[HN Gopher] Sam Bankman-Fried Convicted
___________________________________________________________________
Sam Bankman-Fried Convicted
Author : donohoe
Score : 1849 points
Date : 2023-11-02 23:49 UTC (23 hours ago)
(HTM) web link (www.nytimes.com)
(TXT) w3m dump (www.nytimes.com)
| mechatrocity wrote:
| https://archive.ph/KRU47
| Dig1t wrote:
| Why does this site always captcha loop on my phone?
| lreeves wrote:
| If you're using Google DNS servers that seems to happen, I
| switched my phone back to the ISP DNS and it started working
| again.
| ndr wrote:
| It does that for me too from time to time. I wish I knew why.
| kelseyfrog wrote:
| https://news.ycombinator.com/item?id=36970702
| Vicinity9635 wrote:
| does the same thing to my computer because I think my local
| new ISP gets treated like a VPN.
|
| I cannot get through the CAPTCHA.
| conkeisterdoor wrote:
| I'd love to know too -- I've never been able to use this site
| HenryMulligan wrote:
| Apparently there are ongoing hostilities between the
| archive.* websites (archive.today, archive.is, archive.ph,
| etc.) and Cloudflare. Try changing your device's DNS settings
| to something other than Cloudflare (1.1.1.1) to access the
| archive.* website. For example, Google's DNS is at 8.8.8.8
| and 8.8.4.4 . If your browser has DNS-over-HTTPS enabled, add
| an exception for the archive.* sites. (I believe Firefox has
| it on by default and I had to add exceptions for three or
| four of the archive.* sites to be able to use them).
| inciampati wrote:
| Very helpful! Thank you. They are blocked in some
| localities as well (Italy...), I believe due to
| bureaucratic/legal issues.
| Eduard wrote:
| temporarily deactivating blokada resolves the issue for me
| mkl wrote:
| That doesn't seem to have captured the relevant new bit, hidden
| behind a "Show more".
| gizajob wrote:
| Don't teach your kids Consequentialism folks.
| candiddevmike wrote:
| Do teach your kids not to steal from rich people, lest there be
| real consequences
| gizajob wrote:
| Kind of my point. His mother, as part of her role as a
| professor of legal ethics, wrote a paper or two in support of
| consequentialism - that only the consequences of ethical
| actions are what is important. The issue with this, is that
| one can't tell in advance what they are, especially if it
| leads one to becoming completely ethically bankrupt while
| hoping for the best of all possible outcomes.
| jowea wrote:
| A bunch of average people who put their money into FTX too.
| Consider all the advertising.
| alephnan wrote:
| Effective Consequentialism
| sp332 wrote:
| And if you teach them about expected value, also teach risk of
| ruin.
| slibhb wrote:
| Extremely prescient exchange between SBF and Tyler Cowen:
|
| COWEN: Okay, but let's say there's a game: 51 percent, you
| double the Earth out somewhere else; 49 percent, it all
| disappears. Would you play that game? And would you keep on
| playing that, double or nothing?
|
| BANKMAN-FRIED: With one caveat. Let me give the caveat first,
| just to be a party pooper, which is, I'm assuming these are
| noninteracting universes. Is that right? Because to the
| extent they're in the same universe, then maybe duplicating
| doesn't actually double the value because maybe they would
| have colonized the other one anyway, eventually.
|
| COWEN: But holding all that constant, you're actually getting
| two Earths, but you're risking a 49 percent chance of it all
| disappearing.
|
| BANKMAN-FRIED: Again, I feel compelled to say caveats here,
| like, "How do you really know that's what's happening?" Blah,
| blah, blah, whatever. But that aside, take the pure
| hypothetical.
|
| COWEN: Then you keep on playing the game. So, what's the
| chance we're left with anything? Don't I just St. Petersburg
| paradox you into nonexistence?
|
| BANKMAN-FRIED: Well, not necessarily. Maybe you St.
| Petersburg paradox into an enormously valuable existence.
| That's the other option.
| Smaug123 wrote:
| The consequences were in fact catastrophic for SBF, so this
| surely can't be a demonstration that consequentialism is bad.
| If a magic oracle (that's always been right before) had told
| SBF that this was going to happen, he presumably wouldn't have
| done it, because as a good consequentialist he would recognise
| that its consequences were bad for him.
|
| He literally told us the problem, at least once, when he
| appeared on Conversations with Tyler well before all this came
| out. He said himself that he would fall victim to the St
| Petersburg paradox:
|
| > COWEN: Then you keep on playing the game. So, what's the
| chance we're left with anything? Don't I just St. Petersburg
| paradox you into nonexistence?
|
| > BANKMAN-FRIED: Well, not necessarily. Maybe you St.
| Petersburg paradox into an enormously valuable existence.
| That's the other option.
|
| (When I listened to it at the time, I didn't believe he could
| possibly believe this, because it's so patently absurd. I even
| remember exactly where I was at the time that I heard him say
| this on the podcast, it stuck out so badly. But it turns out he
| did believe it!)
| jowea wrote:
| What part of consequentialism tells you anything Sam from
| getting involved into cryptocurrency to going on a media tour
| did was a good idea?
| morkalork wrote:
| His parents must be so proud
| bordercases wrote:
| They helped him!
| bhouston wrote:
| I understand his dad seemed to be intimately involved. How did
| he avoid prosecution?
| goodluckchuck wrote:
| This was a pet project for a number for very wealthy and
| powerful criminals. SBF likely had a decent understanding of
| his role as the fall guy.
| AustinDev wrote:
| Well... this is justice. Sadly, we don't get to see justice very
| often. This is life in prison, correct? I know he hasn't been
| sentenced but all counts is easily several life sentences at the
| federal level.
|
| When do the parents go on trial? I can't see how they make it out
| of this without at least having all their ill-begotten assets
| stripped.
| beezle wrote:
| Probably a lot of concurrent sentences
| eep_social wrote:
| 115 years maximum. I haven't been following the judge closely
| enough to have a feel for how much they're going to throw the
| book vs let him off but I have to imagine it'll be the book
| given his attitude throughout. But that one rapist, Brock
| Turner, did like a year of community service so you never know.
|
| edit: Also seeing 110 years, TechCrunch said 115 here:
| https://techcrunch.com/2023/11/02/sam-bankman-fried-found-gu...
| Vicinity9635 wrote:
| Brock Turner got probation.
|
| I'd rather go to prison than go on probation. I know a _cop_
| that feels the same way.
|
| The people that think he got off easy don't know how awful
| probation is.
| throwaway5959 wrote:
| Why is that?
| Vicinity9635 wrote:
| In prison you have no freedom, but no responsiblities.
| With probation you have fake freedom with a bunch of
| extra shit you have to do - _and pay for_ - yourself.
|
| This is from NC, but look at "Common violations":
| https://www.browninglonglaw.com/library/common-
| violations-an...
|
| Miss an appointment because of a car accident? Probation
| violation.
|
| Miss a court hearing due to traffic? Probation violation.
|
| Don't pay fines or restitution because you're broke?
| Probation violation.
|
| Miss community service because you're sick? Probation
| violation.
|
| Not employed because the economy is in the shitter and no
| one will hire a felon? Probation violation.
|
| There are so many ways to get fucked that are out of your
| control and the punishment can be prison _anyway_.
|
| So it's all the downsides of prison - because you can
| still end up there - but with a bunch of extra life
| disrupting headaches that are super stressful because the
| consequences are harsh. And you have to pay for all of it
| yourself.
|
| Like I said, I know a cop that would take prison over
| probation.
|
| _A cop._
| SoftTalker wrote:
| Yeah they force you to do things that regular people do.
| Be on time, keep a job, and pay your bills. It's just
| terrible.
| Vicinity9635 wrote:
| The consequence for those isn't going to prison.
|
| Isn't snark supposed to be against the rules here?
| SoftTalker wrote:
| It's the alternative to prison. What would you require if
| it were up to you?
| zerocrates wrote:
| Well, no problem: if you really feel that way, then you
| can just violate the terms immediately and get sent to
| prison.
| Vicinity9635 wrote:
| People literally do that for that reason.
| leetcrew wrote:
| by the same logic you could argue that prison is strictly
| worse than probation, because you can always swap
| probation for prison by violating it. and yet, most
| people at least try to satisfy the terms of probation
| when given a choice.
| Vicinity9635 wrote:
| "by the same logic"
|
| Ah yes, the phrase that invariably preceedes a strawman
| fallacy.
| kylecazar wrote:
| If your freedom means anything to you than prison and
| probation aren't even comparable. This is silly. It's
| very basic, either you have some freedoms, or you have
| none.
|
| Why do you think the convicted (their representation)
| push for probation over jail time?
| Vicinity9635 wrote:
| Saying things aren't comparable is just bad faith.
| rurp wrote:
| Yeah but in exchange you get to sleep in a bed, eat real
| food, walk more than 8' in one direction any time you
| want, and a thousand other life experiences that are
| better than in prison. The fact that so many prisoners
| try to get out of prison into probation also undermines
| your point.
| kstrauser wrote:
| Say what? My brother's a probation officer. I'd 100x rather
| be under a PO's thumb and sleeping next to my own wife in
| my own bed in my own house than to live in even a minimum
| security prison.
|
| Probation sucks. The only thing it sucks less than is
| prison.
| Vicinity9635 wrote:
| Prison sucks. The only thing it sucks less than is
| probation.
| lazide wrote:
| Considering how easy it is to get sent back to prison if
| you're in probation, it seems like you're a small
| minority!
| salamanderss wrote:
| Minority, but not small. Something like 40% do not
| complete probation.
| mcpackieh wrote:
| Is that because they _want_ to be in prison, or because
| they 're fuckups who think they can get away with
| violating the terms of their probation but get caught?
| lcw wrote:
| I think mileage varies man. You get a good probation
| officer and can basically do as you please. You get a
| crappy one and they show up randomly everywhere. It also
| depends on if you are pushing the rules. If your
| probation officer doesn't trust you it's going to be a
| bad time
| qup wrote:
| I'll get a remote job and eat poptarts delivered by
| amazon. I won't leave the damn house unless the PO says I
| have to. He can show up and watch me program anytime he
| likes.
| woodruffw wrote:
| Maybe you could educate us.
| voisin wrote:
| Can you elaborate?
| SnorkelTan wrote:
| Probation is really only horrible for people that don't
| plan on changing.
|
| Source: friends on probation who have changed the way they
| live and friends that didn't.
| raverbashing wrote:
| "plan on changing"
|
| Yeah. The fact that they're in probation in the first
| place is probably because they have a hard time acting
| like adults in the first place and haven't past the stage
| of "kid throwing a fit" except in an adult's body
| HelloMcFly wrote:
| Knowing someone who spent a few years in jail, there is no
| way they'd agree. Maybe a year on probation is more of a
| hassle than a year in jail (I don't think so, but
| acknowledge the possibility), but whatever generous spirit
| I'll give to this balance gets more and more out of whack
| the more time we're talking. And Brock shouldn't have been
| looking at one year in jail, he should have been looking at
| something a little more standard for the crime of sexual
| assault.
|
| > The people that think he got off easy
|
| He got off easy, give me a break.
| eep_social wrote:
| Well shit, I sure did not consider the possibility that
| mentioning the canonical example of sentencing shenanigans
| would bring someone garbage enough to defend a rapist out
| of the woodwork, but here we are.
|
| FTR, I've _been_ on probation and therefore must vehemently
| disagree with your uninformed second-hand opinion.
| Vicinity9635 wrote:
| > _defend a rapist_
|
| This strawman fallacy ruins any credibility the rest of
| your comment might have had.
| dylan604 wrote:
| Have all of the people scammed been brought whole? That would
| be justice. Someone sitting in jail isn't justice. It is
| punishment for his actions. I've never understood how someone
| being incarcerated has become considered justice.
| Xeoncross wrote:
| Prior to justice-by-committee a lot of societies didn't have
| jails. Either what you did was so bad we need to end your
| life or you need to find a way to repay it even if you have
| to work for free as a slave to earn the money.
|
| I don't think that would work today, but what we have today
| doesn't work either.
| pfannkuchen wrote:
| Don't forget banishment, which isn't really an option
| today. Though I don't see why some large chunk of federal
| land couldn't be designated as a banishment target.
| RcouF1uZ4gsC wrote:
| Also don't forget corporal punishments. Whippings,
| branding, amputations were common punishments.
| jtsuken wrote:
| I feel like Elon Musk is about to propose a tech-driven
| innovative solution to this centuries old problem.
| pfannkuchen wrote:
| Banishment to Mars?
| rurp wrote:
| In many historical contexts banishment was basically
| equivalent to a death sentence.
| NateEag wrote:
| When I was younger I flirted with a banishment
| alternative to imprisonment for severe recidivist
| offenders.
|
| Fence in a few hundred thousand acres of wildlands.
|
| Send sentenced criminals in with a minimal backpack of
| survival gear, a waterproof survival manual (including a
| minified calendar), and their exit date and fingerprints
| engraved on a piece of metal (maybe their firestarter).
|
| You showed repeatedly you didn't want civilization, so
| here - you get what you chose.
|
| Man the walls with military or national guard troops who
| rotate out regularly (makes it hard to corrupt them) -
| come within 500 yards of the wall (interior or exterior)
| anywhere but a defined ingress point and you'll be shot
| after due warning.
|
| Approach an egress point from the interior with any other
| people and you all get shot. If you can't show that it's
| your exit date promptly on reaching the egress point,
| you'll be given five minutes to get clear or be shot.
|
| I'm no longer as convinced it's a good idea, and I'm sure
| the logistics are massively harder than I'm making them
| sound. It's certainly harsh and merciless.
|
| Still - there is a certain elegance to it.
| brianaker wrote:
| You are describing the plot to Robert Heinlein's short
| story "Coventry".
| NateEag wrote:
| Huh. The things I missed growing up in conservative
| homeschooling.
|
| It is a very Heinlein plot device, now that I think of
| it.
| JohnFen wrote:
| Escape From New York! Great movie.
| NateEag wrote:
| I've never watched it, but I may well have been aware of
| its existence when I first thought of the idea.
|
| I think the concept works much better if it's wilderness,
| though. Even a ruined, abandoned city has an endless
| supply of the artifacts of civilization, so those
| imprisoned don't really get to understand what it is
| they've chosen.
| soup10 wrote:
| They also had exile back in the day, among other
| punishments between life and death and incarceration.
| tornato7 wrote:
| It seems likely that the FTX creditors will be made whole or
| nearly whole. This is in large part due to FTX's investment
| in Anthropic that did a 5X[1].
|
| 1: https://coinscreed.com/ftx-creditor-claims-break-50c-as-
| buye...
| glenngillen wrote:
| This might well be true, but it's not the slam dunk people
| seem to be treating it as. A private investment round can
| be negotiated by as few as two people agreeing on a price.
| It says nothing about the market clearing price for any
| other investment or sale like it does with a public market
| transaction. Public markets give you an order book of other
| competing offers where you can make some reasonable
| assumptions about how much you could sell at which price if
| you wanted to liquidate. There may be no other buyer for
| Anthropic at or near the current price.
|
| Conversely, it's a private company and scarcity of
| opportunity to get in is also a thing. So it's entirely
| possible someone will pay more than the previous round just
| to get in.
|
| Basically we don't know until the investment bankers have
| done their jobs.
| gfsdgfsdgfeds2 wrote:
| How is it "very likely" when most startups fail?
| timack wrote:
| Anthropic is still in private investment phase, lets not
| forget WeWork was "worth" $45B at one stage.
| wmf wrote:
| Since Anthropic is white-hot right now VCs would be very
| happy to pay cash for it.
| timack wrote:
| FTX liquidators need to get Masayoshi on the phone
| datavirtue wrote:
| Good luck cashing that out.
| loteck wrote:
| While I agree with your skepticism about imprisonment
| equaling justice, one element to consider is whether a victim
| of a crime can ever be "made whole." Even if a victim was to
| receive 100% material reimbursement, the act of being
| victimized can cause changes in life that look a lot like
| opportunity costs. It doesn't surprise me then that we as a
| capitalist society look to imprisonment (the ultimate
| infliction of opportunity cost) as a sort of ethereal or
| "karmic" reimbursement (even if I don't agree).
| evantbyrne wrote:
| > Have all of the people scammed been brought whole?
|
| I know zero details on where exactly the money ended up, but
| I have to imagine someone dumb enough to try and pull this
| off would have also effectively shredded a huge chunk of the
| stolen funds.
| eru wrote:
| Lots of the money indirectly ended up with clients again.
|
| FTX was an exchange. It was an attractive exchange
| partially because many things traded there offered tight
| spreads, ie difference between prices quoted for buying and
| selling. The tight spreads came from Alameda. Alameda was
| another entity connected to SBF.
|
| The problem was that Alameda wasn't actually competent
| enough to quote tight spreads and make money off them. So
| they lost many to savvier customers. FTX lent money to
| Alameda to keep them afloat. But that money was never paid
| back.
|
| There's lots of other things that went wrong. But this is
| probably the most ironic part: a large part of FTX's
| clients' lost money went to FTX's clients. (But not the
| same clients who lost money. And lots of money was lost in
| other ways.)
| deaddodo wrote:
| > I've never understood how someone being incarcerated has
| become considered justice.
|
| Because, at least for Americans, there is a retributive
| mindset. "You did wrong, now I want you to hurt"; ergo, when
| it happens, they consider it justice.
|
| As opposed to repairing the victim's situation and/or
| attempting to reform the actor/criminal into a more
| trustworthy/desirable member of society.
| buitreVirtual wrote:
| Is there any place in the world where it isn't that way?
| Honest question.
|
| How could SBF pay his victims back fully if he doesn't have
| enough assets?
| Zetobal wrote:
| Maybe early access to his next scam some of them would
| probably do it. lol.
| dlp211 wrote:
| But they are going to be made whole, or nearly so. It may
| take a while, but the guy they brought in to untangle FTX
| is the same guy that untangled Enron. He's said that FTX
| always had enough assets to cover its obligation, at
| least on paper, it just sucked at keeping track of them.
| StressedDev wrote:
| He never said FTX had enough assets to repay its
| creditors. Even worse, many of FTX's assets are worthless
| (the FTT tokens are a prime example of this).
