Their Crypto Company Collapsed. They Went to Bali | Hacker News Reader

Their Crypto Company Collapsed. They Went to Bali

nytimes.com

47 pointskoolba56 comments

"For the past few months, Mr. Davies and Mr. Zhu have been planning a comeback. In April, they unveiled Open Exchange, a marketplace for traders who lost money in last year’s crypto implosions. Customers will be able to buy and sell claims to the bankruptcy estates of defunct crypto firms like FTX and possibly Three Arrows itself."

There is a scam strategy where the victim is targeted again leveraging the initial scam.

Fool me once...

Maybe the real value of the crypto rug pull isn’t the money you make but the list of suckers who will put money in a venture like that.

A remake of “Glengarry Glen Ross” set in crypto could be amazing:

“These are the new leads. These are the Three Arrows leads. And to you they're gold, and you don't get them.”

"Lambos are for closers."

You say scam, they say calculated risk.

It’s all about getting the general population in on it, so the Bell curve can provide some losers.

If no government has arrested them, and they are abiding by the laws, then they are guilty of making a bunch of levered bets that collapsed. I guess it's annoying that they aren't in financial pain but the same story has been told endlessly in the traditional financial system. They had some good years then the hedge fund collapsed.

This is probably one of your worst takes I've seen. They colluded with someone who's currently sitting in jail, Do Kwon. The whole Luna/UST collapse was a train wreck and it isn't like these two just got caught up in the collapse, poor them. This wasn't a hedge fund, this was a bunch of crypto scammers dumping on retail (in this case, it was even tradfi) and they have absolutely no remorse for what they did. They should be held just as accountable as DK, not having NYT puff pieces being written about how they've somehow magically avoided jail time by being uncooperative in investigations.

Puff piece? The article is a laundry list of their sins and a recap of the crypto collapse juxtaposed with their hedonism.

^^^ THIS is how you write a tl;dr.

How about juxtaposing it with a lot more interviews of their victims? I'm not one of them, luckily, but I think that would have been a lot less puffy than their hedonism.

Because I've already heard all of that, the victim they mentioned stuck in my mind though:

> “Losing this money with no end in sight has been unbearable for my family,” wrote one investor who had $30,000 stored on Voyager. “I wake up most nights and just walk up and down the stairs contemplating on my own mistakes.”

That's a powerful image. Pacing the stairs restlessly.

This one is a bit more powerful for me.

https://www.taiwannews.com.tw/en/news/4551502

How many times N will crypto scam before we say crypto is a scam? Hint: that N was exceeded a long time ago.

Do you have any theories why the government(s) of the world have gone after basically everyone in crypto with any public persona whatsoever, but these guys are fine despite having front page NYT articles?

My hope is that they just haven't gotten around to them yet. As for the NYT... see my other comment:

https://news.ycombinator.com/item?id=36261024

Update: just found this one on twitter about DK, but it could a theory applied to 3ac as well...

https://twitter.com/FatManTerra/status/1667078961501700098

https://www.sec.gov/tcr

I would strongly encourage you to spend the 5 to 15 minutes filing a complaint with the SEC.

> not having NYT puff pieces being written about how they've somehow magically avoided jail time by being uncooperative in investigations.

Hardly. The "puff piece" is a textbook example of the "just let them talk" genre. The result is damning.

Is there something wrong with any other industry’s company failing and the founder deciding to take a sabbatical? Or is it just when it’s a crypto company, this raises an eye? I worked for a datacenter where my paychecks were bouncing but the CEO of the company was in Saint Martin during the collapse of his own company.

I'm guessing that your CEO has the common sense to not be interviewed by the NYTimes about his Saint Martin vacation

On the contrary, mentioning St Martin would paint a picture of the struggles the company is facing.

If they were doing well, the CEO would be in St Barts.

Uh? People have been constantly and loudly pissed off about CEOs not being jailed for my entire life.

>Or is it just when it’s a crypto company, this raises an eye?

I don't know a lot of founders in their 20s and 30s who ran a business, especially if it failed who had time or money to take a casual year off, buy luxury real estate in Singapore and pet tigers in Dubai. In most industries running off with your customer or investor funds is probably a crime. For some reason crypto 'founders' always end up with millions even if the people they ought to have a fiduciary duty towards end up broke.

"Three Arrows owes its creditors $3.3 billion; the firm was registered in the British Virgin Islands, and its court-appointed liquidators there claim that Mr. Davies and Mr. Zhu have refused to cooperate in the recovery process. In October, Bloomberg reported that federal regulators in the United States were investigating whether Mr. Davies and Mr. Zhu had misrepresented their finances to Three Arrows investors."

https://archive.is/EptcF

>Mr. Davies said he was ready to move on from Three Arrows by the end of last summer. “I really spent so much time meditating in Bali that I’m really just pretty zenned out,” he said.

