Caroline Ellison and Gary Wang are cooperating in the criminal case against SBF
nytimes.com
nytimes.com
I have read more SEC complaints this year than in all of my previous years combined.
—- Edit 1
Caroline’s guilty plea: https://www.documentcloud.org/documents/23495436-crypto-coop...
Based on what we know so far about Caroline’s misuse (abuse) of funds and possible mass market manipulation all of which has resulted in billions of dollars in investor losses. 10 years in this case seems light, no?
Sunny Balwani, otoh, didn't benefit, wasn't the CEO, didn't make most of the false statements and got a heavier sentence.
These numbers exist solely for the audiences at home.
Depends on which federal drug crimes. The drug kingpin law is based on $, not weight.
Yes, it is.
> it's just what happens if you take the statutory limit on what could be sentenced in the worst possible combination of circumstances, and it assumes that charges don't group or get served concurrently.
Which is, in fact, the theoretical maximum, because while the Sentencing Guidelines call for grouping and concurrent sentences in certain circumstances, the Supreme Court has ruled that the Guidelines are, as the name suggests, more what you'd call “guidelines” than actual rules, and judges are free to depart from them, in either direction, within the mininimum and maximum sentences, if any [0], prescribed for each crime in its own statute.
It’s true that most sentences will conform to the Guidelines, but the Guidelines rules do not set outer boundaries on what is possible.
[0] some crimes have statutory minimums, most have statutory maximums, but some federal crimes specify only imprisonment for “any term of years”.
I look forward to a blog on "The Pirates Code as applied to criminal prosecution in the US." I mean, it is already clear that you can avoid punishment by producing enough pieces of eight, so I wonder what other similarities there are.
[1] https://www.federalregister.gov/documents/2022/02/11/2022-02...
Right, to the extent a federal convict has supervised release time, its not “I got out early from my prison sentence” but “I was sentenced to supervised release on top of my prison sentence.”
(for non-native English speakers, giving information to the police is called "singing" in early/mid-20th century slang)
His sentence was reduced to 36 months in a court action that was publicly reported, and there were several subsequent sealed actions between then and the release.
> but it's just not true that the Feds won't let you out early if they feel like it.
A reduction in sentence is a very different thing than early release.
I expect between 0 and 3 years.
Also, I like how the they're very clear that restitution must be made as "a sum of money in United States currency", as opposed to, say, FTT tokens or Bored Ape NFTs. However, the section on forfeiting the proceeds of the crime does explicitly include "property including but not limited to" USD, meaning the Feds may end up with a pile of shitcoins and monkey JPGs after all!
She won't be further prosecuted (i. e., beyond the charges she is pleading guilty to) for conduct related to the acts specified, if she cooperates fully as agreed. In other words, supposing there are other charges related to that cobduct which could be filed, DoJ is bound not to pursue them if she upholds her end of the agreement. If she does not, DoJ can add those additional charges on top of the existing charges (or, replacing the existing charges with more serious ones related to the same conduct.)
I hope (and assume) these details will have no practical value to my life! But it's good to know how the world works.
My guess would be that it refers to a conspiracy (or other “group” offense, like RICO [0]) for which she was not charged, and which no one else had been publicly charged yet, such that not redacting it would reveal otherwise nonpublic information about how DoJ expects that it might charge other people.
[0] RICO is cited simply as an example of a group offense that is distinct from conspiracy; I am not predicting RICO charges, to be clear.
Also, reading what SBF says about his lawyer, he seems a bit sketchy as well (but obviously that is a one-sided account).
[0]This number is completely made up and betrays my total lack of knowledge about what finance people make.
Human psychology is funny. Not content with being stinking rich in their 20's, they embarked on a massive fraud to get even richer.
To give them the benefit of the doubt, I'm not sure they set out to commit fraud, just make money off suckers, but when the temptation presented itself they couldn't resist it seems.
They were, but arbitrage can only last so long and theirs ran out. They were convinced of their own genius I think which is what got them on the FTX train.
The real issue is that ftx and alameda could have been massively successful without any fraud.
For example, if someone steals a bunch of coins from exchange A then you would want exchanges B and C to be able to made aware of that ASAP so that they can stop the movement of those coins.
Source? Isn’t this just a theory with no evidence?
https://finance.yahoo.com/news/sec-calls-ftt-exchange-token-...
Since all exchange native tokens more or less work the same way, that would mean they are all securities. That would include BNB. If this holds, the crypto exchange game is over.
