the desperate who need to believe in something, we can all fall for this sort of thing.

IANAL

[1] https://news.ycombinator.com/item?id=33910390

> he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once

Yeah, I strongly disagree here.

He's just a pathological liar and he's currently on an interview spree where he's lying out of his mouth to try and avoid jail time.

If you want evidence that he a liar, look at the DMs he sent to his friend (apparently he forgot she was a reporter?) that got published to Vox.

He clearly explained his strategy of lying about his left-leaning political views to get brownie points with the media.

He intentionally wanted to defraud people from the start. When he started FTX, they went through multiple jurisdictions (first Hong Kong, then Singapore and finally the Bahamas) to find the country that would give him the least regulatory oversight so he could run his ponzi.

He intentionally had staff message him using Signal with disappearing messages to minimize the paper trail. Same thing with hiring the Ultimate Bet guy.

He had a clear backdoor that allowed him to send customer funds over to Alameda and he put some some BS "FTX collateral" to serve as a veneer. He bought companies like BlockFi to get more customer funds so he could keep the ponzi going. Spent fucktons on advertising in arenas, F1, superbowl, etc. because your customer LTV calculation changes when you can just steal the user's deposits and use them to lever up your hedge fund.

I'm guessing his plan was that he would use the FTX user deposits to take a huge long position on crypto, ride the bull wave and become the richest person in the world. He thought he'd be able to time it right and get out before the bear market with his profits but he timed it incorrectly and Alameda blew up.

Now, he just wants to make it seem like it was an accident and due to poor management by him. No, it was 100% intentional and he knew exactly what he was doing.

You could be right. But if this interview spree is a calculated move to avoid jail time, he's doing a truly awful job of it. But this wouldn't be the first time he did an awful job of something due to misjudging his own competence.

> But if this interview spree is a calculated move to avoid jail time, he's doing a truly awful job of it. But this wouldn't be the first time he did an awful job of something due to misjudging his own competence.

Yep, I think that's exactly it.

In his mind, it's either

- do not do any interviews. The outcome is a 90% probability of life in prision

- do the interviews and try to shift public opinion to it being an accident. He knows he still has some influence over the media because of his past donations. Maybe 50% probability of life in prison if he can shift public opinion?

He seems like an addicted gambler who thinks he just needs one more bet to dig himself out of the hole.

> "Disgraced crypto boss Sam Bankman-Fried says he hopes to start a new business to make enough money to pay back victims of the FTX collapse."

https://www.bbc.com/news/technology-63911363

If all this was done maliciously from the get-go, I don't understand why he would take this approach as opposed to simply cashing out when things started to turn and disappearing. If you've got enough money, it's not hard to make yourself scarce.

So why stay visible and continue to do these interviews and testify before the US House when all he's managed to do so far is convince everyone that he's guilty as hell?

That's what I can't put together about this strategy. It only makes sense to me if he genuinely, truly doesn't believe he did anything wrong. Which is frankly amazing if true given everything we know.

> why he would take this approach as opposed to simply cashing out when things started to turn and disappearing

Because he wasn't expected their balance sheet to get leaked.

He had enough liquidity from FTX customer deposits to cover any Alameda margin calls from losses and Alameda wouldn't get margin called from FTX for any losses (due to their god mode).

So, he could keep just keep holding levered losses and wait for the tide to turn.

However, the FTX balance sheet got leaked and that caused CZ to want to liquidate his FTT stake.

This caused a huge wave of customers wanted to withdraw their money from FTX just in case (a very smart decision in retrospect) and he didn't expect that many customer withdrawals to come at once.

Or, maybe he thought he'd be fine if 10-20% of customers withdrew (in a worst case scenario) because he could sell the FTT "collateral".

But, the price of FTT also collapsed simultaneously and that caused the ponzi to fall apart.

Edit:

Or sorry, do you mean he should've cashed out and disappeared last month (after it was revealed that FTX lost all the customer deposits)?

Yeah, I don't think that's possible.

He would've been on the FBI most-wanted list and multiple intelligence agencies would be looking for him.

Having a billion dollars is pretty pointless if you're a top 10 most wanted criminal. Unless you have a country that's explicitly willing to shelter you, then you can't really spend the money otherwise you'll give yourself away.

Also, I don't think he's a complete psychopath. Him just disappearing would force his parents/siblings to also have to become fugitives and I don't think he wanted that. (if he disappeared, he would not be able to talk to his family again as aiding a fugitive from justice is illegal. Also, it would be completely impossible for his parents to live normal-ish lives if their son was on the FBI top 10 most wanted list. It's slightly more possible if their son is in prison.)

> Him just disappearing would force his parents/siblings to also have to become fugitives

How is that? Are they involved somehow? I’ve been following this somewhat closely and the only time I’ve seen his family mentioned is that he should have known better given his parents’ expertise, but that doesn’t imply they were involved.

Not sure why they would become fugitives or what exactly parent is referring to, but FYI: FTX bought a $16 million house in the Bahamas and put it in SBF's parent's names https://www.businessinsider.com/sam-bankman-fried-ftx-bahama...

No, I'm saying if he took the route of cashing out and going into hiding. He would never talk to his parents/siblings again. Or, they will be in serious legal trouble if he does.

Helping a fugitive evade governments is illegal everywhere.

And even if he goes with the "never talk to his parents/siblings again" route.

It's basically impossible for you to show your face in public anywhere if your son is on the FBI top 10 most wanted list.

It's slightly more palatable if your son is in prison lol.

