U.S. moves to seize $460M Robinhood stake linked to Sam Bankman-Fried
cnn.com
cnn.com
If this is true, then someone else(Genesis) has a $500M hole in their balance sheet due to this. Which will lead to knock on issues, just like how Luna -> 3AC -> Celsius and Voyager -> FTX
In additional knock on effects, the US sized about $100M of crypto assets from FTX that Silvergate bank was holding.
This put more stress on Silvergate bank that was already in alot of trouble over their loans and shrinking crypto assets.
Based on the Government asking Silvergate for the HOOD shares and $8B in customer withdrawals they've gotten, they're down almost 50% today alone.
We'll probably see someone acquire them for nothing or we'll have a bank failure pretty soon.
Almost certainly people like Elizabeth Warren will use this to show that crypto is having a spill on effect to the real world economy and therefore should be under their regulatory control
[1]: https://www.ft.com/content/69cd8629-278d-4cd5-a3e7-96d2f6c85...
I believe there is also a WSJ source but I cannot login there.
Is it wrong that I'm smiling?
I don't see the contagion spreading, unless some real crimes were also committed on the TradFi side of things. But unlike 2008, these crimes aren't institutional and will have real names attached to them.
The worst I see is crypto dying a firey death, people go to jail, and a new generation of avg greedy folk learn the hard truths about get rich quick schemes. All well deserved.
Frankly I'm relived to finally get this experiment behind us. The sooner it dies the better. The bigger it got the more avg folk that were going to get scammed.
Meanwhile the rest of us go back to our daily lives trying to figure out where to invest wisely.
fine gold coins, r/wallstreetbets, lottery tickets, and shares in "art masterworks"
Yeah it sucks average Joe's got suckered. I feel the pain.
But every generation brings a new group of greedy people that fall for get rich quick schemes, and they all usually learn there ain't no thing as a free ride the hard way. People like this won't listen to the warnings. "Have fun staying poor".
I'm sorry there's collateral damage. But people like this are going to get conned somewhere. Best these people learn a lesson, then they can be smarter with the rest of their lives.
Yeah, the media was all hype. Well guess what, the media isn't reality folks. And they're certainly not looking out for you. More timeless lessons to learn. Be careful who you trust.
Keep the government away from money!! Hey FBI someone stole my bitcoins!
So much old wisdom being re-learned right now. It's about time. The longer this was going to go on the more people were gonna get hurt.
It's why the anti-crypto crowd has been so vocal. They're not haters. They're trying to warn others.
The frustration in that crowd is that you're ridiculed for your lack of faith. Hence the schadenfreude.
No, she's supposed to read "8-18% per year guaranteed, no risk*" and say "there's no legal way that's possible and there are too many asterisks, I'll stay with Vanguard".
How is a person with early stage dementia supposed to differentiate between "new thing that's actually an incredibly wise investment decision" (i.e. Vanguard, popularized in the WSJ in the 1980s) versus "new thing that's actually mostly a scam" (i.e. most of crypto, popularized in the WSJ in the 2010s) when their once-trusted sources of information have failed them so miserably?
The parent comment is totally correct that innocent people were slammed from every angle to the point where even pro investors or techies couldn't see through the SCAM.
Not to pile on, but if one is getting financial advice from sporting event logos, it is yet another timeless lesson to learn not to do that.
So I didn't explicitly say it in my original post because I didn't want it to be too wordy, but yes it is pretty awful that some scammy bullshit was permitted to be advertised to average consumers as if it was a normal investment, and that as a result people will have invested in something that will (in my opinion) ultimately be worth nothing. I was horrified to see giant crypto.com adverts in my mid-sized Central-European city - since it means that many people will have assumed that this is just some new tech asset class (rather than a delicately balanced house of cards) and then effectively dumped some money into a black hole
The issue is that it became a defacto tool of choice for average fraudster to rehash old scams.
I am not feeling the pain, but I am also not celebrating. I want balance and getting SBF should bring some semblance of it ( semblance, because he should be not connected enough to make sufficient amount of connected people angry and vindictive ).
That and "it doesn't get any more useful as you add nodes, but you still have to add them or people can hack it".