It's the SEC's position that you can issue tokens, but they have to be "registered," specifically with them.
- An investment of money
(Send money/BTC, get token)
- In a common enterprise
(the exchange)
- With the expectation of profit
(Token burns)
- To be derived from the efforts of others
(Exchange pays with profits for token burns)
https://www.coingecko.com/en/coins/ftx-token/tokenomics
I think it is more of a stretch to call FTT a cryptocurrency than calling it a security.
"The complaint charges all three defendants with fraud and material misrepresentations in connection with the sale of digital commodities in interstate commerce."
Doesn't seen to be a turf war; SEC seems to be saying the FTT token and direct investment in FTX were securities (and thus, decieving investors in those waa securities fraud), CFTC is saying that the bulk of the crypto traded on FTX were commodities (and thus, decieving people trading in them was commodities fraud), and DoJ—which has included both in the criminal charges as well as each regulatory agency filing civil charges for offenses with their respective civil area of jurisdiction—agrees with both.
Exchanges don't need tokens to be a place to swap and park coins. I don't see Kraken or Coinbase using a house token/security. Some exchanges will be okay.
I bet many companies are like that, where investors or a chairman are the real decision maker and the CEO is managing downwards only. Especially when you have a complex corporate setup where you are told to request funds and resources from a parent org etc.
If I am in a C-level position again I would definetly avoid a situation where I was C-level in name only, if only to avoid the legal risk.
How much are they paying, exactly?
(at least I read that it was 90%)
Something tells me they'll be okay. Just look at Liz Holmes of Theranos.
I don't see any differences between the two. I admit I did look at thunderfoot's videos on musk and was convinced since 2019 he was a small conman. I don't understand how Holmes is any different.
Elon engages in the first, Holmes in the second. I think, if Holmes merely went bankrupt because she couldn’t get to a functional product rather than releasing a product and knowingly lying about its capabilities, she’d be in much less hot water.
Now, regarding SBF, I can imagine there are some big wigs that had their money in there, not only nobodys like you and I. That's the only reason why I think they will get shafted.
In that sense, the concept of a token created by you and traded largely by your firm being used as collateral for loans was incredibly fraudulent. The fact that the DoJ is acting only after the token fell and revealed that SBF used customer funds to rescue it, is either a strategy or an oversight. Same way they don’t want to touch Tether just yet even if it’s so obviously a fraud.
Caroline only took over recently, I haven't heard anything about his legal standing at this point.
If SBF is also going for plea bargain, will various government institutions ask from him to get some dirt on Tether (and on Binance)? Might be that they are more interested in campaign financing.
In the last paragraph on page 3 of the plea letter, we see that most of the counts cover the period from 2019-2022 (2020 for the money laundering). Thus, the crimes that Ellison is pleading guilty to were going on while Trabucco was the co-CEO.
According to Wikipedia, he "officially became the co-CEO in October 2021", and resigned in August 2022.[1]
According to the SEC civil lawsuit against SBF, SBF was running Alameda the whole time, including when Ellison and Trabucco were nominally the co-CEOs. The CFTC lawsuit against SBF, FTX, Aand Alameda asserts the same, and that SBFs resignation as CEO of Alameda was done to create the false image of strong separation between Alameda and FTX.
Ellison apparently had a real role in the fraud, but I don’t know that it’s clear that Trabucco was anything other than a face set up as a distraction, in terms of substantive role.
Lots of people are speculating on sentencing, some are comparing SBF to Holmes, but IMHO it's likely in this case he is going to plead guilty. Whatever comes out in a criminal trial, e.g., testimony, could be used against SBF in the civil cases brought by the SEC and CFTC. Assuming SBF will plead guilty, given the amount of the losses he has caused, which far exceed the amounts involved in Holmes' fraud, what sort of plea agreement will SBF be offered.
One theory of why these charges against SBF were brought so quickly is that the US attorney is extraordinarily confident he can obtain a conviction. The "brilliant" SBF's idiotic public behaviour after the bankruptcy filing has no doubt has made the government's job much easier. This makes sense because as many readers will know, generally federal prosecutors do not like to lose and they will not gamble. Their egos and reputations may be at stake. They want slam dunks. For Damian Williams this is probably a slam dunk. Assuming he does not make any significant mistakes.
That's a funny question to consider. I wonder if this has sufficiently shattered his world-view such that he'll no longer do interviews.
This includes the convictions and statement of the offense that comes with a guilty plea, though, too.