I always found this odd about hardcore meditators. Surely at some point they realize they're just numbing their minds to the problem without actually solving it.

If you meditate long enough you realise there is no problem and no need for a solution.

I suspect he meditated for a couple months and told everyone he was ‘enlightened.’ Or used meditation as a distraction from his problems and thus got no benefit.

s/meditat/pray & s/enlightened/forgiven

This went over my Guinness riddled head.

Probably because the regex replacement patterns lack terminating delimiters.

Ah I get it now, definitely helps that my brain is now Guinness free

naive gradient descent hits local maxima

> Surely at some point they realize they're just numbing their minds to the problem without actually solving it.

Yeah, it's a pretty common trap, the ego has a way of coming in and making you think you're doing some great thing or have accomplished a lot. You can have scammed all these people out of billions of dollars and trick yourself into thinking "well everything is emptiness anyways, it's all good". The best explanation of it I've found of it so far is Chogyam Trungpa's "Cutting Through Spiritual Materialism" [1].

[1] https://www.shambhala.com/cutting-through-spiritual-material...

Thank you so much for that link.

I’ve been meditating with apps for a few years but have recently joined a group and found a teacher. I feel like I was ‘stuck’ for a long time and I think it was due to something similar to your description.

It could very simply be a case of people just saying shit.

Don’t want to elaborate on why you’re making a decision? Just say some words —any words really— and walk away!

Somebody asks you if you screwed over a ton of investors? Just say that only a monk that’s grasped the true essence of satori could answer that question!

Still waiting for the string of articles about the superyachts that all the bank executives bought after the 2009 bailouts.

/sarcasm

I still don't get why the democratic Obama government didn't handle that the way Sweden handled a similar situation in the 90s:

1. Nationalize the bankrupt banks.

2. Get them in order.

3. Sell them and collect the profits.

https://en.wikipedia.org/wiki/Sweden_financial_crisis_1990%E...

I mean, it couldn't be that Obama and/or the democratic party was corrupt and just gave away tax payer money for no reason?

Edit: It was Bush 2 who gave away the money. The then (democratic) presidential candidate Obama supported it, though: https://web.archive.org/web/20080925154355/https://www.foxbu...

> The Emergency Economic Stabilization Act of 2008, often called the "bank bailout of 2008", was proposed by Treasury Secretary Henry Paulson, passed by the 110th United States Congress, and signed into law by President George W. Bush.

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

The bailouts to the banks were by Bush 2.

Bloody time-travelling Obama, disguising himself as Dubya to bail out banks.

> Supporters of the plan included presidential candidates Barack Obama, ...

I'm sure the fact that Obama supported bipartisan legislation is why you blamed the result on "democrat Obama administration" when there was no Obama administration at the time, you made no mention of W, and mentioned only democrats.

I don't think that would have passed congress; the political reality in the US is different than Sweden.

It is truly painful to watch narcissists rewrite their stories.

How out of touch with reality do you need to be to agree to this article?

Surely Su Zhu and Kyle Davis realize that they're the bad guys in this story, right?

Some people look up at them as heroes in the fight against "the system" (whatever that is)

I struggle to wrap my mind around that thought.

Because they don't have final approval of the article. Someone contacted them and told them they wanted to interview them about an article they were writing about the troubles their company is having.

Zhu and Davis see it as an opportunity to "correct the record" and to explain exactly what went wrong and while it may have been technically illegal, they weren't the bad guys. So, they agree. They talk with the journalist, possibly invite him over.

The journalist then collects all that information and all the other information they have, and then write the article they were going to write all along.

There's some degree of social engineering to being a good journalist. You have to try and convince people to talk to you even when it would be against their best interests.

And I imagine it's some degree of hubris on the parts of Zhu and Davis. They probably believe that if they just have the right words put out there, they'd be absolved. What they didn't realize is that they don't control the medium. What they said doesn't matter. Unless they revealed something truly astonishing, the journalist is going to cut out anything that doesn't support their main thesis or anything they feel is just bullshit. Or even frame it in a less complimentary context.

>There's some degree of social engineering to being a good journalist. You have to try and convince people to talk to you even when it would be against their best interests.

And it's very easy to lulled into we're just having a friendly chit-chat. You'd think these guys would be more media savvy than that. But it's extremely easy in the course of an extended conversation to drop some nuggets you may not have intended to. More than once, I've dropped something that, as soon as it was out of my mouth, I was internally "Crap. That's going to end up in the story, isn't it?"

There are very few journalists--and I know a lot--who I'll be completely transparent with even if we're supposedly on background or even just casually chatting.

It's best to think of journalists as predators.

Don't talk to journalists unless you have a prepared agenda.

https://nypost.com/2023/05/08/ny-times-blasted-for-elizabeth...

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