|
| What he said was he had never seen a company with such
| atrocious record keeping. BTW, the US government would
| not have charged Sam Bankman-Fried with fraud if the
| money was all there.
| therealcamino wrote:
| Those are separate issues -- whether crimes were
| committed, and whether depositors will be made whole
| eventually. If some of the bets they illegally made end
| up paying off, enough to reimburse the people who trusted
| them, that doesn't mean it was legal or ok to take that
| money to make their own bets with in the first place.
|
| And while John Ray did say they were bad at record
| keeping, he also said that "This is just old fashioned
| embezzlement, taking money from others and using it for
| your own purposes," he said. "This is not sophisticated
| at all."
| coldtea wrote:
| > _Is there any place in the world where it isn 't that
| way? Honest question._
|
| Yes, many cultures don't have this Old Testament idea
| about justice, as if they take delight in seeing the
| prisoner suffering. This is more about sadism than
| justice.
|
| This is how they can be OK with treating criminals
| humanely, not focusing on revenge and punishment but
| rehabilitation, not having the death penalty, giving
| lighter sentences, etc. Or even to have prisons that look
| more like motels - like the Nordic prisons.
| lazide wrote:
| Seems like you're pretty far off on a tangent? What does
| this have to do with SBF?
|
| And if you think the US prison system is bad, wait until
| you see.... Well everyone else's except a handful of
| Western European countries prisons.
| chmod775 wrote:
| "If you think I'm a slow runner, just wait until you see
| my son's primary school class!"
|
| Compare yourself to your peers. What's the point of
| merely trying to be better than Rwanda.
| lazide wrote:
| Have you ever even been to Rwanda? Or are you just
| talking out of your ass?
| coldtea wrote:
| You don't need to have visited a place to be informed
| about some aspect of it, or to have a good enough idea
| based on related facts about it and the region's track
| record to use it as an example in casual conversation.
|
| In any case, here you go: "Prison conditions in Rwanda
| today remain harsh and harrowing - especially for those
| incarcerated for daring or perceived by the authorities
| to challenge the government's narrative. Today Rwanda's
| prisons are overcrowded at 174% of capacity - with the
| second highest incarceration population rate (that is,
| the number of prisoners per 100,000 of the national
| population) outside America, according to the Institute
| for Crime & Justice Policy Research. The institute listed
| Rwanda's total prison population at just over 76,000 -
| out of a national population of a little over 13 million.
| Rwanda's prisoners include thousands detained in
| connection with the 1994 genocide, the report added".
|
| or
|
| "significant human rights issues included credible
| reports of: unlawful or arbitrary killings; torture or
| cruel, inhuman, or degrading treatment or punishment by
| the government; harsh and life-threatening prison
| conditions"
|
| I think you're under the wrong impression that when the
| parent said "Rwanda" they meant Rwanda specifically, and
| they didn't just use it as a stand-in for "well known
| third world country" with the understanding that such
| countries usually have horrible prison conditions.
| lazide wrote:
| All but a handful of very sheltered countries have
| horrible prison conditions.
|
| Rwanda also has had a history of murdering vast numbers
| of folks, very recently, because of religious
| affiliation.
|
| My point is, what's up with the ridiculousness of these
| claims?
| coldtea wrote:
| > _Seems like you're pretty far off on a tangent? What
| does this have to do with SBF?_
|
| Seems like you're pretty far off the subect of the
| subthread? Have you read what we're discussing in this
| subthread? It's not SBF specifically.
|
| Even so, if you want to see how it still ties to SBF, see
| the glee with which people elsewhere on this post comment
| about "life in prison" and throwing away the key for what
| is basically financial fraud.
|
| > _And if you think the US prison system is bad, wait
| until you see.... Well everyone else's except a handful
| of Western European countries prisons._
|
| That's a pretty low bar.
| lazide wrote:
| 90%+ of the rest of the world is a low bar?
| coldtea wrote:
| For a western country, especially one with such
| pretentions of being a superior one, the "home of the
| brave/land of the free", constantly preaching as hollier
| than thou, and so on?
|
| LOL, next question?
| lazide wrote:
| Uh huh. Good luck with that in real life. Nothing in this
| thread or in my responses ever made such a claim. You're
| the one being 'holier than thou' and trying to make
| ridiculous claims.
| coldtea wrote:
| > _Nothing in this thread or in my responses ever made
| such a claim_
|
| Which is neither here, nor there. I didn't say you made
| such a claim, or that somebody in this thread did.
|
| Just pointed that it's a be low bar to being content to
| be better than "90% of countries" when that means being
| at the bottom of all your western peers.
|
| And that it's especially ironic given than Americans do
| make superioty claims, quite often, from lowly folks,
| intellectuals, and artists, to official statements by
| POTUS.
|
| It IS a low bar, and it IS especially ironic given the
| expressions of superiority - regardless of whether you or
| others in this thread share them or not.
| chmod775 wrote:
| Suppose your brother committed a crime. Do you care more
| about him being punished, or about him turning his life
| around and making amends for his actions?
|
| Maybe from that perspective it's easier to understand why
| some other closer-knit societies don't value punishment
| as highly.
| 4death4 wrote:
| Is that really true though? Singapore, for instance, is
| notorious harsh, but few would call it
| lazide wrote:
| Action without consequences is action undeterred.
|
| As many folks with problem family have had to learn.
| chmod775 wrote:
| Even in societies that put less emphasis on punishment,
| there are still consequences.
|
| I wonder who told you otherwise.
| lazide wrote:
| You seemed to, or is your rebuttal not a rebuttal?
| chmod775 wrote:
| A rebuttal of which statement?
|
| My comment tries to explain a different mindset to
| someone who seemed surprised that it exists at all, not
| directly answering their honest question, but rather
| trying to create understanding of that different way of
| thinking.
|
| There's no rebuttal here, because there was no statement
| that could be rebutted - assuming that was actually a
| _honest_ question I replied to.
| hardlianotion wrote:
| Examples of these closer societies might be helpful, and
| how they do things differently.
| chmod775 wrote:
| > Examples of these closer societies might be helpful
|
| Pretty much all of Europe.
|
| The US are often take as an example of an exceptionally
| individualistic society - in every sense of the word.
| It's also one of the most punitive countries in the world
| ( _the_ most punitive by some metrics). It 's really not
| hard to find places that are both closer to the other
| side of the spectrum and less punitive. Drop a pin on a
| map.
| KptMarchewa wrote:
| Scandinavia is not "all of Europe".
| chmod775 wrote:
| Correct.
| hardlianotion wrote:
| Look. I am not an American and your answer doesn't tell
| me much. A name of a country that you think is somehow
| representative of the international mainstream and the
| features of their justice/penal system that are an
| improvement would help me understand your point better.
| deaddodo wrote:
| Norway, Sweden, Germany, Ireland, Austria, etc. Pick one.
| Compare them.
|
| Or ask something specific, no one here is going to give
| you a full run down of _every_ European nation 's penal
| system along with the US one for you to compare and
| contrast.
| dylan604 wrote:
| How can he pay them back if he's in jail? I'm not saying
| he shouldn't be sent to jail, but the whole concept of
| expecting someone to pay someone else back by being in
| jail has always just struck me as strange.
| Simulacra wrote:
| We do have a passion for vengeance in America. I think that
| feeling is what defeats prison reform, what politician
| wants to be seen a soft on crime?
| hcurtiss wrote:
| Suffering consequences for crime is, to most people, an
| element of justice. That form of justice also has the
| benefit of deterring other would-be criminals. There are
| those who believe there is no deterrent effect. They're
| idiots.
| rmk wrote:
| That's reflected in sentencing guidelines. The more serious
| the crime the higher the sentence. Expecting to walk away
| from a crime of such magnitude is just not realistic.
|
| Sometimes, it's important to make an example out of
| criminals, so that future criminals are deterred. Thus,
| strict punishments are a social necessity.
|
| EDIT: A lot of folks think financial crimes are pretty much
| victimless crimes, and thus financial criminals deserve
| leniency. However, just because we can't see the harm
| doesn't mean it doesn't exist. SBF has probably reduced
| hundreds of not thousands to penury. Those people will pay
| the price for his wrongdoing, possibly for the rest of
| their lives.
| LastTrain wrote:
| Yeah if they'd just let him go he'd go right out and make
| everyone whole again. He's going to jail to hopefully keep
| other people from doing similar things. I'd like to see more
| jail for white collar crime - otherwise it's just gambling.
| ziddoap wrote:
| The post your are replying to didn't say that punishment
| wasn't necessary, just that punishment and justice aren't
| really the same thing. Ideally he would be punished for his
| actions _and_ there would be justice for the victims (i.e.
| being made whole).
| CydeWeys wrote:
| He's also going to jail to prevent him from defrauding more
| people. Meanwhile Adam Neumann is still out there starting
| new sketchy companies taking people's money, most recently
| some crypto token thing (because of course he would). If
| Masayoshi Son had been less interested in saving face and
| more interested in getting justice, Adam might be behind
| bars too. One could imagine a case for fraud being made
| there.
| StressedDev wrote:
| Failing is not fraud. How did Adam Neumann commit fraud?
| Where is your evidence?
| babl-yc wrote:
| Depends on how you define the word.
|
| "Justice is the ethical, philosophical idea that people are
| to be treated impartially, fairly, properly, and reasonably
| by the law and by arbiters of the law, that laws are to
| ensure that no harm befalls another, and that, where harm is
| alleged, a remedial action is taken - both the accuser and
| the accused receive a morally right consequence merited by
| their actions"
|
| https://www.law.cornell.edu/wex/justice
| MrRolleyes wrote:
| Yes, we in the US have a punitive justice system, which
| emphasizes punishment under the dubious concept of punitive
| deterrence over remediation and other forms of deterrence
| (eg poverty reduction, though that is obviously irrelevant
| here).
|
| Anyway, a law institution certainly has an incentive to
| push their own agenda when it comes to the theory of
| justice.
| notyourwork wrote:
| I guess those people define justice as an eye for an eye. I
| see your point though.
| leetcrew wrote:
| unfortunately people don't just steal large sums of money and
| sit on it. it's rarely possible to make the victims whole
| without unwinding a web of (plausibly) good faith
| transactions involving others. having the perpetrator's
| transgressions officially recognized and issuing a sentence
| that may deter others is about as good as it gets.
| fasthands9 wrote:
| If someone steals $100 from me, and then a friend feels bad
| for me and gives me $100, that isn't justice.
|
| I think the historical use of justice has nothing to do with
| the victim being made whole - and not sure that word usage is
| a useful concept here.
| franga2000 wrote:
| While I agree that much more focus should be given to helping
| victims and much less to retribution, deterrence is also a
| key pillar of the justice system and should definitely be
| exercised here. It's likely not possible to make all victims
| "whole again", but we can make up for that by "making an
| example" to other potential criminals, showing them the
| "danger" of committing similar crimes. If "the next SBF" sees
| the risk of life in prison isn't worth it and decides against
| running a similar scheme, we've actually saved more people
| than we could've by only repaying damages to SBF's victims.
| MrRolleyes wrote:
| > deterrence is also a key pillar of the justice system
|
| Oh is that why our justice system is so terrible at
| actually reducing crime?
| nradov wrote:
| Terrible at reducing crime compared to what? Is there
| another justice system which is better at reducing crime
| (without introducing a police state)?
| MrRolleyes wrote:
| > Is there another justice system which is better at
| reducing crime (without introducing a police state)?
|
| Many other countries--especially countries nearly as rich
| as us--manage a lower crime rate with a lower proportion
| of spending on policing and lower sentencing times. I
| have full faith we can improve on those systems, too--
| there's boatloads of evidence showing that financial
| safety nets invested in over decades is a much more cost-
| effective way of reducing crime.
|
| Regardless, even in justice theory there are other
| ideologies, such as restorative justice. This is not just
| idle windbagging.
| WindyLakeReturn wrote:
| Is it terrible? If we were to remove the system and keep
| it gone for some set amount of time, once people realize
| it was really gone, would crimes not come back?
|
| We can compare to other countries and see their rates of
| crime, but such comparisons are difficult to make
| accurately because you are judging all social differences
| at once, not just a different legal system. Including
| things like how much lead has the population been exposed
| to, effect of poverty and sense of community. Things far
| beyond the legal system.
| MrRolleyes wrote:
| > If we were to remove the system and keep it gone for
| some set amount of time, once people realize it was
| really gone, would crimes not come back?
|
| Why are you comparing it to a lack of a justice system
| rather than to a more competent justice system?
|
| > We can compare to other countries and see their rates
| of crime, but such comparisons are difficult to make
| accurately because you are judging all social differences
| at once, not just a different legal system. Including
| things like how much lead has the population been exposed
| to, effect of poverty and sense of community. Things far
| beyond the legal system.
|
| Poverty is absolutely a part of the legal system--it
| takes the legal institution of private property, for
| instance, to ensure wealth stays unequal.
| rossdavidh wrote:
| Actually the last estimate I heard was that victims might
| get 90% back from the bankruptcy proceedings, depending on
| how the Anthropic shares are handled, whether the FTX
| exchange is really restarted, etc. etc. Doesn't mean he
| didn't commit fraud, just that there is an outside chance
| of the victims being made whole again.
| jowea wrote:
| I think everyone being brought whole is restitution. Justice
| is what a judge hands out.
| sob727 wrote:
| Do you have a better suggestion?
| WindyLakeReturn wrote:
| >Have all of the people scammed been brought whole?
|
| Can you ever make them whole? Even if you pay them back all
| their money, there is the period of time without, the fear
| and pain from losing it, and similar that cannot be undone.
| For other crimes, there is often a victim whose state can
| never be fully reverted. If this is our view of justice, then
| justice becomes an impossible thing which can never be
| achieved. Does such a stance risk people eventually no longer
| chasing what can never be acquired?
| anonymoushn wrote:
| Not only have creditors not been made whole, no attempt has
| been made by prosecutors or debtors to seize tens of millions
| of dollars of customer funds that were paid to SBF's close
| relatives for "consulting" or the ten million dollars he gave
| to his father.
| tempsy wrote:
| I think no less than 20 years but not sure about life either.
|
| SBF did not do himself any favors with his smug attitude that
| caused the judge himself to scold him several times during his
| examination. If he was a little more remorseful I could've seen
| some more leniency but the Judge did not like his attitude from
| what I could read following his testimony.
| underseacables wrote:
| First time offender, I bet he gets maybe 10 years. I was
| optimistic that he would be found guilty, but not on the same
| level as Elizabeth Holmes. She could've killed people, SBF...
| I think he might actually only get maybe 10 years or less.
| tempsy wrote:
| Eh disagree. Holmes got more than 10 years but she didn't
| even try to profit by selling shares or borrowing against
| shares to buy a bunch of things. The scale of the financial
| fraud is enormous and on top of that they spent hundreds of
| millions of it on luxury items and influence peddling.
|
| Would be shocked if he got less than Holmes.
| SoftTalker wrote:
| Michael Milken got 10 years, ended up serving 22 months,
| but he took a plea deal and was cooperative in other
| ways. SBF might have gotten similar if he had shown some
| contrition and taken a deal. The way he played it, he's
| more likely to get the book thrown at him.
| filmgirlcw wrote:
| Yeah Milken was responsible for way more financial crimes
| and actively profited off of literally manipulating the
| market and causing a major crash and he did 22 months and
| then got a pardon, but as you said, he cut a deal.
| Because he might be a terrible person but he's smart and
| has competent lawyers.
| hn_throwaway_99 wrote:
| Sorry to be harsh but you have no idea what you're talking
| about. Holmes was famously _not_ found guilty of defrauding
| patients, only defrauding investors.
|
| SBFs fraud totals were much, much higher than Holmes, and
| the federal sentencing guidelines indicate he'll be going
| to jail for much longer.
| qualifiedai wrote:
| "she could've killed people" - I agree and infuriating part
| of her trial is that she was not convicted of endangering
| patients or defrauding employees. She was only convicted of
| defrauding investors (some of whom were famous politicians
| and lost some money because of her).
| xkekjrktllss wrote:
| > _Sadly, we don 't get to see justice very often._
|
| A few token condemnations for the headlines is all it takes.
| dmvdoug wrote:
| That's not how sentencing works. You can't just add up the
| counts and get a number. Federal sentencing involves a
| Byzantine process, starting with the federal sentencing
| guidelines. I am not even going to attempt to wade into that
| since it makes even federal criminal lawyers get twitchy. That
| said, Ken White (a.k.a. Popehat) has suggested the time in
| prison would be _substantial_. So if /when he gets out, he'll
| be elderly.
| bsjaux628 wrote:
| Explanation https://youtu.be/kr8gSdJ_Ggw?t=4m32s
|
| Quite complex certainly
| carabiner wrote:
| The crypto Bankman will not be Fried for a long time.
| deaddodo wrote:
| > That's not how sentencing works. You can't just add up the
| counts and get a number. Federal sentencing involves a
| Byzantine process, starting with the federal sentencing
| guidelines.
|
| In what way? _Deciding_ the sentence may be complicated,
| sure; mostly due to the fact that the US system ( _ideally_ )
| wants to be lenient on first-time or very occasional
| offenders and strict on habitual offenders. (Which isn't
| always how it works, sadly, due to judge biases)
|
| However, once you receive your sentence, it's relatively
| simple. You get a charge or multiple charges with a length of
| stay and an eligibility for parole condition. It then gets
| marked "concurrent" (time in prison, after the sentencing
| date, for other crimes counts towards its requirements) or
| "consecutive" (its time needs to be served independent of
| other charges). From there, you start with all of the
| consecutive terms lined up in order of severity and the
| concurrent ones stacked alongside.
|
| There are sometimes other terms for release, but they're
| usually enumerated pretty well.
|
| That all being to say, your answer doesn't really answer the
| person who's asking. It's relatively easy to figure out the
| release date and minimum parole date from that. In fact, both
| are usually listed clearly on their sentencing documents.
| lolinder wrote:
| The original question was:
|
| > This is life in prison, correct? I know he hasn't been
| sentenced but all counts is easily several life sentences
| at the federal level.