That is is testable. I used it and whether it is more expensive appears to depend a lot how/when/what you use to facilitate it.. not completely unlike Transferwise, which is basically a broker of such services, which is how they can offer them at a relative low cost.
If I used it and found it useful, does that make me a criminal?
<< only useful for criminals, but isn't useful for them because their transaction history is public and forever" should be good enough.
What you seem to be saying is that crypto has properties that are useful and properties that are not useful. In a practical sense, that means it is just like any other payment type ( fedwire has speed over ACH in US; Zelle has convenience over SWIFT in US ). All of these leave some of sort of trace. Crypto's differentiating factor is that the ledger is public. It is both good and bad depending on what you want to achieve.
So, allow me to reframe the question, if only criminals use it, why do they do it if it is not useful to them. Your argument is a little flimsy.
<< That and "it doesn't get any more useful as you add nodes, but you still have to add them or people can hack it".
I agree in principle, but between all the hacks we have seen from all the other non-crypto companies over the past few years, I am not willing to hold crypto to a higher standard.
Probably whoever's on the other side of the transaction is. If you bought your BTC on localbitcoins you probably got them from a money launderer for instance. Nootropic companies are the most legal crypto users I'm aware of.
(And don't forget the costs of converting to/from crypto coins to get to the final good you purchased with the money you transferred.)
> So, allow me to reframe the question, if only criminals use it, why do they do it if it is not useful to them. Your argument is a little flimsy.
Criminals aren't very smart. If they were, they wouldn't be criminals, which is a very low-paying career.
> I agree in principle, but between all the hacks we have seen from all the other non-crypto companies over the past few years, I am not willing to hold crypto to a higher standard.
The regular financial system doesn't need to be 100% immune to hacking because it can undo transactions.
I did buy mine from Paypal so you might be onto something.
<< Criminals aren't very smart. If they were, they wouldn't be criminals, which is a very low-paying career.
Um. I would maybe call it a reverse survivor bias. As for the low paying claim, I suppose it depends on other factors, but we are currently commenting on an article, which discusses sums upwards of millions of dollars. Reality is refuting that claim unless you want to include everyone with a felony in that circle ( technically accurate, but I personally think financial fraud is its own world that lives outside petty criminal circles ). I am open to rebuttal.
<< The regular financial system doesn't need to be 100% immune to hacking because it can undo transactions.
Hmm. It technically can, but, for example, as some people in fraud cases unfortunately found out, once wire is sent out, getting it back is not as simple as pressing a button even for institutions within the same jurisdiction. You are not exactly wrong, but you are not right about it either.
I will admit that this is a first time I see that stated this way and I am a little confused. In a very practical sense, nothing is 100% immune if history is any indicator. If my router is hacked, the fact that I revert it to its prior state makes ok? The original issue remains in place. I am sorry, it is just an odd argument to make. Can you elaborate on what you meant?
>> Probably whoever's on the other side of the transaction is.
> I did buy mine from Paypal so you might be onto something.
Literal LOL. Thank you for that.
You're 100% right. And in theory bitcoin is fine and will still work. The problem is the underlying mechanisms that attract fraud and crime into unregulated spaces.
1) I never thought crypto had that much utility for the average person. It does have a lot of utility for drug dealers, human traffickers, and organized crime.
2) Lack of regulation is a warning sign. Con men and fraudsters are probably mentally primed to spider sense financial spaces and loopholes LEOs are not paying attention to.
3) The above two points make crypto a superconducting magnet for criminals. In retrospect it's no wonder the space is full of bad players. Buying drugs was bitcoins first killer app. Pump and dump frauds were it's second.
4) At this point (as you were saying) "crypto" isn't what it started out as, or wanted to be. But the harsh reality is that it's likely irrevocably tainted, and any attempt to reboot would have to still contend with the above points.
5) Any attempt to cover the above points, and you just get a regular digital payment system that doesn't work well for criminals. Technology aside, the utility is no different than the dozen or so phone app instant payment systems already out there. What's the incentive of average Joe already using Zelle to pay his bills (at no cost) to jump ship into a new unproven digital currency? The problems being solved here are already solved.
"Crypto technology" can power a fed digital dollar, or Bank of America tokens (which is all your balance there is anyway). Such currencies are arguably better in every way due to regulation and clawback protections.
