[HN Gopher] What Happened at Alameda Research
___________________________________________________________________
What Happened at Alameda Research
Author : amadeuspagel
Score : 413 points
Date : 2022-11-15 08:33 UTC (14 hours ago)
(HTM) web link (milkyeggs.com)
(TXT) w3m dump (milkyeggs.com)
| choeger wrote:
| A $3M monthly AWS bill. that's a nugget here. What that means is
| that amazon, Microsoft, and google are essentially selling
| shovels during a gold rush. On a subscription basis. In a form
| that makes it tedious and costly to actually figure out how many
| shovels your business has, what they do and who uses them
| regularly.
|
| Essentially, when there's a digital market hype, the big cloud
| providers collect their share on the revenue. Brilliant.
| abkolan wrote:
| It was 3M yearly.
| Kiro wrote:
| That's like saying people selling food during the actual gold
| rush were brilliantly capitalising on it and equivalent to the
| ones selling shovels.
| Dunedan wrote:
| Google not so much, as they still accumulate losses with GCP.
| [1]
|
| [1]: https://www.computerweekly.com/news/252523200/Google-
| results...
| nicpottier wrote:
| Yearly, not monthly.
| rr888 wrote:
| I remember during the dotcom boom people thought the
| infrastructure providers like Sun Micro would be safer, but it
| got screwed along with the website companies.
| systemicdanna wrote:
| That doesn't sound like a valid criticism of cloud service
| providers. Or shovel sellers.
| rippercushions wrote:
| It sounds more like an admiring compliment. Although for
| cloud providers, the costs of things like hackers stealing
| credentials and using them to mine shitcoins are also
| considerable.
| kgwgk wrote:
| It doesn't sound as a criticism at all.
| lordnacho wrote:
| Makes some sense. When stuff is messy, you can do financially
| stupid things. I've sat on desks that lost money from not
| realizing some very simple things like having options with
| upcoming dividends. If SBF really was on drugs and playing League
| of Legends badly, perhaps he also didn't know what was happening
| in his shop.
|
| But... you have all this money. Hire an adult? Almost anyone
| who's had a trading desk job would tell you to clean up. You
| don't need to have much experience to do this part, just get one
| of your friends that you must know from the business?
|
| Also, WTF would this say about Ontario Teachers' Pension Fund or
| Sequioa if the whole team was on drugs, playing games all day,
| and having no idea what their balance sheet looks like? I
| actually got Ontario into a fund I was at, and we'd have lost the
| investment if we hadn't behaved like adults. This is causing me
| some cognitive dissonance, because I don't think of the investors
| as the kind of people who'd even smile if they found me in the
| office playing a video game, let alone addled on drugs.
|
| Also about the market making strats not working anymore, I don't
| see why they'd even need it. Once the exchange is jump started
| and you have WM/Jump/JS on board, there's MMs on the platform and
| it feeds itself. Just keep marketing running. Hand out some FTT
| or something to retail. Do silly advertisements. Just turn off
| the algo that doesn't work.
| jsemrau wrote:
| >If SBF really was on drugs and playing League of Legends
| badly, perhaps he also didn't know what was happening in his
| shop
|
| You can be drunk by your own success. Without a voice of reason
| or an adult in the room (like sheryl sandberg) that can be
| quickly deadly.
| wikfwikf wrote:
| The Ontario Teachers' investment is outrageous. They are
| charging middle-class people (by definition) good money from
| their retirement savings to make reasonable investing decisions
| and do due diligence.
| thablackbull wrote:
| OTPP has quite a solid reputation and this particular
| investment was a miniscule speculative bet. You can see the
| performance over time here [1].
|
| [1] https://www.otpp.com/en-ca/investments/our-advantage/our-
| per...
| origin_path wrote:
| How do you know there aren't many other bets like this on
| their sheets?
| kasey_junk wrote:
| They are quite open about their investments:
| https://www.otpp.com/en-ca/investments/our-investments/
|
| Here are the other bets in their venture category:
| https://www.otpp.com/en-ca/investments/our-
| investments/teach...
| wikfwikf wrote:
| It's not about performance or risk management, it's about
| due diligence. They should not be giving any amount of
| money to an organization with such poor internal checks of
| their finances.
| pigtailgirl wrote:
| --if you made an investment based on audited books but
| the books were still cooked - what more can you do? -
| audit the auditer maybe - at some point you have to trust
| the books --
| wikfwikf wrote:
| What if you made an investment based on not seeing any
| books, there not being any reliable guide as to the
| company's liabilities, seen or unseen, and not being
| aware of any regulation or oversight preventing fraud
| and/or blowing up? But you had a good feeling about the
| company's hype and the CEO seemed like a nice young man
| with main character energy?
|
| If the company turns out to be a fraud and the investment
| worthless, are you still entitled to say "nobody could
| have known" and "only 1 in 10 has to be a winner"?
| mbesto wrote:
| I'm sorry but thats not how it works. This investment was
| made out of their venture fund which deliberately makes
| risky bets, but is a small amount of the overall pie.
| OTPP is fine and is going to produce returns which are
| favorable, let's stop with the hyperbole.
| andromeduck wrote:
| They have 220B AUM.
| spaceman_2020 wrote:
| Doesn't matter. It's still a neglect of their fiduciary
| duties.
| wikfwikf wrote:
| Canadian teachers and retired teachers have $220b, which
| they paid into the plan from their not particularly opulent
| pay packets. Nearly $100m was given to a company based in a
| regulatory haven, which does not know to within $5bn how
| much money it has, and which was able to steal from its
| customers without any oversight.
|
| Ontario Teachers were an anchor investor in a round which
| lots of less clueless people must have passed on.
|
| Not sure why you think this is ok.
| fatneckbeardz wrote:
| an enormous amount of our economy is based off
| gaslighting and manipulation
|
| they can blur the line between honest mistake, gross
| negligence, nepotism, corruption, and thievery, enough
| that people who will applaud beating up a shoplifter for
| taking 20 dollars of junk will say "oh but they have nice
| suits and went to Stanford" about someone who gave 75
| million dollars for magic beans.
| sebzim4500 wrote:
| They accepted the risk of losing $100m because they
| thought there was a significant chance of getting a much
| bigger return. Obviously in this case the bet didn't pay
| off, but putting 0.05% of the AUM in a high risk
| investment is hardly a scandal.
| pigtailgirl wrote:
| -- also it was out of their early stage fund - the vast
| majority of their money is in traditional investments -
| don't understand why everyone is so up in arms - they
| really think they know better than the most successful
| investment group in Canada? --
| wikfwikf wrote:
| Why do an investment group which is successful in making
| large, traditional, real money investments think they
| know better than the numerous seasoned venture funds and
| experienced crypto investors who did not give $95m to
| FTX?
|
| What was it about FTX's lack of internal controls or
| experienced decision-makers which only TVG was able to
| identify as a source of value?
| kasey_junk wrote:
| Lol. FTX's investors were a whose who of "seasoned
| venture funds and experienced crypto investors".
|
| Sequoia, Third Point Iconiq etc. Coinbase Ventures gave
| them money. Blackrock was an investor.
|
| If you want to see FTX as an indictment of the entire
| venture industry I think there is an argument to be had
| there. But picking on OTP is just a lazy rhetorical
| device. They made a similar investment to other funds in
| the industry they are in, that was a reasonable size of
| their portfolio in an investment style known to be risky.
| wikfwikf wrote:
| Coinbase Ventures (a fund whose wheelhouse is, uh,
| investing in crypto ventures) did not invest anything
| like $95m.
|
| Your fourth example, Blackrock, is tellingly neither a
| seasoned venture fund nor an experienced crypto investor.
| pigtailgirl wrote:
| -- their portfolio is pretty fantastic - so they made 1
| bum investment based on cooked books - VC is literally
| about standard deviation --
|
| https://www.otpp.com/en-ca/investments/our-
| investments/teach...
| wikfwikf wrote:
| Teacher's Venture Growth is 8bn AUM. It makes complete
| sense to me that Ontario Teachers as a whole should put
| 4% of its assets into a venture fund.
|
| TVG put well over 1% of its assets into FTX. Numerous
| people who work for the venture fund, who are paid
| 10-100X the income of the retirees in the fund to make
| investing decisions, went ahead with this investment
| without asking themselves:
|
| 1. Why isn't there a crypto-savvy lead investor for this
| funding round? Why are we, Teachers Venture Growth, the
| best placed people to make this investment?
|
| 2. Why are 3 individuals with, ostensibly, enormous
| personal wealth, seeking outside investment from Ontario
| Teachers for this business?
|
| 3. Why isn't this business headquartered in a
| jurisdiction where people who commit massive financial
| fraud will be investigated and held to account?
|
| 4. What checks and balances regulate the relationship
| with Alameda, a hedge fund which a) trades with leverage
| and favorable fee structures on FTX b) is reputed (long
| before the Series B and the recent trouble) to have
| privileged access to FTX data c) is run by a romantic
| partner of the head of FTX?
|
| 5. Who are the grown-ups at FTX? You might well think
| that SBF and his posse have some magical crypto skills.
| But why don't they have senior people with experience in
| accountancy, compliance, or risk management helping keep
| them on the right path? This is the easiest question to
| answer - you can simply check who works for them, who's
| on risk committees and other oversight bodies, and what
| their resume is.
|
| People like to excuse massive due diligence failings like
| this by pointing out that not all venture investments are
| supposed to end up in the money. It's fine, _if you have
| huge winners_ , to use them to justify a certain number
| of losers.
|
| If you don't have a proven track record for finding out-
| of-the-park winners, it's perfectly reasonable to ask why
| you think you can risk large amounts of money on things
| that look dubious to other investors, while not
| performing basic checks.
| dmix wrote:
| 1% of the 4% for a single years worth of capital isn't
| that much, especially considering the good reputation and
| other high end investors putting money in.
| drpgq wrote:
| Unlike in the US, Ontario teachers are paid well relative
| to the average Canadian, especially with their pensions
| taken into account.
| SkyMarshal wrote:
| _> I actually got Ontario into a fund I was at, and we 'd have
| lost the investment if we hadn't behaved like adults. This is
| causing me some cognitive dissonance, because I don't think of
| the investors as the kind of people who'd even smile if they
| found me in the office playing a video game, let alone addled
| on drugs._
|
| They might been starstruck by Sequoia more than SBF and his
| team, and just gone along for a ride with the most storied VC
| firm in the world.
| kasey_junk wrote:
| I'm no expert in the space but was under the impression FTX was
| still considered a low volume exchange. If Alameda mm was still
| providing substantial volume they may have felt the price they
| were paying being bad at trading was worth it from a marketing
| point of view. This was the same crew buying stadium naming
| rights and over paying for eSports teams.
|
| As for hiring an adult, have you seen some of the things
| they've said in public? They thought the adults were wrong!
| Like on a mathematical level. People that far into their own
| cult-think don't want outside help.
|
| Finally, the Ontario Teachers thing feels extremely overblown.
| They put in 75m of ~220b aum. That's a minuscule investment in
| a category that was clearly part of their highly speculative
| book. I think people keep bringing it up for the "think of the
| teachers!" benefit, but of a pension fund doesn't have some
| outsized return opportunities on their book they'll not be able
| to cover their outflows under certain future economic
| scenarios.
| lordnacho wrote:
| OTP put in something like that in the fund I was at. Yes it's
| small for them but it's still serious, the guy in charge
| wants to move on to bigger things.
|
| Oh and I totally forgot to comment on the math. Kelly
| criterion, I don't get how the guy could have studied physics
| at MIT and not understood it. It's simply a result that tells
| you how much to bet of your stash if you are presented with
| some repeated betting opportunity. It's essentially an
| extension of high school level probability theory, with
| similar clean-room constraints (independence, etc). There's
| also a continuous version of it using Sharpe ratios, no
| surprises.
|
| If you read anything about it, it's very very not smart to
| bet beyond the ideal size. This is actually the reason why a
| lot of people use less than the ideal, because you don't want
| to end up over the hump. Both the assumptions that underlie
| the result and the measurements of the parameters are not
| easy to ascertain, so don't act like it's a dice game within
| a known environment.
|
| By the way anyone studying Kelly Criterion needs to read
| this: https://en.wikipedia.org/wiki/Proebsting%27s_paradox
| bee_rider wrote:
| I don't want to besmirch this particular person I've never
| met, but I definitely _have_ met engineers who look at the
| stock market, look at their sophomore or junior level
| signal processing class and decide that all those Econ guys
| are a bunch of dummies and they could totally beat the
| market with some Fourier transforms or whatever (the fact
| that investing firms hired a bunch of quants is left
| unaddressed). So, I could see somebody making this sort of
| error.
| jasonwatkinspdx wrote:
| I'm friends with a retired quant, and one thing I learned
| from him is the big firms on wall street will hire the
| absolute most brilliant people they can even to work on
| utterly banal well known basic strategies. PhD's doing
| high school math. Because when you're moving billions,
| nothing is actually basic.
| [deleted]
| SnowHill9902 wrote:
| Kelly criterion is not the best strategy for one. It's the
| best strategy for an ensemble of ones in many universes but
| you can only live in one universe. It's a nerd trap because
| it seems so elegant and reasonable.
| anonymoushn wrote:
| This isn't true? If you aggregate utility across
| universes using addition and have utility linear in
| wealth then you maximize your aggregate utility by going
| all-in on every favorable bet.
|
| Kelly turns out to be equivalent to maximizing expected
| log-wealth, if one stays within a single universe, or to
| maximizing the probability that one will eventually have
| more wealth than any agent in the same universe that
| employs any other strategy on the same sequence of
| opportunities.
| kwertyoowiyop wrote:
| Only on HN is it necessary to define that we are only
| discussing the single-universe case!
| SnowHill9902 wrote:
| You are still using infinite universes: expected value
| and probability still are calculated across an ensemble
| of parallel universes.
| anonymoushn wrote:
| This is the worst comment I have ever read. There are
| reasonable definitions of expected value and probability
| that do not require infinitely many universes to figure
| out whether you should raise pre-flop with aces.
| xhkkffbf wrote:
| Yes, the crash at FTX gets all of the press, but it's really
| the slow motion collapse of things liken pension funds that
| should really be getting our attention. SBF is just a piker
| compared to the pension funds.
| tpxl wrote:
| > FTX was still considered a low volume exchange
|
| According to a random source, they moved volume on the order
| of 500 billion. Transaction fees of 0.1% for 500 billion is a
| lot of million to keep the lights on.
| anonymoushn wrote:
| For a maker and taker with best fees, the exchange only
| made 0.5bps, not 10bps. We happen to know that top rebates
| were pretty hard to achieve though, so most volume probably
| paid at least a couple more tenths of a basis point.
| blitzar wrote:
| > According to a random source, they moved volume on the
| order of 500 billion.
|
| According to FTX, the entire market moved 250 billion
| including derivatives of which they were 13 billion
|
| https://ftx.com/volume-monitor
| anonymoushn wrote:
| In the trailing 24 hours, presumably sampled at the time
| FTX's servers for dynamic content such as logging in and
| trading were shut down. also did you reply to the wrong
| person?
| ZeroGravitas wrote:
| I liked the chapter in Nate Sivers' Signal and the Noise when he
| talks about how hard it is to know if you're a good professional
| poker player.
|
| Been a while since I read it but feel like even after a couple of
| years of winning games and tracking his own performance, he had
| enough stats knowledge to realise that he didn't actually know if
| he was good or just lucky. The noise swamped the signal.
|
| This feels relevant to many of these trading things where people
| start to believe their own BS.
|
| If you've flipped a coin and it's came up heads 10 times in a
| row, why wouldn't you bet everything on it happening again?
| You're really good at getting heads when you flip. Humans aren't
| really built for that kind of thing.
| Naga wrote:
| Another book in this vein is Taleb's Fooled By Randomness.