Because he has such a great tendency to shoot himself in the foot in the legal sense, it sounds as if encouraging the judge to grant his release so he can carry on incriminating himself in interviews would be a smart strategy from the prosecutor's POV
Maybe his own lawyer will be arguing against release
I don’t agree with this theory, as I think it’s rather likely SBF will be viewed as a flight risk.
• His heavy involvement in the cryptocurrency space makes it likely he has significant moveable digital cash reserves that cannot be easily seized and which would greatly aid an escape.
• He has shown himself to be extremely mobile and was seemingly already attempting to get some distance from the USA, given that he was arrested in the Bahamas
• The gravity of sentences charges he’s potentially facing are vast, and he has many incentives to flee prosecution if it means potentially dodging spending 10-20++ years in jail
I therefore think it’s very unlikely he gets bail.
Although possibly more relevant is the reasons Kevin Mitnick was denied bail; what can he do from a computer?
I’m very interested to see if the parents are charged.
lol. lmao even
"In June 2018, Theranos announced that Holmes was stepping down as CEO. On the same day, the Department of Justice announced that a federal grand jury had charged Holmes, along with Balwani, with nine counts of wire fraud and two counts of conspiracy to commit wire fraud." [0]
[0] https://www.businessinsider.com/theranos-founder-ceo-elizabe...
Because two people near the top of the conspiracy, with broad knowledge of its details and where the supporting evidence is, have decided to fully cooperate.
And because SBF likes to talk and told his (original) lawyers to, as he tells it, “go fuck themselves” when they advised him to stop publicly confessing his crimes.
In the modern era of email / slack / whatever - every smoking gun piece of evidence is a ctrl-f away. SBF is publicly testifying and pointing to where the bodies are buried, FTX the company is cooperating and co-conspirators are cooperating.
Half of keeping your nose clean and keeping people accountable is cornering them into reading/writing something. This is a great way to make yourself nobody's friend, but also a good weapon for halting something by refusing to do it without getting it in writing first.
Other crimes are very easy: misleading (prospective) investors just requires that you fail to disclose something. No need to prove intent, even something very small will do. And as long as there is at least some connection to the US, US courts will hear the case.
Prosecuting SBF for defrauding customers would take years. But getting him for failure to disclose to investors (which seems to be what they're after) is really easy. So they're powering through.
They also now have 2 co-operating witnesses.
(Or maybe he already knew and it’s just a coincidence).
I think it's good to get one or two insiders - Ellison and Wang seem ideal. Why does the state need more?
Prosecutors, along with their investigators, should come to a position on whether a party is guilty and if so what punishment they deserve. They should then make that case in court. Courts would need much greater throughput to handle this, but the current method seems much worse.
Saving taxpayer money, too.
If that is the case, then putting 10 people away for 10 years due to greater certainty of conviction, but also more lenient sentences, has greater social utility (as a detterrent) than only putting one person behind bars for 100 years, with 9 others getting off scot-free.
Despite the noise, it doesn't look like either Carol or SBF profited much from this scheme. At the end of the day, the "luxurious lifestyle" looks pretty spartan. Bernie funded years of living large off of his victims; not the case here.
The clawbacks and value of the FTX positions long term will be interesting.
They're as much liable as SBF in this whole scheme.
Also, where's Sam Trabucco?
This article is about precisely the process in which that happens.
They now have cooperating witnesses with significant internal visbility into what went on, and more importantly, people who can speak to the intention behind what went on.
"These people will never see a day in prison."
<surprisingly fast case made against the principals>
"Well, what about this other guy over there?"
> Ellison and Wang are cooperating with the SEC’s ongoing investigation...
The whole team knew about stealing billions of dollars of money, clearly there's more than 1 person (and more than 1 company's executives) that need prison time.
> She got into crypto, she explained on another episode, because she was hoping to make lots of money to give away as part of her commitment to effective altruism.
Should the term be capitalized, as Effective Altruism?
It seems to be a new, branded definition, and not in common usage like the generic terms effective and altruism.
It's also bringing some bad associations to good old-fashioned altruism.
Also, in the space of questionable philosophy appealing to insulated rich kids, Objectivism is already capitalized.
Since then, it has grown a lot and Bezos has to do nothing to reap the benefits but keep his shares.
But just because Bezos built one great thing that helps so many consumers, does that make him the best at giving away wealth? He claims it is actually HARD to do effectively. His ex-wife seems to bave given a lot more than he has. And Warren Buffett outsourced it to Bill Gates. And tons if people even hate Bill Gates for his vaccination programs in Africa - despite eradicating Polio.