Crypto's only real utility turned out to be acting as the currency of last resort for criminals. Anyone legit has better options with FDIC protections. Everyone left has no where else to go. So any unregulated space will naturally evolve towards being full of bad players and crime.
The key lesson here is that the primary utility of any extra-governmental currency will always be that it operates as the currency of last resort for criminals. So in my mind, that kills the dream of crypto-anarcho-capitalism. It was an interesting experiment while it lasted. I don't see how it can recover.
As one last point. I came to this line of thinking and conclusion once before, dealing with Freenet and crypto-information space. Freenet is arguably the crypto-anarcho version of the WWW. Same goals, no government involvement, no censorship.
If you haven't followed it's history (been around over 20 years), the space is entirely polluted with CSAM, so much so that many of the idealistic early adopters have fled the space in disgust. [1] Same analogy applies here, Freenet, being the storage space of last resort for data so repulsive no government will allow you to have it, is a haven for the worst kinds of data imaginable.
At this point I'm convinced crypto-anarcho-anything will eventually simply become a magnet for crimes and reprehensible people. There's no place else that's safe for them to go, while the rest of us have safer/regulated spaces.
It's humans that killed the crypto dream. Technology can't solve all of our problems. We presently need, and will always need, human accountability in the loop.
Ok my last-last point. Seeing this play out multiple times now, I'm convinced that total anonymity on the internet is a cancer that must eliminated if digital society wants to move forward. The real world maintains peace/order/justice because we have real identities and real reputations. A similar system is needed in the digital world if we're to evolve past this stage where average people run the daily risk of being waylaid by digital highwaymen. The digital world is still in the medieval ages. The solutions that have allowed society to evolve and scale in the real world need to be implemented in the digital world before we can take it's potential to the next level.
This is by far the most accurate and level-headed take I saw on HN regarding crypto. I am not completely sold on the remaining points, but it is hard for me to refute them ( and I do not have a way to see how things evolve from this point in time ).
In short, I think I agree with you.
I love the discussion here, people are smart, relatively civil, and have a lot of value to add to conversations. One of the few spaces I still learn anything significant from experts in their subjects. Much wisdom here.
And hey whether or not it's right it's still food for thought. Predicting the future is impossible. As I've gotten older I see the same meta-patterns played out again and again, so I try to look for those indicators. I get paid for it, so at least I'm not super terrible at it.
The similarities between what happened to Freenet and what is happening in crypto space are pretty profound. The common denominator is that building extra-governmental spaces just attracts criminals who have no where else to go. The worse the crime, the more attractive the extra-governmental space. The rest of us are not forced to go there, and those that do usually come home with their tail between their legs. It's a brutal space. There's a reason we have governments, the alternative is just terrible.
I'm glad you qualified that!
I think "total anonymity" is reasonable in many circumstances. Not everyone who needs to avoid being unmasked is a criminal.
But again, I don't expect joe public to have enough understanding to navigate this stuff solo.
I agree that it is a cause and effect, but I worry that you may be mistaking one for the other.
Is it? It's just plain old avarice. When someone comes to you and says, "give me a coffer full of money, I'll bring you ten coffers back, don't ask too many questions", you know you're gambling, don't need to be a genius to see that.
My grandfather who had like six years of formal education and lived in a village of 300 people always told me to not invest money into anything that you don't understand. That's about the level of common sense required to dodge the crypto bullet. People got greedy, and wilfully ignored the shadiness because they wanted to earn outsized returns quickly without doing anything, that's about it.
That's not the situation however. The situation was "My relative that I trust and love, that has a successful career doing tech stuff, says this all is a good idea. Also I see people on all the big tv channels and major papers, including the WSJ, saying similar sounding things.
Consider that someone in that age bracket might have entirely not selfish reasons, like wanting to leave the best inheritance possible. How are they supposed to know all these crypto folks are different from a simple diversified portfolio, when apparently the same experts are hawking both?
You people still do not seem to understand the fundamental point: you see things from a vantage other people cannot, and it's insane to demand that every random member of society have this degree of sophistication about tech meets securities fraud, doubly so when major media outlets have been hyping this stuff for years uncritically.