The counterpoint is people have disappeared and not been caught yet who ran smaller crypto exchanges:

- Ruja Ignatova - disappeared in 2017, $3-4 billion missing - https://en.wikipedia.org/wiki/Ruja_Ignatova

- Gerald Cotten - declared dead in India under mysterious circumstances in 2018, $850 million missing - https://en.wikipedia.org/wiki/Quadriga_Fintech_Solutions

- Paul Vernon - disappeared in 2016, rumored to be hiding in China, ~$8 million missing - https://news.bitcoin.com/vanished-cryptsy-ceo-big-vern-order...

Interesting. Yeah idk maybe it is more possible than I thought then.

Maybe I'll try and hop on the next Twitter spaces Sam does and ask him why he decided not to go the international fugitive route.

Or yeah idk. I guess he has strong belief that he can spin the story into an "accident" and get away with 5-10 years of jailtime? That's probably better than spending the rest of your life in hiding.

This is exactly it. He thinks he's the smartest, most persuasive guy in the room. And, given that he was able to raise $420 million while pocketing $300 million in the last funding round, he's probably right. But I doubt even he can talk his way out of this one. I hope not.

Past donations only give you influence when they serve as evidence you will make future donations. SBF won't be making any big donations anytime soon so they will buy him absolutely nothing now.

"Everything Sam Bankman-Fried is doing is in singular pursuit of not going to jail" -- https://newsletter.mollywhite.net/p/everything-sam-bankman-f...

But the media has been surprisingly lenient so far.

<< He's just a pathological liar and he's currently on an interview spree where he's lying out of his mouth to try and avoid jail time.

That is likely true, but it does not disprove parent's point of:

<< he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand

Interview with various fraudsters over the years seem to suggest it is not that uncommon for the individual to create a story around the event that got them in hot water and it is also not uncommon to have them repeat it ( and seemingly even believe it ). It is a basic psychological defense. And, as a bonus, unless the individual is an actual psychopath, in which case it likely does not matter, you get to sell your story without seeming like you are lying ( and most people suck at lying, while they know they are lying ).

Still, it is just an opinion and it is not mutually exclusive with what you wrote.

>"I'll add my own opinion which is that he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber."

Yes and I think that was an image he actively sought to cultivate. This is the whole "cult of the genius" trope that the VC's want us to believe in. This is where you hear people regurgitating things like "he's playing 3D chess", whatever that is means.

Perhaps a telling bit of this chicanery is this incident:

>"In this context, the most telling detail in the FTX saga doesn’t have to do with dubious tokens or suspicious accounting. Rather, it involves League of Legends, the massive multiplayer online game that is a favorite of FTX founder Sam Bankman-Fried. In September, the tech venture-capital firm Sequoia Capital published a profile of “SBF” on its website, explaining how the crypto prodigy convinced the firm to invest some $200 million during a Zoom meeting—while playing League of Legends the whole time."[1]

Further from this same source:

>"What’s significant isn’t just that the now 30-year-old entrepreneur didn’t think it necessary to give the deal his full attention. It’s that Sequoia published this detail in an article meant to advertise its FTX investment. (The article was taken down after the firm began to collapse in early November.) Far from seeing Mr. Bankman-Fried’s gaming as a worrisome example of distraction and disrespect, Sequoia was impressed by it and expected readers to have the same reaction."[1]

[1] https://archive.vn/AiEEO#selection-243.48-247.34

> the crypto prodigy convinced the firm to invest some $200 million during a Zoom meeting—while playing League of Legends the whole time

VC's deserve to be crushed for acts such as this. imagine giving $200 million to a 30 yr old who is playing games on critical investment calls!!!

inconceivable -- from all angles.

> - There was a bug in the dashboard. I made a boneheaded mistake. Oopsies.

Will this hold up in court? Can you go to jail for bugs in dashboards?

The difference is negligence and intentional fraud. SBF is obviously arguing for the former. The law is more lenient to oopsies than Enron.

I don't really know if there's precedence here.

Normally, to burn billions of dollars, you need to be an executive in a big, established corporation that has controls in place to avoid that sort of thing from happening. It's much harder to claim negligence if you conveniently found a way to sidestep all of that in some sophisticated manner.

FTX is kinda different. With crypto in general, you have relatively new, private companies operating in a space with almost no regulation, getting millions/billions of dollars thrown at them by VCs and customers in a short period of time. It would be possible for a software bug to burn money at an unprecedented rate in a crypto company when compared to a big established bank or something.

Even though that is possible, I can't imagine that argument holding up for SBF. I think it'll be tough to buy SBF claim he's a simple startup founder who got in over his head when lawyers present stuff like FTX's corporate structure. But IANAL and all that, so it'll be interesting to see how this plays out.

In a nutshell, he ran FTX like Mt. Gox. He did't know what he was doing but just on a bigger scale than ever.

If you truly believe that he didn’t know what he was doing then he managed to successfully paint the narrative of a naive young entrepreneur. He knew what he was doing.

Mark Karpeles got in over his head, criminally. He lied some, he defrauded some, but most of it seemed to be to try to cover up for previous mistakes, and I think he legitimately just had some bad things happen to him, got in over his head, and made a bunch of mistakes in an early time for Bitcoin. He deserved prison time, and he's paid his debt to society.

That's not what SBF did, not even close. All of the FTX executives are from top schools and have top credentials. They knew exactly what they were doing was fraudulent. They just thought they could get away with it.