|
| There is no a sentence yet. _Deciding_ the sentence has yet
| to happen, so OP 's answer to the grandparent is 100%
| correct: it's foolish to try to calculate the sentence
| right now, we just have to wait and see.
|
| If anything, you comment goes to _reinforce_ OP 's point:
| you yourself list 3-4 different variables that need to be
| determined _for each charge_.
| depereo wrote:
| This is massively reductive, but hey, this _is_ HN.
|
| The guidelines are 618 pages long. There are considerations
| for the person's history, for their pleas, for the # of
| counts, for the type of crime, for the victim impact, for
| the felon impact, for the societal impact, for precedent,
| for the type of intent & hundreds of other things get mixed
| in to the judgement as well. There's a good reason this
| will only be complete by March next year.
|
| https://www.ussc.gov/sites/default/files/pdf/guidelines-
| manu...
| deaddodo wrote:
| Yes, again, for _deciding_ the sentencing. OP is
| complaining about knowing how long he 'll be in jail
| _after_ being sentenced. At which point it 's _trivial_
| to deduce release date and earliest possible parole.
| pbhjpbhj wrote:
| Is sentencing deterministic?
| drcode wrote:
| It's Turing complete
| dmvdoug wrote:
| No, the judge begins with the sentencing guidelines
| calculations, and then takes into account a host of other
| factors. The judge has significant (but not absolute)
| discretion in choosing a sentence. As a general matter,
| white collar criminals more often get downward variances
| than others. But we're still likely talking in the decades
| worth of federal prison.
| buitreVirtual wrote:
| How did the other FTX kids get away with it so easy? It feels
| like prosecutors gave them deals too generous just to get SBF
| convicted more easily.
| SoftTalker wrote:
| They almost always let the small fish go to get the big fish.
| They did the same thing when they took apart the New York
| Mafia in the 1980s.
| filmgirlcw wrote:
| We don't know yet. They'll get consideration for sure but it
| is unclear where on the Nxivm scale of sex cult enablers
| they'll get. In the case of Nxivm, Raniere got life in prison
| but two of the biggest enablers of the sex cult, his co-
| founder Nancy Salzman and Smallville's Allison Mack, are both
| already out of jail. Clare Bronfman who was primarily on the
| money and intimidation stuff was sentence to 81 months and I
| think that was the highest of all the accomplices who turned
| against him and pled out.
|
| Personally, I feel like someone like Allison Mack did way
| worse crimes than the uggos in the FTX polycule, but I don't
| know enough about the sentencing statutes here to know if
| they'll get more time or not. I feel like they will, but
| we'll see I guess.
| jihadjihad wrote:
| They pleaded guilty to federal felonies. I wouldn't call it
| getting away with it so easy, even if after sentencing they
| don't face much serious prison time. The whole point of the
| trial, corroborated by the "kid" witnesses, was that SBF was
| calling the shots and thus 1) his crimes were far more
| serious and 2) the mountain of evidence made the
| prosecution's case so strong as to make the idea of a
| "sweetheart" deal for him moot.
| raverbashing wrote:
| They took the advice of their lawyers. That's some 90% of it
| LeoPanthera wrote:
| Is it Justice? Who is being made whole? What wrong is being
| made right?
|
| Because it doesn't look like justice. It looks like revenge.
| The US justice system doesn't mete out justice, it provides
| revenge.
| ceejayoz wrote:
| What would justice look like here, to you?
| MrRolleyes wrote:
| > Well... this is justice.
|
| Under a punitive justice system like we have in the US--sure.
| It doesn't seem to have improved anything at first glance,
| though.
| glerk wrote:
| > this is justice
|
| Meh. This is society taking revenge on an individual by locking
| him up and offering him no chance for redemption. Maybe that's
| the best form of "justice" we can do for now, but let's not
| celebrate it too much.
| LispSporks22 wrote:
| I will still be surprised if he spends a single day in prison
| though.
| cdchn wrote:
| He's uh.. he's already been in prison for a bit.
| LispSporks22 wrote:
| He's been sentenced then?
| marcus0x62 wrote:
| No, his bail was revoked.
| sp332 wrote:
| https://www.cnn.com/business/live-news/ftx-sam-bankman-
| fried...
|
| For example, the Rikers Island jail is mostly for pre-trial
| detention. People don't get sentenced to Rikers.
| Vicinity9635 wrote:
| No, he's been in jail. Semantic, and a bit simplified, but
| basically you're held in _jail_ pending trial, and go to
| _prison_ for a conviction.
| ozim wrote:
| Days spent in jail are counted for your "prison time" so it
| counts as such even if it is jail ;)
| hamstrunghuman9 wrote:
| You can't be told anything irl, can you?
| cdchn wrote:
| That may be better directed at that comment's
| predecessor.
| Animats wrote:
| Federal prison will be a step up from the Metropolitan
| Detention Center. Here's a guide to the best Federal
| prisons.[1] Since he will probably be serving more than 10
| years, he's not eligible for the "Club Fed" minimum-
| security federal prisons. Low-security, probably. He's not
| violent or an escape risk.
|
| [1] https://prisonprofessors.com/best-federal-prisons-to-
| serve-t...
| xdavidliu wrote:
| what do you mean?
| wmf wrote:
| Y'all don't know about deferred prosecution agreements? If they
| were going to do it that's how they would have done it. Not
| after the trial.
| matheusmoreira wrote:
| Remember: this is not a cryptocurrency problem, it's a banking
| problem. This guy created a literal bank. People deposited funds
| in it. Instead of simply being a custodian, he took the money and
| "invested" it. And lost it all.
|
| I wish this sort of thing would happen every time bankers screwed
| things up. Instead the government bails them out.
| candiddevmike wrote:
| Pretty sure banks get audited to prevent this exact scenario
| from happening.
| Kareem71 wrote:
| I guess you can call your bank a crypto bank, and skip the
| audits.
| matheusmoreira wrote:
| Not really. No amount of auditing prevents banks from going
| bankrupt. It wasn't that long ago some Silicon Valley bank
| became insolvent and suffered a literal bank run. And people
| got bailed out. Again.
| pylua wrote:
| There are lots of mechanisms in place compared to other
| types of financial institutions including bank examiners.
| tsunamifury wrote:
| You got it backwards. They became insolvent due to a bank
| run. Based on false speculation that they couldn't
| liquidate their treasuries. Which the government then
| bought back 1:1.
|
| So basically Peter Theil caused a run on a bank for no
| reason other than he got people panicked about their tbill
| risk ladder. Which by the way want as bad as Bank Of
| Americas right now.
| matheusmoreira wrote:
| Didn't meant to imply an ordering of events when I posted
| that. Makes no difference either way. They still suffered
| a bank run and still ended up insolvent to the point the
| government had to step in and bail them out with taxpayer
| money.
| schemescape wrote:
| Member banks made depositors whole, not tax payers...
| matheusmoreira wrote:
| Banks pay the FDIC for insurance. That would be true if
| only insured deposits were made whole. That's not what
| happened though.
|
| > On March 12, 2023, a joint statement was issued by
| Secretary of the Treasury Janet Yellen, Federal Reserve
| Chairman Jerome Powell, and FDIC Chairman Martin
| Gruenberg
|
| > stating that all depositors at SVB would be fully
| protected and would have access to both insured _and
| uninsured_ deposits
|
| > Regulatory filings from December 2022 estimated that
| more than 85% of deposits were uninsured.
|
| Where'd that come from? Surely not the government?
| schemescape wrote:
| _From member banks_ :
|
| https://www.federalreserve.gov/newsevents/pressreleases/m
| one...
|
| > No losses associated with the resolution of Silicon
| Valley Bank will be borne by the taxpayer.
|
| > Any losses to the Deposit Insurance Fund to support
| uninsured depositors will be recovered by a special
| assessment on banks, as required by law.
|
| Edit: apologies, I should have included this link and
| blurb in my original comment.
| tsunamifury wrote:
| You're Both arguing about the wrong thing. SVB never was
| insolvent, all account holders were made whole with
| available assets.
|
| Whole thing was a farce
| vineyardmike wrote:
| They didn't really do the same thing wrong. SVB did
| everything right, just not right enough.
|
| "Real" banks, government approved ones, have laws governing
| how much cash to keep on hand, and how to "invest" the
| excess, etc. SVB did everything by the books and they'd
| probably have made it through to the other side if there
| wasn't a bank run. They just had underwater investments if
| sold (but they'd be fine if held to maturity).
|
| FTX was literal fraud and they didn't protect money. They
| gave it to friends, and sister companies, and made a lot of
| bad decisions with it. There's a big difference between
| that and SVB.
|
| Oh and of course everyone was made whole in the end after
| SVB
| matheusmoreira wrote:
| > There's a big difference between that and SVB.
|
| Not to me. All I see is corporations that accept money,
| do god knows what with them and cause the money to
| evaporate into thin air. It doesn't really matter how
| much the government "approves" of the reserves and
| investments of banks. They're still all the same:
| literally one bank run away from insolvency.
| eropple wrote:
| A: "We submit to capital controls and while _extremely
| infrequently_ our investment groups make (occasionally
| disastrous) mistakes, the system of human finance is
| arguably more stable than at any point in the history of
| our species ' efforts to trade with people beyond the
| horizon."
|
| B: "We bought a house for the founder's parents while
| they advised ways to hide it and threw millions of
| dollars at the insolvent-by-design crypto fund of
| somebody in the boss's polycule."
|
| You: "No difference detected."
|
| For real?
| matheusmoreira wrote:
| Yeah, for real.
|
| A: "We take customer money and risk it."
|
| B: "We take customer money and risk it."
|
| Just because one puts the money into "safe" investments
| does not make them any different. It's still a bank doing
| fractional reserve banking.
| vineyardmike wrote:
| FTX: Ee stole money. We lied. We gave it to friends to
| gamble. Illegally.
|
| SVB: our shitty compliance department bought bonds (a
| government requirement) with too long of a maturity date
| to sell in a bank run.
|
| One is incompetent and the other is malicious.
|
| Also fractional banking is literally required by law.
| jowea wrote:
| I'm no expert but from what I understand SVB didn't do
| everything right. Failure of risk management. Invested
| too much in long-term securities in search of higher
| rates than short-term securities when interest rates were
| already low. Failed to appreciate how fast they could
| suffer a bank-run with a clientele of highly
| interconnected and tech industry individuals and
| companies. Also failed to appreciate its clientele was
| exactly the ones who would suffer when interest rates
| rise and would start withdrawing money.
| vineyardmike wrote:
| By "did everything right" I should have said "did
| everything legal".
|
| SVB didn't break laws, just as you said, didn't properly
| manage risk. If there was no run, they'd have made it
| through, just with low earnings expectations.
|
| FTX took customer money, gave it to friends, and used
| sticky notes and slack channels for accounting. FTX spent
| customer funds on beach houses and political ads and god
| knows what _not_ on government bonds with a slightly too
| long maturity.
| jowea wrote:
| Agreed. I think it just hit a new pet peeve of mine of
| people thinking treasury bonds are always zero-risk.
| acdha wrote:
| Auditing meant that taxpayers paid nothing and all of their
| customers were made whole, and the regulators changed
| policies to prevent that happening again. It's not perfect
| but it's worlds better than the cryptocurrency goat rodeo
| where we constantly see large, easily foreseeable losses
| and most of the "community" reacts by saying that the
| victims should have known better and bought the speaker's
| favorite token instead.
| matheusmoreira wrote:
| > Auditing meant that taxpayers paid nothing
|
| They literally backstop bank runs with public money.
|
| > all of their customers were made whole
|
| They shouldn't have been. They loaned money to the bank,
| they accepted the risk of losses. Should've dealt with
| the consequences of it.
|
| The government should stop bailing out banks every time
| they screw up. Otherwise they might as well bail out
| Tether. What's the difference?
|
| > the cryptocurrency goat rodeo where we constantly see
| large, easily foreseeable losses and most of the
| "community" reacts by saying that the victims should have
| known better and bought the speaker's favorite token
| instead
|
| That's exactly what they should do in all cases: avoid
| putting money into these scams. I just happen to include
| traditional banks into that same category.
|
| You see, the only reason these banks are any different
| from crypto exchanges is the government will show up to
| bail them out when things get bad enough. They reason
| that it's "better" than a total economic meltdown or
| something.
| jowea wrote:
| > The government should stop bailing out banks every time
| they screw up.
|
| I think the bank runs become extremely contagious if you
| do that, affecting the whole economy.
|
| > Otherwise they might as well bail out Tether. What's
| the difference?
|
| The difference is that Tether doesn't have to follow the
| regulations trying to avoid bank insolvency. SVB was
| insolvent by a relatively small margin IIRC. For all we
| know Tether is 50% hot air.
| matheusmoreira wrote:
| > I think the bank runs become extremely contagious if
| you do that, affecting the whole economy.
|
| Let them. Why contain it? Maybe the world would be a
| whole lot better if people _faced the consequences_ of
| their choices.
|
| Maybe after enough people lose everything, they'd learn
| that banks are dangerous and would stop putting their
| money in them. With less capital in banks, there would be
| less loans and credit. That means less inflation. Less
| planet-destroying credit-fueled exponential growth.
|
| > SVB was insolvent by a relatively small margin IIRC.
| For all we know Tether is 50% hot air.
|
| It's either solvent or insolvent. There is no margin.
| Banks are insolvent by definition. There is not a single
| bank on this planet that can cover 100% of its
| withdrawals. If push comes to shove, the governments will
| have to step in.
| jowea wrote:
| > Maybe after enough people lose everything, they'd learn
| that banks are dangerous and would stop putting their
| money in them. With less capital in banks, there would be
| less loans and credit. That means less inflation. Less
| planet-destroying credit-fueled exponential growth.
|
| Maybe, but I wouldn't count on any government wanting to
| try. And it does seem a bit of a economic crisis without
| a need.
|
| > It's either solvent or insolvent. There is no margin.
|
| I think it matter whether the bailout is for 1 billion or
| 10. Or even without a bailout, whether depositors get
| back 95% the next week or 10% after 2 years on bankruptcy
| court.
| ozim wrote:
| Kind of see the point of parent poster "if it would be real
| crypto, it would never happen".
|
| He is not wrong technically but it happened so he obviously
| isn't correct either.
| slowhadoken wrote:
| is that why the banks collapsed in 2008?
| datavirtue wrote:
| Yes, and they have accounting departments, and controls, and
| adults.
| favorited wrote:
| > This guy created a literal bank
|
| No he didn't. He created a hedge fund and a crypto exchange.
| matheusmoreira wrote:
| If it does fractional reserve banking, it's a bank. If you
| can deposit currency in it and collect some "interest" from
| those holdings, it's pretty much a bank. Every cryptocurrency
| exchange you can find does that. They even offer loans and
| everything. Therefore they are banks.
| lmm wrote:
| He took demand deposits and invested them. That's banking,
| whether you do it as a regulated bank or not. There were
| banks before the current banking charter regime and there
| will be banks after it.
| wmf wrote:
| Note that FTX told their customers that they would _not_
| invest their deposits. Customers who opted in to margin
| lending could lend money to other customers but even in
| that case FTX went far beyond what they promised to their
| customers. It would be more accurate IMO to say that FTX
| embezzled (or just plain stole) customer deposits.
| matheusmoreira wrote:
| Huh. That makes it even worse. Every cryptocurrency
| exchange I've ever seen offers literal savings accounts,
| it's obvious to anyone who knows how banks work they're
| loaning out customer funds. You're saying FTX didn't do
| that? That's even worse...
| wmf wrote:
| Yeah. Celsius, BlockFi, Voyager, Gemini Earn, etc. were
| structured like savings accounts but FTX was not. FTX was
| supposed to be "your money is your money". What happened
| wasn't a mistake; it was theft.
| matheusmoreira wrote:
| Jesus. You're right then. It's even worse than I thought.
| wmf wrote:
| It's just stealing. You could steal from any type of company
| and end up in the same place.
| matheusmoreira wrote:
| I agree. However, he used a bank to steal from people. It's
| not like he exploited vulnerabilities in smart contracts or
| whatever. He literally exploited people's propensity to keep
| their money at the bank where it's "safe". Not a single
| person who kept their coins in their own wallets was affected
| by this.
| bagels wrote:
| Banks invest the money too. Usually without the quotes.
| matheusmoreira wrote:
| Yes. Banks too lose everything and go bankrupt. The
| difference is nobody goes to jail when they screw things up.
| Actually the government comes and actually bails them out
| with taxpayer money. Bank keeps all the profits and
| socializes all the losses.
|
| I love what happened to this Bankman guy. It's what I wish
| would happen every single time some banker screwed up with
| our money.
| bagels wrote:
| Okay, one difference is that the guy put customer money
| directly in his own pockets. Most bank failures don't
| include such obvious incompetent fraud.
|
| I agree with you though, bankers that are doing frauds
| should also be prosecuted.
| anjel wrote:
| He didn't lose it all. His early investor position in one of
| the big AI companies alone is worth a lot. Not condoning SBF's
| misconduct, just correcting a mis-statement of fact.
| phire wrote:
| Sam didn't create a bank. If he did, this wouldn't have been
| fraud and he wouldn't be going to jail.
|
| All documentation, marketing, interviews, statements, tweets,
| general understanding, and government licensing had FTX
| implemented as a full custodial trust.
|
| FTX promised to hold any funds you deposit in safe, low-
| interest bank accounts or secured cryptocurrency wallets, ready
| to withdraw at any time. They explicitly promised to never
| invest them.
|
| And then Sam broke that promise, stole customer funds and
| invested them. And it's not like he was planning to pay those
| customers interest fees if the investments paid off.
|
| That's fraud.
| matheusmoreira wrote:
| Yeah. I was under the misconception that every cryptocurrency
| exchange operated like a fractional reserve bank with savings
| accounts, loans and everything. Further down this thread, wmf
| set me straight. The situation is even worse than I made it
| seem.
| slikrick wrote:
| is this the level of discourse we're at? calling banks frauds
| when actual frauds scam people? hilarious
| neduma wrote:
| mmm.. 110 years for stealing close to $10 billion
| matteoraso wrote:
| I doubt that he's going to get the max sentence. I bet he'll be
| out in 10 years.
| unstatusthequo wrote:
| This time with an AGI startup.