It's not “cannot” but “choose not to”. Continuously throughout this process anyone with a high-school level econ education knew that cryptocurrencies were a high-risk investment and, in most cases, could not possibly deliver the advertised benefits. The fact that some people in the media hyped it up didn't mean that you couldn't listen to the many people in the media who urged caution, or remember that those same people hyping it up had a history of being wrong about other things as well. People _wanted_ to believe there was a way to make a ton of money without doing any real work and so they _chose_ only to listen to the bulls. Hopefully the lesson wasn't too expensive for most of them but it's important to remember that throughout this process there was no specialized education or skill needed to understand that meteoric returns are not sustainable long-term and speculation always involves risk. The same skills which kept your great grandfather from buying swamp land in Florida or “investing” in a 90mph carburetor design worked here, too.
That's the problem with the “My relative that I trust and love, that has a successful career doing tech stuff, says this all is a good idea.” stuff — it's tragic when that happened but those kind of sales pitches (and, let's be honest, that's what that was) were someone urging their relatives not to listen to the sober voices. We don't need to make excuses on behalf of the people who mislead their friends and family to make a buck.
If that sort of media did not have crypto to hype, it would be something else like hedge funds or Chinese Yuan or fintech or some amazing security where the risk is obscured. r/wallstreetbets had exactly the same sort of clickbait cheerleading and it is still going on to some extent.
Really? Maybe crypto media
Under this analysis one could argue that Madoff was having no effect on the "real world economy" so his conduct should not have been regulated. His "advisory service" made zero investments. All he did was accept money from clients, spend it on himself, his family, his employees and charitable donations. His advisory service was arguably "disconnected" from the real world economy. For example, when the real world economy was going into a "meltdown", when Madoff knew he could not pay all of his clients' withdrawals, he wanted to use the limited funds he did have in the Ponzi account to give bonuses to his sons.^1
It was the real world economy, i.e., the 2008 conditions, that ultimately brought Madoff down.
1. That tipped them off, they discovered the fraud and once they knew about it, they had to turn him in or else risk facing criminal charges themselves. One of them later committed suicide, the other died of cancer.
Madoff was not buried as is customary for his faith. He was cremated and his family refused to accept the ashes. They are allegedly in his lawyer's office.
How will SBF's family react to what he has done if and when all the facts are revealed. Unlike Madoff's family it seems like they knew what he was doing. Time will tell.
Likewise, FTX probably provided its customers with an impressive "user interface" and "user experience".
With respect to Madoff, clients thought it was an investment fund, outsiders thought it was a hedge fund, while it was actually no such thing.
Whereas with respect to FTX, customers thought it was a "futures exchange", not conduit into a hedge fund.
Then again, it's not really possible to regulate.
With regulation, crypto is a completely boring pseudo-investment.
But hey, maybe I’m wrong and regulation will be a positive for crypto. I doubt it very much though.
I think about this too, but I'm conservative enough that I would not held onto (all) BTC as it went past $1000, so I suspect my gains would have been large relative to my investment, but not life-changing.
I tell myself the same thing, except I would have sold at $100
Hell of a lot easier than cash.
That's easy if you can tolerate risk; just put it in the back of a u-haul and obey the speed limit. Of course if the "cash" is actually a number in a bank account, not actual cash, then it's not so easy.
Then I remember more and more people pay with plastic or phone and it kinda starts to click.
FTX in the broad sense (Alameda borrowing from BlockFi, specifically), which is why SBF (who nominally owned the shares), FTX (from whom SBF appears to have “borrowed” the purchase funds), and BlockFi were in litigation over ownership of the shares, as I understand it.
The funds to purchase the Robinhood shares were borrowed from Alameda, according to this SBF affidavit
https://storage.courtlistener.com/recap/gov.uscourts.njb.109...
I disagree. It's tulip mania all over again and serves only to facilitate corruption and fraud. Name any single legit use cases that are more than 20% of transactions.
even as hyperbole it relies on a misunderstanding of tulip mania, eventually getting a list of a bunch of separate use cases and some poor soul actually getting roped into watching you play devil's advocate on each use case about how its not a "legit" one
bubonic plague deaths of the speculators seems to have caused the crash more than anything else, because price discovery just stops until May, where it has re-ranged
And it's not only corruption and fraud. That implies some level of intent. I'm sure more than 20% of transactions are honest day traders just trying to make a quick buck before the speculation collapses.