> Having followed a lot of the SBF discussion since he keeps giving interviews,

The better question is, why is anyone still interviewing him? You're far better off interviewing a terrorist than a conman - as dangerous as the former may be, they aren't going to talk you to death... Whereas the raison d'etre for a confidence man talking to you is so he can sell you a self-serving line of bullshit.

There's literally nothing that SBF says that isn't aimed at the singular purpose of keeping him out of prison. Until he's testifying under oath in a court of law, there's nothing he could say that's worth listening to.

We are generally smart enough to not hand a killer a loaded gun, but can't seem to resist handing a fraud and liar a loudspeaker.

On #4, Coffeezilla got past the smokescreen and got SBF to admit there was "fungibility created during those withdrawals between assets" and that it had always operated this way.

[1] https://www.youtube.com/watch?v=4o_jPzBZSIo (~15:30 in)

A key thing seems to be that Alameda couldn't have been a totally independent hedge fund because my understanding is that SBF owned 90% of Alameda.

*remotely testify.

https://www.reuters.com/legal/ftxs-sam-bankman-fried-says-he...

As the saying goes...

If you forget to hire an accountant, make sure you listen to your lawyer.

They did not "forget to hire an accountant". They took customer funds and did whatever they wanted with it. Just look at that hilarious "balance sheet" that was leaked, it's not even on the same planet as a balance sheet of an exchange.

It worked until the funds ran out.

In a sense this is worse than a pyramid scheme because in a pyramid scheme at least a good portion of the "profits" is actually paid out. Here the funds went partially to fuck-knows-who, partially were lost in trading.

They remembered to hire a chief compliance officer though. One with plenty of fraud experience.

Did I really need air quotes around "forget"?

Yeah, the point is this was much more than some accounting problems - looks like the intent (to defraud) was there as well. On a massive scale.

Of course.

But the SBF story is "man, I dunno, maybe I forgot to reconcile those ledgers? It's complicated I think.".

My guess: He knew exactly what was happening but believed he could outlast the crisis and everyone would be whole on the other side. That risk would probably have paid off about 50% of the time. And I think the Binance guy called SBF's bluff and killed FTX for fun.

Mic in his ear that feeds him answers?

No, that’s the mic connected to the computer he is playing League of Legends from.

Congress should demand in-person testimony

He was a political donor, not going to happen LOL

He made donations to Democrats and clearly favored them. It seems FTX made donations to Republicans when they thought they could buy regulatory influence.

So while I'd rather see him questioned under the upcoming house, not the current one, nothing would happen either way.

SBF: “I donated to both parties. I donated about the same amount to both parties,”

https://www.theguardian.com/technology/2022/nov/30/ftx-billi...

Yea, I totally trust what he says.

He made dark money donations to Republicans according to him as well. We don't know the scale of those dark money donations, which is certainly convenient for those involved. Your last line betrays the issues with the post you've made.

> He said that it was important for him to remain in the Bahamas, where FTX is headquartered, and that it is difficult for him "to move right now and travel because the paparazzi effect is quite large."

Because of the paparazzi, mind you.

They can be quite annoying, or so I've heard.

The encouraging thing about the FTX collapse is that it didn't affect the rest of the economy. The Washington Post points out that the FTX crash didn't produce any visible change in any major US economic indicator outside crypto.[1] The whole crypto sector is that disconnected from the real world.

So, let the prosecutors, courts, and accountants sort this out. Follow the court filings here.[2] Today's updates: the Internal Revenue Service is getting involved. And, amusingly, the U.S. Bankruptcy Trustee is using FTX's privacy policy against them.

[1] https://www.washingtonpost.com/opinions/2022/12/11/crypto-co...

[2] https://restructuring.ra.kroll.com/FTX/Home-DocketInfo

We still don't know that.

> “We note that you own or have issued crypto assets and/or hold crypto assets on behalf of third parties,” one of the questions said. “Explain whether these crypto assets serve as collateral for any loan, margin, rehypothecation or other similar activities to which you or your affiliates are a party.”

https://www.wsj.com/articles/sec-asks-public-companies-for-m...

I know lots of people in finance who are claiming the big banks used made up coins as collateral for stocks, and the house of cards just hasn't collapsed yet. And if you look through their 13F reports it kinda confirms it.

If someone has a direct contact to someone from the committee please forward them this video: https://www.youtube.com/watch?v=4o_jPzBZSIo

Did they write anything up?

tl;dw: It's hard to get SBF to admit to fraud involving Alameda because he can fall back on the excuse that he wasn't the CEO and didn't know what was happening (even though there's every chance he actually did). So the youtuber hit him with a more targeted question: if FTX guarantees deposits are not traded, why were deposits not able to be withdrawn -- where did they go? He gets SBF to admit that they were commingling regular deposits with funds from customers doing riskier things like margin trading, and during the run those riskier users withdrew funds that should have been deposits that were set aside in a separate pool. That exposed regular depositors to risk contrary to what was laid out in the TOS. SBF gets mad and lashes out.

Seems like he has been admitting this constantly, don't think this is a new scoop.

CoffeeZilla has done a really great job of following up with this line of questioning but on a technical point I am not sure that this gets him where he thinks it does.

From what I have seen I do not think that FTX held itself out to formally be a "segregated accounts company" and the example CoffeeZilla uses of a bank is a bad example because that is exactly how banks operate. i.e. the problem with FTX was that they informally held themselves out to be a segregated accounts company but formally operated like a bank on a first-come-first-served basis.

Here [0] is the current membership of the committee (note it will change in 2023). I don't expect too many tough questions.