| pge wrote:
| The same is very true in VC investing. Because any individual
| partner does not make that many bets per year, and the time
| frame to exit is long, it is very difficult to distinguish
| skill from luck (including being in a long-term bull market
| like the last decade).
| bambax wrote:
| In Midnight Run (1988) when Marvin finds the Duke and Jack in
| the sandstone of Red Rock Country he exclaims "Am I lucky or am
| I just good?":
|
| https://www.youtube.com/watch?v=Gokkl2br7G8&t=152s
|
| Later in the movie, when Marvin decides to ask for more money
| and takes a Polaroid of the Duke in the bathroom of the motel,
| he comments to himself: "I amaze myself... I'm always
| thinking."
|
| The thing is, the character of Marvin is quite dumb, not a nice
| person and above all someone who never grasps the full picture
| -- but at the same time he has good instincts and is, in fact,
| a fairly good hunter. It's a dangerous combination.
| [deleted]
| blitzar wrote:
| In crypto as in wall street bets. If your sample is "a bull
| market when every single week the price is higher than the
| previous" - then the signal and the noise confirm; if you lose
| money on monday _buy the dip_ with your client funds - because
| you cant possibly lose.
| Avado wrote:
| Going forward we actually need to get back to the principals.
| Self-custody, bankless as much as possible. Using exchanges only
| as on- and off-ramps.
|
| Here is an article about some bear market strategies if you have
| the courage to look forward and stay after the FTX scandal.
|
| https://ava.do/blog/safest-crypto-bear-market-strategies-in-...
| zone411 wrote:
| This looks like a plausible scenario about what happened at
| Alameda that matches with what I read earlier (especially the
| effect of Luna's collapse):
| https://twitter.com/AutismCapital/status/1592406121368543233...
| halukakin wrote:
| "FTX periodically uses a portion of its profits to buy back FTT
| tokens. This makes FTT kind of like stock in FTX: The higher
| FTX's profits are, the higher the price of FTT will be."
|
| I think this is an interesting alternative to equity vesting. Not
| all countries have laws that make equity vesting possible. Also
| this could work if you are a US company and hiring from all
| abroad. You can give tokens to your employers abroad, keep the
| token valuable as long as the company is profitable. What do you
| think?
| [deleted]
| hn_20591249 wrote:
| It could work, but the moment FTX started allowing FTT to be
| put down as collateral on multi-hundred million dollar
| liabilities, the entire house of cards fell apart.
| pjc50 wrote:
| > Not all countries have laws that make equity vesting
| possible.
|
| However, if tokens are securities, that doesn't mean you can
| legally sell/give them tokens either.
| hiidrew wrote:
| This is a great summary of what I've read so far. I haven't read
| any of Levine's coverage but this is certainly a better breakdown
| than the NYT piece.
| gedy wrote:
| Maybe a silver lining to all this is the vaporizing of some of
| the money printed into existence over past decade.
| KVFinn wrote:
| The extensive use of stimulants is alarming, though heavily
| speculative.
|
| What does the league of legends article say? That part seemed
| crazy speculative. I'm bottom quartile at FPS and fighting games
| but I enjoy them and play a lot. Dota 2 as well. And I've been
| top 1 percent at other games. Even higher for a bit in Auto
| Chess. I hope this isn't evidence of brain damage...
| martynr wrote:
| FWIW: as a bona fide user of various anti-parkinsonian
| medications for their intended purpose, I can say with a degree
| of confidence that the speculation on cognitive impact (and
| impairment) is very plausible - and that the article is
| factually correct on the side effects in a Parkinson's context.
| God knows what they would do to a brain with a "normal"
| dopamine level.
|
| It's also worth noting (and quite frankly pretty harsh when you
| eventually realise) that the affected brain has massive
| difficulty recognising its own altered cognition and perceives
| its distorted interpretations and consequent chains of response
| as perfectly natural and justified.
|
| Not drawing any specific conclusions on the particular
| assertions in the article, but IMHO the interpretation is
| certainly plausible given the apparent drugs involved.
| 55555 wrote:
| There was a VERY interesting article on HN recently about the
| risk-taking/compulsive side effects of dopamine drugs.
| jwozn wrote:
| Got a link? Would be interested in reading this.
| par wrote:
| link?
| Laaas wrote:
| Depends on what you mean by a lot. Thousands of hours? You
| might want that checked out.
| rejectfinite wrote:
| Some just play for fun and not in ranked.
| mola wrote:
| This is really low quality 'reporting'. Those tangents about how
| bad SBF blog is compared to Carroline's. Wtf? He calls out NYT
| research, but he bases his "research" on random anonymous forum
| msgs... The world really is dumbing down...
| gillesjacobs wrote:
| I like how OP opens smugly by calling the NYT article a fluff
| piece, then proceeds to immediately cite anonymous Twitter
| anecdotes as better sources.
|
| He's right about the specific NYT article not including much
| pertinent information, but they're a serious journalistic
| publication and have verification standards for sources.
| lawrenceyan wrote:
| The person who wrote this post is pretty well known in the
| crypto space. Not saying that what was written here is
| guaranteed to be accurate, but it's likely to be much closer to
| reality than what the New York Times put out.
|
| To be clear, I enjoyed Levine's commentary on the situation so
| it's not just because I dislike mainstream publications.
| trompetenaccoun wrote:
| Never heard of them, I've been in the crypto space for many
| years. Their social media looks like it's run by a teenager
| and I'm not not being facetious, it literally reads like a 14
| year old boy runs the account. The person also writes so many
| tweets they'd hardly have time for serious work. Over 90% are
| jokes, memes and rumors.
|
| https://nitter.cz/0xfbifemboy
|
| Not sure how this stuff makes it to the top on HN.
| fatneckbeardz wrote:
| cmon man anonymous twitter > new york times
|
| milkyeggs dot com is disupting journalism, by
| permissionless quote tweeting and decentralized fact
| checking.
|
| and if you join now using my code "FNB" you can get 20
| percent off your first milky coin.
| huimang wrote:
| "The person also writes so many tweets they'd hardly have
| time for serious work."
|
| This statement makes zero sense. What is the arbitrary
| threshold of tweets to "serious work"? What correlation is
| there to making tweets and writing articles? This is just a
| weird form of elitism - congrats on not posting tweets, I
| guess.
| lawrenceyan wrote:
| It's how you say, the "lingua franca"?
|
| I myself greatly enjoy it and am happy to see it become
| more widespread, but that's mostly because I grew up
| immersed in the culture.
| wil421 wrote:
| Yikes he posted a screenshot of your comment on Twitter. I
| agree with you about the tone and despise reading meme
| filled articles or tweets.
| hytdstd wrote:
| I'm confused, I don't see any memes in the article. Were
| they deleted?
| [deleted]
| petchyindee wrote:
| Where were the verification standards of the NYT when they
| advocated for the Iraq War, for example? Trust in mainstream
| media is at an all-time low, and for good reason. These appeals
| to authority seem out of touch to me.
| anonu wrote:
| Agreed. This article is a fun read at best.
| wweeeebb wrote:
| The NYT article was biased. Have you read it? Read the author's
| other articles and the sharp shift in tone. He is strictly
| apologetic towards the FTX ponzi scheme, the author's behavior
| is to the level which one could call morally compromised. He
| has a history of badmouthing other exchanges (e.g. Kraken)
| while singing the praises of FTX.
|
| Appeals to authority are weak compared to facts laid bare. The
| fact is that the NYT author has made clear biases against other
| exchanges and overly forgiving of a single exchange guilty of
| customer theft, which is papered over in his article. This is
| unusual compared to all other reporting of FTX amongst
| mainstream jouranlists. There were no articles attempting to
| humanize Bernie Madoff, this article hides the fact that SBF
| ran a ponzi scheme, imagine the same with Madoff, it would be
| shocking. This is shocking.
|
| Imagine having the Bernie Madoff subheading, "he had expanded
| too fast and failed to see warning signs". This is the scale of
| ludicrousness here. The facts aren't subjective or unclear in
| any way, FTX didn't have customer deposits, which they claimed
| to have up even until the very end. When it comes to
| journalism, this is an unforgivable failure.
| wikfwikf wrote:
| But the author makes it very clear in the second par "our
| claims only remain tentative at best".
|
| Isn't it much more useful to write something which actually
| tries to answer the question of what happened, albeit with
| appropriate caveats, than something which doesn't advance the
| understanding of the reader at all?
| TotoHorner wrote:
| The New York Times piece is even worse, since it paints a
| misleading picture of SBF and his cronies losing all the
| money accidentally rather than malice (far more likely).
| andromeduck wrote:
| The guy is Bronxe 2/3 in league - there's nothing to
| degrade.
| nl wrote:
| Actually it's almost the opposite.
|
| This piece speculates _very_ strongly about SBF 's
| stimulant usage degradating his cognitive abilities. Eg:
|
| > If the above observations about SBF's personality and
| competence are even half true, that would go a great deal
| toward explaining Alameda's losses.
|
| The entire article goes into much further depth. But it
| doesn't even speculate about malice.
| blitzar wrote:
| "their systems became unprofitable" - "Alameda & FTX
| jointly continued to lose large amounts of money" -
| "uncompetitive market-making strategies, risky lending
| practices" - "erratic behavior and unprofitable
| gambling".
|
| > losing all the money accidentally rather than malice
| (far more likely)
|
| They sound an awful lot like trading / accidental losses
| than malice to me.
| anonymoushn wrote:
| Normally if your fund is out of money and your exchange
| is fine you could spin down the fund rather than stealing
| customer money from the exchange
| blitzar wrote:
| Normally you dont have a fund and an exchange sharing
| capital
| oldgradstudent wrote:
| Alameda was a hedge fund. It could lose all of its money
| and it would be totally fine.
|
| The moment they touched customer funds it became fraud
| and theft.
|
| This was not accidental. Losing it in trading might have
| been, but it was trading with stolen funds.
| nl wrote:
| I agree with that. I don't think this was malice though -
| just extreme stupidity (and hopefully criminal). I think
| they thought they could trade their way out of it.
|
| That's different to malice which goes to motivations.
| anonymoushn wrote:
| Alameda just non-maliciously gave their own account
| special privileges on their own exchange, non-maliciously
| front-ran customer orders, non-maliciously traded on
| material nonpublic information (their own exchange
| listings), non-maliciously used their ownership of their
| exchange to strike trades that caused them $400mm of
| losses in one of their multiple KCG-style algorithmic
| meltdowns, non-maliciously stole billions of dollars from
| their exchange's customers, non-maliciously lied about
| Bahamas residents being senior to all other creditors so
| they could withdraw hundreds of millions of dollars
| again, non-maliciously "hacked" their exchange wallets to
| steal additional hundreds of millions of dollars from
| their creditors, and non-maliciously prematurely unlocked
| hundreds of millions of dollars of FTT and sent it to
| binance to dump.
| oldgradstudent wrote:
| All with the best of intentions.
|
| For the greater good of humanity. The most effective
| altruism.
| nl wrote:
| Yes to be clear I agree. I'm saying the article doesn't
| claim malice.
| naijaboiler wrote:
| despite being tentative, I would guess its the best
| explanation of what happened. Their handing out margins, and
| market-making approach with Alameda left them potentially
| liable to losing lots of money really fast.
| rkagerer wrote:
| There's so much rampant speculation in this article... for me
| it lost a degree of credibility around the point he fixated
| on the drug aspect. Despite all the disclaimers.
|
| Yes, it paints one picture of how the losses could have added
| up, but I'm looking forward to more exhaustively investigated
| reports grounded in more than heresay and gossip.
| anonymoushn wrote:
| If Alameda employees tell Twitter DM groups of systematic
| traders what happened at Alameda, it's hearsay, but if they
| tell NYT employees, it's an exhaustively investigated
| report.
| andromeduck wrote:
| We have photographic evidence. What more do you need?
|
| This isn't a criminal court.
| TheOtherHobbes wrote:
| Completely unrealistic.
|
| You'll never find rampant drug abuse in the financial
| industry.
|
| Certainly _not_ on Wall St.
| williamcotton wrote:
| Is it more fun to read and talk about the story if it
| covers existing tropes about rampant drug abuse in the
| financial industry or more fun to read and talk the story
| without those tropes?
|
| Is it more fun if the shared story has a clear villain or
| more fun if the shared story has a diffusive, complex
| relationship between good and bad between not only the
| characters but also the readers?
| why_only_15 wrote:
| the anonymous Twitter anecdotes are clearly far better than
| what the NYT people can come up with because Twitter is where
| all of these people spend their time.
| bigbacaloa wrote:
| Agreed. I'm sure that the NYT checks that its twitter sources
| have the little blue check mark before publication.
| dereg wrote:
| > they're a serious journalistic publication and have
| verification standards for sources
|
| It goes both ways. It seems like they didn't do much
| verification of Sam's claims.
| jasmer wrote:
| It's a 'puff piece' because they essentially take his words
| almost at face value, almost as if they are supporting his
| argument and don't dig more cynically into the underbelly of
| the issue.
|
| There are a lot of really crazy things happening with this
| story they don't touch upon.
|
| It's worse than a 'puff piece' to the point I suggest there is
| background manipulation going on. This is 'reputation
| laundering'.
|
| There is a huge amount of money here, and a ton of very, very
| powerful people involved.
|
| I suggest that within a few weeks this will be known to be
| truly a criminal enterprise and this NYT article will not age
| well.
| TotoHorner wrote:
| > He's right about the specific NYT article not including much
| pertinent information, but they're a serious journalistic
| publication and have verification standards for sources.
|
| Ok? Regardless, this piece does a significantly better job than
| the NY Times and the "serious journalistic publication".
|
| The times articles actually misleads readers into thinking that
| the FTX downfall was moreso from bad timing & outside attacks
| then from SBF fraudulently stealing user funds.
|
| > immediately cite anonymous Twitter anecdotes as better
| sources
|
| The Twitter accounts directly quoted have many followers and a
| long history of tweets that are easily searchable.
|
| If you're referring to the Autism Capital tweet, that's a tweet
| of a photograph which you can look at yourself. It's clearly a
| stimulant that says EMSAM on it.
|
| Name the specific tweets in the piece that you find incredulous
| rather than an ad hominem.
| shawabawa3 wrote:
| The NYT article is a shockingly bad puff piece. It doesn't once
| mention fraud. Doesn't call out that Alameda borrowing funds
| from FTX deposits is insanely illegal
|
| Makes it sound like poor SBF got unlucky and it wasn't his
| fault he recklessly gambled $8+B of customer deposits
| spaceman_2020 wrote:
| Given both SBF and Caroline's family connections, I'm not
| surprised that the MSM is going to treat them with kid
| gloves.
| headsoup wrote:
| Let me guess, the article doesn't even mention those
| connections?
| renewiltord wrote:
| Interesting, this displays a classic problem with the NYT: they
| end up searching for their lost keys under the streetlamp since
| that's where the light is. If they report on an organization
| that has $1 million in verified assets, but the organization is
| suspected to have $999 million in assets and $2 billion in
| liabilities, they will report the organization as solvent
| because they have verification standards for sources and are a
| serious journalistic publication. Therefore, they can only
| publish about the $1 million in verified assets. The
| organization could therefore be widely suspected to be
| insolvent, but reported by the NYT as solvent.
|
| In fact, that's what happened this time.
|
| Perhaps this is why the NYT's Judith Miller has such prominent
| roles in journalism.
| ZephyrBlu wrote:
| If you had been following this whole saga at all you would know
| that Twitter anons have been a way better source of information
| than anyone else.
|
| The on-chain anaylsis, digging and commentary done by people on
| Twitter has been insanely insightful.
| SilverBirch wrote:
| Twitter might provide _more_ information than the NYT, but
| there 's a reason NYT doesn't publish it - because the NYT
| wants to be reliable. They want their claims to actually
| stand up to scrutiny and be an accurate portrayal of the
| events we know happened. Whereas big chunks of this article
| are just pure speculation. The whole section about how
| Alameda might have had a rogue algo are just made up out of
| whole cloth. Is it true? Who knows, there's certainly no
| evidence for it, but let's stick it down as $1Bn of loss
| anyway.