Bill also speaks to world leaders and wants to spray mist in the atmosphere to cool the planet. And kill all mosquitoes. Pretty big plans.
Plus Bill buys a huge amount of farmland for some reason. What makes people think central planning would be the best way to allocate donations in the world?
There’s a problem with a society that enables billionaires to exist at all. It shouldn’t even be possible but we’re here for a lot of reasons.
Interesting thesis, do you have any reasoning to support your claim?
They can't liquidate all their assets without harming the company, thus the livelihoods of their employees.
Look at what they create, not only what they are worth.
Also your charity endeavors are more effective with the compound interest of a billionaire vs a multi-millionaire.
sam bankman-fried is purported to have used a variation of this.
Don’t get me wrong, I think in growth stages, stock exchanges do allocate money to fuel productive sectors of society. But during other periods of a company’s life, they are mere zero sum games, where money goes mostly from retail investors to enrich hedge funds.
I think the problem is that there is no limit to shareholder value extraction. The non-productive sector of society parks their money in shares in order to legally plunder the value exchange of producers and consumers.
Now that we have utility tokens, the network can be owned by the participants. Raise money by selling utility tokens at a discount. They have a ceiling after all (the value of the utility token) and you can only sell as much as people believe there will be demand in the end from actual customers.
You can raise money by selling shares temporarily but have the shares be usable as discounts on utility tokens so you can sell them to customers. And that way you can ignore your shareholders clamoring for you to cannibalize your ecosystem for them.
I am saying that the ones who generate revenue (money going one way) are not automatically the best to fund social programs (money going the other way).
There were never any philanthropic objectives.
It was always a scam from the get go.
Also look into one-coin and Ruja Ignatova.
The point stands. He said what he thought he needed to say and there were never any philanthropic objectives.
This is what I meant:
https://cdn.vox-cdn.com/thumbor/3FuCAM_X4mREv2FJTnDv_QMmD6M=...
Or this:
Alleged Twitter DM conversation between SBF and Vox reporter that fits otherwise: https://www.vox.com/future-perfect/23462333/sam-bankman-frie...
Audio recordings of two calls between SBF and Tiffany Wong where he says he donated to Democratic Party publicly but equivalent amount to Republican Party dark to play both sides:
https://piped.video/watch?v=6DezodR9hNI
https://piped.video/watch?v=xP54LZB3WRw
Maybe there's more in those, I found it too tiring to listen to all of it due to it being hard to make out what SBF is saying.
CoffeZilla commented and subbed parts: https://piped.video/watch?v=0rL35_WV3lE
And then, maybe 90% down the page, a little more on how he feels about ethics.
(It's too bad that this whole HN thread is still flagged, because it seems very relevant to the story, and one of the more interesting facets.)
Both just happen to be able to justify the acquisition of infinite capital without typical counter-weights that society puts forward… and inversely to justify authoritarian state control of everything for either purely rational or purely altruistic pursuits as was in vogue in the 1910-1940s.
Sometimes it seems like the ultra wealthy need some sort of story to tell themselves (and others) as to why they are different, why they have earned and deserve these vast richest, etc. Philosophy more and more seems to be a rich mans game. Wonder if it has anything to do with Imposter Syndrome? As if preaching a philosophy can somehow make up for the ruthlessness (and I have to believe some emptiness) underneath it all?
Also, there seems to be an element of fashion involved. Like when it was in vogue for celebrities to adopt foreign kids (only to have them raised by nannies). Gotta virtue signal. Maybe that explains why the beliefs come and go, Objectivism was so last year, etc.
This also applies to "open source" vs "Open Source". The former has regular connotations from regular English usage. The latter, and only the latter, should refer to the proprietary definition offered by the OSI.
I've seen it written both ways, though it looks like lowercase is more common. Ex: Wikipedia uses lowercase https://en.wikipedia.org/wiki/Effective_altruism
"Effective Altruism" is more appropriate in this case.
The problem isnt the adderall. Its that she was clearly abusing it. She participated in the theft of billions and she felt great doing it.
even worse is when the people who have this attitude are extremely ignorant but truly and genuinely believe they have good intentions. they will proceed to do extremely damaging things to other people, causing extreme harm, all because they truly believe their intentions are good, but often their viewpoint is wrong due to incomplete information. these people almost see themselves as heroes and are empowered by their moral conviction from that viewpoint. i've observed this first-hand too many times in my personal life.