Speculative trading on known garbage is certainly some kind of moral corruption and ethical fraud, although not illegal.
I say this having made a little under $1000 doing so occasionally for the past 2 years.
The article mentions:
1. SBF himself
2. FTX
Who are the other two? This seems important because those other two entities may have recorded the shares as assets or even themselves pledged them as collateral.
See https://www.reuters.com/legal/ftx-opposes-blockfis-claim-ban...
I am not sure who the 4th party is.
4. Probably one of their creditors or authorities in the Bahamas
Billionaires in general aren't playing 4D chess, why would they? 4D chess is hard, requires sacrifice and valuing something bigger than oneself and one's bank account. Much easier to jump on popular hype trains. If it works you look like a genius and have a million stans to stroke you off, and money number go up so you can flex on other billionaires. If it fails nothing really happens to you personally.
SBF wasn't actually at that level, but he had enough paper wealth that he clearly thought he was. We're watching the wealthy equivalent of that COVID-denier who, with their last breath before being intubated, calls the doctors and nurses who diagnosed them liars.
Elon is facing a $25B write-down of Twitter the moment, that's also a 'consequence'.
They are definitely playing 2D++ chess, and a bit of cheating, making us think they are playing 3D sometimes, but they are not stupid. Most of their glib stuff is calculated and it works to great effect.
Musk will probably pull through and still be one of the richest dudes ever with Tesla and Space X still floating, even if the rest burns, that's still way ahead.
Furthermore it doesn't make much sense to calculate drawdown of a 40 billion USD investment with a timeframe of a few months. The idea of any large investment is to make it grow with time after long term interventions (years, decades).
This all sounds like very silly Elon bashing to me.
https://arstechnica.com/tech-policy/2022/06/in-letter-to-twi...
This was unusual to the point of getting criticism from a judge when Twitter sued to force him to follow through on the deal (which bought them at a significant premium over market):
https://www.businessinsider.com/judge-calls-elon-musk-legal-...
> Furthermore it doesn't make much sense to calculate drawdown of a 40 billion USD investment with a timeframe of a few months. The idea of any large investment is to make it grow with time after long term interventions (years, decades).
This is vaguely true but in this case the big question is how he'll make it massively more profitable than it's ever been. Twitter was marginally profitable for the last few years but the massive debt load Musk saddled the company with means they need to increase profits by whole number multiples simply to catch up to where they were in 2019-2021. It's not enough to get advertisers back, they have to significantly increase their spending.
It absolutely makes sense to re-established a valuation if there are 'material events' and there have been - notably, major layoffs, operational problems, customers have left in drives. Most poignantly, the CEO has indicated 'there is a very material chance' that Twitter could go bankrupt.
What do you think 'we could go bankrupt' means? I means that, and, it was not the case prior to his arrival.
Finally, there has been a major market correction which has affected the price of all tech companies. Were Twitter to be a public company probably it'd be worth 1/2 as much - essentially P/E ratios have changed, even if the business did not.
Twitter is worth 1/4 what it was before - Musk bought at the peak and even if he did nothing it'd be worth a lot less, but his actions have caused the business harm with no predictable positive outcome (the changes mostly don't seem to align with some kind of plan to profitability).
That seems to be even more true of the customers that pay the bills, that is, advertisers.
? Yes, and ?
You can say and do (and should) a ton of things when you are rich, that you should not / cannot when you are not rich.
Which is a work of fiction. Such a thing probably happened no more than a few times. The only reason it gets parroted back is because it serves as a nice bit of propaganda to gin up fear and get people to fall in line.
If I showed you a homeless person dead from a heroin overdose, would you fear heroin? No, because it's entirely within your control whether you use it or not. I think you need to learn how propaganda works.
Anyone who's spent time browsing r/HermanCainAward, or knows nurses who've been on the COVID front lines, can assure you that it's not. People die horrible deaths, often clawing harder than ever to the conspiracy theories they've been fed.
https://www.yahoo.com/entertainment/elon-musk-calls-report-s...