|
| This article is very little more than just a gossip rag
| version of the NYT article.
| gd1 wrote:
| rglullis wrote:
| I too once believed that newspapers were focused on
| providing quality information.
| wikfwikf wrote:
| The NYT article is headlined "How Sam Bankman-Fried's
| Crypto Empire Collapsed". The parts of the article which
| actually answer this question are, in their totality, as
| follows:
|
| > Alameda had accumulated a large "margin position" on FTX,
| essentially meaning it had borrowed funds from the
| exchange,
|
| Par 6. Common knowledge, finance-splained and followed by
| equivocation and hand-waving from SBF.
|
| > On Nov. 6, Mr. Zhao announced on Twitter that he was
| selling the FTT, spooking customers who rushed to withdraw
| their FTX deposits
|
| Common knowledge for more than a week (in par 28). More
| well-known things about the Zhao deal in the next couple of
| pars. Obv suggesting the two key questions, why did they
| need a bailout in the first place, and what was wrong with
| the business that led Zhao not to invest? Needless to say,
| neither of them is answered in the article.
|
| > Her voice shaking, she apologized, saying she had let the
| group down. Over recent months, she said, Alameda had taken
| out loans and used the money to make venture capital
| investments, among other expenditures.
|
| > Around the time the crypto market crashed this spring,
| Ms. Ellison explained, lenders moved to recall those loans,
| the person familiar with the meeting said. But the funds
| that Alameda had spent were no longer easily available, so
| the company used FTX customer funds to make the payments.
| Besides her and Mr. Bankman-Fried, she said, two other
| people knew about the arrangement: Mr. Singh and Mr. Wang.
|
| > The meeting was previously reported by The Wall Street
| Journal.
|
| Several day old scuttlebutt taken from another newspaper in
| par 30+. (And nicely written to suggest that it's an urgent
| eyewitness dispatch "Her voice shaking")
|
| That's it. Literally no actual news reporting was done in
| this article.
|
| The high standards of reliability and standing up to
| scrutiny are worthless, because they are not actually
| applied to any useful or new information, but just to the
| human interest color that 90% of the piece consists of.
| Yes, the 'facts' that SBF has 15 room-mates and not 12, and
| that he plays League of Legends not Terraria are rigorously
| fact-checked, but they might as well not be. The actual
| question of _Where did the money go_ is completely ignored
| beyond what is widely known.
|
| This isn't news reporting, it's a form of entertainment
| journalism, which allows people out of the loop to get a
| sense of the excitement and glamor of what's it like to
| live in the Bahamas and have your crypto exchange go
| bankrupt. (And it equally fulfils the desire for other
| clueless people to tut and sigh over the way the world is
| going.)
| SilverBirch wrote:
| I think you're misunderstanding what the NYT article is,
| it's not a piece of deep investigative journalism, it's
| an interview with SBF with context attached.
| wikfwikf wrote:
| Right. So it was accurately described by the author of
| the linked article as 'a poorly researched fluff piece'.
| keneda7 wrote:
| I am generally curious what your position is here? You
| seem to be arguing the NYT article is not a fluff piece
| but then with this comment you admit its not
| investigative journalism but rather a fluff piece? I
| don't understand.
| headsoup wrote:
| So an entertainment piece, as mentioned?
|
| I can't see the article because of the login, but what
| does the piece achieve? Does the interview ask Sam hard
| questions?
| wikfwikf wrote:
| There is a mirror of the NYT article linked from TFA.
| ajross wrote:
| > This isn't news reporting, it's a form of entertainment
| journalism
|
| I don't see where you're justifying that. I read this
| article and it gave me a good overview of the situation.
| You're right, I guess, that it's not "new" investigative
| journalism and that if I'd been paying better attention I
| could have found the same info elsewhere and earlier.
|
| I don't see how a correctly-reported review piece becomes
| "entertainment journalism" though. Do you make the same
| article about wikipedia?
| wikfwikf wrote:
| I justified it, at length, in the above comment by
| pointing out how little real information there was in the
| article about what had actually happened to BTX and
| Alameda.
|
| I did not say anything about "new investigative
| journalism". I said it was not news reporting.
|
| The claim that is is entertainment journalism is very
| simple. This type of piece is written, not to inform, but
| to entertain. That's why it focusses on color and
| character, while missing basic story details - the 5 W's,
| any overview of how the bankrupt businesses worked, etc.
| Such pieces are often designed to give the _impression_
| of information, because this impression is part of the
| entertainment experience. You can easily find decent and
| free writing on this topic which provides way better
| analysis and is generally accurate and honest.
|
| As you have probably noticed, stories about scams and
| frauds are a very big business, and articles about them
| are now part of a well-worn pipeline by which books,
| movies and mini series are made. Very few of these have
| any commitment either to accuracy in general or to useful
| information about why such scams are possible, why they
| are socially important, or how they can be stopped. They
| exist merely to entertain and titillate. A writer like
| the author of this piece, will be aware that they are
| part of this machine, and that there is lots of career
| advancement to be made in writing fluff about grifters,
| particularly in a way which tends to get you closer to
| other grifters.
|
| Wikipedia is not news reporting either. Not sure of your
| point, however note that the wikipedia page about Sam
| Bankman-Fried, while shorter than the NYT article,
| contains vastly more detailed information about his
| career, and has 85 citations to its sources.
| ajross wrote:
| I'm still not understanding what part of the article you
| think is incorrect, and/or what information you wanted it
| to contain that it didn't. All this meta stuff about
| "what the article is for" is just confusing me.
|
| Again, I read it and liked it. If you don't want me to
| read this piece, what summary _should_ I be reading?
| keneda7 wrote:
| I'm not the OP but to me the article did everything in
| its power to muddy the waters. It seems to try get me to
| feel bad for or even like someone who appears to have
| committed major crimes and lost billions of peoples
| money. If you didn't know anything about the situation
| and read this article you would think Sam did nothing
| wrong, is blameless, and just had some bad luck.
|
| Not once did the article tackle the question of where did
| the money go or why is it okay for this persons company
| to misplace billion of dollars of customer money?
| listenallyall wrote:
| There was a time, not that long ago, when what you say is
| true. Unfortunately NYTimes gave up caring about accuracy
| and reliability a while ago.
| ZephyrBlu wrote:
| > _This article is very little more than just a gossip rag
| version of the NYT article_
|
| This characterization is so far from the contents of the
| article I have to assume this comment is in bad faith or
| you're extremely biased towards the NYT.
|
| The article is 90% discussing facts/quotes from various
| sources and 10% speculation on what actually happened by
| people who are very familiar with crypto markets.
|
| The NYT piece on the other hand contains almost no facts
| (90% narrative) and throws a pity party for SBF. It's a
| complete joke.
|
| NYT piece: https://archive.ph/413e0.
|
| E: the author of this piece even states on Twitter that
| it's mostly a compilation of known information. Nowhere
| near gossip or speculation.
|
| https://twitter.com/0xfbifemboy/status/1592387837126905857
| hoffs wrote:
| >The NYT piece on the other hand contains almost no facts
| Did you even read it? It has plenty of facts and public
| statements. It creates a thorough timeline of all things
| that happened over years.
| SilverBirch wrote:
| I'm not biased towards the NYT, what I'm saying is that
| what the NYT is doing is a different thing from this
| article. The NYT is an interview with SBF, interspersed
| with the story of what happened, and the NYT will stick
| to what it can actually prove. You're pissed the NYT is
| biased towards SBF but it's not - it's an literally an
| interview with SBF, you're not meant to take what SBF is
| saying in there uncritically.
|
| Whereas this article has a tonne of speculation (none of
| the stuff about market making has fact behind it, it's
| speculation based on a handful of tweets) and a heavy
| reliance on sources that are at best questionable. The
| stuff about the rogue algo is entirely without evidence,
| and the stuff about drug taking, whilst lurid, could be
| entirely tangential to why the company actually
| collapsed. The NYT isn't going to quote random anonymous
| users on an EA forum claiming to be ex-employees.
| jasmer wrote:
| The NYT is not supposed to 'stick with what they can
| prove'.
|
| That's definitely not the bar they have or else they
| wouldn't be able to publish much.
|
| Journalists should be a bit cynical, dig for info. The
| NYT has more resources than anyone, and should be able to
| ask around, do some actual blockchain work, interview
| others.
|
| This story looks like one of the biggest frauds in
| history, likely because it is, it's the job of the NYT to
| show at least there's a lot of smoke and put puzzle
| pieces together (obviously with context), they are not a
| formal judiciary.
|
| There are so, so many crazy parts of this story that were
| not addressed it reeks of something awry. For example the
| co-CEO. There's almost nothing about this guy, as though
| he does not exist. That's a huge mystery and it's only
| one small artifact of the story.
|
| This article raises as much suspicion as it clears up.
| SilverBirch wrote:
| It's pretty insane to me that you think the NYT would
| ever deliberately print accusations they couldn't prove.
|
| I also think you're massively overstating the role of the
| NY Times, yes they have resources but they have to cover
| massive breadth. The NY Times isn't really going to be an
| expert in every topic, and there are real expert
| reporters out there who are going to dig in to this for
| specialist information. In this case there are reporters
| covering tech and finance - so you're going to see good
| articles from Levine, and the Odd Lots people, Michael
| Lewis was literally shadowing SBF for 6 months. Arguably
| the Odd Lots guys got to this first - basically getting
| SBF to admit he was running a ponzi in an interview - an
| admission that made absolutely no difference because
| everyone kind of knew it was all a scam anyway. If you
| said to me there's an article about FTX I would be
| looking for it in Bloomberg or the FT, not the NYT.
| jasmer wrote:
| "NYT would ever deliberately print accusations they
| couldn't prove."
|
| That statement implies a misrepresentation of what I
| said, and a misunderstanding of what journalists do.
|
| Journalist investigate, source, and provide clarity.
|
| This is one of the biggest frauds in history, it's the
| job of the NYT to investigate the issue, and show us
| what's up. If there's likely fraud, they should be
| spelling that out.
|
| They've already admitted to using deposits to make risky
| bets at Alameda, which is fraud. There should have been a
| lot more questions about that alone. Just to start.
|
| Instead, it was a light nothingburger puff piece.
|
| There are better sourced artifacts on Twitter - this very
| article provides more valuable information that the NYT.
|
| "basically getting SBF to admit he was running a ponzi in
| an interview - an admission that made absolutely no
| difference because everyone kind of knew it was all a
| scam anyway"
|
| To suggest that the people with collectively billions in
| FTX 'knew it was a ponzi/fraud' and willingly lost all of
| their money is absurd.
| danem wrote:
| > It's pretty insane to me that you think the NYT would
| ever deliberately print accusations they couldn't prove.
|
| What are they doing when they cite "unnamed sources"?
| They constantly publish accusations that they have no
| intention of ever backing up. I'm not saying that they
| don't believe their sources, but "100% bulletproof" has
| never been their standard.
| EamonnMR wrote:
| They might be working on that article, but such an
| article will take time because they'll want to reach out
| to the anonymous posters and talk to them directly, find
| people who can do the chain analysis, verify people's
| stories, etc.
| anonymoushn wrote:
| The piece is well informed and aggregates a variety of sources
| only a few of which are not completely credible. the NYT
| literally refuses to use the word "fraud" or hint at
| criminality after Sam stole ten billion dollars from customers.
| burkaman wrote:
| > the NYT literally refuses to use the word "fraud" or hint
| at criminality
|
| 11/10: Meanwhile, the S.E.C. and the Justice Department are
| said to be investigating FTX for potential securities
| violations. [...] Whether S.B.F. or others associated with
| FTX also face civil or criminal action -- and where such
| legal fights would take place -- remains unclear.
|
| - https://www.nytimes.com/2022/11/10/business/dealbook/ftx-
| cry...
|
| 11/11: Authorities worldwide are intensifying their scrutiny
| of the embattled cryptocurrency exchange, amid concern about
| improper use of customer money.
|
| - https://www.nytimes.com/2022/11/11/business/dealbook/ftx-
| sbf...
|
| 11/11: The bankruptcy proceedings may be only the beginning
| of Mr. Bankman-Fried's legal troubles. Federal investigators
| are examining the relationship between FTX and Alameda, and
| customers are likely to file lawsuits.
|
| - https://www.nytimes.com/2022/11/11/business/ftx-
| bankruptcy.h...
|
| 11/12: The implosion of Mr. Bankman-Fried's cryptocurrency
| exchange has already cost customers billions of dollars in
| lost crypto deposits, setting off law-enforcement
| investigations that could lead to criminal charges. [...]
| Investigators at the S.E.C. and the Justice Department are
| examining whether Mr. Bankman-Fried improperly used customer
| funds to prop up Alameda Research, a trading firm that he
| also owns. FTX lent as much as $10 billion in customer funds
| to Alameda, according to a person familiar with the finances.
|
| - https://www.nytimes.com/2022/11/12/business/ftx-
| cryptocurren...
|
| 11/13: "Sam and FTX had a lot of good will -- and some of
| that good will was the result of association with ideas I
| have spent my career promoting," the philosopher William
| MacAskill, a founder of the effective altruism movement who
| has known Mr. Bankman-Fried since the FTX founder was an
| undergraduate at M.I.T., wrote on Twitter on Friday. "If that
| good will laundered fraud, I am ashamed."
|
| - https://www.nytimes.com/2022/11/13/business/ftx-effective-
| al...
|
| 11/14: Should the U.S. have moved faster to create an
| attractive regulatory environment so companies like FTX would
| have moved here and had to abide by Washington's rules?
| Maybe. But if the FTX case turns out to be fraud, regulation
| unto itself may not have been enough to stop it. Madoff
| didn't live on an island beyond U.S. jurisdiction -- he was
| based on Lexington Avenue. [...] If we ultimately learn that
| FTX's undoing is the first of many in an industry that has
| been built on a pile of offshore fairy-dust leverage, the
| regulatory lesson will actually be the opposite: The S.E.C.,
| C.F.T.C. and Treasury will have proved prescient for all
| their warnings to the public that crypto was too risky.
|
| - https://www.nytimes.com/2022/11/14/business/dealbook/ftx-
| ban...
|
| 11/15: Major questions still remain, such as whether FTX
| improperly used billions of dollars of customers' funds to
| prop up Alameda Research, a trading firm that Bankman-Fried
| also founded.
|
| - https://www.nytimes.com/2022/11/15/briefing/iran-
| clampdown-p...
| hoffs wrote:
| Because actual journalists have standards to abide
| jasmer wrote:
| ? Stealing $10B is fraud. So when $10B goes missing, due to
| what we know is 'bad behaviour' at minimum, and all the
| other 'smoke' around this story - we should use that word
| in proper context.
|
| This is literally one of the biggest fraud cases in
| history.
|
| By their own 'standards' they are compelled to use the word
| in proper context.
| thehappypm wrote:
| I don't think it's up to their standard yet. Of course
| the whole world believes it's a big case of fraud but
| they may need to wait until there is more clarity on
| that.
| danaris wrote:
| While I'm sympathetic to this position, I can also easily
| see an argument from the NYT's side that "fraud" is a
| specific _criminal_ allegation, and as such using it in
| an article like this could open them up to libel or
| defamation suits.
| enraged_camel wrote:
| I mean, they can always call it "alleged fraud", right?
| They use that kind of language to describe all sorts of
| _alleged_ crimes.
| danaris wrote:
| They can, which is part of why I'm so sympathetic to the
| GP's position.
| TedShiller wrote:
| blitzar wrote:
| Yeah it was in the basement of a pizza place right?
| EdwardDiego wrote:
| Heard of it. Repeatedly. Never seen any, you know, proof.
| petchyindee wrote:
| Both the New York Times and the Washington Post have by now
| admitted the legitimacy of the Hunter Biden laptop story
| (of course they waited for the election to be over before
| doing so). If you haven't seen any proof, it's because you
| haven't looked.