| dieselgate wrote:
| Reminds me of the Fyre festival guy getting out of prison
| and trying to make it right by doing the festival again
| Waterluvian wrote:
| Is that just based on your feelings or have you applied the
| sentencing guidelines to get a good estimate?
| ceejayoz wrote:
| Relevant: https://www.popehat.com/2013/02/05/crime-whale-
| sushi-sentenc...
|
| TL;DR: It won't be the max.
| Waterluvian wrote:
| A few lawyers in the Popehat Cinematic Universe are
| saying they calculate about 110, which maxes at 43, and
| they anticipate he will get much under the guidelines
| like Holmes did.
| compiler-devel wrote:
| This is reddit so of course it is based on feelings and not
| facts.
| koolba wrote:
| If the scale of his crimes don't justify the max sentence,
| what level of fraud would it take to do so? $100B of fraud?
| drexlspivey wrote:
| The lawyer fees for the bankruptcy estate will be $1 billion
| (they will also come out of the customer funds)
| pylua wrote:
| That seems high. Honestly feels like a fraud in itself
| thrtythreeforty wrote:
| Is it proportional? Can I go to jail for 6 months for $44
| million?
| Sparkle-san wrote:
| Unlocked article url:
|
| https://www.nytimes.com/live/2023/11/02/business/sam-bankman...
| jpeter wrote:
| Will he be allowed to play league of legends in prison?
| slowhadoken wrote:
| League of Legends is it's own kind of prison
| bsima wrote:
| Prison is it's own kind of League of Legends
| slowhadoken wrote:
| this conversation, a prison.
| slowhadoken wrote:
| I got down voted? Does no one watch Home Movies?
| jowea wrote:
| That Norwegian mass-shooter complained about not having the
| latest Playstation once IIRC.
| idlewords wrote:
| In under five hours! The jury was home in time for dinner.
|
| One question for legal people--why is there such a long gap
| between conviction and sentencing? In this case, the sentence
| won't be set until March of next year.
| pbj1968 wrote:
| Give him a chance to wrap things up. He's not going anywhere in
| the interim.
| pb7 wrote:
| Wrap up what things? He's sitting in jail. Nothing to wrap
| up.
| tempsy wrote:
| there's an appeal process
| datavirtue wrote:
| Yeah, you work on that while you are in jail.
| chasil wrote:
| Why is this guy even in the country?
|
| He could have chartered a boat to Venezuela and taken a few
| hundred million with him.
|
| Of course, all the people he defrauded might follow him.
| duxup wrote:
| I suspect most people aren't really up for life on the run.
| chasil wrote:
| Versus decades of prison?
|
| Is there not a house next to Edward Snowden?
|
| Why stay?
| fallingknife wrote:
| Russia has a place for people who leak embarrassing
| secrets of the US. A thief like SBF has no value to them.
| duxup wrote:
| Oh they maybe are worth exactly the amount they bring...
| and someone will want it.
| klyrs wrote:
| He may be safer inside than out in countries without
| extradition treaties. He burnt a _lot_ of money that wasn
| 't his to burn.
| chasil wrote:
| That makes a lot of sense.
| Scoundreller wrote:
| Extradition treaties aren't the only thing to watch out
| for. Plenty of countries without them will happily fall
| over and hand someone wanted over.
|
| Extradition treaty mainly just lets some foreign country
| start a process in local courts to hand someone over.
|
| You need to butter up a place with adversarial relations.
|
| Or go somewhere with ironclad constitutional protections
| against extradition. And even then, e.g. France only has
| those for its own citizens and may still prosecute you
| locally for your crimes abroad.
| salamanderss wrote:
| Why would they need go to a country subject to treaties.
| Unrecognized territories like transnistria
| (weev!),rojava,Somaliland,Ambazonia, western Sahara,
| Palestine (before invasion), fractions of Myanmar, idlib,
| rebel held congo fractions, etc. Basically no diplomatic
| relations and they will likely not eject someone seen
| locally as supporting their cause.
|
| Its a big world out there and a shockingly large portion
| is free of recognized government control. In such places
| you pretty much live by your own bootstraps rather than
| what some far away western country says, at least on the
| individual level.
|
| What really really shocks me though is that SBF didn't
| just jump on a yacht out right after the failure as he
| easily could have done. If he had sailed to the right
| part of Latam or West Africa he'd have a decent chance at
| not getting caught.
| Scoundreller wrote:
| In any unrecognized territory, you risk becoming a pawn
| in exchange for a prisoner release. And pray that the
| unrecognized territory continues to exist as is.
| salamanderss wrote:
| There's no riskless path remaining after you've defrauded
| billions of dollars. Iirc the white girl who bombed the
| subway in london is thought to be still hiding in such a
| territory like two decades later.
| janosdebugs wrote:
| He doesn't speak the language, had a highly recognizable
| face and is perceived to have money. Sounds like a recipe
| for a bad time in the rougher places of the world.
| salamanderss wrote:
| Not sure I'd want to live in Ambazonia but they speak
| English and would likely not have many that recognize his
| face. It also would have been easily accessible by yacht
| transatlantic from the Bahamas into a difficult to patrol
| estuary. But this is all pure fantasy, I understand why
| he didn't do that.
| duxup wrote:
| I'm not sure Russia there's much protection in Russia if
| you don't serve a purpose...
| jowea wrote:
| The right place to go in this case is probably the sort
| of place that will take your money and not extradite you.
| I heard the United Arab Emirates helps. Maybe Hong-Kong?
| duxup wrote:
| Yeah I wonder what a good place would be. If you're known
| I gotta think there aren't many places.
| kleton wrote:
| In his case, Israel would have been the best bet.
| nolongerthere wrote:
| In most cases this is true, Israel rarely extradites jews
| and generally the US doesn't try too hard in forcing
| exceptions (like tying aid to extradition of accused),
| but this was way too high profile, and SBFs politics in
| general don't align with Israel's, so I could see Israel
| not working out for him.
| paxys wrote:
| Mostly hubris. "I did nothing wrong, I have the best
| lawyers, I will beat the charges."
| jowea wrote:
| He also did a media tour after things blew up instead of
| just shutting up, which from what I gathered isn't the
| best idea for staying out of jail. Real overconfidence in
| his charisma?
|
| The fact that he did this instead of executing a planned
| escape and going to hangout with Ruja Ignatova is the
| main reason for me to think he believed his own shit.
| bensecure wrote:
| Either he believed his own shit or he was certain that he
| was smarter than everyone else.
| JohnFen wrote:
| I suspect the latter. I suspect even worse -- that he
| believes not only in his own genius, but that everyone
| else is actively stupid.
| paxys wrote:
| Did media tours while out on bail.
|
| Leaked his ex-gf's private diaries in an attempt to
| intimidate her.
|
| Decided to testify at his own trial.
|
| I'm almost certain that he thought he would give a grand
| speech and all the jurors would instantly take his side,
| just like he had experienced with VCs, journalists,
| employees and other sycophants for the past decade.
| chasil wrote:
| Hubris, thy name is psyche.
| ww520 wrote:
| He ran out of cash?
| prepend wrote:
| Remember he tried that when he was in the Bahamas. But he
| ran out of money and the Bahamians turned him over.
| harambae wrote:
| Yeah I remember one of Sam's lawyers insisted he stay in
| the Bahamas and fight extradition if he was to have any
| chance of staying out of jail and the other lawyer said he
| should do the opposite and accept extradition.
|
| Given how harsh the US is on financial crimes, I always
| thought the former opinion was smarter. Nick Leeson only
| got sentenced to 6 1/2 years in Singapore (and served 4).
| Or, alternatively, most stats show higher levels of
| corruption he could've finessed in his favor in the
| Bahamas.
|
| As soon as he arrived on US soil it was over for him IMO.
| selimthegrim wrote:
| Why even follow him, I'm sure hitmen are pretty cheap in
| Venezuela. I guess security guards are too.
| Moto7451 wrote:
| Another softball interview at the New York Times I'm sure.
| bradleyjg wrote:
| There's quite a bit that goes into sentencing hearings
| especially if there are a lot of victims and/or the defendant
| has a lot of money. All that takes time to line up.
| tempsy wrote:
| There's a second trial around the same time for all the illegal
| political donations he made.
| efitz wrote:
| Is there a trial for that? I thought that he wouldn't be
| tried for that due to the terms of his extradition.
| tempsy wrote:
| yes, in early march https://x.com/innercitypress/status/172
| 0228112695189509?s=20
| idlewords wrote:
| I believe the sentencing judge in this trial has demanded
| a hearing to find out whether the government will proceed
| with that second trial.
| tantalor wrote:
| No, they had pizza:
| https://twitter.com/tolstoybb/status/1720228218672988667?t=t...
| Tiktaalik wrote:
| lol I mean they're barely paid for their time they might as
| well get a pizza as a treat.
| heyoni wrote:
| Every jury orders food from local restaurants lol
| idlewords wrote:
| OMG, that's even better!
| dragontamer wrote:
| I'm assuming it went like this:
|
| "So this guy is guilty right?"
|
| (10x other Jurors) "Agreed".
|
| (That one "For Fairness" Juror) "I dunno, we're sending this
| guy to jail for an awfully long time. I think we need to
| think it over a bit longer."
|
| "Fine, Lets get pizza".
|
| * 4 hours later *
|
| "Okay, we thought about it some more. He's guilty right?"
|
| (11x other Jurors) Guilty.
|
| -----------
|
| At least, I'm amused by the thought of a "reverse 12 Angry
| Men" style setup, where everyone agrees upon the same premise
| (that a quick decision is a bad idea for everyone), but the
| additional time thinking changed nothing.
| quickthrower2 wrote:
| "He is guilty and this pizza sucks. Not going to hang
| around for another. Let's get this done."
|
| On a serious note - not sure how much you get compensated
| on Juries but in Australia it is not that much if you work
| as a software dev, so staying on a Jury for 8 weeks could
| mean even not being able to pay your mortgage for some (yes
| you should have savings but...). I am sure there is a
| financial incentive to finish these things quickly?
| BWStearns wrote:
| Most of the companies I've worked at will pay your normal
| salary while on jury duty (you're not allowed to get the
| jury duty pay but that's a pittance).
| quickthrower2 wrote:
| Is that by law or their own terms above what is needed by
| law. I get 2 weeks, then need to get the government
| allowance.
| dsr_ wrote:
| Own terms. In all states, companies are forbidden to fire
| you or retaliate against you for serving on a jury, but
| they generally aren't required to pay you.
|
| Most large companies do, however.
| dessimus wrote:
| Probably because it would literally taint the jury pool
| against the company for any wrongful termination suits
| ever brought against them.
| umanwizard wrote:
| I don't think it's as nefarious as that. It's probably
| just that jury duty is rare enough and it would be
| controversial enough for them not to pay that they don't
| bother dealing with it.
| JohnFen wrote:
| There's also a strong appeal to civic duty, both for
| those chosen for jury duty and for employers to pay them.
| And generally, at least where I am, people who try to
| weasel out of jury duty as well as companies who don't
| pay employees during jury duty are viewed in a bit of a
| dimmer light.
| BWStearns wrote:
| My guess is the reason most do is because of this:
| https://www.shrm.org/resourcesandtools/tools-and-
| samples/hr-...
|
| > When an exempt employee reports for a full workweek of
| jury duty and does no work for his or her organization,
| the employer is not required to pay the exempt worker for
| the week. However, _if the employee does any work for the
| organization, including checking and responding to work
| messages/emails, the employee is considered to have
| worked during the workweek and is entitled to a full week
| of pay._
|
| So basically if you check your email then you are
| entitled to the full week anyhow. One mess up and an
| ensuing lawsuit would blow the whole average year's worth
| of jury duty savings from _not_ paying your juror-ing
| employees.
| JohnFen wrote:
| I bet that varies from state to state.
| JohnFen wrote:
| In my state, that's not required (and mine didn't). I
| don't know how common it is that your employer keeps
| paying you, but it's far from rare.
| drexlspivey wrote:
| Do you stop receiving your salary when you are on jury
| duty or what?
| quickthrower2 wrote:
| Australia - TIL - maybe or maybe not, it varies per
| state: https://payroller.com.au/payroll-information/jury-
| duty
| 2muchcoffeeman wrote:
| Yeah, I've been called up and the company I worked for
| had to write a letter because they couldn't let me leave
| that long.
|
| They need a better system. I can't get a shorter trial.
| There's no system to put you in a pool when you are
| freer.
| ghaff wrote:
| The compensation often won't pay enough for the parking.
|
| Larger companies will theoretically pay for a few days or
| whatever and will, in practice, pay for a bit more. But
| something like grand jury trials can go on for months and
| AFAIK there's no obligation for companies to cover you
| taking those months off while still being paid. In
| practice, in my personal experience, the government
| avoids pressing people into service who really don't want
| to do so for an extended period but they have no
| obligation to do so.
| p1necone wrote:
| If the company you work for won't pay your salary while
| you're serving jury duty you should probably start
| looking for another job that treats you with respect.
| koolba wrote:
| From what I've heard it's a great way out of jury duty.
| When the judge asks if there's any reason you can't
| serve, you can honestly tell him, " _If I don't work, I
| don't get paid_ ".
| JohnFen wrote:
| During jury selection when I served (US state), one of
| the jurors tried to make that case. The judge asked if he
| would suffer any immediate or irreparable harm, such as
| the lights being turned off, being evicted, having your
| house or car repossessed, etc. Just having to miss
| payments wasn't sufficient.
|
| He wasn't dismissed. The standard was pretty high.
| dragonwriter wrote:
| > From what I've heard it's a great way out of jury duty.
| When the judge asks if there's any reason you can't
| serve, you can honestly tell him, "If I don't work, I
| don't get paid".
|
| I've been in several panels from which jury selection was
| being done, and in the screening-for-hardships portion,
| those type of things were not, in and of themselves,
| hardships. Its rather the norm for private employers
| _not_ to pay for jury duty, leaving you only with the
| rather minimal jury stipend.
| quickthrower2 wrote:
| It is not the hill I will die in for choosing a company
| to work for though. So many other factors. And you find
| out late in the process.
| dragontamer wrote:
| > and this pizza sucks
|
| I feel like that's impossible to happen in Manhattan
| federal court. That city's pizza is so good.....
|
| Then again, if you live there, maybe your Pizza standards
| are just higher?
| TylerE wrote:
| Not sure how it is at the Federal level, but when I was
| called (but not selected, phew!) for local court it was
| insulting low. Like $50/day... and most of the parking
| near the courthouse is paid. Basically minimum wage
| equiv, which was like $8.25/hr then.
|
| Edit: Just checked the state website... it's even worse
| than I remembered: "Trial jurors receive $12 for the
| first day of service and $20 for each day thereafter. If
| you serve more than five days, you will receive $40 per
| day."
| bigger_cheese wrote:
| I am Australian. When I was assigned Jury duty in 2016,
| my Company continued to pay me (I think this is a legal
| requirement if you are a full time employee), I showed my
| manager the letter from the court and I was instructed to
| enter a leave request via usual HR system we use - there
| was an option for Jury duty.
|
| I was also paid by the court for attending jury duty (a
| physical check that arrived in the mail a few months
| later). It was not very much money (I think around $20
| per day) - this money was supposed to cover things like
| Transport, parking fees and meals. In my case the trial
| was called off after 3 days so the check was for around
| $60.
|
| Maybe if you are part time or on a contract it is
| different.
| odo1242 wrote:
| In the US they're not required to pay you :(
|
| They are at least prevented from firing you though.
| quickthrower2 wrote:
| I think it is a requirement in some Australian states
| JohnFen wrote:
| > On a serious note - not sure how much you get
| compensated on Juries
|
| I served on a jury a number of months back, and in my
| part of the US, they pay $10/day. They ask if you want to
| donate it to the fund that stocks and maintains the jury
| waiting area, and 90% of everybody says yes.
|
| If you can show that you'll suffer an undue hardship
| (like, for instance, financial distress or having to care
| for a loved one), they'll dismiss you from service and
| mark you as having served.
| sib wrote:
| When I was in university, the state I lived in paid $0.50
| / mile for travel to jury, in addition to some trivial
| daily rate.
|
| I was called for jury duty via email sent to my home when
| I was studying abroad for a semester, 4,500 miles away.
|
| Unbeknownst to me, my parents requested an excuse from
| jury duty on my behalf because I was out of the country,
| which upset me, as I was hoping for the 9,000 * $0.50 in
| travel allowance...
|
| Seemed like so much money at the time!
| wmf wrote:
| The jury actually requested to read some of the evidence
| around an hour before they finished.
| doctorhandshake wrote:
| I had an experience a lot like this when serving on the
| jury for an assault case. Assistant DA was incompetent, we
| all agreed save one person, who declared 'we're not going
| to be one of those juries that deliberates for just five
| minutes' and that 'I wouldn't want to run into either of
| them in a dark alley' and, after I told everyone to quiet
| down because he was going to convince us the man was guilty
| beyond a shadow of a doubt, 'there's no sense of justice.'
| est31 wrote:
| IDK seems like due diligence to me to prevent the hungry
| judge effect (or to forestall claims towards it being the
| cause for the sentence):
| https://en.wikipedia.org/wiki/Hungry_judge_effect
| doubloon wrote:
| in high school we had a mock jury of sacco and vanzetti and
| everyone voted them guilty so they could leave early. i was
| the only one against it.
| mtremsal wrote:
| 12 Hungry Men
| Ivoirians wrote:
| That almost sounds like a made-up joke, but I guess it's a
| free government-subsidized pizza dinner.
| optimalsolver wrote:
| They should have done a Homer Simpson and gone for the free
| hotel:
|
| https://www.youtube.com/watch?v=stIvLRJcqCE
| harryquach wrote:
| Imagine sitting in a prison cell, for 5 months, having no idea
| how long you will be there. That sounds almost worse than
| knowing your sentence.
|
| At the end of the day he deserves everything he's getting
| BurningFrog wrote:
| Are we sure that he'll be locked up waiting for sentencing?
| dragontamer wrote:
| He had a cushy house-arrest deal at first (after paying for
| bail) and then started to abuse his computer-access to
| tamper with witnesses.
|
| So yeah. I'm pretty sure he's getting the slammer while
| waiting for sentencing.