So Elon must not have liked how that went since he was publicly encouraging others to roll over.
My speculation of course.
The strategy would start with getting intertwined with crypto, then move into crypto-tangential like Robinhood, eventually hoping to claw his way into Washington and Wall Street. The FTX / Farmington State Bank investment comes to mind.
John Ray definitely has his work cut out for him trying to unravel this mess. I think he'll be able to cleanly claw back anything in TradFi (it's a great test of the TradFi system). Good luck trying to clawback any of the crypto. Not like it matters though, anything he can claw back there is worthless. "Hey, here's your XYZ coin back, you've been made whole."
This is just so fun to watch.
Deliberately becoming "too big to fail", eh?
(Which was more accurately termed "too big to be permitted to fail". Which then raises the question of who is doing the permitting, and why we would trust their judgment; but that would give the game away.)
The "who" is just greedy connected people, who are everywhere. Including government and finance.
Thankfully we have laws and regulations, which at least serve as some checks and balances to prevent these people from causing too much damage.
The genius of checks and balances government as that it doesn't rely on ensuring "bad" people never get into positions of power. You will never be able to stamp out 100% of bad actors. Instead it sets things up such that the damage bad actors can do is minimized and/or identified quickly. Less collateral damage, and a chance for justice afterwards.
"No regulations" in crypto should be a warning flag to people.
Meanwhile, I'm really really interested if any crimes were committed on the "regulated" side of things. Those people need to be put in jail. Will be fun to watch this unravel.
That seems pretty suspicious.
https://abcnews.go.com/Business/funds-recovered-victims-bern...
They only get contributions back with no earnings.
The most baffling part of all of this is that he has never attempted to escape. Surely a Liberian or Somalian warlord or something will protect him in exchange for $1MM / annum and probably provide him a harem and a nice plot of desert.
You watch too many movies my friend.
She is protected by various Islamic groups in the Somalia/Kenya border region, it is believed and evades determined capture by the rich Anglosphere nations.
A rich western elite just buying protection from Islamic warlords in Africa sounds like a movie plot.
It isn't remotely the same thing as your example of someone who has 20+ years of connections to a religion and community disappearing into its criminal underworld.
Also "without remarkable connections"? The Wikipedia article that you linked says she was literally married to one of the 7/7 bombers and associated with other known terrorists, including one whose family is from Kenya.
Anyways this is more words than I even wanted to write about this.
They might let him waltz off onto a yacht, and sail just far enough to slap some charges for violating his bail terms, though.
If Sam was really, really smart, he'd have found his way into their den, so that Xi could use him as populist political treasure. I mean, Sam would be eating dumplings for the rest of his life, but hey, China is a big and interesting place!
SBF is either a criminal genius, or so self-deluded he might be borderline psychotic.
A criminal genius, knowing what they're doing is a crime, would have an exit strategy.
The fact there wasn't an exit strategy tells me that SBF really believed in what he was doing. That he really was the genius everyone has been telling him he was. So the conclusion I'm drawing is this just self-delusion on a grand scale.
I mean, there's really no other explanation for him running his mouth against his lawyers advice, talking about how everyone doesn't understand this will all work out he was about to close another $8B etc. He really believes he's the smartest guy in the room. If only we regular folk could understand him. He's not living in reality.
Usually the worst guys like this do is con their friends/family out of a $100k to start some wild ass venture that "can't go wrong". This guy talked his way into how many billions? I suppose the difference is attributable to how well connected he was.
If so, what a damning indictment on the rich, well connected, cultural elite in and around SBFs world. The right has been pointing out for a while that the cultural elite seem disconnected from reality. We'll, here's some hard evidence that supposition may in fact be correct. Call it an "elite" bubble, where they're so disconnected from reality that whatever they seem to believe works out, so they must all be geniuses. The people setting cultural policy in this country are untethered from any sort of day-to-day reality.
I mean, SBFs mother wrote that piece about not assigning blame when things go wrong. [1] Parents with this kind of thinking raise deluded kids like SBF. And his well connectedness got him the $Bs needed to create this disaster.