| EdwardDiego wrote:
| The legitimacy of _which_ story about his laptop? Was it
| really filled with child porn? There were so many
| stories.
|
| Please feel free to share links to the NYT or WaPo
| acknowledging all this truth. I feel very remiss in
| having missed it.
| PubliusMI wrote:
| AustinDev wrote:
| If you know how to torrent you can download an image of his
| iPhone or iPad taken from that same laptop.
| EdwardDiego wrote:
| Why would I need to torrent it? And how do I know it's
| legitimate?
|
| I had assumed that the big news about its contents would
| break any day now. All I've ever seen is people talking
| about what people told them that they totally saw on it.
| AustinDev wrote:
| It has numerous photos and text conversations that are
| timestamped and geo located to verifiable locations where
| he would be. The pattern of life seems reliable. It's all
| rather tragic lots of drugs, prostitutes and mental
| health issues abound if you dig in. I don't recommend it.
| boppo1 wrote:
| Well you can see lots of photos of his penis and face in
| the same picture. I think that's fair verification.
| fxtentacle wrote:
| I didn't know before that they were all so much into drugs.
| kristianov wrote:
| Two words: Ponzi Scheme.
| binarray2000 wrote:
| I'd say that Madoff was a Ponzi Scheme. It seems, what Bankman-
| Fried et al have pulled off was more of stealing other people's
| money and probably washing money, both for political purposes.
| They have donated other people's money to Dem's and have paid
| visits to the Biden White House. And, considering how billions
| have been sent to one of the most corrupt countries in the
| world (Ukraine; according to Transparency), I am not the first
| one to think that probably some of that money was laundered and
| used for elections or even for personal gain. It wouldn't be
| the first time (Hunter's "Laptop from hell").
|
| (I am not an US American. And I don't care for either the
| Democrats nor the Republicans.)
| Cthulhu_ wrote:
| And worse: pretty much everyone was aware of it, but thought
| that because they were aware of it and everyone else is a
| schmuck, they could benefit from it. Some did, but only if they
| liquidated their holdings last year.
|
| NFTs this year was a microcosm of exactly that. Loads of people
| jumped on the bandwagon, buying up NFTs as they were released,
| but the whole thing collapsed again when it turned out the
| resale market just wasn't there. Except for the first movers.
| Gigachad wrote:
| NFTs were like all cryptos. _Everyone_ knew they were
| bullshit but expected there would be one more greedy idiot to
| pass the bag to.
| highwaylights wrote:
| Unsure why this is downvoted.
|
| "lol at you spending all your money on magic beans, not
| like my magic beans which are very shiny and special."
| gasull wrote:
| NFT art was likely a bubble, not a Ponzi. Many investments
| are bubbles, but not Ponzis.
| [deleted]
| TheOtherHobbes wrote:
| NFT art was a scam intended to create a bubble.
|
| The art market itself is a bubble. Famous art is primarily
| used for investment, tax avoidance, and sometimes money
| laundering. Occasionally someone will hang it on a wall and
| look at it, but it's more likely to end up in storage.
|
| NFTs were designed as a microcosm of the art investment
| market, sold on the promise of increasing resale value -
| like the real thing.
|
| Of course that didn't happen. But some artists made a lot
| of money, some dealers made even more, and some people made
| significant savings on their tax bills.
| gasull wrote:
| No. Some NFTs are definitely art, like the ones by
| @beeple on Twitter. There are also NFTs that work as a
| membership card for a community, like BAYC. And of course
| there are scams too. You're oversimplifying.
| flanked-evergl wrote:
| For reference:
|
| https://www.cnbc.com/2022/11/13/sam-bankman-frieds-alameda-q...
|
| > In making some of these leveraged trades, the quant fund was
| using a cryptocurrency created by the exchange called FTT as
| collateral. In a lending agreement, collateral is typically the
| borrower's pledge to secure repayment. It's often dollars, or
| something else of value -- like real estate. In this case, a
| source said Alameda was borrowing from FTX, and using the
| exchange's in-house cryptocurrency, FTT token, to back those
| loans. The price of the FTT token nosedived 75% in a day,
| making the collateral insufficient to cover the trade.
| helsinkiandrew wrote:
| This was nothing like a Ponzi scheme - the money was lost due
| to bad trades, poor collateral, bad accounting/compliance with
| probably a little bit of criminality thrown in at the end.
|
| Although they were trading crypto it was more like an old
| fashioned/real money collapse.
| [deleted]
| zucker42 wrote:
| There's a slide deck floating around[1] purported to be from
| Alameda research in 2018. That deck claims they offer 15%
| fixed returns to investors. If that slide deck is genuine, it
| seems possible that the unaccounted for money at Alameda
| Research went to paying for redemptions by early investors.
| Given how bad the accounting at FTX/Alameda seems to be, it
| seems possible to me that Alameda investors were paid back at
| high APYs even as the underlying strategies performed poorly,
| and the people at the top might not be aware that they were
| heading towards insolvency. If this is the case, it would be
| close to a pure Ponzi.
|
| Now I don't really know how likely this is because there's
| very little public information about Alameda. It's also
| possible that Alameda bought Doge and Shiba which proceeded
| to crash 10x.
|
| [1] https://www.theblock.co/post/186187/alameda-promised-
| high-re...
| esoterica wrote:
| > In a podcast from 2019, SBF brags about making predictions on
| the timescale of 1-2 seconds
|
| > While this might have been considered highly competitive in
| 2019-era crypto markets, it is a far cry from the microsecond-
| level precision of market making in traditional finance.
|
| The author is confusing tick-to-trade with prediction horizon.
| The "microseconds" market makers talk about is how long it takes
| to react to incoming market data and send out a trade message.
| The 2 seconds SBF is talking about is how far ahead in the future
| you want to predict price changes over.
|
| Doesn't really inspire a lot of confidence in the rest of the
| analysis if this is the level of domain knowledge the author has.
| lordnacho wrote:
| You're right about the technical aspect, but the rest of the
| critique is more about business level stuff like knowing what
| you have. I don't think you can say the whole piece lacks
| credibility because he got this thing mixed up.
| lvl102 wrote:
| Coinbase has to be the biggest winner here. Despite some odd
| stories about Armstrong past couple of years, they appear to act
| like "adults". BTC and ETH are not going away for awhile.
| tromp wrote:
| > Having several years' worth of experience at a trading firm
| does not make you a geniusthe top tier of such firms hires well
| over a hundred new employees every year.
|
| Renaissance Technologies hires less than a dozen new employees
| per year...
| terminal_d wrote:
| Who is the author of this piece?
| TrackerFF wrote:
| AFAIK, BTC and ETH have been classified as commodities - would
| FTX have to adhere to Commodity Exchange Act?
| anonymoushn wrote:
| Do all companies in the world have to adhere to US law?
| AustinDev wrote:
| Companies run by US citizens and that deal in US dollars
| certainly do.
| [deleted]
| zhxshen wrote:
| flanked-evergl wrote:
| Before or after they were bribing politicians for favourable
| regulation for FTX at the detriment of their competitors who were
| not fraudulent?
|
| https://prospect.org/power/sam-bankman-frieds-multimillion-d...
|
| > Crypto's supporters in Congress are determined to ignore the
| massive gap in capacity between the two agencies; in fact, they
| likely understand that its incapacity is part of its appeal to
| FTX. A bill proposed by Sens. Cynthia Lummis (R-WY) and Kirsten
| Gillibrand (D-NY) seeks to grant the CFTC "exclusive jurisdiction
| over any agreement, contract, or transaction involving a contract
| of sale of a digital asset that is offered, solicited, traded,
| executed, or otherwise dealt in interstate commerce, including
| market activities relating to ancillary assets." Perhaps in
| anticipation of such a move, FTX has stocked up its ranks with
| former CFTC officials. Former CFTC commissioner and acting chair
| Mark Wetjen is FTX's head of policy and regulatory strategy. Ryne
| Miller, who was legal counsel to Gensler when he led the CFTC, is
| FTX's general counsel. The Tech Transparency Project has also
| identified 14 other cases of CFTC alumni revolving into the
| crypto industry.
|
| Vote these people out.
| williamcotton wrote:
| If the cup is half empty it's called bribing. Otherwise it's
| called lobbying.
|
| I don't know anything about the CFTC in particular but I'm
| familiar with the general idea of lobbying and the role it
| plays in a representative government.
|
| Elected officials have to interface with basically every
| industry in the country. How is any specific representative in
| a legislature going to have the knowledge required to vote on a
| banking act? Or a bill pertaining to power plants? Or
| cryptocurrencies?
|
| Does it make sense to allow representatives from various
| industries access to members of the legislative branches of
| government? How else could Cynthia Lummis or Kirsten Gillibrand
| make an informed decision when writing federal laws related to
| cryptocurrencies? Should there be federal laws related to
| cryptocurrencies? Should legislatures have a government
| regulatory agency that enforces federal laws? Who is going to
| write those laws? Should there be a federal agency like the
| SEC, but specifically for cryptocurrency? Is that the CFTC? Who
| should make up the CFTC? Who should make up the SEC? Are the
| people who are qualified to work for industry more or less
| qualified to work in the agency that regulates the industry?
| Who is best qualified to lobby for the industry? For the people
| who work for the regulatory agencies or lobby for industry, are
| they owners or laborers in the regulated industry? What if
| everyone at least wrote their name down on a big public list
| and said who they worked for and published when they met and
| who from which government position they met with?
|
| Are there easy answers to these questions? How the hell has any
| of this ever worked?
| Stranger43 wrote:
| The problem is not with industry insiders leaving private
| enterprise to go work for the government, the problem is
| government regulators leaving the government to collect large
| paychecks from the companies they used to be tasked with
| regulating, i.e. that there is the appearance of personal
| benefits to regulate to the benefits of future employers
| rather then the general public.
|
| What's actually needed is government agencies staffed with
| industry insiders who knows that they will never ever work in
| the industry again and have nothing to loose from putting the
| general public first, but this is kind of hard to do when
| government work is not seen as something of particularly high
| status, where people go for self realization after a success
| career in the private sector.
| NickC25 wrote:
| >but this is kind of hard to do when government work is not
| seen as something of particularly high status,
|
| Super easy to solve for - pay them more.
|
| With the amount of money the government has (the DoD has a
| nearly 2 trillion dollar yearly budget), it should be
| relatively trivial to be able to outspend the private
| sector.
|
| I hate paying taxes, but if those taxes go towards paying
| an extremely competent professional who will prevent this
| sort of shit from happening (which would cost us more in
| taxes to fix), I'm more than happy to pay as much as the
| government would want me to.
| throwaway290 wrote:
| I'm not sure paying more will help. It looks like greed
| can be boundless, so as long as power converts to money
| malicious actors will keep abusing it.
|
| Perhaps we should make power unattractive to such types
| instead, making it not lucrative so that only crazy*
| individuals who are content with good enough clean salary
| seek it out of dumb* desire to make the world better.
|
| * In a good way, obviously.
| danaris wrote:
| I don't have the links at the moment, but there were some
| fairly well-researched articles I saw a year or two back
| about this. The gist was that while our Congresspeople
| are, indeed, paid quite well by normal-person standards,
| because of the things they're expected to do (for
| instance, keep both a home in their district _and_ one in
| Washington, DC--one of the country 's hottest real estate
| markets), the amount they are paid is low enough that it
| _does_ lead to significant additional (mostly legalized)
| bribery.
|
| Making elected positions pay very little, rather than
| discouraging people who seek wealth, will limit them
| (even more) to people who are _already_ wealthy, because
| they will be able to bankroll the expected lifestyle out
| of pocket.
|
| Furthermore, for those who go into politics looking for
| money (as opposed to those who go into it looking for
| power, which is a related, but separate, issue), the
| salary is peanuts compared to the kinds of money they can
| get from lobbyists, or _as_ a lobbyist themselves once
| they leave office. So reducing the salary will have very
| little effect on that.
| throwaway290 wrote:
| > very little
|
| I'm not saying "very little", I'm saying make them pay
| _just enough_ for a reasonable life and make sure the
| position of power itself does not convert to money in any
| way.
|
| > will limit them (even more) to people who are already
| wealthy, because they will be able to bankroll the
| expected lifestyle out of pocket.
|
| First, you are ignoring the part about "crazy". If they
| are willing to go into this knowing they will only be
| losing money, maybe they have some clean motivations
| guiding them?
|
| > Furthermore, for those who go into politics looking for
| money (as opposed to those who go into it looking for
| power, which is a related, but separate, issue), the
| salary is peanuts compared to the kinds of money they can
| get from lobbyists, or as a lobbyist themselves once they
| leave office
|
| That's what I mean by "make it not lucrative". Power
| converting to money is a bigger problem than salaries.
|
| As it is, people in power who are already clearly far,
| far from being poor effect laws just after their
| relatives sell/buy stocks affected--it's almost as if
| there's no amount you can pay them to squelch the greed.
|
| If power should not be attractive to people with no
| integrity pathologically addicted to increasing wealth,
| then increasing salaries will achieve effect the opposite
| of desired. They will put their huge salary into stocks
| then pass laws favorable to their portfolio.
| Stranger43 wrote:
| But is it easier to outspend the private
| contractors(staffed full of former generals) that end up
| rewarded contracts based on their ability to network with
| government officials?
|
| The pentagon budget is a chronic scandal and a pretty
| good example of exactly how the private-public
| partnerships is creating a system where everyone benefits
| from the government being seen as inefficient.
| NickC25 wrote:
| > _But is it easier to outspend the private
| contractors(staffed full of former generals) that end up
| rewarded contracts based on their ability to network with
| government officials?_
|
| Sure. You know, you can also prevent that from happening,
| right? Any former high ranking military official gets a
| pretty nice pension and benefits. those alone are more
| than enough to last a lifetime.
|
| You want to go work at a defense contractor after
| retiring from the military? Fine, give up your benefits,
| give up your pension, give up your VA healthcare rights,
| give up your security clearance.
|
| Using taxpayer money to fund the retirement of a former
| general who then takes their knowledge and relationships
| (again, both paid for by taxes) to the private sector to
| enrich themselves seems highly unethical and a massive
| conflict of interest. You're essentially bankrolling the
| development of someone who is going to eventually sell
| that knowledge to people who profit off of ripping off
| the very institutions you (as a solider) swore to protect
| and defend.
| pjc50 wrote:
| > Does it make sense to allow representatives from various
| industries access to members of the legislative branches of
| government?
|
| Yes.
|
| It does not make sense to allow those industries to influence
| elections or the decisions of those elected by making
| political donations, though.
|
| > Should there be federal laws related to cryptocurrencies?
|
| Increasingly I think prohibition is the only option. Even if
| it's very leaky. It's far worse a mind virus than, say,
| TikTok. At least if it's illegal there won't be superbowl
| adverts for frauds.
| [deleted]
| nova22033 wrote:
| _FTX has stocked up its ranks with former CFTC officials_
|
| This is regulatory capture. If you think it's bad for crypto,
| wait till you see how bad it is for the agencies that approve
| our drugs.
| [deleted]
| throwaway82635 wrote:
| Much of the regulation of CFTC-regulated entities is done
| through the NFA, and the NFA committees look like this:
|
| https://www.nfa.futures.org/about/committees/index.html
|
| The influence of the regulated companies is entirely
| transparent.
| jpadkins wrote:
| If voting changed anything, they'd make it illegal.
|
| https://coinpedia.org/crypto-live-news/ftx-ceo-in-connection...
| https://www.foxbusiness.com/markets/sec-chairman-gary-gensle...
| https://twitter.com/bof_tob/status/1592247076100112385/photo...
