I suspect the resulting number of shortened lives amongst all the people who lost $8 billion worth of their money due to the fraud is more than the number caused by a single murder.
Just because you put on a suit and mask doesn't make it okay.
* In developed countries. I doubt people from 3rd world countries had $2000 on FTX.
> Kaplan said he had found that FTX customers lost $8 billion, FTX's equity investors lost $1.7 billion, and that lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion.
https://www.reuters.com/technology/sam-bankman-fried-be-sent...
Clearly the real crime is bilking investors out of their money. It’s also questionable whether they even ended up losing money given the rising price of crypto in the past year. It’s also interesting how this happened:
> when it filed for bankruptcy after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.
https://www.reuters.com/technology/bankrupt-crypto-exchange-...
So basically the traders did a bank run and Sam ended up going to jail. It’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things even though that ended up being very costly for the government.
Shkreli dealt with the "making people whole/replacing money you took": it's not okay to steal or defraud people just because you later make them whole or they don't even realize that you did.
But even moreso, to your point: Please don't conflate the rising crypto price with SBF's intent. He didn't care about that. The fact that crypto rose and may have lessened the losses is entirely orthogonal to his intent, just a "fortunate" coincidence. It could equally have cratered. The people who are being recompensed are only being recompensed in part because of something entirely outside of SBF's control and intention.
The only reason people can be made whole is because SBF was arrested for fraud, and all the funds got frozen. Given his track record, had he kept steering the firm for another year or two, he would have almost pissed away all the gains/potential gains from the crypto rally, and his customers would have found themselves in an even bigger hole.
Also, Bernie Madoff could have just taken a ten year timeout, bought and rode the S&P 500, and had made his customers whole, too, so I guess he also did nothing wrong...
What? No.
The “lost” money was bet on red at the roulette wheel. While the firm was in bankruptcy, the wheel stopped spinning and came up red. That was enough to make customers whole to their original deposits. But it didn’t make up for capital gains, opportunity cost or the emotional damage caused by having your funds locked away for years.
> interesting that by contrast SVB leaders didn’t face any repercussions
Totally different situations. The analogy would be PayPal freezing everyone’s accounts for 3+ years while they put all the money into Peter Thiel’s hedge fund.
That's not how that works. Whatever purchasing power they were supposed to have that they were deprived of because of his actions results in damages - obviously equal at least to the crypto gains they would have.
LOL, yeah, no. SFB also did really well established old fashioned tradCrime. It wasn't even DeCrime.
Did it? The FDIC is funded by banks, not the government.
It’s not fully funded by the banks & borrows from the government when it’s short. I don’t know how to account the government borrowing from itself, but I wouldn’t think it’s necessarily “free”. Yes it does get paid back, but you’re borrowing on very preferential terms that aren’t available to the public so there is as cost to the broader economy.
While it's true that the FDIC is "backed by the full faith and credit of the US Government" it is funded by the banks and by interest from treasuries [0]. Has there ever been a case when the FDIC actually ran out of funds and had to be bailed out?
[0] https://www.fdic.gov/resources/deposit-insurance/understandi...
So yes, it ran out of funds & had to borrow. It has not yet experienced a shock bad enough to leverage the Treasury line of credit but that’s a fig leaf IMO. The 2008 crisis saw the government bailing out banks through TARP to shore up failing banks to the tune of 700B. Without that, FDIC would have failed. So from that perspective, yet it was bailed out in 2008 & the funding from members wouldn’t have been anywhere near sufficient. That’s why I don’t understand the political football around TARP - “the full faith and credit of the US government” would have been meaningless if FDIC failed as that would have sent a giant shockwave of trust loss through the broader population as everyday people would have lost huge savings.
Because Silicon Valley Bank leaders were nobodies whereas SBF became perceived as a trophy, pretty much immediately.
This is something to be mindful on. When doing self promotion some people start seeing you as an inspiration , many others as a fraud or a human trophy to be captured and paraded around.
Especially in startup communities where groupthink takes over and everybody wants to be the new cult figure of the Silicon Valley or the crypto valley or whatever. People outside that bubble (especially LE, prosecutors and judges) see right through that BS and are specifically looking with a magnifying glass everything that goes on hoping to get themselves a nice trophy on their desk, they want the heads of cult founders. Some would say rightfully so.
These people should be spending their free time reading papers and books on how Romans enforced their laws over remote German provinces of the Empire.