If my hypothesis is correct, then this guy is heading towards a huge mental breakdown. He's never been challenged by reality, and frankly won't know what to do with himself once the prosecution gets running and the blows start landing fast and furious. It was only two days ago the judge told him to stop accessing Alameda funds, at which point SBF became "animated". [2] This rich kid is in for a collosal wake up call.
[1] https://www.businessinsider.com/sam-bankman-frieds-mom-wrote...
[2] https://twitter.com/molcranenewman/status/161036343874802073...
edit: edited to point out this is an indictment of the trusted people in and around SBFs world, not "wokes" or "elites" in general.
I also think the system all around him his whole life let his unhealthy behavior go unchecked. This kid needed some tough love. Instead his mom pens essays writing how "the philosophy of personal responsibility has ruined criminal justice and economic policy". [1]
Yeah, when your parents say personal responsibility has no place in economics or justice, of course you're going to double down on line-go-up.
He's been patted on the back his whole life. Now real average Joe's are out a LOT of collective money. Real people being hurt here.
This would never have happened at this scale had any sane adults been in the room. This is an indictment about the kind of people in the world that SBF spent his life living in.
[1] https://www.bostonreview.net/forum/barbara-fried-beyond-blam...
Why does this have to be a left/right thing for you?
There are grifters in all parts of society, and in all cultural groups. And there's no connection between wealth and intelligence, so there will always be a never-ending line of people with money who will fall prey to said grifters.
Political allegiance and cultural beliefs have nothing to do with it.
Ironically, people trying to argue Sam is a product of the "leftism" of his environment are expressing his mum's position on determinism, whilst the utilitarian moral and mathematical arguments Sam quoted to rationalise his enthusiasm for grand gambles is rooted in the exact opposite position...
I'm looking for answers. I agree that con artists come from all walks of life. But this isn't your average greedy person and an average con. That's why we're talking about this.
Normally when dealing with this kind of money there a lot of social checks and balances to prevent someone like this from ever having the ability to do this kind of damage. You just can't put untethered/unhinged people in positions of power. Money may help break down barriers, but you start with knowing who you can trust, and those you've vetted, and those they've vetted.
SBF was clearly vetted. By trusted people. Who were supposed to be wiser.
This isn't one persons failings, it's pretty clear that the people around SBF either encouraged or enabled him or both. They all looked the other way. How did that happen?
So that's the angle I'm interested in here. How in the heck did the kid get this far? Whatever caused this to happen should be identified and contained, lest we get a repeat performance elsewhere.
The only common denominator I see is that there is leftist thinking in and all around SBFs world. He's soaked in it.
His mom wrote an essay saying "the philosophy of personal responsibility has ruined criminal justice and economic policy". [1] This is very leftist thinking. This is one of the core people responsible for helping lay a moral foundation for this kid. Is it any wonder that SBF thinks this is all one big misunderstanding?
There's all the Ivy league connections, not known for being particularly conservative. For example there's this [2]. SBFs dad taught at Stanford.
His mother also started a Democratic super-PAC "Mind the Gap". [3] So clearly this family doesn't just lean left, but they feel it's their duty take their beliefs in the public sphere, to help push a leftist agenda in politics. These are True Believers if you will. I'm certain their circle of friends is also heavily left leaning. No one who starts a left leaning super-PAC has a lot of close right wing friends.
You can say those were just his parents views. But I say the apple doesn't fall far from the tree. Certainly explained why SBF talked a lot about Effective Altruism and donated politically. He believed in pushing his views on others and wielding that kind of power politically. This isn't your average crime -- I think this kid is seriously deluded, and thought he was changing the world for good. So yeah, his world view, however it leans, is worth examining close up. Because this kid isn't living in reality, and the belief system that put him there, and enabled him to do damage to others, deserves some scrutiny.
This kid was raised by leftists, in and around leftists, and their views have spilled over into his actions. The group of people around SBF created this monster. I'm not putting politics into this, I'm pointing out that he and those around him did. That's what I'm suggesting.
And so it seems to me this group of very left leaning people encouraged and connect SBF to people, thereby enabling him commit crime at this scale. And not one of them raised any red flags? Not one concern? I guess because on the outside he looked like one of them? I can tell you this, the right leaning people I know have been sounding alarms about the crypto space for a good long time.