| https://twitter.com/jchervinsky/status/1592173682687938560
| https://twitter.com/SenLummis/status/1592212987259281408
|
| This is speculation, but this is starting to fit the classic
| playbook of: 1) Create / seize a crisis 2) Have new regulation
| already ready to "address" crisis (using voter outrage to pass
| under rushed conditions) 3) Incrementally increase regulatory
| control (regulatory capture) 4) profit / increase power
| concentration
|
| In this case, it's clear they are trying to establish CFTC
| control of eth & btc.
| SkyMarshal wrote:
| Well FTX's competitors are not necessarily not fraudulent,
| especially their primary competitor Binance.
| largepeepee wrote:
| Ironically Binance's low trust makes their users especially
| diligent about on and off boarding their funds. Their model
| is closer to DeFi than their competitors who are CeFi
|
| Besides what makes FTX especially trendy to cover was how he
| targeted mostly American, supposedly sophisticated SV VC
| types. He got funded by dozens of billionaires.
|
| Funny enough SBF openly described his cynical scam months
| ago, explaining both how shit coins and greedy VCs operated.
| bondarchuk wrote:
| >* Their model is closer to DeFi than their competitors who
| are CeFi*
|
| CeFi is CeFi, Binance is CeFi.
| flanked-evergl wrote:
| Vote out the politicians who are not prosecuting Binance then
| also. Not sure how two wrongs make it okay that FTX were
| ghost writing crypto regulation [1].
|
| [1]: https://coingeek.com/ftx-sam-bankman-fried-pens-crypto-
| regul...
| Semaphor wrote:
| What fraud does Binance do besides evading U.S. regulations?
|
| note: This is an actual question.
| perlgeek wrote:
| If the story goes like FTX, we'll only know after it's too
| late.
|
| Not being incorporated anywhere (which is the last thing I
| heard about the matter) is an extremely bright red flag, so
| that's some evidence (in the Bayesian sense) that
| _something_ is off.
| xiphias2 wrote:
| I'm sure they are doing (or at least were doing) fractional
| reserve banking as well. They have their own token just
| like FTX, wihch is a bad sign. Maybe right now they are
| working on fixing it.
|
| Kraken is one of the few exchanges that provide proof of
| reserves, which is basically just a Merkel tree of all user
| assets which users can use to check that the exchange holds
| their money. This is not just trivial to implement, there
| are open source implementations that exchanges could just
| use and prefer not to.
| DebtDeflation wrote:
| A Merkle tree may show what crypto assets are held, but
| it doesn't stop the exchange from having a balance sheet
| with a negative $8bn entry described as "hidden, poorly
| internally labled 'fiat@' account".
|
| Until these crypto companies are audited by actual
| recognized auditors I would just assume that everything
| they say is suspect.
| saurik wrote:
| The auditor that Kraken used claims to be "one of the top
| 25 largest accounting, consulting and technology firms in
| the U.S.". Is the idea that they aren't "auditors"?
| JumpCrisscross wrote:
| > _auditor that Kraken used claims to be "one of the top
| 25 largest accounting, consulting and technology firms in
| the U.S.". Is the idea that they aren't "auditors"?_
|
| Armanino was FTX's auditor [1].
|
| [1] https://www.afr.com/companies/financial-services/ftx-
| collaps...
| Yizahi wrote:
| "The results of our most recent audit were once again
| verified by top-25 global accounting firm, Armanino LLP.
| " (1)
|
| So from this I read that Kraken has done audit themselves
| and then some other firm has verified it. This (if true)
| is called attestation, and not audit. Attestations are an
| empty claim with no proof in the tokenbro industry.
|
| And second issue I see (directly related to the first) -
| they list some tokens they are auditing. Auditing on
| chain. But what if the Kraken company has a completely
| off the chain liabilities? Like a contract where they
| loan money/btc to some shady person and get some
| worthless tokens as a collateral in return. You can't see
| this on chain, only a real independent audit can uncover
| such things.
|
| (1) https://blog.kraken.com/post/15002/kraken-proof-of-
| reserves-...
| DebtDeflation wrote:
| Top 25 means literally nothing. Outside of crypto,
| billion dollar a year companies use the Big 4 (Deloitte,
| PWC, EY, KPMG) for their audits. There is a second tier
| of maybe a half dozen audit firms (Grant Thornton being
| probably one of the best known) below the Big 4, used by
| smaller companies. By the time you get to #25 you're
| dealing with mom and pop shops.
|
| Also, this wasn't an "audit" in the traditional sense of
| the word, it was an attestation as to proof of reserves
| based on the Merkle tree.
|
| The press release about the "audit" is full of red flags:
|
| "Administered by Armanino LLP, the Proof of Reserves
| audit is the second of its kind conducted on our exchange
| since 2014". Two audits in eight years, lol.
|
| "Though the audit covers just two of the over 100 assets
| available for trading on our exchange". They only checked
| BTC and ETH reserves, nothing else, lol.
|
| From the audit report itself:
|
| "This report may not be suitable for any other purpose.
| The procedures performed may not address all the items of
| interest to a user of this report and may not meet the
| needs of all users of this report and, as such, users are
| responsible for determining whether the procedures
| performed are appropriate for their purposes."
|
| "We were not engaged to and did not conduct an
| examination or review engagement, the objective of which
| would be the expression of an opinion or conclusion,
| respectively, related to the platform account liabilities
| and asset balances represented by Kraken. Accordingly, we
| do not express such an opinion or conclusion. Had we
| performed additional procedures, other matters might have
| come to our attention that would have been reported."
|
| "The practitioner's report is as of a specified point in
| time and we have no responsibility to update the report
| or findings therein for subsequent points in time."
|
| All this "audit" tells you is that on December 31, 2021
| Kraken had an amount of BTC and ETH that matched customer
| deposits. That's it. Nothing about other coins. Nothing
| about assets and liabilities overall (e.g., did they take
| out loans using customer BTC as collateral). Nothing
| about financial practices. Nothing about what they may or
| may not have had the day before or the day after.
| Semaphor wrote:
| This is pretty cool [0] is the Kraken page, at [1]
| someone collected both background information, links, and
| PoR entities, and finally a 2014 post of Kraken's first
| PoR audit [2].
|
| [0] https://www.kraken.com/proof-of-reserves
|
| [1] https://niccarter.info/proof-of-reserves/
|
| [2] https://bitcointalk.org/index.php?topic=528432.0
|
| Edit: And here is CZ of Binance claiming they'll do it
| soon as well: https://nitter.kavin.rocks/cz_binance/statu
| s/159005581941633...
| Yizahi wrote:
| Have you read Kraken's own page about that? Here is a
| quote:
|
| "The results of our most recent audit were once again
| verified by top-25 global accounting firm, Armanino LLP.
| " (1)
|
| So from this I read that Kraken has done audit themselves
| and then some other firm has verified it. This (if true)
| is called attestation, and not audit. Attestations are an
| empty claim with no proof in the tokenbro industry.
|
| And second issue I see (directly related to the first) -
| they list some tokens they are auditing. Auditing on
| chain. But what if the Kraken company has a completely
| off the chain liabilities? Like a contract where they
| loan money/btc to some shady person and get some
| worthless tokens as a collateral in return. You can't see
| this on chain, only a real independent audit can uncover
| such things.
|
| (1) https://blog.kraken.com/post/15002/kraken-proof-of-
| reserves-...
| Semaphor wrote:
| Unless I'm misunderstanding things (as a non-finance
| person that is very possible), this is not a normal
| audit, but instead proof, that they actually have the
| customer tokens they claim to have.
| anonymoushn wrote:
| Binance regularly closes deposits or delays deposits by
| hours in an apparent attempt to allocate arb opportunities
| to their internal trading desk instead of customers. For
| example, in May, we sent some LUNA to Binance whole the
| chain was working perfectly, then waited several hours
| whole chatting "VIP support" about the delay while they
| told some implausible lies about multi-hour internal
| network latency (????).
| wweeeebb wrote:
| This is a false equivalence. FTX stole customer deposits and
| lied about it, to the tune of billions of dollars.
| howmayiannoyyou wrote:
| Nobody will be voted out. You cannot get elected without cash,
| but if you do then you can't remain in office without it. You
| also won't influence legislation without money in your campaign
| or PAC wallets.
|
| If HN users want to impact policy and legislation, its not
| happening without donating a lot of money (or to a limited
| extent time) en masse to lobbyists and institutes that believe
| in whatever it is you believe in.
|
| Better to be slapped with the truth, than kissed with a lie,
| and having worked in politics, this is the truth.
| [deleted]
| nisegami wrote:
| I've wondered a lot about a hypothetical scenario where
| people organize and crowdfund a pool of money with the intent
| of disbursing it to anyone who votes for the legislation they
| want. For example, vote to codify Roe and you can get a slice
| of the pie. It's almost surely explicitly illegal though, but
| the absurdly wealthy are already playing this game, why can't
| we do it too?
| pge wrote:
| Isn't this essentially what a PAC is?
| nisegami wrote:
| My understanding is that a PAC can pay for advertising
| and campaign costs but I'm suggesting literally just
| giving it to them, straight to their bank account.
| danaris wrote:
| I'm not particularly well-versed on the relevant
| statutes, but I strongly suspect that that would make it
| bribery.
| pjc50 wrote:
| You've got to launder it a little bit to make it look
| respectable.
| vharuck wrote:
| The National Rifle Association pretty much does this. One
| could also count professional organizations that lobby and
| are funded by dues.
| PeterStuer wrote:
| I find it curious Musk was able to snif out SBF as a bullshit
| artist in his 30 min. Meeting with him, whereas countless
| polititions and regulators aparently did not have a clue despite
| years of meetings and other contacts.
| strikelaserclaw wrote:
| Elon Musk is a master self promoter, so i would take what he
| says with a bit of caution.
| highwaylights wrote:
| Yeah that never happened. The only thing clear from those
| messages was that he wanted the money and was simply asking if
| the guy was good for the cash.
|
| Musk and the religion that's built up around him in recent
| years exist in two separate realities.
| SilverBirch wrote:
| Think we need to take that with a massive pinch of salt - Musk
| only came out and said that _after_ the whole thing blew up.
| The actual contemporaneous messages are simply that SBF wanted
| block-chain twitter and Musk didn 't. It's easy for all the SV
| people who didn't work with SBF to come out and act the genius
| now, but it's a bit self-serving.
| TotoHorner wrote:
| The politicians and regulators wanted SBF's money. Musk didn't
| need it.
| mudrockbestgirl wrote:
| What a bunch of BS. It's obviously easy to say that in
| hindsight. There are a million reasons for why he did not take
| the investment, but in none of the published conversation was
| anything about him thinking SBF is lying. In fact, knowing
| Elon, if he had really said that at some point before FTX
| collapsed, he sure would have published it by now to prove how
| smart he is.
| highwaylights wrote:
| bingo.
| memish wrote:
| He was skeptical even though SBF wanted to _give him money_ ,
| not the other way around. And people Elon knew were pushing
| for SBF. Elon ended up ghosting him anyway. Look at the chat
| logs that were revealed in court.
|
| Michael Grimes [IBanker at Morgan Stanley]: Do you have 5
| minutes to connect on possible meeting tomorrow I believe you
| will want to take?
|
| Elon: Will call in about half an hour
|
| Michael: Sam Bankman Fried is why I'm calling
| https://twitter.com/sbf_ftx/status/1514588820641128452 https:
| //www.vox.com/platform/amp/recode/2021/3/20/22335209/s...
| https://ftx.us
|
| Elon: ??
|
| Elon: I'm backlogged with a mountain of critical work
| matters. ls this urgent?
|
| Michael: Wants 1-Sb. Serious about partner w/you. Same
| security you own
|
| Michael: Not urgent unless you want him to fly tomorrow. He
| has a window tomorrow then he's wed-Friday booked
|
| Michael: Could do $5bn if everything vision lock. Would do
| the engineering for social media blockchain integration.
| Founded FTX crypto exchange. Believes in your mission. Major
| Democratic donor. So thought it was potentially worth an hour
| tomorrow a la the Orlando meeting and he said he could shake
| hands on 5 if you like him and I think you will. Can talk
| when you have more time not urgent but if tomorrow works it
| could get us $5bn equity in an hour
|
| Elon: Blockchain twitter isn't possible, as the bandwidth and
| latency requirements cannot be supported by a peer to peer
| network, unless those "peers" are absolutely gigantic, thus
| defeating the purpose of a decentralized network.
|
| Elon: ["disliked" "Could do $5bn ..."]
|
| Elon: So long as I don't have to have a laborious blockchain
| debate
|
| Elon: Strange that Orlando declined
|
| Elon: Please let him know that I would like to talk and
| understand why he declined
|
| _Elon: Does Sam actually have $3B liquid?_
|
| Michael: I think Sam has it yes. He actually said up to 10 at
| one point but in writing he said up to 5. He's into you. And
| he specifically said the blockchain piece is only if you
| liked it and not gonna push it. Orlando referred Sams
| interest to us and will be texting you to speak to say why he
| (Orlando) declined. We agree orlando needs to call you and
| explain given everything he said to us and you. Will make
| that happen We can push Sam to next week but I do believe you
| will like him. Ultra Genius and doer builder like your
| formula. Built FTX from scratch after MIT physics. Second to
| Bloomberg in donations to Biden campaign.
|
| https://danluu.com/elon-twitter-texts/#62
|
| Will MacAskill [co-creator of effective altruism movement,
| Oxford professor, Chair of board for Global Priorities
| Institute at Oxford]: Hey - I saw your poll on twitter about
| Twitter and free speech. I'm not sure if this is what's on
| your mind, but my collaborator Sam Bankman-Fried
| (https://www.forbes.com/profile/sam-bankman-
| fried/?sh=4de9866...) has for a while been potentially
| interested in purchasing it and then making it better for the
| world. If you want to talk with him about a possible joint
| effort in that direction, his number is [redacted] and he's
| on Signal.
|
| Elon: Does he have huge amounts of money?
|
| Will: Depends on how you define "huge"! He's worth $24B, and
| his early employees (with shared values) bump that to $30B. I
| asked about how much he could in principle contribute and he
| said: "~$1-3b would be easy-$3-8b I could do ~$8-15b is maybe
| possible but would require financing"
|
| Will: If you were interested to discuss the idea I asked and
| he said he'd be down to meet you in Austin
|
| Will: He's based in the Bahamas normally. And I might visit
| Austin next week, if you'd be around?
|
| Will: That's a start
|
| Will: Would you like me to intro you two via text?
|
| _Elon: You vouch for him?_
|
| https://danluu.com/elon-twitter-texts/#12
| xdavidliu wrote:
| > Elon: Blockchain twitter isn't possible, as the bandwidth
| and latency requirements cannot be supported by a peer to
| peer network, unless those "peers" are absolutely gigantic,
| thus defeating the purpose of a decentralized network.
|
| Anyone able to evaluate this comment? Is this another
| "poorly batched 1000 RPCs slowing down home timeline"
| remark?
| 55555 wrote:
| It's absolutely true.
| chubot wrote:
| It's true, and the RPC comment is also very plausible
|
| It's definitely not as ridiculous as what lots of
| experienced engineers are oddly saying
|
| e.g. simply open up Twitter in Chrome's devtools and look
| at the networking tab -- I get 148 requests that finish
| in 6.3 seconds
|
| That is very plausibly "1000 poorly batched RPCs" that
| makes Twitter slow in other countries -- if it's 6
| seconds for me, it's easily 20, 30, or 60 seconds for
| others
|
| It will be shocking to me if some executive attention on
| latency can't halve it, in short order. The problem with
| latency is that no one team is in charge of it -- every
| team is incentivized to use as much latency budget as
| possible to ship their feature.
|
| Larry Page harped on at this at Google for a decade,
| until he kind of gave up / moved on, and Google became
| nearly as slow as every other website.
|
| So Elon is absolutely doing the right thing with respect
| to latency -- he's not wrong, and he's not micro-
| managing.
|
| ----
|
| Yes Elon is not infallible -- he made flatly wrong claims
| about self-driving for years, despite experts in the
| field telling him otherwise, to his financial benefit.