Instead they open all sorts of media and like hunters in the forest they pick a trophy that suits their liking and then they just use all their means to collect that trophy.
Or even worse they are not even creative in their trophy hunting quest, they all pile on Trump because by the way he looks and acts he looks like a fraud and advertises his nature thanks to his huge megaphone . So every prosecutor in the Nation piles on him because they want to be the one uncovering this big revelation to the American public...pathetic.
Their goal should be ratio of Money recovered from criminals to money spent for investigations/proceedings. No one operates this way because they are essentially predators, much like SBF and Trump are, just a different kind, but they receive a salary paid for by taxpayeyrs.
Given that FTX is not a bank, and does not do any sort of (high regulated for a reason) fractional reserve lending ... how exactly can there be a run? All of the assets should still have been there.
This is out of date. There is no reserve requirement anymore.
Why is it interesting? SVB leaders didn't engage in fraud or money laundering.
The rationale behind prison, as opposed to corporal punishment without incarceration, is to remove dangerous people from society, so that they don't further victimize the public.
A violent murderer -- of really any type of murder, e.g. of a random stranger, of one's spouse, or a murderer-for-hire -- should be removed from society for society's benefit. The key point is that the needs of society must come first; punitive measures are a secondary concern. As theory goes, this is trivial.
In SBF's case, his ability to further harm the public is absolutely minimal, provided his punishment includes severe restrictions on his ability to access computers and serve as the director or shareholder of any business. I'd sentence him to a few years in jail, as a punitive measure, and then a lifetime of community service and probation. Let him try and do some good, if he's sincere about those stories he tells re his motivations.
You might argue that punitive measures serve a vital function as deterrence, but evidence doesn't seem to support that argument, and in any case it applies far more strongly to violent crime than to financial crimes. As, in the latter, crimes are often amorphous and poorly delineated, and selective enforcement is the rule rather than the exception.
Please stop defending white collar crime as somehow more palatable, as somehow a better class of criminal.
https://www.nytimes.com/2020/05/11/upshot/virus-price-human-...
To you the value of somebody else's life may be $10M. To society, it varies with time and place. Yet, to the person in question, the value could well be infinite -- it's probably infinite more often than not -- i.e. no amount of money will induce somebody to die. When you kill somebody, you rob that person of everything they have, everything they ever will have, and of the value they've placed on their own life.
But we're speaking of society. Is SBF a physical danger to society? Clearly not. He's not going to rob and murder you if he catches you in the park after sundown. His reputation is destroyed, and from a harm mitigation perspective it should be enough to monitor his economic activity and make sure he isn't in a position to run any more frauds.
If you seek punitive measures, that's all well and good, but it should be done in a way that's equitable and according to a theory of punishment that's applied uniformly. I don't believe that exists, and jailing a non-violent criminal for such a period of time, when extremely violent criminals serve less time and are then allowed to reintegrate into society (often with poor results,) seems both strange and wrong.
Not true; people have committed suicide due to financial losses that they believe have destroyed their life and made it not worth living. If any FTX customers ended up killing themselves over this (I saw a post somewhere upthread claiming that was true, though I haven't verified that), isn't that just as bad? Certainly the intent is different in the case of a murderer vs. someone who incidentally drives someone to suicide by stealing their life savings. But the end result is still the same.
Regardless of that, I'm not sure how I feel about the idea that a person would value their own life at infinite dollars. Certainly I don't want to die, but would I expect or want an unbounded amount of money to be spent in order to keep me alive? No, I don't think so; that feels selfish and would undoubtedly harm others.
And people will do some funny things to help their family, including working a job where eventual death due to a job-related accident or illness is inevitable. While that's not the same as someone agreeing to be killed in exchange for money, it seems relevant. And hell, I wouldn't be surprised if there were quite a few (financially desperate) people in the world who would agree to be murdered in exchange for their family being financially taken care of for the rest of their lives.
> non-violent criminal [...] violent criminals
I really dislike this bucketing. It ignores quite a spectrum of crime: punching someone in the face at a bar is not the same as stabbing someone who survives is not the same as shooting someone who dies. And violent crimes-of-passion are not the same as cold, calculated, planned violence.
I'm just not convinced that a violent crime is automatically worse than a non-violent one.
And the terms themselves are somewhat arbitrary. I would consider it incredibly violent to deprive someone of their savings and livelihood.
This undermines a lot of the certainty of punishment and therefore the deterring factor of law enforcement, of course.