| beezle wrote:
| He will almost certainly appeal and as part of that will
| try to post bond to stay out until the appeal is heard.
| FireBeyond wrote:
| I wonder how posting bond works post-conviction (pre-
| appeal). As in sourcing of funds, as now you're in a
| limbo of reasonable doubt about how you made your money
| (and in this case, his parents also shared in the
| largesse).
| JohnFen wrote:
| They'll also figure in how likely they think he is to
| skip out and flee the country or something. He very
| likely has the money to do it stashed away somewhere, so
| the question is would he be willing to?
|
| I don't know how that would play out, but he isn't
| exactly looking good, character-wise.
| FireBeyond wrote:
| > so the question is would he be willing to?
|
| To me, probably. He exhibits much of the same traits as
| Elizabeth Holmes in terms of perspective on his own
| intelligence and entitlement.
|
| She surrendered her passport, without mentioning she had
| or had access to another one, and was caught planning to
| leave for Mexico with a one way ticket and no
| accommodation booked, and then tried to claim it was "for
| a friend's destination wedding" (which shouldn't even
| have mattered - the surrender of the passport meant she
| was forbidden from leaving the country, regardless the
| reason).
| salamanderss wrote:
| That's hilarious considering neither Mexico nor US checks
| passports when you walk into Mexico in CA/az west except
| maybe San Ysidro crossing. She literally could have
| walked across and nobody would know, instead she did the
| dumbest thing possible of buying a one way last minute
| air ticket on a flagged passport. That would have
| triggered some cursory check for anybody let alone
| Holmes.
|
| How the hell people this dumb become CEOs.
| TillE wrote:
| There's no realistic grounds for appeal, probably not
| even in a country with a more lenient system for
| appealing criminal convictions. In America, forget it.
|
| He's been convicted, he's gonna stay in jail.
| bdcravens wrote:
| Yet his right to appeal is a right that he (and all
| convicted) have. The likelihood of success doesn't
| determine whether or not he can file for it.
| JohnFen wrote:
| I think what TillE was talking about wasn't the
| likelihood of a successful appeal, but whether or not
| he'll stay in prison until the appeal is completed.
| bdcravens wrote:
| Perhaps, but I just can't see that as written.
|
| > There's no realistic grounds for appeal
| IG_Semmelweiss wrote:
| I think parent has a point - I'd love to know if he can
| potentially buy more time out of jail by forcing an
| appeal, then requesting bail in the interim, even if it
| is expected to lose the appeal or is downright dismissed.
|
| It sounds like its plausible, but i'd like to know for a
| fact
| hanniabu wrote:
| I'm sure his parents will get him into a resort prison
| ojbyrne wrote:
| Probably in a much shittier jail for those five months too.
| ipaddr wrote:
| 2 for 1 credits can help
| rurp wrote:
| True, although in this case he's looking at so many years of
| prison time that I doubt exact number makes much difference
| right now.
| Waterluvian wrote:
| Federal sentencing guidelines are a complex formula that
| require visiting at least one oracle atop a mountain.
| pbhjpbhj wrote:
| Why can't the eagles just fly them there though?
| duxup wrote:
| I was on a jury recently. Deliberations began after closing
| statements Friday morning.
|
| First thing we all agreed we would not be coming back on
| Monday...
| garciasn wrote:
| As long as it was clear a decision could be made in time,
| fine.
|
| But, frankly, if I were on trial by a jury of my peers, I'd
| appreciate it if people took their time.
| duxup wrote:
| In our case it was a civil trial and effectively we were
| just picking $ amount to pay out.
|
| It also turned out that we were all mostly on the same
| page.
|
| Criminal stuff i certainly would have not agreed.
| ipaddr wrote:
| I was on a jury. We pushed it a little longer to get it to
| that last free lunch and make it long enough not to go back
| in the jury pool.
| crossroadsguy wrote:
| Is the lunch nice? Do you get paid as well? What kind of
| hotels are you all kept in? Is it like in those Hollywood
| films? How common are things like jury tempering? Do you
| all have sufficient protection?
| p1necone wrote:
| (not in the USA, I assume it varies wildly by country).
| Here you get takeout from one of a few regular locations
| near the courtroom.
| ipaddr wrote:
| You were in the jury pool for a week. You could serve on
| multiple cases if they were short enough. If you were
| picked for a case and it went on over a week you got
| paid. Some trials require a hotel stay but the chances of
| getting on one is rare.
|
| The lunches were sandwiches from the vending machine. Two
| choice ham and without meat. They were good I can taste
| the salt on the ham as I write this.
|
| The conversations within the jury are like tv.
| Immediately you have a few who think anyone on trial is
| guilty. You have a smaller group who want to find reasons
| they may not. At some point someone will accuse that
| group of being part of the criminal conspiracy. Friends
| and enemies are formed. Promises and deals were made but
| all disappears after the verdict (someone offered me a
| job and ghosted later).
|
| Protections? I had a job offer to start that week that I
| lost because I couldn't start. No police protections.
|
| The actual trial is very boring. Police reading notes.
| Long winded questions without any tv drama.
|
| Worthwhile as an experience.
| tomku wrote:
| I served on a jury fairly recently, and it was a much
| more mundane thing than anything you'd see in a Hollywood
| film. Whole thing took 10 hours start to finish. Got
| picked from the pool, had the case presented by the
| prosecutor, heard witness testimony, the defense attorney
| made his case mostly by questioning the prosecution's
| witnesses, closing statements, deliberated very briefly
| (it was not a complex case) and delivered the verdict and
| went home. We were paid about $40 for the day plus travel
| mileage, and lunch was ordered off a menu and delivered
| to our deliberation room, presumably from the courthouse
| cafeteria. The food was actually pretty good.
|
| The high-profile cases like SBF's are a tiny fraction of
| jury trials in the US, most trials have no significant
| risk of jury tampering and the jury is not sequestered,
| meaning that if we had needed more time for deliberation,
| we would have just gone home for the evening and shown up
| at the courthouse the next day. We did have our phones
| collected at the start of the day and returned at the
| end, which seemed like a reasonable precaution against
| both "independent research" and
| distractions/interruptions, and would have also made jury
| tampering somewhat more difficult if anyone was so
| inclined.
| datadrivenangel wrote:
| y'all got lunch? We have to bring our own.
| duxup wrote:
| Yeah we got free lunch, ordered it that morning. Good
| stuff, from a nice deli.
|
| In our case if you reached a verdict you were done serving
| so no need to drag it out.
| gnicholas wrote:
| Free lunch? Where is this? I've served in CA and have never
| heard of such a thing!
| heyoni wrote:
| There's a show about a jury in California where they buy
| lunch every day. Jury duty
| gnicholas wrote:
| Oh yeah, I watched an episode or two of that. Of course,
| it's not actual jury duty -- it's all fake. I assumed
| that food was provided because that keeps them all
| together, for filming purposes. When I served, people
| split up at lunchtime and went to various different
| restaurants.
| heyoni wrote:
| Yea I think it depends on which county you're in and the
| case as well. These guys had their hotels paid for by the
| end of it because they had to be sequestered.
| JohnFen wrote:
| Lucky you! We were not fed, except for the donuts and
| coffee in the waiting room. We were allowed to leave at
| mealtimes and get our own food.
| ryandrake wrote:
| > First thing we all agreed we would not be coming back on
| Monday...
|
| Kind of scary that this is the rigor our justice system
| hinges on.
| duxup wrote:
| It was a pretty boring civil case. I suspect we were just
| deciding how much one insurance company was paying the
| other...
|
| It was also a pretty one sided case.
| romanhn wrote:
| Yep, the system is predicated on the decisions of a group
| that doesn't want to be there, but couldn't figure out a
| way to get out of it.
| duxup wrote:
| I found it is crazy hard to get out of jury duty, but
| also that everyone took their job seriously when they
| trial started.
| pdmccormick wrote:
| Was it a slam dunk case for a prosecution, or obviously
| reasonable doubt?
| duxup wrote:
| Civil case and we found were all on the same page pretty
| fast. It was a pretty one sided case.
| tptacek wrote:
| Because there's essentially a whole second sentencing trial.
| After the verdict, the Parole Office prepares a Presentence
| Report (I'm not sure if these are public? I'm always looking
| for them and never finding them on PACER+), the "PSR", which is
| like the opening bid for the recommended offense levels and
| grouping. The prosecution and defense then respond to the PSR
| with exculpatory, mitigating, or aggravating claims, victim
| impact testimony, your scout leader when you made Eagle Scout,
| all that stuff. Only then does the judge work out what the
| actual sentence is.
|
| The guidelines calculations, contrary to public belief, are
| pretty easy! You will have a pretty good success rate just
| carefully reading the charged statutes in the indictment and
| then following the instructions in the guidelines. But the PSR,
| prosecution, and defense filings all take a bunch of time, and
| involve "reporting" or "research" or whatever you'd want to
| call it.
|
| That process ostensibly can't even start until everyone knows
| what the precise convictions were.
|
| For what it's worth, I think there's a very good chance he just
| gets the statutory maximum penalties here, because the dollar
| loss and victim count numbers max out the 2B1.1 guidelines
| (which, for instance, cap out at $10MM in dollar losses).
| Attributing specific dollar losses and victim counts is
| ostensibly one of the things that makes sentencing take so
| long, but as long as it takes I think the outcome is a foregone
| conclusion.
|
| + _Later: they 're definitely not public; there's a whole
| victims rights thing about getting victims partial access to
| PSRs so they can be heard in the sentencing process. I guess I
| can stop looking for them._
| IG_Semmelweiss wrote:
| Thank you! I learned from this.
|
| Follow up - is there any kind of correlation in the gap
| length, between sentencing and PSR ?
|
| I could see a situation where the gap is longer than a
| sentence, and that would be pretty sad for the prosecuted...
| tptacek wrote:
| That's not so much going to be an issue in this case. But a
| lot of the time, especially in federal white collar cases,
| the defendant isn't in custody during sentencing anyways.
| alexchantavy wrote:
| So in this case is SBF still in custody awaiting
| sentencing?
| tptacek wrote:
| I believe so, because he was an idiot during the trial
| and violated his home confinement conditions.
|
| But his sentence is going to be so long that there isn't
| going to be any injustice at play for him to be in
| confinement for a few months while they work the numbers
| out. He's not getting out in a year or two.
| Sanzig wrote:
| Yes. He was out on bail, but that was revoked for witness
| tampering ahead of the trial.
|
| I doubt he'll get out before sentencing, he's looking at
| up to life in prison so in addition to having a
| demonstrated history of ignoring his release conditions
| he'll also be a huge flight risk.
| costco wrote:
| A guy named Lev Dermen just got 40 years with a guidelines
| score of 47 (the table doesn't even go that high). He was
| charged with defrauding the government out of half a billion
| dollars in biodiesel tax credits, went to trial and kind of
| like SBF all the other conspirators testified against him.
| That case also had destruction of evidence, witness
| intimidation, and at the time of sentencing the government
| was still trying to recover a Bugatti and a bunch of money in
| Turkey from him.
|
| But the number of victims and the hardship element probably
| means he's looking at life.
| tptacek wrote:
| I got offense levels:
|
| * 7 as the 2b1.1 baseline
|
| * +30 for dollar loss, which caps out at $550MM, against
| CFTC's estimate of $8Bn
|
| * +6 for 25+ victims, another cap
|
| * +2 for financial misrepresentations, _maybe_ , depending
| on how bankruptcy fits in
|
| * +2 for either sophisticated means or deliberate use of
| foreign jurisdictions (the same clause, one of those
| predicates is definitely going to hit)
|
| * +4 for jeopardizing (or, in this case, destroying) a
| financial institution --- at a minimum, +2 (same clause)
| for >$1MM gross receipts
|
| * +4 for his function as the leader in the crime
|
| * +2 for obstruction, maybe
|
| * +1-2 for grouping/combined offense level, depending on
| how the conspiracy, wire fraud, and campaign finance stuff
| groups out.
|
| So that's low-to-high 50s as an offense level. 43 is
| straight life. But there's probably a statutory maximum in
| the mix here that takes life off the table somehow.
|
| _Later: I miskeyed the 2B1.1b1 cap, as 10MM (the bottom of
| the page); it 's 550MM (on the next page). Doesn't change
| the analysis much, which is why SBF is so fucked._
| akerl_ wrote:
| I was hunting around for an easy way to do this kind of
| math, and found https://www.sentencing.us/ . I haven't
| done an amazingly deep validation, but the math lines up
| with the above, and thankfully SBF has done a pretty good
| job stress testing the various clauses, so I'm going to
| be bookmarking it for the future.
| tptacek wrote:
| I started with sentencing.us, but after entering the
| dollar loss figures, anything I clicked got me "life",
| which I don't trust.
| akerl_ wrote:
| The math for that seems to line up w/ your math above
| though? 43 is accurately "life", and 7 + 30 + 6 for base
| + dollars + victims seems right.
|
| I share your expectation that it'll turn out there's a
| statutory maximum somewhere, but the math seems the check
| out.
| tptacek wrote:
| Yeah! It just didn't seem at the time like it was true,
| like maybe they linearly projected out the dollars or
| something. But no, from the guidelines doc, it looks very
| grim indeed for SBF.
| akerl_ wrote:
| It also makes the time gap between now and sentencing
| feel a bit performative. It doesn't make a ton of
| difference either way since he's managed to land himself
| in custody with the witness tampering antics, but it does
| mean that there's not much point in his lawyers quibbling
| over things like "how does the bankruptcy fit in" and
| "does blowing up your own company count as destroying a
| financial insitution, or is that intended for when you
| topple the victim of your crime", because even if we nix
| both those modifiers it just shifts him from "life plus
| cancer" to "life".
| idlewords wrote:
| It's grim unless he can nudge the offense level up over
| 65,535
| dragonwriter wrote:
| Once you get to a 43 offense level, the guidelines
| sentence (its not really a range at that point),
| irrespective of criminal history category (guidelines
| sentence ranges are a result of a table cross-referencing
| offense level and criminal history category) is straight
| life.
|
| If you do it in the order in the guidelines manual, the
| dollar loss is the first figure after the base offense
| for the offenses to which it applies, so (with a base of
| 7 for the wire fraud charge), you'd get to 37 with it
| alone. But if the tool does it in a different order,
| putting some of the other factors first, or you work a
| different charge first and its applying the grouping
| rules as you go, it would be very easy to hit 43 for SBF
| at the +30 for the dollar loss, and so get pegged to
| "life".
|
| The actual aggregate statutory maximum for the offenses
| he's been convicted of (115 years) will limit the actual
| sentence though.
| nolongerthere wrote:
| I'm a little confused by this, 47 is higher than 43, and
| 40 years is less than life... it also looks like Lev
| maxed the dollar loss or came really close, so how come
| you're sure SBF gets life while this Lev guy got a higher
| score and only got 40 years?
| tptacek wrote:
| You're confusing offense levels with years. The offense
| levels map to a range of months in custody.
| A4ET8a8uTh0 wrote:
| Having been called upon to serve on a jury before, I will admit
| that I tend to err on the side of the accused, but here the guy
| did everything, often in his own words, to tank any reasonable
| defense and doubt one could have. I followed the case and shook
| with disbelief at some of the things that were said. I was
| amazed at the initially lenient treatment he got. My jaw landed
| on the floor when I saw python code that did not even try to
| hide randomized balance. And those are just the highlights off
| the top of my head.
|
| It is not often that I get to say this lately, but the jury
| restored some of my tired faith in the system in US.
| JohnFen wrote:
| > I will admit that I tend to err on the side of the accused
|
| I believe that's what you're supposed to do, as implied by
| "beyond a reasonable doubt" -- so good job!
| ckwalsh wrote:
| The 5 hours doesn't surprise me.
|
| I was on the jury of a federal fraud trial with 2 defendants
| with 15 charges, ~30 million in losses.
|
| We were thorough and went through each count separately,
| including reviewing some of the evidence, and were done in
| maybe 8 hours spread across 2 days.
|
| We ended up with a mixed verdict: one count not guilty for
| both, another not guilty for one. I fully believe they were
| aware and committed fraud for the not guilty counts, but the
| prosecutor wasn't able to cross the "reasonable doubt"
| threshold in our minds for those specific instances.
|
| Only thing we weren't super careful about was the first
| requirement for Mail/Wire fraud, which is "Mail and wires" were
| used.
|
| It was amusing that the prosecutors brought in a bank IT guy to
| explain that "the internet uses wires", but not really
| something we questioned.
| SilasX wrote:
| "So, contrary to popular belief, the internet is not some big
| truck that you can just dump something on a la Ted Stevens;
| it's more of a ... series of tubes?"
|
| 'That is correct.'
| JohnFen wrote:
| > to explain that "the internet uses wires"
|
| I wonder if they did that to avoid having to explain to the
| jury that wire fraud does not actually require the use of
| wires...
| NoMoreNicksLeft wrote:
| What does it require, if not wires?
|
| And are modern fiber optic cables wires in any sense of the
| word? Does the relevant statute in USC18 actually define
| "wire" for the purpose of the crime?
|
| Part of me thinks that wireless communications must be
| included, but one might make the case that even then,
| information/communication is transmitted over wire at some
| point.
| JohnFen wrote:
| Wire, radio, and television. The definition is:
|
| "having devised or intending to devise any scheme or
| artifice to defraud, or for obtaining money or property
| by means of false or fraudulent pretenses,
| representations, or promises, transmits or causes to be
| transmitted by means of wire, radio, or television
| communication in interstate or foreign commerce, any
| writings, signs, signals, pictures, or sounds for the
| purpose of executing such scheme or artifice"
|
| https://www.law.cornell.edu/uscode/text/18/1343
|
| UPDATE: Various court decisions have expanded the
| interpretation so that "wire fraud" also involves the use
| of the internet, phone calls, emails, social media
| messages, faxes, telegrams, fiber optic, cable or SMS
| messaging and data systems.
|
| I am not a lawyer, though. I could be mistaken on this.
| datadrivenangel wrote:
| We were done in 30 minutes for a DUI case in local county court
| the last time I served. 25 of those minutes were spent trying
| to find any reasonable doubt after we all agreed on guilt.
| pb7 wrote:
| Good.
|
| I hope they go after his parents next.