| And Tesla is being rightly investigated for those claims
| (years too late, probably)
|
| It doesn't mean that Twitter isn't slow as hell for
| extremely basic reasons
| memish wrote:
| > It's definitely not as ridiculous as what lots of
| experienced engineers are oddly saying
|
| It's scary how many engineers are burning their
| credibility in exchange for some temporary internet
| points.
| searchableguy wrote:
| No, it's true.
|
| Theoretical TPS limit for mainnet and L2s isn't enough to
| support the scale of twitter. The writes will get
| expensive very fast unless you offload that and only send
| a batched proof. Putting actual content on blockchain is
| a non-starter as well.
|
| Most of the blockchain based social graphs end up using
| centralized indexer.
|
| Everyone is also dependent on centralized RPC providers
| for querying and sending transactions since it requires a
| lot of resources to maintain your own.
|
| So peer to peer isn't possible at their scale depending
| on how you interpret it.
| kingkawn wrote:
| Takes one to know one
| spaceman_2020 wrote:
| I'm amazed that a man can build a company that literally
| created a reusable rocket and people will still call him a
| "bullshit artist".
|
| Also incredible how everyone on the left turned on Musk so
| quickly because he...tweeted some bad jokes?
|
| Strange reality we live in where your actions seem to matter
| so much less than your words.
|
| I thought it was the other way around.
| [deleted]
| jasonwatkinspdx wrote:
| Just to explain as someone that was initially a fan of Musk
| but now highly critical of him:
|
| SpaceX owes a great deal of it's success to the people
| around Elon, particularly Shotwell, minimizing his bad
| behaviors. Compare this to Tesla and now Twitter, where
| Elon has unilateral power. At the first he managed to get
| in trouble with the SEC in the dumbest way possible, as
| well as continues the Fully Self Driving saga that many of
| us regard as fraud, the solar tiles debacle, etc. At the
| latter he's treating employees in an utterly reprehensible
| and illegal way. He's currently under investigation for
| similar behaviors at Tesla but involving far fewer
| employees.
|
| The left hates Elon more for his union busting and abusive
| labor practices than bad jokes, but bad jokes certainly
| don't help Elon any when it comes to PR.
|
| I can give Elon credit for advancing the timelines of both
| EVs and solar power, and applaud SpaceX for their
| innovation, while also being highly critical of Elon's
| general behavior and treatment of the people who work for
| them.
|
| Put more bluntly: I AM judging Elon on the basis of his
| actions. Your position is actually that SpaceX is so cool
| it forgives all wrongs.
| spaceman_2020 wrote:
| The EV industry as well as the spacetech industry would
| have none of the momentum they currently have if there
| was no messianic figure like Musk leading the pack.
|
| Industries need charismatic evangelists to attract
| capital. Musk made investing in serious hardware ventures
| cool.
|
| Now all the billionaires have their own space companies
| just to compete with Musk.
|
| All in, a net positive. Otherwise Bezos billions might
| have gone into yet another superyacht.
|
| If you get an abrasive personality with it, that's a
| decent bargain.
| MichaelCollins wrote:
| > _Now all the billionaires have their own space
| companies just to compete with Musk._
|
| Do they? The only other billionaire-owned space company
| that comes to mind is Blue Origin, but they were founded
| _years before_ SpaceX. (Which incidentally, seems to
| debunk the common argument that any billionaire funding a
| space program would have success similar to SpaceX /Musk.
| If success with such funding were inevitable, Blue Origin
| would have gotten to orbit years ago but in reality they
| still haven't.)
| memish wrote:
| You get a lot of internet points and clicks for jumping on
| the hate bandwagon and cynically tearing people down.
|
| Maybe if they weren't so focused on a manufactured villain,
| and people and the media had put even a tiny fraction of
| this scrutiny on SBF, an actual fraud might have been
| mitigated. But no, let's go after the guy putting rockets
| in space and producing millions of electric cars in the
| real world. He's the real bad guy!
| spaceman_2020 wrote:
| Just surprised that HN has been flooded with the same low
| tier takes on Musk and tech culture in general. This
| audience usually understands nuance better
| Yizahi wrote:
| People are acting towards him like that exactly because
| they praised him before and were holding him at high
| esteem. I certainly did. Now he started to disappoint
| people, multiple times.
|
| Nobody cares (much) about CEO of Comcast, or BP, or
| Electronic Arts. They have bad reputation and when they do
| something bad again, people just shrug and move on. While
| people with good reputation doing same things are discussed
| a lot.
|
| Also note that Comcast, BP, EA etc. are all successful
| businesses. They just shitty to humans, but successful. So
| founding a big successful technology company is a big
| achievement, but not a unique one.
| spaceman_2020 wrote:
| Founding multiple big successful companies in nascent
| industries that had been starved of capital before is a
| unique AND big achievement.
|
| Nobody cheers on Bezos because of Blue Origin. They
| praise him for building Amazon when e-commerce was still
| new (or when dot coms had gone out of favor).
|
| Same with Musk. There are multiple major private space
| ventures now. Ever car company has a heavily funded EV
| division. When Musk started, EVs were considered a joke
| and private space tech had little to no capital.
|
| Musk is unique because he put his money into industries
| no big money would touch before him.
| MichaelCollins wrote:
| > _Nobody cheers on Bezos because of Blue Origin._
|
| I honestly think they would, _if_ Blue Origin actually
| did anything worth cheering. Their best achievement so
| far is stalling ULA 's Vulcan Centaur for years. By the
| time it flies it will most likely be utterly obsolete,
| because Blue Origin has fumbled the BE-4 severely. Vulcan
| Centaur was supposed to fly in 2019 but Blue Origin only
| delivered some engines about a few weeks ago. They're
| years late and it's hurting ULA badly. Because of Blue
| Origin, SpaceX's Starship will probably fly before Vulcan
| Centaur. Vulcan Centaur is meant to be a HLV marginally
| more performant than Falcon 9, but Starship should wipe
| the floor with both.
| rkagerer wrote:
| One thing that stuck out at me in the NYT puff-piece was:
| Alameda had accumulated a large "margin position" on FTX,
| essentially meaning it had borrowed funds from the exchange ...
| He said the size of the position was in the billions of dollars
| but declined to provide further details.
|
| Did FTX use their pool of customer deposits to extend leverage to
| margin traders?
| anonymoushn wrote:
| The NYT is just lying. The people who controlled both FTX and
| Alameda stole funds from FTX (which FTX customers have claims
| against) and gave them to Alameda
| shawabawa3 wrote:
| Alameda went underwater on loans and they transferred customer
| funds from FTX to bail them out
| moffkalast wrote:
| They couldn't find the nucular wessels.
| jamesholden wrote:
| spaceman_2020 wrote:
| Going through all their shenanigans, any legal activity on the
| exchange was rare. Extremely criminal behavior. SBF would buy
| tokens from his personal account, Alameda would then buy the same
| tokens, and then FTX would list those tokens after Alameda bought
| them.
|
| Criminal beyond measure and it's absurd that all of these big
| name funds did not do even ten minutes of due diligence.
|
| The Ontario Teacher's Pension Fund was "investing" in trash like
| this without even looking at their corporate governance. How do
| you treat a pension fund like that?
| mckirk wrote:
| I'm not actually sure that particular move is criminal. Morally
| reprehensible, most certainly, but my understanding was that,
| since crypto isn't regulated like a security by the SEC or
| anyone else, you are free to pump&dump all you want without
| having to fear legal consequences.
| jojobas wrote:
| Fraud upon fraud upon embezzlement upon fraud fraud.
| AustinDev wrote:
| When do we find out the fund's partners bought the tokens
| before FTX listed them? That's what I'm waiting for it's the
| only way the lack of DD makes any sense.
| remoroid wrote:
| For even more context of how bad SBF was at League of Legends, a
| large part of their player-base is children and teens. You would
| not expect a normal functioning 30 year old man to lose to 12
| year olds after years of playing with the frequency he did.
| pjc50 wrote:
| Eh, I'd expect the obsessive 12 year olds to beat the 30 year
| old with a job every single time.
| thinkingemote wrote:
| From what I understand (only seen a game, not played it),
| League of Legends is more similar to Starcraft where it's about
| strategy, knowledge and timing than the necessary very fast
| reaction times of teenagers found in a first player shooter.
|
| You would expect even retired people to be good at the game if
| they played enough.
|
| Regardless, playing video games, doing drugs, looking
| dishevelled and being over weight are all visible signs of some
| kind of internal disorder. Most people don't wear their
| disorder visibly, they either learn to hide it or it doesn't
| reveal itself physically. In this episode it's like the signs
| are treated as a good sign - of creativity.
| rejectfinite wrote:
| You need both micro and macro in Leauge for sure. Depening on
| the hero/champ being played.
| rxyz wrote:
| I don't think League is a popular game in that demographic. I
| see it as a old man/woman game now, like counter strike
| remoroid wrote:
| Do you have any data to back that up? Do you not understand
| that the lowest ranked players on the server are going to
| disproportionately include children that are bad?
| pezezin wrote:
| https://www.statista.com/statistics/1018224/league-of-
| legend... https://theglobalgaming.com/lol/average-age-
| player
|
| According to that data, most players are between 18 and 34
| years old, with children and teens being only 12% of the
| demographics.
| Lapsa wrote:
| "it is actually shocking that SBF was unable to rank higher
| than the Bronze or Silver league after years of regular play"
| ouch... author certainly does not play league of legends.
| ladder is broken, you are always at the mercy of riot's
| matchmaking. there was a reddit post appropriately criticizing
| it and received around 8k upvotes - mods deleted it. even if
| you completely MinMax everything to climb (which gets quite
| tedious and boring) - actually climbing takes ridiculous
| amounts of time. and it's time sensitive - folks that play
| around 5AM could easily give Faker a run for his money, folks
| that supposedly are bronzies (I call them robo smurfs). turn
| the same game on when the school ends and the amounts of
| stupidity are overwhelming. and the older account is - the
| worse it gets. at the time I was placed in bronze - won a local
| tournament full with diamonds, masters and even couple
| challengers. and the game itself is mistake driven - gold
| differs from diamond by a single mistake that diamond player
| never lets go.
| remoroid wrote:
| Sounds like you are mad about being in Bronze where you
| belong
| Lapsa wrote:
| yeah, suck a d*ck kys or whatever you expect me to say.
| I've been in plat too multiple times but then it gets
| really really boring
| zozbot234 wrote:
| So, is this the _real_ 1) What 2) H post?
| 1letterunixname wrote:
| Not to be confused with IBM Research Almaden.
|
| https://research.ibm.com/labs/almaden/
| DebtDeflation wrote:
| > Most news accounts seem to portray the scale of the bankruptcy
| as relatively small.
|
| This is a key point.
|
| They lost $16B in customer deposits.
|
| LTCM lost $4.6B in investor funds.
|
| Enron lost $11B in shareholder capital.
|
| Interestingly, while Madoff is widely quoted as having lost $65B,
| that was almost all fabricated paper wealth, actual losses were
| around $18B and $14.4B of that was recovered and returned.
|
| All of these situations are obviously somewhat different, but if
| what we're starting to hear is correct, FTX may be one of, if not
| the, biggest financial frauds/scandals in history. The media
| doesn't seem to be treating it as such.
| ReptileMan wrote:
| Also 1MDB seems t9 be somewhere between 16-50 B usd
| ploppyploppy wrote:
| > The media doesn't seem to be treating it as such.
|
| The massive links to the Democractic party probably have
| something to do with this.
| Ntrails wrote:
| > if what we're starting to hear is correct, FTX may be one of,
| if not the, biggest financial frauds/scandals in history. The
| media doesn't seem to be treating it as such.
|
| I think the media treats anything to do with crypto as much
| more buyer beware than eg Enron
| rrrrrrrrrrrryan wrote:
| > The media doesn't seem to be treating it as such.
|
| FTX has been the lead story on the front page of the Wall
| Street Journal for days now.
| jjtheblunt wrote:
| What's LTCM?
| hollerith wrote:
| A hedge fund that went bust: Long-term Capital Management.
| jjtheblunt wrote:
| Thanks
| elie222 wrote:
| They haven't lost 16b though.
|
| Unclear if we have accurate info from Sam but the situation is
| more like 9b in liabilities with 70% of that in liquid and
| illiquid assets. People getting back that much is highly
| optimistic but the 16b doesn't seem accurate at all. FTX
| already paid users out $5b btw
| [deleted]
| anonymoushn wrote:
| The starting point is the assumption that FTX's equity sales
| left them with a few billion and Alameda's trading left them
| with a few billion. You have to burn through these billions
| and then dig a ten billion dollar hole.
| jjfoooo6 wrote:
| It's pretty clear that "info from Sam" can't by trusted
| shawabawa3 wrote:
| > 9b in liabilities with 70% of that in liquid and illiquid
| assets
|
| They have $9B in liabilities, and realistically they have
| about $1B in realisable assets. On the balance sheet Sam has
| included about $7B worth of Serum and FTT, both of which
| vastly exceed their circulating market cap and are also
| effectively worthless as the businesses they represent have
| lost all credibility and/or are insolvent (Serum is a
| decentralised exchange created by FTX)
| manholio wrote:
| > FTX may be one of, if not the, biggest financial
| frauds/scandals in history. The media doesn't seem to be
| treating it as such.
|
| Most of that wealth was manufactured in the crypto bubble, not
| actual money people worked for and put into crypto, just early
| stage ponzi investors that kept rolling their investment. The
| wealth, while apparently substantial, was never actually there,
| I think most understand that the mirage would have collapsed
| anyway if most investors would have attempted to exit earlier.
|
| Basically, any early holder of Bitcoin today, while losing 70%
| or so of the peak value, is still a bazzillion basis points in
| the black, because they can get real dollars for what is
| essentially an early and rudimentary shitcoin with arcane
| limits, slow transaction times and extreme volatility, which is
| only used in the real world for speculation, money laundry and
| trading other shitcoins. Pretty ironic that's the "gold
| standard" of the crypto world, followed by an entire brown
| spectrum of shittier and scammier tokens.
| anonymoushn wrote:
| This is simply not true. Their liabilities are in dollars
| because their customers wired them dollars.
| manholio wrote:
| Many of their customers (if not most, on volume) wired USDT
| obtained from other parts of the ponzi ecosystem, then
| traded them internally for dollars. This way, FTX could
| accumulate internal USD liabilities without ever having
| those dollars wired into their accounts. Even if we were to
| take at face value the $5 billion liabilities from SBF's
| "Excel ballancesheet", that's still less than a third of
| the loses.
|
| Sure, Tether should have a 1:1 backing to real dollars or
| dollar denominated assets - but it's like the ponzi-world's
| worst kept secret that they don't, as we'll soon find out.
| onlyrealcuzzo wrote:
| If most of the losses are USDT, how do we know Tether
| didn't just print them out of thin air to lend to FTX /
| Alameda as their "Commercial Paper"?
|
| That would be my first guess.
| MangoCoffee wrote:
| > Most of that wealth was manufactured in the crypto bubble,
| not actual money people worked for and put into crypto
|
| Its real money.
|
| https://twitter.com/Travis_Kling/status/1592198107734876160?.
| ..
|
| https://www.coindesk.com/business/2022/11/14/ikigai-asset-
| ma...
| manholio wrote:
| So the assets of a "crypto hedge fund" that somehow kept "a
| large majority" of the fund's total assets on a 3rd party
| centralized exchanged is "real money" now?
|
| That's the very definition of fake wealth, hot money
| seeking 50% returns in the hot risky mess that is the
| crypto market. The recursively leveraged self-licking
| icecream is melting down.
| boh wrote:
| The financial news (WSJ, FT, Bloomberg) is definitely less
| blase about it. There's definitely a sense that a scam is
| slowly being unearthed.
|
| I don't know if it's SBF previous political connections that
| are making most media outlets hesitant to delve into the
| details, but the scale of the failure is going to be
| unavoidable as more details emerge.