Again, this isn't your average con. We're talking about massive systemic blind spots in the thinking of those trusted/vetted adults sitting in the room with SBF.
I'm not trying to make this a left/right thing. But there is a lingering smell of leftism all around it. And I do think that's worth bringing up, because I don't want a repeat performance. A lot of real average people got hurt here. This may be one big social experiment to the elites SBF runs with, but it's not to the little people that are losing money. The blind spots in thinking here need to be uncovered and examined up close.
[1] https://www.bostonreview.net/forum/barbara-fried-beyond-blam...
[2] https://www.thecrimson.com/article/2022/7/13/faculty-survey-...
[3] https://www.influencewatch.org/political-party/mind-the-gap/
It's a fun conspiracy but it doesn't make a lot of sense.
I understand the mental gymanstics used to justify this, in that the property is the defendant in a civil action (for a suspected criminal act by its owner, no less). The end result is what we see here: civil asset forfeiture and absolutely no protection against unlawful seizure.
Now a lot of people won't care about this because it's SBF and it looks pretty likely that he's guilty. At least there's a criminal indictment in this case. If the government has this power (and, again, I think they should not) this use seems appropriate.
But the government doesn't require a criminal indictment at all (let alone a conviction) to use this power. Consider the case of Amy Nelson [1]. At the behest of Amazon, the Department of Justice seized the bank accounts of her, her husband, a bunch of employees of a company and even their lawyers who worked for a law firm, ultimately charging nobody with anything and returning 85% of the money 2 years later once the Nelsons agreed not to sue the government.
Also, SBF gave tens of millions in donations to both parties in the recent midterms. If the Robinhood shares are fair game, why aren't the donations?
[1]: https://www.geekwire.com/2022/former-seattle-entrepreneur-an...
Bankruptcy proceedings are all about identify all assets and loans, and figuring out how to recover them maximally in order to distribute whatever's left of them to creditors and owners.
This isn't some arbitrary seizure. Obviously an owner can't be allowed to start drawing gigantic loans from a company they control, declare bankruptcy, and think they get to keep the loan money or what they've bought with it. (Same thing as how, in a criminal case, a thief can't sell a stolen painting for $10M cash, and then expect to be able to use that cash to fund their defense.) Bankruptcy court rightly has the power to claw back fraudulent transactions such as these.
I'm not saying the government never abuses search and seizure, but in the specific case of bankruptcy, retrieving assets is the whole first half of bankruptcy (with their reallocation being the second). So bankruptcy is basically the worst example you could use for trying to claim abuse of search and seizure.
And from some other comments pointing this out, this seems to be related to the bankruptcy of FTX and a claim to the funds by FTX.
It literally does not.
https://en.wikipedia.org/wiki/Fourth_Amendment_to_the_United...
Because SBF allegedly owns the shares. He doesn't own the donation. Unless you want the government to seize whatever goodwill the donation got him.
That would be a fun sheriff's sale. "One lunch with selected congressman, to discuss voting in up to two bills."
Wrong, wrong, wrong. Even putting the specifics here aside, that's not how civil asset forfeiture works. If the government seizes your assets, you can force them to go to court, where they have to establish to a preponderance of the evidence that the seized property was the proceeds of illegal activity. That's the same standard that anyone seeking to sue you and take your money has to meet.
These shares must have completely slipped his mind when he said all he had left was $100k in his bank account.
https://www.axios.com/2022/11/29/sam-bankman-fried-100000-ft...
- SBF
The shares weren't in his bank account, they were in his brokerage account
And how is this seizure even being contemplated before a trial and conviction? Does the Fourth Amendment not apply to him just because nobody likes him?
"The Justice Department said Wednesday that has moved to seize millions of shares of Robinhood, the popular stock-trading app, whose ownership is disputed by several parties, including Bankman-Fried himself, his bankrupt crypto exchange FTX and another bankrupt crypto company.
Because the competing claims, FTX filed a motion earlier this month to the Delaware bankruptcy court to keep the assets frozen until the court “can resolve the issues in a manner that is fair to all creditors of the debtors.”"
Troll.
The present and historical states aren't fundamentally any different except in people's rose tinted rear view mirrors.