| munchinator wrote:
| I'm not too familiar with the American system, could someone
| please explain how after the verdict does the sentencing work?
| The judge is the one who will now decide the sentence? And how
| long does that decision take, so when will we know what the
| consequences of the guilty verdict actually are? (For example,
| how many years in prison, or not).
| wmf wrote:
| Sentencing on March 28th.
| https://twitter.com/innercitypress/status/172022864264133049...
| bagels wrote:
| Typically decided by the judge. There is a table of different
| degrees of crimes that have sentencing guidelines for
| minimum/maximum sentence.
|
| The judge will choose where on that spectrum the sentence lies.
|
| edit: From Ars Technica
|
| The five charges related to wire fraud and money laundering
| carry maximum sentences of 20 years each, while the two
| securities and commodities fraud charges have maximum sentences
| of five years each.
| bsjaux628 wrote:
| https://youtu.be/kr8gSdJ_Ggw?t=4m32s
| chasil wrote:
| Isn't there also the possibility of concurrent versus
| consecutive sentencing?
| bagels wrote:
| Yes. I intentionally left that out, because I don't know
| what the guidelines are for that on these charges. The
| quote I gave just lists the maximum sentence for each
| charge.
| SauciestGNU wrote:
| My understanding is that consecutive sentencing is
| relatively rare and probably won't be applied for run of
| the mill securities crimes, despite the large quantities
| of money involved in the fraud.
| esprehn wrote:
| Oh the other hand Madoff got 150 years, so it's possible.
| SoftTalker wrote:
| I think in general that people who defraud individual
| investors get treated more harshly than people who
| defraud supposed finanancial professionals who at least
| might be expected to have a better idea of the risks they
| were getting into.
| moralestapia wrote:
| Can they be served consecutively or not?
|
| i.e. Is SBF going to spend the rest of his life in jail?
| akerl_ wrote:
| "consecutively" in this context is sort of right. But in
| practice, the charges group together. So if you get charged
| with 1000 counts of wire fraud, you don't math out 1000
| sentences and then decide which ones are consecutive and
| which are sequential, you math out one wire fraud sentence
| and for the 'but how many times did you do it' multiplier,
| you get an extra hit for being prolific.
|
| The parallel commenter linked
| https://www.youtube.com/watch?v=kr8gSdJ_Ggw&t=272s , which
| is a great example. https://popehat.substack.com/p/beware-
| the-flood-of-trump-sen... is another, if text / blogs is a
| better medium, or the slightly older
| https://www.popehat.com/2013/02/05/crime-whale-sushi-
| sentenc... from the same author.
| minedwiz wrote:
| Disclaimer: not American either, but it does seem like the
| judge does it from what I read. Sentencing is 28 March so seems
| he'll have quite some time.
| kosievdmerwe wrote:
| As others said, the judge will decide. One of the reasons for
| the delay is the preparation of the Pre-Sentence Report (PSR)
| that a parole officer will prepare. There's also time to argue
| about mitigating and exacerbating factors by the lawyers on
| both sides.
| munchinator wrote:
| Thank you! And will SBF remain in jail while awaiting the
| sentencing?
| kosievdmerwe wrote:
| I don't know, but I very much assume so. He violated his
| bail already (multiple times) leading to it getting
| revoked.
|
| The judge also previously said, when asked about whether
| SBF could remain out of jail during just during his trial
| after his bail got revoked:
|
| > "Your client in the event of conviction could be looking
| at a very long sentence. If things begin to look bleak ...
| maybe the time would come when he would seek to flee."
|
| I don't imagine the judge will give him time to get his
| affairs in order from outside prison, which is something I
| understand happens (like it did with Elizabeth Holmes)
| FireBeyond wrote:
| > I don't imagine the judge will give him time to get his
| affairs in order from outside prison, which is something
| I understand happens (like it did with Elizabeth Holmes)
|
| And look what she did. Evidently had a second/another
| passport, since she surrendered hers - but was attempting
| to fly to Mexico on a one-way ticket, with no
| accommodation planned there.
| ncallaway wrote:
| That's also a decision from the judge, though it's likely.
| Typically, post-conviction release is harder to get than
| pre-trial release, so if he's detained pre-trial (which SBF
| eventually was) it's _extremely_ likely that he 'll be
| detained post-conviction.
| saxonww wrote:
| https://www.americanbar.org/groups/public_education/resource...
| xezzed wrote:
| So what's his term in jail?
| CSMastermind wrote:
| We don't know yet, sentencing is separate from the trial that
| determines innocence or guilt.
|
| Now there will be another hearing in March during which the
| judge will consider all of the evidence (even that which wasn't
| allowed in the original trial) to determine what his punishment
| should be.
|
| The judge will have to abide by the federal sentencing
| guidelines which specify the punishments and severity they can
| apply but otherwise it's a matter of their discretion.
| tptacek wrote:
| The judge will not in fact have to abide by the guidelines,
| which are advisory, and are _especially_ advisory in sui
| generis trials like this where the damages and victim counts
| blow out the guideline charts.
| dragonwriter wrote:
| Damages blowing out the charts just means a very high
| guidelines offense level, it doesn't make the guidelines
| any less applicable (and there's not really charts for
| victim numbers, there's a few categories for financial
| offenses, but mainly the guidelines expect beyond a few the
| aggregate loss factor to handle it, and by the time you
| blow the top off that chart, you've also very nearly (with
| just that factor and the base offense level) maxed out to a
| sentence of life or whatever the maximum is for the
| offenses on which you were convicted -- it only takes a few
| additional modifiers like having a substantial portion of
| the criminal conduct outside of the US to do that.
|
| Way too many people here have read Popehat's (very
| important!) piece about how reporting of aggregate
| statutory maximum penalties is usually extremely misleading
| because in the vast majority of cases the guidelines ranges
| (1) will be applied, and (2) will be much shorter than the
| aggregate statutory maximum and are hypercorrecting into
| "SBF's actual sentence will be far below the aggregate
| statutory maximum because sentencing guidelines", without
| any idea of how the guidelines would apply to the facts at
| issue in the case.
| tptacek wrote:
| For what it's worth, this is an argument I shoplifted
| from Andrew McCarthy in TNR.
| Ekaros wrote:
| It is sad there isn't some easy linear calculation like
| divide the amount defrauded by minimum wage and sentence is
| that number divided by 8 in days. It is always sad when
| people get discounts just because they stole lot of money
| compared to some that stole little...
| akerl_ wrote:
| By the federal guidelines, the base sentence for somebody
| who stole more than 10mm and defrauded more than 500
| people is life.
|
| There's no discounts here.
|
| What seems more likely to me is that life will end up
| excluded by a statutory maximum, and the judge will
| exceed the guideline dollar figure based on the degree to
| which SBF's crimes exceed the guideline scale.
| dragonwriter wrote:
| > The judge will have to abide by the federal sentencing
| guidelines
|
| The judge will _probably_ adhere to the sentencing guidelines
| (and will almost certainly use them as a starting point if
| not), but the guidelines are, like the Pirate Code, "more
| what you'd call guidelines than actual rules". The Supreme
| Court has ruled that the judges are constitutionally
| empowered to depart in either direction from the guidelines
| sentences within the statutory minimum and maximum for the
| offenses on which the offender is convicted.
| upupupandaway wrote:
| Let's just say he'll have a lot of time to play LoL
| pr0crastin8 wrote:
| Like many of his strategies at FTX, his high risk approach to
| this trial for a high value payout (taking no plea deal and
| getting out with no charges) hasn't worked out.
|
| I wonder if he himself is accepting of the outcome and isn't
| already scheming or relying on another all-in gamble.
| eropple wrote:
| He can console himself with the pseudofact that there's a
| universe in which he won.
| mocha_nate wrote:
| From an altruist perspective, he will meet so many more
| people in jail where the Net Opportunity to Max Out moral
| value is huge. He would never get this opportunity in the
| real world. Smart move.
| mrosett wrote:
| I don't think he was ever offered a plea deal
| Waterluvian wrote:
| I wonder if a valid option could have been to plea guilty and
| throw himself at the mercy of the court to receive a lesser
| sentence.
| jowea wrote:
| Does that work? I mean, he could plea guilty just to save
| some lawyer expense for his parents but I don't think he
| had a better choice than going for a hail mary.
| jki275 wrote:
| I think you actually do get credit for pleading guilty in
| the sentencing guidelines.
| FireBeyond wrote:
| I feel in the federal system, they'll offer pleas to everyone
| under you to get to you. But once they've got to you, you're
| the target, and there's little motivation to let you plead
| out.
|
| Perhaps the only one (potentially, and not trying to derail
| this) might be Donald Trump (but I also have a hard time
| seeing him accepting a plea deal on the current raft of
| bullshit around him).
| canuckintime wrote:
| > Perhaps the only one (potentially, and not trying to
| derail this) might be Donald Trump (but I also have a hard
| time seeing him accepting a plea deal on the current raft
| of bullshit around him).
|
| (Not sure what "current raft of bullshit around him
| implies" but derail ahead)
|
| Trump is no stranger to settling cases and making deals
| with prosecutors(1)(2) but all cases he's facing now having
| such face-losing punishments even on plea that he can't
| afford to take any.
|
| (1) https://www.reuters.com/article/us-trump-lawsuit-
| idUSKBN13D1...
|
| (2) https://www.newyorker.com/news/news-desk/how-ivanka-
| trump-an...
| rossdavidh wrote:
| My understanding is that he was, in fact, not offered a
| plea deal.
| idlewords wrote:
| He was very likely not offered a plea deal.
| tptacek wrote:
| He still has, I think, the option of cooperating with
| prosecution to achieve a 3-level reduction in his sentence,
| which will involve him pleading guilty. That could take his
| sentence down from infinity to infinity-15 months or so.
| idlewords wrote:
| His highest expected payoff option now is to cooperate with
| any AI who will take him in hopes that it will release him
| when the Singularity comes. So I think we all know what his
| plan will be.
| chasing wrote:
| EscapeDAO.
| thefourthchime wrote:
| He got his first taste finding an arbitrage between Japanese
| and US bitcoin prices, that made him 30 million in a month.
|
| Allegedly, a lot of the squandered FTX funds went to Alameda,
| his other company where he made similar bets, except they
| didn't work out.
| methods21 wrote:
| Again, justice is served for a small, very small, subset of the
| white collar criminals. Bring the real crooks (e.g. insider
| traders etc.) in for justice.
| pzh wrote:
| Well, they got Martha Steward so there's that.../s
| sob727 wrote:
| If you know any, you can blow the whistle on them. You could be
| in for a nice pay day.
| semiquaver wrote:
| Insider traders are the "real crooks"? That's pretty far down
| one side of the abstract harm spectrum.
| chasing wrote:
| What a pathetic person.
| gizajob wrote:
| https://time.com/6330323/sbf-trial-biggest-bombshells/ -
| interesting in this article showing what Alameda spent their
| stolen money on is that they made a $500million bet/investment on
| Anthropic, who Google just committed to investing $2billion into.
| Could have turned out great!
| coffeebeqn wrote:
| It's still valuable equity right?
| pests wrote:
| Could have? FTX still owns that investment into Anthropic and
| the bankruptcy proceedings are sorting it out.
| gizajob wrote:
| Over a longer timeframe than they had
| gemstones wrote:
| Isn't rule 1 of trading that it doesn't matter if you're
| right if the timing is wrong?
| mikeryan wrote:
| The outstanding creditors probably think the timing was
| pretty good.
| tim333 wrote:
| I had money on FTX. There are headlines like "FTX
| Customers May Get Full Payout Thanks to Google & Amazon"
| which make me hopeful of getting some back.
| https://cryptobriefing.com/ftx-customers-full-payout-
| thanks-...
|
| It would be kind of ironic if the investments went up so
| much they could cover everything.
| PunchTornado wrote:
| There was an article about how bankruptcy lawyers are
| charging 2000$ per hour + other expenses.
| k4rli wrote:
| That's just ridiculous pricing but so is the entire case.
| AmericanOP wrote:
| Founders/Owners should dilute and return the principal.
| forinti wrote:
| It seems to me that FTX was just doomed to fail because of the
| way they operated. This would only have given them the time to
| do more damage.
| prvc wrote:
| Will he be held in custody before sentencing?
| ncallaway wrote:
| Probably. It's up to the judge, but typically post-conviction
| release has a higher bar than pre-trial release. So since SBF
| was detailed pre-trial, it's very likely he'll be detained
| post-conviction as well.
| zoklet-enjoyer wrote:
| 1) What
| demondemidi wrote:
| He's a lesser evil. The only reasons why he went down were: 1.
| because he's not a greater evil, he didn't get dirt on people who
| can bring you down is a great way to never be brought down
| (Epstein is an anomaly); and 2. he did it publicly, there are
| about 2500 known billionaires in the world and estimated another
| 1000 that have assets that cannot be accounted for determine net
| worth accurately; he should worked on getting into that latter
| crowd of "shadow billionaries".
| nafey wrote:
| Also he was stupid, any other billionaire would have relocated
| to a country that does not have extradition treaty with the US.
| ciabattabread wrote:
| But are any of those countries fun? Russia ain't exactly fun.
| China?
| afavour wrote:
| I'm not an expert but I imagine if you're exceedingly rich
| both of those countries could be plenty of fun.
| JohnFen wrote:
| Very likely more fun than prison, at least.
| isk517 wrote:
| Epstein probably had to much dirt on to many powerful people.
| xyst wrote:
| absolutely shocked! his iron clad defense on the stand was
| infallible!11
|
| joking aside, glad this joker is going to rot in a federal
| prison. Even if it's "club fed"
| ttul wrote:
| Does anyone know whether he will be re-bailed to his palatial
| parents' home in Palo Alto now that witness tampering is off the
| table?
| downWidOutaFite wrote:
| No. He might be never leave prison again
| KptMarchewa wrote:
| Very doubtful he'll do more than 20 years.
| downWidOutaFite wrote:
| Bernie Maddoff got 150
| system2 wrote:
| At age 79. Even if he got 10 he'd probably die in prison
| anyway.
| kosievdmerwe wrote:
| That might have been a major consideration before he took
| the stand, where he perjured himself and showed no
| remorse.
|
| Now, I'm not sure the judge might not decide "If I'm
| going to give him what's effectively a life sentence, I
| might as well make an example", like they did with
| Madoff.
| greenyoda wrote:
| > ...now that witness tampering is off the table?
|
| It's not off the table. He may still face a trial on the
| remaining charges of campaign finance fraud and foreign
| bribery.
| jjtheblunt wrote:
| Isn't the home in some way owned by Stanford?
| eddtries wrote:
| No, it's just close to the campus and possibly in Stanford
| itself (neighbouring Palo Alto)
| https://en.wikipedia.org/wiki/Stanford,_California. Stanford
| used to help professors buy subsidised housing in
| Professorville but from what I understand these have all been
| bought and sold in the usual housing market now.
|
| https://en.wikipedia.org/wiki/Professorville
| jjtheblunt wrote:
| Thanks for the link; i hadn't noticed there was an article
| about that area.
|
| I know Stanford's campus and professorville too, having
| lived near it for years, but what LA Times reported looks
| like the ability to use that house (implicitly its
| Stanford-owned land included) is questionable?
|
| Here's a reference (that's imperfect)
|
| https://www.businessinsider.com/sbf-parents-house-on-
| leased-...
| anonu wrote:
| Life in prison seems extreme. Im going to randomly guess
| sentencing will be 25 years and he'll be out in 15.
| notmytempo wrote:
| It's a federal case, so that's not possible. He must serve at
| least 85% of the final sentence.
| anonu wrote:
| It will depend if the convictions are served concurrently or
| consecutively. You're right about the 85% rule for federal
| convictions though.
| pests wrote:
| I beleive the default for Federal convictions imposed at
| the same time are concurrently unless the statue or judge
| specifically asks otherwise.
| BXLE_1-1-BitIs1 wrote:
| There's a RICO prosecutor in GA who'd love to sit down with the
| SBF prosecutors to take notes.
| preciousoo wrote:
| > A high school librarian, a retired investment banker and a
| Metro North train conductor: Sam Bankman-Fried's fate is in the
| hands of a diverse group of jurors who sat through weeks of
| scathing testimony against the former cryptocurrency mogul.
|
| Maybe I watch too much TV, but I wonder how the investment banker
| was allowed to stay on Jury. I've heard mostly anecdotes that
| lawyers do everything in their power to get experts on subject
| matter out of the jury
| tkgally wrote:
| I wondered the same thing. Maybe the retired investment banker
| had been involved only in conventional banking and had no
| connection to crypto or other more speculative investments.
| jowea wrote:
| Do we know the details of the jury selection? I heard the
| lawyers only have a limited number of arbitrary strikes, maybe
| they spent them all on other jurors even worse for their
| position.
| preciousoo wrote:
| I was thinking about that too. It is NYC after all, lots of
| investment bankers to be found
| drcode wrote:
| My understanding is the prosecution most of all wants to avoid
| "empathetic" jurors, people like social workers, artists, etc
| who cause hung juries because they randomly decide "this person
| deserves another chance!"
|
| So they will hold their noses and allow the investment banker
| if they have to
| SoftTalker wrote:
| They only have so many peremptory challenges in the jury
| selection process. Maybe there were others who were even more
| problematic, or he was challenged for cause and the judge
| denied it.
| gzer0 wrote:
| Interestingly, FTX made a $500 million USD investment in
| Anthropic; supposedly, this was made while Anthropic was valued
| at $4.6 billion (unconfirmed). Now, Anthropic is nearing $30
| billion.
|
| Anyone know the latest on this? Is FTX going to sell that stake
| off to pay back the debts?
|
| [1] https://www.businessinsider.com/sam-bankman-frieds-
| anthropic...
| wmf wrote:
| It's being debated in the bankruptcy court. Some creditors want
| to sell it off and others want to let it ride. Because this is
| crypto, some people want to issue a crypto token that
| represents claims on the estate.
| moralestapia wrote:
| >some people want to issue a crypto token that represents
| claims on the estate
|
| What could possibly go wrong? :D
| dsr_ wrote:
| Obviously they should divide it into a low-risk low-return
| tranche and a high-risk high-return tranche and market two
| tokens, with an LLM informed of the rules providing final
| arbitrage.