|
| Too many institutional investors got burned and they will no
| doubt be eager to prove fault lest they themselves be blamed
| for poor judgement.
| cma wrote:
| > I don't know if it's SBF previous political connections
| that are making most media outlets hesitant to delve into the
| details, but the scale of the failure is going to be
| unavoidable as more details emerge.
|
| The Ryan Salame part of it may be making both parties not
| want to look into it too much.
| jasode wrote:
| _> LTCM lost $4.6B in investor funds. [...] All of these
| situations are obviously somewhat different, [...] biggest
| financial frauds/scandals in history. _
|
| LTCM shouldn't be in that list because that wasn't fraud. That
| hedge fund had a flawed math model of volatility of their
| holdings when a cascade of events got triggered by Russia
| defaulting on their bonds. LTCM losses were magnified by their
| over leveraged positions.
|
| A bunch of PhD traders lost their wealth and got their
| reputations tarnished but it wasn't criminal activity.
| danrocks wrote:
| The book about LTCM's failure, "When Genius Failed", is a
| fascinating account of what happened, and a quick read.
| wbl wrote:
| Not just PhD. World famous economists with Nobel prizes.
| alainchabat wrote:
| I can't find which Nobel prize were in, do you have any
| names?
|
| Robert C. Merton got the nobel prize, but it seems 3 years
| later (ironic)
| pinkwinds wrote:
| Myron Scholes and Robert Merton, Economics 1997.
|
| LTCM imploded in 1998.
| [deleted]
| isthisthingon99 wrote:
| Correct. Arrogance is not illegal (yet).
| DebtDeflation wrote:
| Taking customer money and using it for something else is
| absolutely a crime. And it has nothing to do with the
| regulatory status (or lack thereof) for crypto. If a car
| dealership takes customer down payments on cars and instead
| of ordering the cars they gamble the money away in Vegas,
| they don't get to just declare bankruptcy and say "too bad
| so sad", they go to jail.
| isthisthingon99 wrote:
| To be clear, SBF/FTX total fraud.
|
| The PhD guys from LTCM, not so much. Just arrogant.
| [deleted]
| SilasX wrote:
| It had the potential to cascade to the rest of the market
| because of how they used leverage, and the only reason it
| didn't was because of emergency Fed intervention.
| kumarvvr wrote:
| That does not make it a fraud. They took investor money and
| leveraged it and made bets on basis of their mathematical
| models. Their models didn't work out.
|
| I don't think their intention was to rob / hide / betray /
| hoodwink.
| SilasX wrote:
| I was replying to this:
|
| > A bunch of PhD traders lost their wealth
|
| That is, the only reason the losses were limited to them
| was because of special intervention. Otherwise, it
| _would_ have caused losses for many others.
| ghufran_syed wrote:
| right, but if a counter-party ends up losing money
| because of incorrect assessment of credit or liquidity
| risk, isn't that _their own_ responsibility? It's like
| when someone can't pay the mortgage loan a bank lent them
| - the borrower isn't performing under the terms of the
| contract, but part of the payments that borrowers make to
| the lender is to account for that credit risk - what
| matters is if the lender has accurately priced this over
| their portfolio, taking into account how "independent"
| (or otherwise...) the individual loan risks really are.
| The liquidity problem is usually when it turns out that
| the individual loans credit and liquidity risk are NOT
| independent at times...
| SilasX wrote:
| Yes, I understand how financial contracts work. But like
| I said in my original comment[1], at the top of this
| subthread, that provides vital context for the point I'm
| making, this was big enough to have the potential to
| _cascade_ , i.e. be such a big loss -- against such a
| formerly-safe capital buffer -- as to spill over to other
| financial institutions, bankrupt them, then spill over to
| their counterparties etc, and eventually to the broader
| markets that are many degrees removed.
|
| The kind of situation they were worrying about and rushed
| to prevent in 2008, IOW.
|
| You are correct, in a trivial sense, that maybe the
| entire market should have just not trusted anyone else,
| except perhaps under extreme constraints, which would
| have amounted to almost no financial intermediation and
| thus almost no financial industry whatsoever. But even
| the most hardcore "you should have vetted your
| counterparty" finger-waggers aren't willing to go that
| far.
|
| [1] https://news.ycombinator.com/item?id=33608638
| naijaboiler wrote:
| this is exactly what happended at FTX/Alameda. A bunch of
| "smart" guys who backstopped and over-extended loans to
| players, and their losses were magnified with their over-
| leveraged positions, that was backed up with assets with no
| values. That's exactly what happens in just about every
| financial scandal.
| jasode wrote:
| _> this is exactly what happended at FTX/Alameda. A bunch
| of "smart" guys [...]_
|
| No, they're different situations.
|
| The current details trickling out of the FTX scandal is
| that CEO Samuel Bankman-Fried _secretly used customer
| funds_ to prop up Alameda which is _unethical and
| criminal_. This is fraud.
|
| In contrast, the LTCM guys _lost billions honestly and
| transparently_ via flawed math models based on
| overconfident assumptions of price spread behavior. That
| wasn 't criminal fraud. There was no illegal transfer of
| investor funds.
| naijaboiler wrote:
| ignore the fraudulent part of covering up the money, how
| Alameda lost money is the same as how LTCM guys lost
| money. guys who think they are too smart and made wrong
| predictions about the market. That part is very very
| similar. SBF then compounded it by layering fraud on top
| of the "im too smart to fail" losses by using customer
| funds to cover up the losses.
| simiones wrote:
| FTX took customer deposits (which were supposed to be held
| in custody and untouched, according to their TOS) and
| loaned them out to Alameda to gamble with. That is entirely
| different from being over-leveraged and having your debts
| default.
| JumpCrisscross wrote:
| > _FTX took customer deposits (which were supposed to be
| held in custody and untouched, according to their TOS)
| and loaned them out to Alameda to gamble with_
|
| This is what I initially suspected. But we can see FTX's
| balance sheet [1]. There is no loan to Alameda. "FTX shot
| its customer money into some still-unexplained reaches of
| the astral plane" is the best explanation we have for
| billions of missing dollars [2].
|
| [1] https://www.ft.com/content/0c2a55b6-d34c-4685-8a8d-3c
| 9628f1f...
|
| [2] https://www.bloomberg.com/opinion/articles/2022-11-14
| /ftx-s-...
| DebtDeflation wrote:
| I have a hunch that:
|
| >negative $8bn entry described as "hidden, poorly
| internally labled 'fiat@' account"
|
| probably had something to do with the loan as that seems
| to be roughly the amount and the description literally
| makes no sense.
| dwater wrote:
| It's also possible that the one hastily thrown together
| excel spreadsheet the CEO himself chose to release
| doesn't include the full accounting. Maybe Sam decided to
| leave off an illegal off-book loan?
| JumpCrisscross wrote:
| > _doesn 't include the full accounting_
|
| I think the running bet is there is no full accounting.
| kryogen1c wrote:
| > we can see FTX's balance sheet [1]. There is no loan
|
| The problem with this is that the customer funds are also
| not present on their balance sheet. Levine opined about
| this yesterday; Like 3 of the biggest assets are coins
| ftx didn't pay for - so where did the money go?
|
| That's why the Alameda explanation is likely, in one way
| or another. Money had to go somewhere.
| simiones wrote:
| The information about a loan from was taken from the NYT
| interview [0]:
|
| > Meanwhile, at a meeting with Alameda employees on
| Wednesday, Ms. Ellison explained what had caused the
| collapse, according to a person familiar with the matter.
| Her voice shaking, she apologized, saying she had let the
| group down. Over recent months, she said, Alameda had
| taken out loans and used the money to make venture
| capital investments, among other expenditures.
|
| > Around the time the crypto market crashed this spring,
| Ms. Ellison explained, lenders moved to recall those
| loans, the person familiar with the meeting said. But the
| funds that Alameda had spent were no longer easily
| available, so the company used FTX customer funds to make
| the payments. Besides her and Mr. Bankman-Fried, she
| said, two other people knew about the arrangement: Mr.
| Singh and Mr. Wang.
|
| [0] https://www.nytimes.com/2022/11/14/technology/ftx-
| sam-bankma...
| shawabawa3 wrote:
| That balance sheet is a total joke and of course it
| doesn't include an extremely illegal loan explicitly
| written on it
| gruez wrote:
| >FTX took customer deposits (which were supposed to be
| held in custody and untouched, according to their TOS)
|
| Can you provide the exact wording? At least when it comes
| traditional finance, if there's margin involved (FTX most
| definitely has margin), your deposits/holdings are fair
| game for your broker to use as they please.
|
| https://www.sec.gov/oiea/investor-alerts-and-
| bulletins/ib_ma...
|
| >Some margin accounts allow the brokerage firm to lend
| out securities in the account to a third-party, at any
| time without notice or compensation to the account
| holder, if the investor has any outstanding margin loan
| in the account
| HideousKojima wrote:
| "You control the Digital Assets held in your Account,"
| says Section 8.2 of the terms. "Title to your Digital
| Assets shall at all times remain with you and shall not
| transfer to FTX Trading." The terms continue: "None of
| the Digital Assets in your Account are the property of,
| or shall or may be loaned to, FTX Trading; FTX Trading
| does not represent or treat Digital Assets in User's
| Accounts as belonging to FTX Trading."
|
| https://www.axios.com/2022/11/12/ftx-terms-service-
| trading-c...
| JamesianP wrote:
| I think the "gambling" you referred to was their point,
| not the accounting games they subsequently played to try
| and get back into the black.
| simiones wrote:
| My point is that the real problem isn't that Alameda was
| over-leveraged or gambling, it's that SBF stole user
| funds from FTX to try to rescue Alameda. This is not what
| (some of) those other companies did.
| naijaboiler wrote:
| from SBF perspective Alameda & FTX are the same. Yeah
| yeah they are separate legal entities, but in actual
| practise, one market-made for the other, and he treated
| them like one is left hand, the other is right hand So
| yeah Alameda gambled, overleverated and lost money just
| like nearly every other financial crises in history, SBF
| then fraudulently moved money from FTX to cover Alameda's
| gambling losses. I won't be shocked if FTX has alway been
| the source of funding for Alameda's gambling, just that
| Alameda was winning when everything was rosy. then the
| crypto market turned
| syrrim wrote:
| They lost roughly $8B in customer deposits. The $16B cited in
| the article is the total amount of money they lost which
| includes a sizable profit that they were supposed to have made
| on their legitimate business activities.
| pinkfairy10 wrote:
| Madoff's investors "lost" more than $14.4B. Many of them were
| invested in his funds for 20-30 years and received 0.77 on the
| dollar per your comment.
| belter wrote:
| If only these calls for regulation from the two persons in this
| interview, could have been heard on time. Most interestingly,
| and as it's obvious from the interview, regulators were
| watching these children playing and only poking gently.
|
| At correct time: https://youtu.be/2ozjiX1E7ZA?t=25
| pjc50 wrote:
| The secret is that regulators can only have a fairly limited
| effect, and retrospectively. As well as the inherent
| jurisdiction difficulties in operating out of the Bahamas.
| Mind you, that's something crypto investors _wanted_ :
| freedom from government!
|
| There's a real "accountability overhang" not just in crypto
| but so many other things. Justice is slow and getting slower.
| oldgradstudent wrote:
| > The secret is that regulators can only have a fairly
| limited effect
|
| Not in this case.
|
| A momentary glance from a distance at the balance sheet by
| a semi competent bank supervisor would have noticed the
| fraud.
|
| The question: do you hold your users' assets in segregated
| account is easily asked and easily answered with no.
| bboygravity wrote:
| May have something to do with FTX having paid off both US
| political sides and having close ties to SEC's chair.
| coffeebeqn wrote:
| They were trying to push through a legislation that would
| make most of their competitors illegal
| jpm_sd wrote:
| Was that $16B in "real money" (dollars), $16B in "pretend
| money" (astronomically overvalued cryptocurrency), or some of
| each?
| prego_xo wrote:
| Considering that "pretend money" is purchased with "real
| money", this distinction doesn't matter much. I guess it just
| depends on if you consider property valuable despite not
| having a green tint and dead political figure on it.
| robertlagrant wrote:
| The question being asked is if the pretend money has risen
| in value subsequent to purchase, then is the amount lost
| the real money used to purchase it, or the pretend money at
| peak (or another) valuation.
| prego_xo wrote:
| With both the 16 billion figure being preceded by the U.S
| dollar sign, and FTX being an exchange for many different
| cryptocurrencies at drastically different values, they
| were probably adding up the dollars invested by
| stockholders and the dollars input into the website.
| After all, their FTT coin crashed and burned completely,
| and many other currencies are also dipping to record
| lows. If they valued the dollar based on current prices,
| then it would be multiples of $16B instead.
|
| Either way, the inclusion of "astronomically overvalued
| cryptocurrency" as a descriptor definitely makes it seem
| more like a slight towards crypto than an honest question
| of the valuation. Put simply, a lot of people lost a lot
| of money.
| matthewdgreen wrote:
| I wonder how much of those $16B in customer deposits were
| actually lightly-traded altcoins that could never have been
| liquidated at anything close to that value? There is no doubt
| they defrauded people of a lot of (real!) money, but my guess
| is a huge chunk of that $16B top-line figure is fantasyland
| dog-coin nonsense. Whereas the LTCM and Enron investors at
| least started with real cash.
| tommica wrote:
| But those coins were most likely purchased with real money?
| matthewdgreen wrote:
| Yes, but how much real money is the question. I'm not
| doubting that real money was lost, just wondering if $16B
| of actual customer dollars ever flowed into the exchange.
| scottyah wrote:
| Exactly, I always wondered what the real numbers looked
| like. It's so easy to mint 100 coins, get a friend to buy
| one at $100, and say you "have" $9,900.
|
| I wouldn't be surprised if the number of actual dollars
| was less than $100 million.
| tfehring wrote:
| It's easy to see how FTX's _assets_ could be "worth"
| $16B in the absence of any real money coming into play,
| but I don't see how they could get to $16B in
| _liabilities_ that way. The most obvious possibility
| would be if their liabilities were also denominated in
| thinly-traded shitcoins, but at this point it seems clear
| that that wasn 't the case.
| bena wrote:
| I think his point is that while it was bought with real
| money, it couldn't be sold for real money.
|
| If I buy 50 RandoCoins for $1 today, tomorrow it shows that
| it's now valued at $2, and then the next day RandoCoin is
| hacked and all the coins are stolen, I didn't really lose
| $100, I only lost $50.
|
| So he's wondering if the value of loss is being expressed
| as the money used the purchase the coins or the perceived
| value of the coins.
| anonymoushn wrote:
| You can just look at SBF's excel spreadsheet describing his
| own liabilities, they are mostly in dollars
| TrapLord_Rhodo wrote:
| Dog-coin nonsense has a 24hr trading volume of $669M. There's
| actually quite a bit of liquidity in crypto since it lends
| itself to HFT.
|
| BTC for instance has a 24hr TV of $37B, making it one of the
| most exchanged assets in the world.
| benjaminwootton wrote:
| Strangely, I am not hearing many stories from retail of big
| losses. There were tons of people coming out of the woodwork on
| Reddit and Twitter after the LUNA collapse. Not sure what
| that's all about.
| coffeebeqn wrote:
| Their s*tokens were mainly held by Alameda - serum and ftt.
| So probably not a ton of exposure among real users. Now when
| people won't get to withdraw their money/tokens from FTX..
| ever? That'll become a huge problem. Sounds like all the
| money is just gone on stupid gambles
| adrr wrote:
| How much shareholders capital did FTX lose? I assume they lost
| billions of investor capital.
| mkj wrote:
| If they lost it through bad bets, who was on the winning side
| of those bets?
| paulusthe wrote:
| Crypto shorts
| JamesianP wrote:
| Or just to people losing money who would have lost more had
| Alameda not bought from them on the way down.