[0] https://financialservices.house.gov/about/committee-membersh...

> don't expect too many tough questions

Sounds like he finally got some good advice: he's testifying in the House but not the Senate.

> I don't expect too many tough questions.

Wanna bet? He's super unpopular across the aisle and politicians are quick to turn on donors if they are dead in the water.

I'm not so sure he's dead in the water as a future donor. There is $8 billion missing. I think it's likely most of it is gone in the sense of irrecoverable by SBF, but with the amount he was moving around it wouldn't be hard to drop $100 million here, $40 million there. That's not to mention the $300 million he cashed out in the last FTX funding round and the $1 billion personal loan he took from FTX, neither of which I've seen addressed yet as to where that money is now.

He's not going to be donating $100 million here or there to these politicians. They would not accept his donations, he is politically the kiss of death.

He likely does not even have the $8 billion.

> They would not accept his donations, he is politically the kiss of death.

I'm not going to address this part, which is the main point of your message. You might be right, I really don't know how political money moves, especially "dark money" and whatnot.

I'll address the other parts to clarify because I think there were a couple minor points of confusion.

> He's not going to be donating $100 million here or there to these politicians.

The $100 million here, $40 million there I spoke of was him dropping money in accounts / crypto wallets controlled by himself. I'm saying I think he still has a lot of money, and from what I understand money can buy influence. You might be right that his money cannot buy influence on Capital Hill anymore. But I do think he still has a lot of money.

> He likely does not even have the $8 billion.

No, I definitely don't think he has $8 billion. Clearly a lot of that was lost. But I do think there's good reason to believe he has access to money in the order of $100 million - $1 billion while he's trying to claim he only has $100k left.

Cory Booker had no problem putting in a good word for Elizabeth Holmes.

Good counterpoint, I hadn't been aware of that.

I should have taken this bet.

Not to defend SBF or suggest he did anything correct, but isn't that _negligence_? Given that the factors of the negligence benefited their operations, it still may be charged as fraud and he may be guilty in court.

Couldn't anyone committing fraud just claim negligence? I'd imagine it is pretty common for people doing fraud to try to cover it with negligence, like not keeping records of money going "missing"

The US Trustee has now filed its objection to the proposed motion to redact the names of FTX's creditors.

https://ia601406.us.archive.org/2/items/gov.uscourts.deb.188...

Celsius recently asked to redact the names of its creditors in its bankruptcy filings and the court denied the request.

What are the chances FTX's motion will be granted.

The IRS has also filed a notice of appearance.

This isn't a substantive story, so the thread is just a repetition of discussions that have already been had many times by now.

Once he does testify, maybe that will be a substantive story, with something new to discuss.

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...

Edit: it looks like https://news.ycombinator.com/item?id=33959557 has some new information? not sure how significant it is

This is crazy. It seems like SBF is determined to go to jail. Put another way: it seems like he's so full of himself and deluded that he thinks these interviews, Tweets and (now) an appearance before Congress are good ideas.

They are not. The one thing you should do when facing a likely criminal indictment is to shut the F up. Every statement you make can be used against you and remove your legal options. You may be admitting to things that the prosecution would otherwise have to prove. Yes, interviews aren't given under oath but then you have to argue what you said was a deliberate lie or you were mistaken. The prosecutor will have a field day with this: "what else did you lie about?", "were you lying then or lying now?", "how are we to believe anything you say when you've admitted that you lie?", etc.

His parents are lawyers. They should know this. He should have legal counsel. They will definitely know this. So he either doesn't have legal counsel or is ignoring their advice.

He will absolutely spend the rest of his life in prison or on the run.

Does anyone else find it extremely ironical that FTX happened in crypto? Wasn't FTX one of the things crypto was meant to solve?

It is and that's why now bitcoin folks now are distancing itself saying that crypto != cryptocurrency and the only real cryptocurrency is bitcoin and crypto are all "shitcoins".

What do you mean?

> FTX is an abbreviation of "Futures Exchange".

No, not even remotely. FTX is a centralized exchange, and is the opposite of what crypto’s original philosophy is

Kind of like how git made tools for decentralized development widespread, so nobody uses centralized intermediaries to host their repositories any more.

I don't think the /s is needed, decentralisation of "power" or "authority" has never worked. Decentralised protocols can work, such as Git, but people in general are both lazy and don't care. They will always gravitate towards the easy option, which is giving someone else control.

What does work is centralise powder and authority with democratically chosen rules and regulations. It's the easy option, and it works. Fundamentally that's the thing "crypto" misses, those democratically created rules are there to protect the masses from the few. Unwittingly (?) the creators of Bitcoin actually created the greatest tool ever for financial crime and defrauding the unwitting general public when they were actually trying to empower them.

It's not lazy - it's efficient.

Centralization is an optimization, fragility/trust/single point of failure being tradeofs.

The old joke being that if an economist designed humans we would share one kidney between 3 people instead of having a redundant one.

At what population size is democracy acceptable? Is it bad to say live in a world with decentralized democracies i.e. say the US and Sweden are separate entities?

I don't think the /s is needed, decentralization of "power" or "authority" has never worked.

Yes it most likely has. It's just not absolute. There's a very strong argument that all of history is supporting data for all societies and governments being on a spectrum of centralized power, with the more decentralized ones being better for the common person.

https://www.youtube.com/watch?v=rStL7niR7gs

I mean, at least git is easily "re-decentralizable" if you have to: Just add another remote to your working copy and push your state.