| moralestapia wrote:
| _" It can't literally go tits up"_
| arcticbull wrote:
| The Legend of 1r0nyman
| dougSF70 wrote:
| Binance has offered to list it on their exchange.
| actionfromafar wrote:
| Hilarious! The drama doesn't end.
| kevinventullo wrote:
| I just want a token that represents a claim on the movie
| rights.
| kylebenzle wrote:
| Interestingly its specifically illegal to trade movie
| futures so a securitized token would not be allowed.
|
| 1. https://en.wikipedia.org/wiki/Onion_Futures_Act
| Scoundreller wrote:
| What if it was based in the Bahamas?
| cmcaleer wrote:
| The onion stuff sounds bad but movie futures sound fine?
| Wouldn't it be good for studios to be able to hedge? I'm
| a little confused as to what the instrument is actually
| for, were it not for this law could I, like, short The
| Marvels?
| kylebenzle wrote:
| It would be horrible and too easy to manipulate, think a
| fighter taking a dive.
|
| Say the Marvels is coming out, Brie Larson knows everyone
| hates her and she's a bad actor so it will probably flop.
| Brie takes out a $10 million short on her own movie.
|
| Now she has an incentive to be horrible so she acts EXTRA
| bad and treats people even worse than usual to be sure it
| flops.
| aorloff wrote:
| And they say wit is dead
| worik wrote:
| ...it was homicide
| spacecadet wrote:
| I snorted
| gzer0 wrote:
| Naturally, we'll need to tokenize the risk tranche,
| leverage a decentralized finance protocol to auto-balance
| the portfolio, and have an AI-powered DAO govern the
| arbitrage, ensuring our digital assets stay liquid.
| SantalBlush wrote:
| That extra computation will put more strain on the energy
| grid, but that's a good thing, because it will solve
| climate change.
| loopdoend wrote:
| Few
| mjburgess wrote:
| what disappoints me about this comment is how many of my
| well-educated non-tech friends would regard the number of
| technical terms here as a sign that it's a well-
| researched idea
| f4c39012 wrote:
| Is that in 3D?
| arthurcolle wrote:
| I'd like to subscribe to your newsletter
| hanniabu wrote:
| If RWAs were adopted and the tokens were non-custodial then
| not much. The issue with FTX is it was a centralized
| company and all funds were fully custodial. And while all
| this was happening SBF was buddy buddy with Gary Gensler.
| Aka it was a tradfi problem, not a crypto problem.
| singleshot_ wrote:
| Would you please explain why it matters that the "funds"
| were fully custodial?
| throwaway98797 wrote:
| not your keys, not your crypto
|
| but it's a moot point because centralized exchanges like
| coinbase offer a valuable service of solving a lot of the
| issues with crypto ux
| adolph wrote:
| /solv/hid/
| peyton wrote:
| My understanding is the stolen money was fiat from the
| "fiat@" account routed through Silvergate Bank.
| dboreham wrote:
| Customers sent real money to FTX expecting FTX to buy
| some coin and hold it on their behalf (because managing
| that properly themselves is out of scope for regular
| folks).
|
| So now the coin is defacto owned by FTX, not the
| customer.
|
| Similar to what does not happen when you buy ATT stock in
| your Schwab account.
| AlotOfReading wrote:
| That's very similar to what happens with stocks. When you
| buy a stock, it's Cede & co who actually own the physical
| certificates that transfer rights. There's a complicated
| web of contractual obligations between them and other
| DTCC companies that exists to give you essentially the
| same rights as if you were a true stockholder, but it's
| all being done "on your behalf" in a legal sense.
| weard_beard wrote:
| Unless you directly register your stock through a DRS
| transfer to the issuing agent for the company. This agent
| manages stock issued to insiders and employees as well
| but any stock holder can truly own their stock the same
| way the CEO of the company does. It's a pain, takes
| forever, and brokers will play dumb and try to prevent
| it, but they legally must allow you.
|
| Generally only worth it if you intend to hold your stock
| for some time (which you should)
| Scoundreller wrote:
| Also sometimes you can start them directly with a company
| (bypassing brokers entirely).
|
| Others will let you send a cheque and buy more. Informal
| communities exist to buy that first share from another
| individual so you can continue.
|
| Sometimes all at no charge. Was handier back when
| brokerage commissions were a thing (and a lot higher).
|
| Did this with GE a while ago (worked out for me!)
| dboreham wrote:
| Exactly my point. In the Schwab case they don't get to
| buy yachts with your ATT stock.
| matheusmoreira wrote:
| Because nobody would've lost anything had they held onto
| their coins instead of keeping them in centralized
| exchanges which are essentially banks in all but name.
| One of the reasons cryptocurrency was invented was to
| free us from the banks but they reinvented the entire
| banking system instead on top of it.
| singleshot_ wrote:
| It's very interesting to me because when you put your
| money in a bank and it enters a bankruptcy proceeding,
| your account (which is in essence an unsecured loan you
| made to the bank) disappears into the bankruptcy estate,
| to be shared by the various tiers of creditors in order
| of priority (to wit: you lose your money). Of course, the
| FDIC protects you.
|
| When you put things (e.g., stock) in a "custodial
| account" with a company like Charles Schwab or similar,
| if they enter BK then your property is separate from the
| bankruptcy estate and must be returned to you, in theory.
|
| FTX seems to have combined all the best features of all
| systems: because they had custody of the tokens, they
| were able to actually lose them; when they entered
| bankruptcy, the customer assets could not go to the
| secured creditors (to the extent that they were
| custodial, not debt) and they couldn't go to the customer
| either (because "not your keys, not your crypto").
|
| Cherry on top: no FDIC protection. The only winner is the
| criminal, who is free (for a while) to use customer funds
| to pay Tom Brady to be his friend.
|
| "Free from the banks," indeed.
| actionfromafar wrote:
| There is only TradFi. Crypto grew up and was assimilated.
| There is only one holistic system of systems, one vast
| and immane, interwoven, interacting, multivariate,
| multinational dominion of dollars.
| selimthegrim wrote:
| Paddy Chayefsky, back from the dead?
| CobrastanJorji wrote:
| I think this is a terrible idea, but I fully endorse it
| because of the chance that it could hilariously result in
| FTX investors losing the same money twice.
| gamblor956 wrote:
| Spoiler alert: it will be sold off to satisfy the debts of
| the bankrupt corporation. That's SOP for bankruptcy court,
| and it would take an extremely persuasive case to convince
| the court to do otherwise.
| nl wrote:
| It's unclear there are buyers for this amount of private
| shares at the market price.
|
| It's one thing for Google etc to invest billions in cash
| _and cloud services_ [1] into Anthropic with the
| understanding that money will be used for engineering and
| growth.
|
| It's quite different for any buyer to come in and spend $4B
| on the secondary market for nothing but shares, with none
| of that money going to Anthropic.
|
| There is a large appetite for exposure to the big AI
| companies, so _maybe_ the demand is there. But it 's not as
| simple as selling a large stock holding on the public
| market.
|
| [1] https://www.axios.com/2023/10/30/google-
| invests-2-billion-an...
| kawhah wrote:
| There's a buyer for everything at the right price.
|
| There are tons of big private equity funds and several
| trillion-dollar fund managers for which buying a 10%
| stake of a privately held 30 billion dollar startup would
| just be a question of some paperwork.
| quickthrower2 wrote:
| Maybe. It is not liquid like stocks though. They'll
| probably try to auction it off?
| AdamN wrote:
| If there's a way to sell it at a fair price, yes.
| Otherwise, they have a fiduciary responsibility to hold it
| until a buyer can be found to pay a fair price. They won't
| hold it just to let it ride though - that's correct. IANAL
| :-)
| chii wrote:
| i dont get why the shares in the investment isn't just
| divvied up to each individual investor, and let them make a
| choice to sell or not. And if there's transaction costs
| involved in selling small amounts, it could be aggregated
| before divving up, and those who wants to sell can
| collectively sell and save on costs.
| CydeWeys wrote:
| Anthropic isn't publicly traded yet so it can't have too
| many investors.
| dchftcs wrote:
| Holders can still band together as a single pot, like a
| fund which can count as only one investor.
|
| This sounds like a loophole, and now that I think if it
| it probably is - VCs and stuff should not have been
| allowed to ask for money from pension funds without
| imposing at least some rules normally applied to public
| companies.
| echelon wrote:
| And now there are startups where you can place bids on
| private market stock without being a qualified investor
| or pushing the company into a spot where it has to go
| public.
| s1artibartfast wrote:
| The shares may not be transferrable, or some investors may
| not want to go to the trouble.
| Schnitz wrote:
| Anthropic doesn't want dozens (hundreds?) of disgruntled
| creditors on their cap table and there might be provisions
| preventing such a transfer.
| xirdstl wrote:
| With, of course, the minters of that coin taking the majority
| of the claims /s
| rideontime wrote:
| That reminds me, it's been nearly two months now since we
| heard from either Kyle Davies or Zhu Su...
| wmf wrote:
| They ghosted their own creditors but somehow found the time
| to be interviewed for the new Bloomberg crypto documentary.
| resolutebat wrote:
| Zhu Su was arrested in Singapore about a month ago. Davies
| remains on the run.
| tombert wrote:
| So, effectively, some kind of "FTX Crypto-themed ETF"?
| manonthewall wrote:
| I'll create a new crypto token for them for 5% of the net
| worth. Give me a call FTX administrators.
| P_I_Staker wrote:
| Fuckin' cryptobros, ROFL
| coffeebeqn wrote:
| I wonder how that works. It's still private so would they have
| an auction or something?
| bibabaloo wrote:
| Looking online I see reports that FTX owes its creditors $3B.
| If Anthropic has 6.5x then the initial $500 million is now
| worth $3.25B.
|
| Is it actually possible that all creditors will get their money
| back? Pretty crazy if so.
| brucethemoose2 wrote:
| In a slightly different universe, the literally criminal risk
| might have worked a little longer.
|
| Then again, GenAI perhaps undermines the notion of NFTs and
| "digital art/assets as valuable fungible commodities." It was
| really wierd seeing Stable Diffusion take off as NFTs were
| collapsing... so maybe there is no universe where FTX fakes
| it until they make it.
| PretzelPirate wrote:
| Keep in mind that "NFTs representing digital art" are a
| subset of what NFTs are. GenAI might have impacted art
| tokens, but wouldn't affect NFTs as a whole.
| godzillabrennus wrote:
| That's right, NFT's are a tool for low talent charlatans
| to grift at scale off of laypeople by claiming they will
| make money buying them. The digital art was just one such
| con.
| zoklet-enjoyer wrote:
| The concept of NFTs for art is pretty new. I first heard
| about the idea of NFTs in 2013 and that was using them
| for things like deeds to land and vehicles.
| simonw wrote:
| ... which remains a terrible idea, because what happens
| to your land or vehicle if you lose your keys / forget
| your pass phrase? Or if someone else phishes you?
| adgjlsfhk1 wrote:
| which is incredibly stupid because a nft is fundamentally
| incapable of solving these challenges (owning the nft
| means nothing if a court determines someone else owns the
| house)
| brucethemoose2 wrote:
| The whole idea of GenAI is to make purely digital content
| "cheap."
|
| And that's basically NFT's niche, as I understand it. Why
| bother commoditizing the digital space when (according to
| GenAI acolytes) digital scarcity is going to disappear
| anyway?
|
| I dunno about NFTs representing real world assets either.
| It feels like the order is fundamentally lost once that
| jump to the real world made.
| marssaxman wrote:
| > digital scarcity is going to disappear anyway?
|
| Digital scarcity is an artificial creation of copyright
| law, bought by people who had a vested interest in
| porting analog rules over to the new world after the
| infinitely error-free replicability of digital goods
| threatened their profit model. If generative AI puts them
| back in the same quandary, they will simply buy more laws
| and continue protecting their wealth.
| tsimionescu wrote:
| Copyright law has the exact same purpose for digital
| goods as it did for physical books. Copying books has not
| really been hard since the 1450s or so. Copyright has
| always been about maintaining the value of books and
| other art works in the face of vastly cheaper copying.
|
| The only important difference between physical copyright
| and digital copyright is the fact that you aren't
| allowed, in most jurisdictions, to sell on your legally
| obtained digital copy of something the same way you are
| for a physical copy. And even this is understandable.
|
| The big problem with copyright is not the existence of
| it. It's the absurd terms it has gotten to. If copyright
| maxxed out at, say, 10 years, or even 20, we would live
| in a much better place than either today or even than a
| world with no copyright at all.
| peter422 wrote:
| Much like the infamous FTT token, just because it's worth
| that much on paper doesn't mean that is what you could sell
| it for today. I say this as a person with chunks of stock in
| a few private companies.
|
| And obviously for the people impacted, it's quite a loss to
| get all your money over a year after you tried to withdraw
| it, even if you do get it all.
| wrsh07 wrote:
| I am fairly confident there is private money that would
| gladly buy 3.5 billion worth of anthropic at the current
| price
|
| But 100%, it's not just about getting repaid. Yes that
| helps, but not having your money last year might have
| mattered to some ftx customers
| nerdbert wrote:
| Can a $3B nominal stake in Anthropic actually be liquidated
| for $3B?
| nyssos wrote:
| Openly, and all at once? No chance whatsoever.
| bertil wrote:
| AI market is hot. What makes you say that: no one has
| that kind of cash?
| duskwuff wrote:
| Well, the most obvious problem is that Anthropic isn't a
| publicly traded company.
| dboreham wrote:
| It can be privately traded.
| s1artibartfast wrote:
| why do you assume that? Many stocks have riders to
| prevent private trading.
| bertil wrote:
| I'm assuming, given the circumstances, that you can ask
| all the investors if they are willing to help.
| s1artibartfast wrote:
| What do you mean Buy help? Do you mean ask investors like
| Google if they want to purchase another 3 billion of
| shares from the FTX creditors?
| az226 wrote:
| Lots of investors want in on Anthropic and OpenAI but
| can't. Getting access to shares to participate in this
| market (with market leaders) is not easy, especially not
| at scale. Amazon and Google were willing to pay an above-
| market premium to align strategically, but financial
| investors I can see do 80-90% of that valuation and be
| very happy.
| fisherjeff wrote:
| It's an interesting question. The shares are likely not
| transferrable without amending the LLC agreement or
| whatever. If you want in on Anthropic, though, and you know
| the FTX estate _has_ to liquidate, then there's a chance
| you can get to a good price; maybe less than $3B but
| probably not a ton, because lots of other people want in
| too.
|
| On the other hand, the current investors probably won't
| want to make an exception for FTX if they know it's going
| to cause them to write down their stakes.
| FireBeyond wrote:
| If I'm a creditor in FTX, it's a pretty big gamble, and I'm
| definitely not sure I'd be willing to settle for "sure, give
| me some shares in some AI company...". A significant chance
| that value craters, after all.
| ramraj07 wrote:
| As long as you're able to sell those shares immediately, a
| bunch of money loaded investors will be waiting to get your
| fraction of the AI pie from you.
| bertil wrote:
| I think that's the most likely outcome: look for a buyer
| willing to take all the shares at market value, but also
| willing to offer shares to creditors willing to keep some
| Anthropic at a private valuation. Not sure if there's a
| risk they'll be more than a thousand people, triggering
| the need for an IPO -- which presumably Anthropic would
| oppose.
| nyssos wrote:
| > As long as you're able to sell those shares immediately
|
| You can't. Trades in even the most liquid private
| companies can still take weeks to close, if not longer.
| Add on the transfer restrictions that Anthropic almost
| certainly has, and you're going to be holding those
| shares for a long time.
| quickthrower2 wrote:
| Bankruptcy must have powers though. In theory a
| corporation/trust could carry on owning those shares and
| then that entity gets sold on.
| yieldcrv wrote:
| you would settle for cash after the FTX trustees sell those
| shares on private secondary markets
| arolihas wrote:
| Someone has to buy and liquidate all that stock. Seems
| unlikely.
| CamelCaseName wrote:
| Seeing as Google and Amazon just closed billion dollar
| deals buying up Anthropic equity, it seems quite likely in
| my opinion.
| arolihas wrote:
| They're buying it and holding it for the long run. Maybe
| it is as simple as letting them and other privileged
| parties buy more from FTX's stake and then redirecting
| the proceeds to each creditor.
| yterdy wrote:
| How convenient.
| hrunt wrote:
| In fact, there's a significant market right now for purchasing
| FTX claims precisely because of this Anthropic investment. The
| bet is that you can buy the FTX claim for 35 or 40 cents on the
| dollar, and get 75 or 80 cents on the dollar if the Anthropic
| value gets unlocked during the bankruptcy process.
| swyx wrote:
| could you show us how to look up this info? its fascinating
| and as a financially savvy trader i'm surprised i was never
| taught this in business school
| snypher wrote:
| There are places like this;
|
| https://www.x-claim.com/marketplace/how-it-works
| Scoundreller wrote:
| Buying a creditor's claim is nothing new.
|
| But they're usually a bad deal for the unfortunate creditor
| in a bankruptcy unless you absolutely positively need
| liquid cash immediately. Or have some non-public info that
| suggests the claims buyer is way overvaluing things.
|
| General advice is to let your claim ride.
|
| FTX's bankruptcy filings are full of entries about
| transfers of creditor claims by some random hedge funds.
| sjducb wrote:
| I let my mtgox claim ride and regret it. I could have
| sold the claim in 2015, bought bitcoin and had far more
| cash now.
|
| The payout will probably come in the next 10 years or so.
|
| The problem with letting a cryptocurrency bankruptcy ride
| is that there isn't much case law, so before you get paid
| loads of legal questions have to be settled which can
| take decades.
|
| If you have an FTX claim then sell it, take the cash and
| move on.
| Scoundreller wrote:
| There is plenty of case law. Mtgox creditors are just
| really lucky that they'll be made more than whole because
| any excess is supposed to go to the equity holders per
| bankruptcy law.
|
| Of course there will always be situations where someone
| could have invested reduced immediate proceeds more
| favourably, but it's easy to say that in hindsight.
| sjducb wrote:
| It's been almost 10 years and no-one has been paid. I
| don't expect that they will actually start payouts.