| gruez wrote:
| Ironically keeping a short position to benefit from this
| collapse is pretty risky. Shorting requires leverage by
| necessity, which means you'll have to turn to an exchange
| like FTX, which has the possibility of collapsing.
| Decentralized lending protocols aren't much better, as
| collapses a few months ago has shown.
| super256 wrote:
| CME offers micro futures at globex: METX2 and MBTX2. You
| can short those with your typical margin rates; my broker
| gives me the same leverage as legally defined by my gov.
| pcthrowaway wrote:
| You can short by borrowing and selling as well. Even on-
| chain, though you're then susceptible to defi hacks that
| would affect your collateral
| gruez wrote:
| >You can short by borrowing
|
| that's leverage.
| Scoundreller wrote:
| An interesting part of Madoff recoveries were through
| settlements against originators/feeder funds because they <<
| ought >> to have known it was a ponzi.
|
| Unsure if FTX creditors will be able to do the same.
|
| But mostly, Madoff himself didn't really spend much money. Just
| did nothing with it. The few pieces of fancy real estate he
| lived in were actually profitable because he didn't build some
| gawdy illiquid palace.
|
| But there was a lot of time-value loss that isn't accounted
| for. Even 14 years later there are still distributions. Even
| getting $1 back on your 1995 $1 is still a big loss.
| JamesianP wrote:
| > An interesting part of Madoff recoveries were through
| settlements against originators/feeder funds because they <<
| ought >> to have known it was a ponzi.
|
| Did the judge say that? I would think the logic was that they
| were effectively getting stolen money as gifts. Like when a
| scammer gives their victims' money to their own family.
| Doesn't matter if they were in the dark or even spent it
| already.
|
| As I understand it, if stolen/scam money is used to buy
| something it's not the seller's responsibility because money
| is legal tender. On the other hand, if a stolen item is sold,
| the issue of knowing where it came from does becomes
| important.
| Scoundreller wrote:
| No, but I think they were all settlements, so one needs to
| read between the lines.
|
| But maybe you're right and it's just recoveries of their
| commissions etc.
| ChrisMarshallNY wrote:
| I'm wondering if the numbers are believable. That's because I
| think they are doing "paper valuation," like when a drug bust
| happens, and the value of the kilo is broken into "street-
| level" packets; quadrupling the value.
|
| I am not a crypto expert, but from the bit I do know, it seems
| as if it's fairly difficult to correlate fiat with crypto.
| pjc50 wrote:
| The Matt Levine article looks at that and claims quite a lot
| of it is just tokens issued by FTX themselves or related
| trading entities. In the words of Walter Sobchak from the Big
| Lebowski : "Mark it zero!"
|
| Perhaps "only" $5bn was real and much of that was from
| institutional investors. Not yet clear how many retail rubes
| have been caught up in this.
| hoseja wrote:
| Are those 2022 dollars?
| eternalban wrote:
| Unless there is some sort of event horizon in financial
| systems, it is wrong to use the word "lost" as if it is
| impossible to find out who got these kingly sums. Billions of
| dollars were "blown" and the question we should be asking, very
| forcefully, is who got that money.
| pjc50 wrote:
| It's crypto! Once it's transferred off the exchange, it's in
| a pseudonymous wallet.
|
| Just to confuse matters, it appears that both the exchange
| was hacked and an insider was draining funds just before it
| shut down. But before that, there was a lot of "money" that
| went out the door in legitimate trading losses.
| eternalban wrote:
| (I thought these [addresses] could be watched.)
|
| > there was a lot of "money" that went out the door in
| legitimate trading losses.
|
| Let's not give them easy pass on this. I could be wrong so
| correct me on this:
|
| Easy setup is to have a bunch of people setup 'shitcoins'
| and shell companies, scam people to put actual money into
| the scheme to pump the price, and then pay inflated prices
| for your fellow scam artists' shitcoins, so they clean out,
| but the chumps who bought your coin are holding the bag.
| xhkkffbf wrote:
| It could be that no one "got that money." If a stock is
| trading at $2X and the value of all of the shares is $1
| billion, no one gets the money if the stock opens the next
| day at $X. That's the problem with thinking of stock prices
| as real money. (And, indeed, real cash can also lose value
| through inflation.)
| jjallen wrote:
| This is a great point. I guess I am skeptical that everything
| will be lost, but even if it's only half it will still be an
| absolutely enormous bankruptcy and loss.
|
| If all of the actual cash, the real liquid assets were
| withdrawn leaving only illiquid, relatively valueless crypto
| tokens, and those tokens are sold down over the coming months
| then the percentage losses as a percentage of the max or total
| value they managed will be very high indeed. Sorry for the run-
| on sentence.
| anonymoushn wrote:
| The secondary market for claims against FTX is pricing those
| claims at about 5c
| matwood wrote:
| For another reference, 16B is Spotify's entire market cap. The
| amount lost here is staggering. And given what's leaked from
| their balance sheet, I don't see how people avoid jail time.
|
| I'll also add, if you want to really dig into FTX details,
| simply read Matt Levine's newsletters.
| mudrockbestgirl wrote:
| I think a lot of people are missing that it was not 16 liquid
| USD that was lost here. It was 16B of various assets on
| paper. That's different from a pretty liquid stock traded on
| the NYSE.
|
| The 16B could've never been liquidated as 16B in cash because
| the liquidity for many of these assets is too low. Selling
| even just a small fraction would have crashed the market for
| many of these assets. It's impossible to know what the liquid
| worth of these assets was, but it was probably 5-10x less
| than what's on paper.
| [deleted]
| gadders wrote:
| I can't think of any possible reason.
|
| https://fortune.com/2022/11/10/sam-bankman-fried-ftx-joe-bid...
| nova22033 wrote:
| Ryan Salame, the co-CEO, donated heavily to the GOP.
| PubliusMI wrote:
| jpadkins wrote:
| Don't fall for the red-blue trap. There is one
| establishment, which uses social issues to divide and
| conquer and create the illusion of choice.
| joenot443 wrote:
| As I've explained to others here before, there's a
| difference in magnitude which is relevant here. SBF pledged
| to donate _$1 billion_ to the Democrat party. The only
| person to spend more money on the Democrats this cycle was
| the dear George Soros.
|
| Who knows what's in store for SBF, but it's important to
| look at the facts here and acknowledge that this operation
| was heavily invested in the success of the Democratic
| party.
| amanaplanacanal wrote:
| Pledged, but it sounds like it never happened.
| DebtDeflation wrote:
| There's an even bigger difference between donating and
| pledging to donate.
|
| Salame donated $26.4M to individual GOP politicians and
| another $2-3M to GOP political organization.
|
| SBF donated $39.8M to Democratic politicians and
| organizations.
|
| Not all that different.
|
| The $1B pledge was realistically never going to happen,
| just as his offer to loan Musk $3B to buy Twitter was
| never going to happen. Even in the best of times he never
| would have been able to extract that kind of real money
| from his operation within a short time.
| SilverBirch wrote:
| This article spends quite a bit of time talking about SBF's risk
| appetite and how it might be drug related. I think that's missing
| a fairly obvious piece of logic.
|
| In order to decide to go into crypto trading you need to have an
| extremely high tolerance for risk. The crypto industry is self-
| selected for risk in the first place, you don't need complex
| explanations of why they use lots of leverage on highly volatile
| assets, that's literally the reason why they're there. If SBF had
| a low appetite for risk he wouldn't have entered crypto or
| started a start up, he would have stayed in trad-fi getting paid
| massive sums of money for some fairly basic quant work. It's not
| that Sam has a high risk appetite, it's that in order to get into
| the position Sam was in you need a high risk appetite.
|
| And that obviously poses a big problem for people who want to use
| a crypto exchange - because they can only find exchanges run by
| people with a massive risk appetite making it likely to blow up
| in your face.
| wikfwikf wrote:
| I think there's a huge difference with someone who has a huge
| appetite for risk, and someone who is taking risks, essentially
| without oversight, while on dopamine-replacing drugs. Many
| people who work in conventional finance are well aware of how
| brain chemistry changes (caused by illness, medication, illicit
| drugs, or emotional and life changes) can push someone from
| being in control while pursuing risky but profitable strategies
| to being a degenerate gambling addict.
| MichaelCollins wrote:
| Putting so much blame on the drugs seems like a way of
| casting Bankman-Fried as an addict/victim. In reality he's a
| thief and has been from the start of this scheme. He has a
| sociopathic disregard for others and cynically covers that
| with cheap talk of being an altruist.
| disqard wrote:
| Another HN commenter wrote that "EA is charity for
| sociopaths"
|
| https://news.ycombinator.com/item?id=33578131
| [deleted]
| [deleted]
| voxadam wrote:
| Archive: https://archive.ph/kkpuz
| Abecid wrote:
| Nice the site is down now for some reason
| jrochkind1 wrote:
| A side issue, but I found it distracting that the text
| consistently refers to Caroline Ellison by her first name alone,
| rather than last name or both names or initials like all other
| people discussed (and like is generally done for public figures
| covered in news articles etc).
|
| But I'm not in the "community", I don't read a lot of this inside
| baseball stuff. Is this the way she is usually referred to? It
| looks like her twitter name, in tweets quoted here, was just her
| first name too? And she's referred to by just her first name in
| the "insider's account" quoted at the end too. What's up with
| that?
| smcl wrote:
| It opens by using their full names, but goes on to refer to
| them as sbf, caroline and trabucco in the rest of the piece. I
| guess it's like "zuck" and "pg" etc, I don't _think_ it was
| meant in a bad way.
| joenot443 wrote:
| Sometimes peoples' first name ends up being what they're known
| as by the general public, usually because using just the last
| name might be ambiguous. Nobody called him "West" before the
| name change, it was always "Kanye". Similarly, one might not
| immediately know who "Winfrey" is, but everyone knows "Oprah".
|
| Presumably, since Larry Ellison is also a figure in the high-
| net-worth tech world, one might unintentionally mislead the
| reader by just using Caroline's last name, so in this case I
| see people just using her first. I don't think there's much
| more to it than that.
| jrochkind1 wrote:
| I mean in that first-name-celebrity sense, it actually is
| kind of bombastic, rather than denigrating. Is another read.
| It still seems weird to me.
|
| The celebrity first-name-ism is sort of an attempt to claim a
| global fame, as well as a sort of artificial familiarity. I
| refused to call them "Hillary" or "Bernie" either, they
| aren't my friends, they are public figures.
|
| It seems notable and weird and interesting to me in this case
| (as well as distracting as a reader who wasn't expecting it),
| but I'm not certain or making assumptions about what's behind
| it, I'm curious.
| aliqot wrote:
| she went by other names like "Fake Charity Girl"
| lzooz wrote:
| bitcharmer wrote:
| There's an interview with her where you'd think they're talking
| to some cringy teenager and not a CEO of a multi-billion dollar
| company.
|
| https://youtu.be/8yqmf9sbaZw
| highwaylights wrote:
| Not planning to, but this still really saddens me.
|
| You can have grievances about what happened here (and I'm sure
| many do), but the overtly sexual attacks on Caroline Ellison
| should disgust us all.
|
| This isn't a defence of anyone's actions. If crimes have been
| committed, they should be investigated and prosecuted. If no
| crime has been committed, maybe regulation should be introduced
| - or maybe people should learn a valuable lesson about what
| happens when you go out of your way to engage in investments
| that derive their gains from dodging consumer protection
| regulations.
|
| In any case, the attacks on Caroline Ellison reflect really
| badly on the worst stereotypes of Crypto Bros as a whole - even
| though I'm certain it's a tiny minority of people involved in
| them.
| lzooz wrote:
| What the fuck is a "sexual attack"
| highwaylights wrote:
| Maybe I'm misunderstanding your Google Images reference,
| but the content of the discussions on Reddit since this all
| kicked off have followed enough of a theme that I can take
| a guess at what some of those people have photoshopped up
| for the web masses.
|
| Probably easier to ask outright, why shouldn't I do a
| Google Images search for Caroline Ellison?
| lzooz wrote:
| Because those pictures can produce some darn explosive
| puking.
| [deleted]
| qsi wrote:
| As often is the case, Matt Levine has an amazingly detailed,
| horrific and informative rundown of it all at
|
| https://www.bloomberg.com/opinion/articles/2022-11-14/ftx-s-...
|
| The FTX "balance sheet" (which was a spreadsheet) had a cell
| called "hidden, poorly internally labled 'fiat@' account".
|
| Another key bit from Levine:
|
| "If you try to calculate the equity of a balance sheet with an
| entry for HIDDEN POORLY INTERNALLY LABELED ACCOUNT, Microsoft
| Clippy will appear before you in the flesh, bloodshot and
| staggering, with a knife in his little paper-clip hand, saying
| "just what do you think you're doing Dave?" You cannot apply
| ordinary arithmetic to numbers in a cell labeled "HIDDEN POORLY
| INTERNALLY LABELED ACCOUNT." The result of adding or subtracting
| those numbers with ordinary numbers is not a number; it is
| prison."
|
| And that's not all. This is fraud on a truly epic scale... Read
| the whole thing.
|
| Edited to add that the HIDDEN POORLY INTERNALLY LABELED Account
| had a value of negative $8 billion.
| croes wrote:
| It is always a good start when the author praises himself and
| insults others in the first paragraph. /s
| H8crilA wrote:
| > _When loans were recalled in early 2022, an emergency decision
| was made to use FTX users' deposits to repay creditors._
|
| Just so you know, this is a clear and obvious prison sentence in
| normal finance.
|
| Also FTX itself was trading with customer deposits instead of
| just keeping them like an exchange is supposed to do, which is
| also prison in normal finance.
|
| Matt Levine wrote a good piece on this debacle, and will probably
| write more. It is simply breathtaking, every paragraph evokes a
| massive "wat".
| onlyrealcuzzo wrote:
| FTX supposedly collected 0.1% commission on $100B+ volume per
| day.
|
| Why couldn't they just get a loan to cover their losses?
| vgatherps wrote:
| Neither of these numbers are correct, they imply 100M of
| profit a day.
|
| Volume is heavily weighted towards the highest tiers which on
| ftx were paying 0.015% to take and receiving 0.01% to make
| (given, alameda would receive no rebate).
|
| They've also never claimed to do 100B+ a day. They published
| stats about their volume as well as some other exchanges
| here: https://ftx.com/volume-monitor.
|
| It's stale since the collapse but they're claiming 16bn, and
| usually were claiming 5-10bn a day in the last month. Give
| some fudge factor for various traders at various tiers and
| this backs out to 1m a day order of magnitude.
|
| Not covering a multi billion dollar hole with that anytime
| soon.
| onlyrealcuzzo wrote:
| Okay - so even 0.01% on $10Bn = $1M per day = $365M per
| year, and - at the time - growing.
|
| One would think they should've been able to get a loan (if
| those numbers were real).
| H8crilA wrote:
| No one in their right mind wants to lend to scammers. They
| took customers money and used it for their own goals
| (unsuccessful trading). I cannot express how fucked up that
| is.
| [deleted]
| eternalban wrote:
| > This is, frankly, just absurd and incomprehensible. It makes
| absolutely no sensewhat is he doing? I struggle to imagine the
| state of his mind at the moment.
|
| Apparently working on his defense. Temporary loss of mental
| faculties due to drug use, along with this "it wasn't anything
| other than Sam on drugs" & (yes there it is again) "incompetence"
| article. Country club prison it is to be then, after all.
|
| I've seen tweets that question the origin story of first windfall
| of SBF. Has anyone actually vetted that initial "arb" that was
| the pretext for Forbes et al to introduce us to SBF the virtuous
| genius? These tweets claimed surprise that it could have been
| done without substantial unmentioned support. I would start
| digging there.
| NDizzle wrote:
| It's a bipartisan, top to bottom rug pull exposing the corruption
| everywhere.
|
| Fucking nothing will happen.
|
| Here is the turtle's cut, for example. Out in the open.
|
| https://docquery.fec.gov/cgi-bin/fecimg/?202210159536655878
| [deleted]
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