I also believe there are lots of companies who run their own internal git services to not be dependent on GitHub.

I agree though, in theory, git would allow some fully p2p working mode, where each developer just adds the machines of the other developers as remotes and there is no "authoritative" remote at all. If that was ever seriously proposed as a real working mode, it definitely didn't catch on, due to it quickly becoming extremely confusing.

In practice, having one universally agreed upon "authoritative" location of the project repo gives you an enormous amount of advantages, more than a p2p setup would give you.

I think as long as you can freely choose where to host that authoritative version and can quickly change its location if need be, I'd still consider git to be decentralised in practice.

> I also believe there are lots of companies who run their own internal git services to not be dependent on GitHub.

The same is true of Subversion or CVS or Perforce, which are all very centralized source control systems. Relying on Github.com itself is another level of centralization over and above the near-universal industry pattern of having a centralized repo.

> I agree though, in theory, git would allow some fully p2p working mode, where each developer just adds the machines of the other developers as remotes and there is no "authoritative" remote at all. If that was ever seriously proposed as a real working mode, it definitely didn't catch on, due to it quickly becoming extremely confusing.

That is more or less how Linux kernel development works, with Linus' own repo just being more respected than others, but with many entities maintaining their own central repos (e.g. many distros and larger organizations only manually take patches or merges from Linus' repo, they don't otherwise rely on it in their automation). Changes are often collaboratively worked on for months or even years outside in sine of these repos before being sent to one of the official maintainers for inclusion in Linus' repo.

Now, this practice makes no sense at all for a centralized entity like a company, which is why virtually all companies used centralized repos where all code and collaboration happens by mandate - whether using Hg, Git, or SVN.

> but with many entities maintaining their own central repos

This sounds more "federated" than p2p though. I imagine each organisation has again a centralized hub for coordinating their own development on the kernel. So the collaboration between those different orgs (and eventually with Linus) is sort of a layer on top of the normal git workflow.

I think you can see "federation" patterns (i.e. where orgs/servers/hubs/etc are p2p but each user belongs to a particular hub) pretty often in decentralised systems - and my subjective impression is that they are a lot more successful than "true" p2p systems (where users themselves are p2p).

Other examples of that pattern would be IRC, Mastodon, email and in a limited sense the web itself (users are bound to a platform but platforms can interface with other platforms via APIs)

Crypto (and git) would be sort of hybrids: It's technically possible to use the system without a hub, but the vast majority of users goes through a hub - for crypto, those would be cloud wallets and the exchanges we're talking about...

You'd be extremely foolish for your github or gitlab code to not be backed up on any devices you own

One of the best features of git that every cloned repo is a full copy. Now having a separate backup of the golden repo itself is also a good idea, but if shit hits the proverbial fan you at least have the full history up to your latest git fetch on your laptop.

git remote update

You make that comment sarcastically, but git has in fact made decentralized development easier, and is in fact used that way by some projects such as the Linux kernel.

That many people choose to use it though centralized services such as Github doesn't diminish its power as a tool for decentralized software development compared with earlier tools such as cvs and svn.

Likewise, Bitcoin and Ethereum also enable decentralized coordination that wasn't previously practical, and the fact that accessing them via centralized middlemen is currently popular doesn't change that.

However, pretty much only the Linux kernel.

A side-effect of developing from a normal-sized git repo is that you have a copy of your "blockchain" locally.

I won't claim that github/gitlab couldn't somehow do evil remotely and cause you to nuke the code history next time you build from a hacked pull request or something. But even then there's a decent chance at least one developer hasn't done the evil git pull. And if that's the case I just copy it from them and I'm back where I was.

If I understand correctly, nothing at all like that was possible in the FTX case.

One could spin it like: thanks to git reducing the requirement for servers for more of the development experience, it has reduced the reason for companies to self-host repository servers.

Crypto had a philosophy? Yikes

primarily the crypto community (outside of the scam artists, which is an upsettingly large percentage) is working to build trustless and capture resistant forms of value & exchange

That still makes it ironic no? If the outcome of events at one of the largest crypto exchanges is "the opposite of what crypto’s original philosophy is" that's a textbook example of irony.

Back in the very early, more promising, days of crypto the standard critique of crypto was the common mantra "you can't use technology to solve social problems". I think we've had that objectively demonstrated multiple times now (and will continue to do so).

Though I do expect "No True Scotsman" to be a pretty favorite cry from the remaining crypto enthusiasts for quite awhile.

Pretty sure it originally had FTX and crypto flipped, which is why my reply made sense. At the moment, yes it’s ironic that this happens in crypto even though crypto’s main (and maybe only) strength is that it isn’t beholden to a centralized authority.

It seems to me that without regulated centralization, crypto will never work / take hold and be a little niche that only enthusiasts care about.

Are you confusing FTX with the Foreign Exchange Market (aka Forex/FX)?

No.

"It's easier to fool a man than to convince him he's been fooled."

Precision of language is important here.

Where's the easiest place to defraud people? Directly adjacent to the place where it is mathematically impossible to be defrauded.

Uninformed people stored their assets on FTX.

Had they stored their funds on the blockchain, instead of entrusting them with SBF, it would have been impossible for SBF to abscond with their funds.

He could not have defrauded them _by stealing their deposits after claiming he would not_, even if he really wanted to. It's a mathematical impossibility.

As I understand it, most people using FTX were not buy-and-hold investors who wanted FTX to "store their assets." It was a place where people loaned out their crypto, among other things.