Sure, they're justifying their means, but none of it has any actual good intentions.
It would be a slap in the face if they got some absurd plea deal where they didn't have to go to jail if they testified against Sam.
On the other hand, great lawyers and connections might still make something out of it.
That's my concern. Caroline's father is an MIT professor who was previously Gary Gensler's (head of SEC) boss.
It would be extremely disheartening if Caroline gets an extremely generous plea deal due to her father's connections.
Personal connections to the head of the SEC on the other hand are valuable.
More broadly it seems like it might be blurring lines... SBF's parents being specifically Law professors, and having a certain level of access to FTX, would likely have been aware of any criminality occurring and should have tried to prevent it.
You're right that what matters is: - Ellison's father is strongly connected to the SEC head - SBF's mother was a major fundraiser for the DNC
Are you joking?
That's absolutely not the case for Economics (the context we're talking about here).
Why don't you look up the backgrounds of the people on the Federal Reserve Board of Governors?
Or, look up who drafts major legislation? If you watch MIT's Econ 101 course on YouTube, the professor who teaches it was actually the guy behind Obamacare (John Gruber).
Modern Monetary Policy has become a huge part of a base of the Democratic Party, again... drafted by an Economics Professor.
> Is everyone putting forth these theories still in college? Do they not know how little power college professors wield outside academia.
No. I'm not still in college.
You just seem to be completely unaware on how influential Economists (almost all of whom are college professors) are.
> Personal connections to the head of the SEC on the other hand are valuable
Oh yeah, head of the SEC is also an MIT Econ Professor.
But... clearly they have no power outside academia!!
Saying otherwise is a conspiracy theory!!
The former head of the SEC was also a partner at Goldman Sachs, where he co-chaired their Finance committee overseeing their internal controls, spent 4 years in an undersecretary position in the treasury department, joined the Senate staff and helped write Sarbanes-Oxley, is former chair of the US CTFC where he overhauled regulations for 6 years.
By my count, that's 12 years of high-level federal government experience, 18 years at Goldman Sachs, and maybe 6 years as a professor. And the professorship was after at least 24 years doing other things at a very high level
You seem to confuse cause and effect
The answer is unequivocally yes.
You seem to have changed the discussion to something else.
You’ve changed the argument to… i don’t even know?
The question is whether Economics Professors are influential outside of academia and if they’re well connected. The answer is obviously yes. The top professors (i.e. MIT Profs, Harvard Profs, Yale, etc.) are extremely influential far beyond academia.
I'd agree that you're right in other contexts. Like, a history professor or something. But that's not what we're talking about here.
Schools, business schools especially, like to hire influential people as professors. So there are many powerful professors. But that's not why they are powerful.
Since that's not why they are powerful, there's no reason to bring it up.
Reread the thread to see why.
"He is known for his role in the development of the market for high-yield bonds ("junk bonds"), and his conviction and sentence following a guilty plea on felony charges for violating U.S. securities laws... With a net worth of $6 billion as of 2022, he is ranked by Forbes magazine as the 412th richest person in the world"
He wrote them for caroline and her sister when they were in elementary school, because they excelled in math and wanted more of a challenge.
I bought these books after reading about her when this first started happening a few weeks ago.
No joke, those books are really tough. They are for elementary and middle schoolers, aannnndddd I can't get thru them. lol
Seasons 1 and 2 were absolutely hysterical and amazing, but by the end the writing got really terrible.
MIT 15.025 | Spring | Graduate Game Theory For Strategic Advantage
That is the deal. It's a cooperating plea deal; prosecutors will accept a much smaller sentence (out of the very wide ranges available) if they follow through on the coperating part.
Yes, getting off scot-free seems unlikely.
> The idea that there is some agreement for say 5 years recommended is not on the table in this type of situation.
Sure it is. The Feds will ask to suspend sentencing on these charges until their cooperation is completed. If they cooperate appropriately, they'll spend much less time in prison than if they'd pled not guitly.
That is absolutely the situation. That’s why you take the deal. They got her to plead to seven counts! There’s almost certainly an agreed-upon recommended sentencing.
https://www.documentcloud.org/documents/23495436-crypto-coop...