It doesn't seem like there are ways to loan out crypto without risk. However, there are methods to mathematically guarantee that you will at least end up holding collateral that's worth much less than you thought it would after something bad happens.

Unfortunately, this is not true.

Many non-US engineers were paid salaries in stables or fiat on FTX. These people gained exposure to US stocks and crypto, or just held onto their USD on FTX.

I personally know people who lost their life savings on FTX, even though the majority of their holdings was fiat.

Decentralized exchanges can solve some of the problems now plaguing FTX investors, but there is still a big problem that the blockchain can’t solve: on and off ramps to fiat.

This is where the criminal underground can potentially thrive.

Black-market dollar markets already exist across the developing world, backing it with stablecoins allows these criminals to better operationalize illicit dollarization, rather than keeping massive amounts of risky cash on hand.

The on & off ramps in the West will have to be centralized due to political will and strong rule of law.

As someone else mentioned, going to and from fiat has always been an issue for crypto. So as a result, exchanges exist. Problem is with exchanges in order for settlement to happen the money has to be held somewhere where it can actually be used to settle trades. That is, users can't just keep the tokens in their own wallet until the trade is complete then pay up (or they could just not pay if eg; the trade was unfavorable... for example if they could get a better price now).

Since crypto transactions routinely take 15+ minutes you can't just pay right as you trade. And if using fiat to buy crypto then there's no getting around the exchange needing to hold your fiat.

All that said, exchanges need proper auditing and oversight. Building exchanges is a slow process. This is something that coinbase actually got right but alas they were outglossed by binance and FTX that offered very risky offerings like leverage, way more coins, etc.

> So as a result, exchanges exist. Problem is with exchanges in order for settlement to happen the money has to be held somewhere where it can actually be used to settle trades

An exchange is just an unregulated bank.

Irony depends on your priors and expectations.

If you expected this to happen it isn't ironic, just business as usual.

The only think crypto solves is "shady money" in some form or another (money laundering, drug sales, bribing and corruption, pump and dump schemes).

So yes, in this sense, FTX is the perfect poster child.

There's a flagged sibling comment here that I think should be the most upvoted one. The other replies trying to clear up the confusion are also downvoted. What's going on? Why are generic flame wars upvoted instead?

Question for folks here who have been very involved in the space - if you had 1-2 yes or no questions for SBF, what would they be?

I think FTX claimed 1.2 million users awhile back. Is there any insight into a true count of FTX users and maybe the average value of holdings they entered into FTX with?

I'm interested in understanding just how much actually flowed into FTX from users vs what (the probably fake?) value of their holdings were when FTX melted down.

If you are testifying remotely, I suppose you are still under oath and have serious consequences for perjury ?

Yes

yes, so he's been hard at work practicing coming up with all kinds of non-answers several interviews a day.

but seriously, I'm not sure how much they expect from this. He does have a legitimate excuse of being cut off from all the corporate data, so he can just keep replying "I'd tell you but the bankruptcy ceo took all my data".

They don't expect to get any useful information out of him, they expect to be doing their jobs. When this kind of disaster happens, politicians don't question the perpetrators to get any key insight into them, they do so to put on a bit of theatre, that they can later use to support legislature that they are going to draft. (Or quietly kill in committee.)

The only people who can do anything meaningful about SBF are working for the DOJ, and they don't do their work by holding public hearings.

There are theoretical consequences for lying to congress, but I can't recall a high profile case of them being applied to anyone. Famously James Clapper, then director of the NSA, told congress that the NSA does not collect data on Americans[1] which is what inspired Snowden to leak the info on NSA data collection. Despite this, he went on to continue serving as head of the NSA right up until the end of Obama's term in office.

[1] https://en.wikipedia.org/wiki/James_Clapper#Testimony_to_Con...

Tomorrow, somebody will become the first person in history to play League of Legends against a person who is simultaneously testifying at a US House hearing.

SBF getting in character now and practicing his deception and manipulation skills in front of the mirror.

SBF should not be underestimated, he might be hard stuck in the silver league of LoL, but he is GM level or above at bullshit.

Observing him dodging questions and managing to deflect the heat of relatively tenacious and seasoned journalists is a sight to behold.

As irritating as it is impressive.

Politics might have been a better fit for him.

bronze*

His parents are endowed professors at Stanford Law, so it's not surprising that he learned these skills.

*were, neither are teaching this coming year due to 'pre-planned retirement'

It's likely they could end up in legal trouble as well as they were on FTX's payroll and had property gifted to them, likely bought with customer funds.

His mother ran a PAC which had large sums of money to spend on US politics... again with no accounting of where this money was coming from (likely customer funds).

Presumably with emeritus status, in that case?

Looks like more SBF the magic boy wonder talk.

His bullshit doesn't get challenged. This same media machine could make him an 'unperson' if they wanted. He has political capital in the sense that his going down may affect others. It is possible that it is these others that are likely being protected here.

As for "tenacious and seasoned journalists", my favorite these days is Whitney Webb:

https://unlimitedhangout.com/2022/12/investigative-reports/f...

That is tenacious journalism.

Just a p.s. regarding who is who. The David Tang character from the above article piqued my interest.

Wiki entirely forgets to mention this guy was chairman of SF Federal Reserve Board (as article mentioned in passing):

https://en.wikipedia.org/wiki/David_Tang

"The Federal Reserve Bank of San Francisco named David K.Y. Tang, a partner at law firm Preston Gates & Ellis, as chairman of its nine-member board of directors."

https://www.latimes.com/archives/la-xpm-2005-dec-16-fi-calbr...

David and friends: https://duckduckgo.com/?q=David+K.Y.+Tang+and+friends&t=ffab...

That might work on George Stephanopoulos but it won't work against a seasoned prosecutor. It'll be interesting to see if he's allowed to plead the fifth for topics on which he's publicly spoken, repeatedly.

Isn't that what the media tour has been for?

This guy is something else. He's one of the largest scammers in history, if not the largest, by the amount of appropriated funds. But he's also very "cute", I mean he cannot open his mouth without incriminating himself. This is going to be a good show.

On a more serious note I do hope for some serious sentences on the back of it (counted in decades, maybe a few life sentences if possible), because it's too much of a financial fraud to even look plausible. Yet it is real. If you want some good writeups check out the old dependable "Money Stuff" by Matt Levine, every paragraph is better than the last.

> But he's also very "cute"

You’re unvoluntarily making another good point here: He’s young and, yes, cute in the form of having smooth skin, and young. Such things affect the imaginary of people: Old guys are often seen as bad guys in movies. Jurys are heavily influenced by looks. 30 years old and good-looking is an upside in affairs.

I wonder whether the average age of scammers is getting smaller, due to being able to penetrate large finance much quicker in life. Madoff had to be 50-60 to setup such a large scheme. SBF is 30. Will the next AI-wizz be 2 years above legal age?

I am quite sure that Holmes was also “cute”.

There's a theory that his "gee shucks I'm so cute and dumb" thing is an act. He's portraying a character. No one is dumb enough to talk so much to so many news outlets after losing so much money.

Could be, absolutely. But I'm guessing there's more than enough evidence to convict him already. The real question is just how deep the rabbit hole goes, I bet this is what the prosecutors are working on. Meanwhile, "never interrupt your enemy while he's making a mistake".

https://en.wikipedia.org/wiki/Idiot_defense

"The idiot defense" is a satirical term for a legal strategy where a defendant claims innocence by virtue of having been ignorant of facts of which the defendant would normally be expected to be aware. Other terms used for this tactic include "dumb CEO defense", "dummy defense", "ostrich defense", "Ken Lay defense", and "Sergeant Schultz defense"

"Ostrich defense" makes me laugh every time.

>He's one of the largest scammers in history, if not the largest, by the amount of appropriated funds.

Not true. There are plenty of bigger scams. Even my tiny country (Denmark) has been involved in bigger scams like when Danske Bank laundered $230 billion out of Russia and into tax havens around the world.

The fact that this guy has not been arrested just goes to show how completely f*cked America is.

The question of jurisdiction is interesting. Technically FTX was not operating in the US or for US citizens but, as I understand, there were many workarounds. FTX US did operate in the US, but I'm not sure how fucked they are relative to the main FTX exchange.

It's also notable that FTX customers (at least the "in-crypto-for-the-ideology" ones) and investors wanted this. They wanted a financial system that was out of the reach of the US legal system - none of them had a problem dealing with an exchange that was based in the Bahamas for legal reasons until the whole thing fell apart. So it's interesting to hear so many calls for SBF's arrest by US authorities.

| FTX US did operate in the US, but I'm not sure how fucked they are relative to the main FTX exchange.

I'm going to go out on an amputated limb here and say...right well fucked.

Not completely, but the "American dream" looks very differently today.

It took the feds 3 years to indict Kenneth Lay for Enron. You’re going to be waiting a while. Feds get one shot at a case and they don’t tend to lose for a reason.

By arresting him now he can force a speedy trial. Feds are going to gather every single ounce of evidence they can before they go after him.

That seems optimistic but I hope so.

>You’re going to be waiting a while.

He's been arrested.

https://www.cnbc.com/2022/12/12/ftx-founder-sam-bankman-frie...

Dude literally paid a substantial proportion of Bahamas GDP to the Bahamas government, my guess is they got some sort of deal in exchange for this.

> Dude literally paid a substantial proportion of Jamaican GDP to the Jamaican government, my guess is they got some sort of deal in exchange for this.

Do you mean Bahamas?

If so they you are very wrong about their GDP :)

Yes, oops!

They transferred $500 million to Bahamas govt, which is ~5% of GDP. I would say that is a substantial portion.

Once SBF gets arrested, the clock on trying him in court begins. The "clock" varies by jurisdiction; it can be a short as 30 days or as long as 6 months, and they have to gather all of the evidence they will be using before the trial begins.[1] Once the trial has concluded, he cannot be re-tried on the same or related charges even if new evidence comes to light.

Or IOW: prosecutors get one shot at the apple. They're going to wait until they have a good case and then they will prosecute him, assuming he hasn't been offed by then, and he will spend many years in prison.

[1] Defendants are usually asked to waive this deadline. For less serious charges, or for non-violent felonies where the defendant isn't planning to contest the charges, this is usually a good idea because prosecutors will agree to a better plea deal. For more serious and complex cases like this, it's never a good idea to waive the deadline. The defendant doesn't want to give the prosecution more time to prepare a case because the prosecutor won't agree to a better plea deal if they do. When defendants refuse to waive their right to a speedy trial, conviction rates are usually below 50% (from a standard rate of north of 80%) as the standard criminal investigation takes much longer than the speedy-trial window.

He can be imprisoned on one "sacrificial" offense for which they have probable cause but don't care much about.* Then reset the clock with a superseding indictment.

* Note per below the sacrificial offense would be a Bahaman offense while the superseding offense would be in US jurisdiction.