Imagine Caroline Ellison on the witness stand. “Ms. Ellison you were looking at charges that could bring 110 years of prison or more, is that correct? And how many years did the prosecutor’s office agree to recommend instead in exchange for your testimony today?” There’s really no good answer, is there? The best answer your witness can give in that situation is something along the lines of “I’m cooperating with the hopes that the prosecution will recommend leniency to the court at my sentencing.” So that’s exactly the situation they’ve put her in. They’re under no obligation, per the agreement, but it’s absolutely on the table. And, assuming she holds up her end of the bargain, they will definitely file a motion with the court to have her sentence drastically reduced. Although the judge will be free to ignore it.
It doesn’t sway the jury.
> This Office cannot, and does not, make any promise of representation as to what sentence the defendant wil receive, and will not recommend any specific sentence to the Court.
That's not in every federal plea agreement. If there was a deal done for sentencing guidance, it would be there to read. A common one is something like "Acceptance of Responsibility", where parties to the agreement say that because of their cooperation, the government will provide evidence to the court to help meet a reduction via the sentencing guidelines.
I would accept this deal if I were Caroline Ellison because the alternative of being found guilty would give me a much harsher sentence.
Pleading guilty, admitting your involvement in the crime, and making restitutions are parts of the sentencing guidelines. Everyone has access to these - you don't need a deal to get them.
You plead guilty - you get a lesser sentence. That's why she (and I would too) did it.
Not sure what you mean there. The prosecution recommends a sentence to the judge. They are agreeing to recommend a shorter sentence than they would have if she fought.
Judges (especially federal) are despots and don’t care at all about prosecutors or what prosecutors want. The judge will want to know exactly how much she blew on bad investments, how much she stole for herself, and how useful her cooperation has been. Then, using the sentencing guidelines and the United States Probation and Pretrial Services Office Presentencing report, the judge will impose a sentence.
https://apnews.com/article/donald-trump-business-34deb7d885d...
> Prosecutors urged a judge Wednesday to impose a “very substantial” prison sentence on Michael Avenatti for trying to extort millions of dollars from Nike.
> Prosecutors noted in a Manhattan federal court submission that Probation Office officials recommend an eight-year prison term for the California attorney who gained fame three years ago through his representation of porn star Stormy Daniels against then-President Donald Trump.
Well that prediction didn't age well. Looks like she got herself a deal.
I think you massively misread the doc.
Read the doc, its not that long
https://www.documentcloud.org/documents/23495436-crypto-coop...
> Moreover,if the defendant fully complies with the understandings specified in this Agreement, the defendant will not be further prosecuted criminally by this Office for any crimes, except for criminal tax violations
They agreed to not charge her with more crimes other than tax evasion. That's a huge deal given what she could have been charged with.
That's a huge difference from what you quoted.
Her deal is that they won't prosecute her for anything else related to these crimes except that they can't promise she won't be prosecuted for tax fraud.
Her deal is also a sentencing recommendation that a judge is very likely to accept.
Neither the SEC nor the CFTC have authority to regulate crypto.
Can traditional financial instruments (like cash, securities or commodities) be used for fraud? Absolutely. But it's not as easy.
I work in traditional finance and this imo is a major reason why - the GP is right in that nothing about the fraud was crypto related. But today you could never run an equities brokerage with such absurd lack of anything related to operational competence and customer protections.
It's not necessarily that the technology inherently lends itself to scams, but the culture around it absolutely does. A startlingly large percentage of the biggest players in crypto have turned out to be scams, this isn't a one-off thing.
But for one, he lobbied for a future where individuals would no longer legally be able to use blockchains directly or build businesses on them (aside from pure direct person-to-person payments).
Doesn't get much less "cryptobro" than lobbying against people being able to use blockchains.
Crypto was a major factor in this scam and others. True decentralized crypto will never be integrated into society. Crypto fundamentalists can't get past these things.
FTT is on the Ethereum Blockchain.
Anyone can put scam token on Ethereum, just like anyone can publish a website. It has no relevance to Ethereum whatsoever. What the poster meant was that the FTX, the organization, was not an Ethereum protocol, it was just a centralized financial institution that published some random token.
> Nothing here happened on a blockchain. If it had there wouldn't have been problems.
My response addresses their point exactly. FTT being on the blockchain did not solve the problems, and she is specifically being charged with fraudulent on-chain activity (not just fraud on the edges).
As for the protocols, I don't blame the technology, I blame the culture. The culture that surrounds crypto is uniquely prone to perpetuating scams. That's not the fault of the technologists who started the movement, it's what happened when crypto became a gold rush.
2. You can't entirely separate a thing from its effects, the effects of cryptocurrency have been to enable this massive ecosystem of frauds and scams. That may not have been the initial intent, but it's certainly a large part of the outcome.