That's not how it works, at all.

A superseding indictment does not "reset" the clock. The speedy trial clock begins with the first indictment, regardless of whether there is a subsequent or superseding indictment. See e.g., U.S. v Black (2nd Cir. 2019), or US v. Young (11th Cir. 2008, available at https://caselaw.findlaw.com/us-11th-circuit/1425888.html). The Young opinion is a good primer on the history of the speedy trial case law.

The following U.S. Circuits have ruled similarly to the 2nd and 11th Circuits on speedy trial rights and superseding indictments: D.C, 3rd, 5th, 7th, 8th, 9th.

Looks like you're right, thanks. Gonna be a long time before he goes to jail then. Maybe Bahamas will charge him first to get him in jail and then US would be able to extradite as I doubt Bahaman charges would count toward US speed trial.

Edit: SBF has been arrested by Bahaman authorities.

Maybe Bahamas will charge him first to get him in jail and then US would be able to extradite as I doubt Bahaman charges would count toward US speed trial.

Edit: SBF has been arrested by Bahaman authorities.

!!!

That's correct, double-jeopardy applies at the jurisdictional level (meaning, double-jeopardy from a state court trial wouldn't prevent a trial at the federal level, or vice versa), so charges in the Bahamas would not trigger double-jeopardy protection against charges filed in the U.S. at the state or federal levels.

| Once the trial has concluded, he cannot be re-tried on the same or related charges even if new evidence comes to light.

..thought that was the only situation in which double Jeopardy doesn't apply. Can you explain a bit? Is this condition specific to violent crimes or something? If not, seems like there should be a stronger consideration for the magnitude of harm done.

Double-jeopardy applies once the charges have been resolved, such as when a verdict has been reached, charges dismissed with prejudice (whether voluntarily by the prosecutor or unilaterally by the judge), a plea deal has been accepted, or if the speedy trial window has passed.

The last bit is why prosecutors wait to try defendants in complex cases.

(Note that there is no right to speedy sentencing...any time spent in jail/prison after conviction but before sentencing is credited against the incarceration sentence.)

welp - that was fast, they just arrested him lol

Given that he's been arrested, I guess America is not that fucked?

Yeah I'm definitely eating crow. Can't say I'm unhappy about it though.

Will this be streaming somewhere hopefully?

Cspan

Can we just perp walk this guy already?

No, because then he can invoke his right to a speedy trial (72 days) leaving prosecutors in a spot where they can't use a grand jury to find new charges, have a time limit to get their case locked down, and they don't have time to make deals with smaller fish to testify against the big fish.

"The wheels of justice turn slowly, but grind exceedingly fine"

Oh this will be rich

Mark Zuckerberg’s-interrogation-by-the-congress-rich, or Bill Gates saying “I don’t know whether I wrote this” in front of a printout of his email, at the 1998 DoJ interrogation, rich?

Either way, neither were dismantled.

Binance waiting next in the queue? /s from reddit

Probably. I think I am going to close all my "crypto" accounts because it is a scam as many of us thought it from the beginning. The only real value of blockchain is immutable history that is a pretty good thing in few cases.

I met someone who claimed they lost money in FTX when I was taking four figures in winnings from boomers at the poker room yesterday.

(Could have been just table talk -- you can't trust anything you here in that context, just like you should take psudoanonymous internet comments from some guy named "Greg" with a grain of salt.)

I didn't have a ton of sympathy for him or her, since this is the flip side of engaging in a market where the major players shun regulation - gamble in an illegal (or illegality ridden) market and the host might pull an exit scam and you might be left counting your blessings you're alive afterwards to complain, but I sympathize with those who simply want to use BTC as a fee free value transfer mechanism to kill abusive entities like Paypal.

Conversely, I don't think it's something that should be used for day to day purchases -- cash is king folks. Offline, hard to counterfeit, and if we need to start moving it around physically more because the internet and/or market crashes, we can go back to having larger denominations just like back in the 1920s[1].

- Greg.

[1] https://en.wikipedia.org/wiki/Large_denominations_of_United_...

> I met someone who claimed they lost money in FTX

> Could have been just table talk -- you can't trust anything you here in that context

I was expecting something more noteworthy. Many people lost money.

Does anyone know if FTX.us users are completely made whole?

>completely made whole

Both the FDIC and NCUA only insure deposits up to ~250k USD IIRC.

Why would you expect differently in a less regulated context?

Because SBF said FTX.us wasn’t impacted.

Cool story, bro.

Thanks for the compliment.

Shouldn't be be in custody?

My understanding is the Bahamas has confiscated his passport and is working with the DOJ to decide who prosecutes first as they aren't happy he ripped off rich people either.

Source?

Don't have a direct source, I've only been following loosely, but he was just arrested by the Bahamas government https://twitter.com/tier10k/status/1602446984090107905

What are the odds that Bahamas authorities were previously partners in his scheme, and now want to keep him in the Bahamas simply so they can loot the corpse of FTX before anybody else can?

They just arrested him on behalf of the US and say they plan on processing his extradition quickly once it is formally requested. I don't think they like the spotlight.

https://twitter.com/tier10k/status/1602446984090107905

Excellent news.

My understanding is if you want to launder money, that you create a business in the Bahamas or some other Caribbean island. I don't think the authorities there are really the best arbitrators of truth.

The Bahamas attorney general just announced he's been arrested while they wait for the US DOJ to formally request extradition.

https://twitter.com/tier10k/status/1602446984090107905

I guess I just had my prescient goggles on this morning lol

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