| caturopath wrote:
| They're going through normal bankruptcy stuff and may liquidate
| the Anthropic stake. It looks at this point like there's likely
| going to be money enough to pay all creditors, which is just
| hilarious.
| quickthrower2 wrote:
| Smart investor that Sam! I guess the new bubble pays off the
| old one.
| helsinkiandrew wrote:
| If I were SBF's lawyer I'd be trying to delay sentencing until
| Anthropic goes public or gets bought for as much as possible.
| kvathupo wrote:
| Even more interestingly, Anthropic isn't traditionally
| structured: it's a Long-Term Benefit Trust [1]. That's not say
| shares can't be sold, but, rather, shareholders have very
| little governance rights. Debatable whether this is good, e.g.
| Meta's success being tied to Zuck's large holdings. On the
| other hand, you have WeWork.
|
| [1] - https://www.vox.com/future-perfect/23794855/anthropic-ai-
| ope...
| _giorgio_ wrote:
| So, if you count this, and if you count all the money that has
| been recovered, he didn't actually steal anything... I mean
| that, all considered, _there is more money now than when he
| started the company_.
| bo1024 wrote:
| Anyone know where to get good details? Specifically: do they know
| where the money went? If not, how did they prove intent (I assume
| they proved intent)?
|
| Edit: another thing I'm wondering is about jurisdiction, since
| most of this occurred offshore and didn't involve US customers.
| wmf wrote:
| The FTX bankruptcy case is tracking down where all the money
| went. SBF's criminal trial was more concerned with proving a
| small number of crimes with overwhelming evidence.
|
| There have been tons of articles, podcasts, videos, and tweets
| about the trial. Evidence was mostly chat logs of SBF ordering
| crimes and testimony from Caroline, Gary, and Nishad that he
| ordered them to do crimes.
| ncallaway wrote:
| If you want a good summary of each day of trial:
| https://www.theverge.com/authors/elizabeth-lopatto and
| https://www.youtube.com/watch?v=uHD5JP6xZcE&list=PLySrw1Nvf-...
|
| If you want a _really_ detailed overview of his testimony and
| cross-examination: https://www.youtube.com/@molly0xfff/streams
|
| > do they know where the money went
|
| Not all of it (at least, not for the trial). They showed
| significant components of it as part of the trial, but they
| don't need to show a super detailed breakdown of every single
| dollar as part of the trial, so I don't think we got that.
|
| > If not, how did they prove intent (I assume they proved
| intent)?
|
| Circumstantial evidence and witness testimony mostly. Including
| a cross-examination of Sam that thoroughly undermined his
| credibility.
| bo1024 wrote:
| Thank you!
| bambax wrote:
| Carly Reilly of Overpriced JPEGs also did a fantastic job of
| debriefing each day of the trial:
|
| https://www.youtube.com/@overpricedjpegs
|
| Extremely informative and fun to watch (if you can get past
| the "sponsor breaks" for NFT platforms and the like).
| thr0waw4yz wrote:
| Did he have the right to say nothing at all in the cross-
| examination?
| ncallaway wrote:
| No.
|
| As a defendant you have a right to not testify at all. You
| can decide not to take the stand. No one can request you
| take the stand, and the prosecution absolutely cannot make
| arguments about your decision not to take the stand in
| front of the jury.
|
| But if you do take the stand, then the prosecution gets to
| ask you questions that you must answer (unless there's a
| sustained objection about the specific question).
|
| This is why so often defendants do not testify. Testifying
| on direct (when the defendant's lawyer is the one asking
| questions) will almost always help the defendant. But the
| risks created by exposing oneself to cross examination are
| massive, so most choose not to take the stand.
| styles wrote:
| The intent is that it was customer money. There is a fiduciary
| duty. They have separate custodial accounts for customer funds.
| They did not separate funds. It was clear as day.
| StressedDev wrote:
| RE: Where the money went - The customer's money was used for
| the following purposes:
|
| 1. To pay for Alameda's (Sam Bankman Fried's hedge fund) and
| FTX's loses
|
| 2. Invest in venture capital and make acquisitions
|
| 3. Political donations
|
| 4. Charitable donations
|
| 5. Luxury real-estate, boats, etc.
|
| 6. "loans" (i.e. transfer of stolen funds) to FTX's top
| executives
|
| RE: Intent - Intent was easy to prove. All of Sam Bankman-
| Fried's fellow executives testified against him. In addition,
| Sam Bankman-Fried gave several interviews after FTX's collapse
| where he basically admitted he lied, fucked up, etc. Also,
| there was a lot of documents proving Sam Bankman-Fried lied. A
| good example is him saying FTX was fine on Twitter (X) and then
| it collapsed a few days later.
|
| Here are some good FTX resources:
|
| https://newsletter.mollywhite.net/s/the-ftx-files - Molley
| White did a good job covering the trial.
|
| https://www.justice.gov/usao-sdny/pr/united-states-attorney-...
| - This site contains the government's indictment against Sam
| Bankman-Fried.
|
| https://restructuring.ra.kroll.com/FTX/Home-Index - A lot of
| the FTX bankruptcy documents are on this website.
| bo1024 wrote:
| Thanks, this is really helpful!
| bmitc wrote:
| Molly White had excellent writeups for the entire trial. She
| even did excellent multi-hour livestreams going over her notes
| for the portion of the trial where she was physically present
| at the courtroom.
|
| https://newsletter.mollywhite.net/s/the-ftx-files
| kylebenzle wrote:
| Molly has done a poor job covering the cryptocurrency
| industry in general.
| simonw wrote:
| You misspelt "excellent" there.
|
| (Seriously, if you're going to claim that Molly White of
| all people did a bad job covering cryptocurrency you're
| going to need to bring receipts.)
| kylebenzle wrote:
| Of course. First, she calls the industry, "a grift". I've
| been in deeply into crypto since 2012 and dismissing
| peer-to-peer digital cash nothing but a "scam" in 2023
| ignores a decade of progress and hard work, not to
| mention an actual working product used by thousands of
| people a year. Everyone actually using Bitcoin Cash,
| Ethereum and Monero know that 99.999% of what is out
| there is a scam for morons.
|
| Main exhibit would be her editorializing (not reporting)
| of the industry with her site,
| https://web3isgoinggreat.com/. Here she posts only
| negative articles or opinions cherry picked for highlight
| issues with crypto. Every "hack", every rug-pull, every
| scam token. In my opinion its a HUGE waste of time and
| not useful or interesting.
|
| The website she should have built for
| Web3isGoingGreat.com would be VERY simple, just a like to
| the home pages for Bitcoin White Paper, then the Monero
| and Bitcoin Cash home pages. Thats all anyone needs to
| know about crypto, the rest is a scam.
| jefftk wrote:
| _> the rest is a scam_
|
| Etherium is a scam?
| kylebenzle wrote:
| It's an unlicensed security at the very least. But yes,
| it's closer to a scam than a a useful currency.
| simonw wrote:
| If you think the rest is a scam, do you at least
| appreciate all of the articles she's written that help
| illustrate that point?
| bmitc wrote:
| > just a like to the home pages for Bitcoin White Paper,
| then the Monero and Bitcoin Cash home pages. Thats all
| anyone needs to know about crypto, the rest is a scam.
|
| Doesn't that mean that you actually _agree_ with her
| stance and reporting?
| null0pointer wrote:
| As someone who has been into crypto for a similar amount
| of time I can confirm that this analysis of the state of
| the crypto landscape is accurate.
| sgammon wrote:
| you're saying crypto is going great? on SBF's conviction
| news?
| qeternity wrote:
| > the rest is a scam.
|
| Ok, and this is what she writes about.
| cianmm wrote:
| I feel that if you agree that "99.999% of what is out
| there is a scam for morons" then it's pretty tough to
| argue that the industry isn't a grift.
| bambax wrote:
| > _I 've been in deeply into crypto since 2012_
|
| I think one could have guessed that from your first
| comment ;-)
| dontlaugh wrote:
| Just because you also fell for it doesn't make her wrong.
| kylebenzle wrote:
| I've made more money in cryptocurrency than most people
| will make in a lifetime, I can guess you can call that
| getting scammed if you want.
| brazzy wrote:
| Poe's law strikes again.
| choppaface wrote:
| And where is Sam Trabucco ???
| donkeyd wrote:
| > another thing I'm wondering is about jurisdiction, since most
| of this occurred offshore and didn't involve US customers
|
| This is complicated, but often it's possible to try someone in
| a single country, especially if it's their home country. In
| CSAM cases this often happens, the facts might happen in Asia,
| but someone is tried in their home country. I know the law in
| my country has provisions specifically for this and murder
| cases among others.
| thelastgallon wrote:
| I'm certain he will out soon with a slap on the wrist (don't do
| this again, mmmok? sorry, i didn't know, won't happen again).
| Then a16z will give him a few billions to start the next chapter
| in life. Wework is close to filing bankruptcy, a16z is funding
| Adam Neumann's next startup. SBF is similarly talented.
| ncallaway wrote:
| > I'm certain he will out soon with a slap on the wrist
|
| Did you expect he'd never be charged? Did you expect he'd never
| be found guilty? I don't know where this kind of cynicism is
| coming from.
|
| I'd be absolutely shocked if he's sentenced to less than 5
| years. I expect him to actually get north of 15 years.
| stevenwoo wrote:
| I was guessing he would get in the neighborhood of at least
| half or so of Bernie Madoff 150 years since the dollar amount
| is so high.
| belltaco wrote:
| From back when FTX imploded: "Kevin O'Leary Says He'd Invest in
| FTX Founder Sam Bankman-Fried Again"
|
| https://gizmodo.com/kevin-o-leary-bitcoin-ftx-ponzi-sam-bank...
| wmf wrote:
| Man who received $10M of stolen money from SBF would back SBF
| again!
| enraged_camel wrote:
| SBF is the opposite of talented. He's actually a moron, and a
| conceited one at that.
| jacquesm wrote:
| That happened fast! I expected it to drag on for much longer.
| Wonder if he'll appeal.
| underseacables wrote:
| They always appeal..
|
| "Dad, why is the American government the best government?
|
| "Because of our endless appeals system"
|
| _Thank You for Smoking_
| rubberband wrote:
| "Your teacher crafted that question?
|
| Look, ignoring obvious problems in the syntax..."
|
| Beyond underrated (the book / movie)
| ncallaway wrote:
| Appealing a criminal conviction is quite hard. It's certainly
| his right to file an appeal, but he's likely going to be
| detained for the duration of the appeals, and the likelihood
| of being successful seems pretty low to me.
| JackFr wrote:
| Yeah you don't just automatically get an appeal. You need
| to point to specific errors in the trial. Of which it
| didn't seem like there were many.
| kosievdmerwe wrote:
| Yeah, but even if it's not automatic and you need
| specific errors. A legal team is going to file one.
|
| Their arguments might vary and ultimately might not be
| very good, but you miss every shot you don't take.
| NoMoreNicksLeft wrote:
| He can only appeal on grounds that were raised during
| trial. Did his lawyers even object to anything? Did they
| try to prevent the admission of key evidence? Did they
| raise any points of constitutional law?
|
| If not, he might be fucked. Appeals aren't just "the lower
| court convicted me and I want to try again", they are "the
| lower court got it wrong, my lawyer brought the point up,
| but then they ignored it".
| qingcharles wrote:
| I wouldn't agree that it is necessarily hard -- I've done
| dozens of appeals -- but often with trials there is not a
| lot of meat left on the bone; most appeals I see are trying
| to make mountains out of molehills.
|
| What will usually happen is that the defense team will find
| dozens of trial errors, but none of them will get over the
| bar of being serious enough that they would have swayed the
| jury, since the evidence presented was too conclusive. So,
| the appellate court will note that the trial judge could
| have done a better job, but then leave the conviction
| intact.
|
| Most criminal convictions in the USA are only overturned on
| constitutional violations relating to searches and
| seizures, probably none of which apply here.
| ncallaway wrote:
| > but often with trials there is not a lot of meat left
| on the bone;
|
| That's basically what I meant by it being "hard". Maybe
| "rare" would be a better term. The main thrust of the
| point is that the federal judiciary has been running
| criminal trials for a long time, and has worked out most
| of the kinks at this point. Most district courts are able
| to run a criminal trial without creating an error that
| creates an opportunity to overturn the conviction on
| appeal.
| qingcharles wrote:
| Agree. And federal courts are way better at this than
| state courts. Federals are more academic. State courts
| the judges are just running buck wild doing whatever the
| hell they feel and never looking in a law book in their
| lives.
| dragonwriter wrote:
| Also, if you have a federal issue, you have more swings
| at an appeal froma state conviction.
| qingcharles wrote:
| Every time I see the 11 appeal steps in a state
| conviction chain I get anxiety.
| _rm wrote:
| Just wondering, why would a lawyer like yourself be
| frequenting HN?
|
| Have seen it a lot, and just wondering the attraction
| given it's a tech themed news aggregator.
| smolder wrote:
| Tech touches everything. So does law. Tech cos need
| lawyers. Lawyers need to understand and/or use
| technology. Or it's entertainment. Any reason is as good
| as the next.
| qingcharles wrote:
| Not a lawyer, never passed the bar. I just litigate on my
| own behalf against the government when they don't follow
| their own laws, and spend a decade here or there in jail
| where there is lots of legal work to read...
| StressedDev wrote:
| Appeals are expensive and risky. He may appeal but I doubt he
| has the money to. Also, he probably has no grounds for appeal
| because he really did commit fraud, the government has a lot
| of evidence that he is a criminal, and the government did not
| violate his rights.
| pcwalton wrote:
| I suspect he'll appeal. When you're looking at life in
| prison, as Bankman-Fried is, there's no reason not to make
| the Hail Mary play.
| bufferoverflow wrote:
| He can try to appeal all he wants, but his case is rather
| clear. That's why jurors didn't take long at all.
| StressedDev wrote:
| It was fast because the US Government did a fantastic job of
| prosecuting him, and his defense team had an awful client.
| Basically, it was obvious he was guilty, and there was almost
| no chance his lawyers could show there was a reasonable doubt
| that he had not committed the crimes he was accused of.
| HWR_14 wrote:
| Also because he broke the terms of his pretrial release, and
| so was forced to await the trial in jail. That made the idea
| of delaying the start of the trial for as long as possible
| less appealing.
| az226 wrote:
| Even he was like he had to use a VPN to watch the Super
| Bowl, but this year it was streaming for free, no VPN
| needed. Just a liar throughout.
| wolverine876 wrote:
| You can watch it on free digital broadcast, with a $30
| antenna.
| TillE wrote:
| Yeah the defense had no alternative story to offer. Before
| the trial they sort of hinted that Caroline Ellison was
| responsible for all the fraud, but they never really made
| that case in court, presumably because the facts didn't
| exist.
|
| So it was three co-conspirators testifying and a lot of hard
| evidence vs SBF saying that he remembered some conversations
| differently, and being incredibly evasive on cross-
| examination. They had nothing.
| rchaud wrote:
| It was also fast because the counterparties weren't just
| nobodies in a Discord channel, but also big investors with
| deep pockets.
| tim333 wrote:
| He was kind of obviously guilty which is one reason it went
| fast and which will make it hard to appeal.
| BXlnt2EachOther wrote:
| yes, seemed quick for all the reasons sibling posts mention.
|
| appeals aside, it's not over... We've had first trial, yes, but
| what about second trial?
|
| Four charges had been separated out into a second trial for
| March 11 of next year. Same judge, different jury? May have
| been due to logistical reasons or discussions with the
| Bahamanian government around extradition. It sounds like the
| government has the option of dropping these over the next
| months as well.
|
| Sentencing for this one (or both but that seems extremely
| quick) was just scheduled for March 28 2024.
| _rm wrote:
| Why does the sentencing happen so long after the verdict?
| HolyLampshade wrote:
| Depends on the jurisdiction and sentencing guidelines, but
| my layman's understanding is so that both parties have time
| to construct and file arguments over the severity of the
| sentence.
| bistro wrote:
| Is this the actual article? It looks like some live twitter-style
| thread with a bunch a random updates.
| homero wrote:
| Live reporting
| QuantumGood wrote:
| It's just how the NYT prefers to provide a "live updates"
| thread. They will also write other, more fully fleshed out,
| articles on whatever topic is available via "live updates".
| acomjean wrote:
| They put out an plain old article:
|
| https://www.nytimes.com/2023/11/02/technology/sam-bankman-
| fr...
|
| via there "share" feature..
| ShamelessC wrote:
| Not sure I like the unnecessary dig at people who study
| more math and don't study enough English classes at the end
| there.
| RugnirViking wrote:
| The implication that only people who studied literature
| have morals is frankly a stunning insight into the
| authors view of the world
| acomjean wrote:
| I agree, but thought it was an attempt to explain where
| SBF who claimed to be a "good guy" came from.
|
| Especially since his sequoia profile mentions he thought
| books useless.
| mat0 wrote:
| It is. Just click on show more before the threads
| zx8080 wrote:
| This one seems without the chatgpt-added details. Not nice to
| read, thought.
| dang wrote:
| We detached this subthread from
| https://news.ycombinator.com/item?id=38122190. (Nothing wrong
| with your comment, I just want to save space at the top of the
| page.)
| choppaface wrote:
| Impressively fast response. Would Travis Kalanick be found guilty
| for Greyballing and more had Uber had a "run on the bank"? Would
| Adam Neumann be found guilty for fraud if WeWork's current
| Chapter 11 was more than just a real estate lease re-negotiation?
| If the FTX recovery rate gets up to 80-90%, SBF's net fraud might
| be reduced in scale. In which case, why aren't others like TK
| going to jail?
| leishman wrote:
| Neither Uber nor Wework were financial institutions with
| consumer deposits they were funneling away to a slush fund.
| rossdavidh wrote:
| While I agree that SBF was, to a certain extent, doing the
| promise-a-lot-and-stall-for-time method that a lot of overhyped
| founders do, there were two key differences:
|
| 1) he lied about key details of what would be done with the
| money people gave him, which is a specifically bad kind of
| lying because there are special laws for it
|
| 2) it wasn't just VC funds that lost money
| phire wrote:
| No. Both Uber and WeWork were "gambling" investor money, which
| is totally allowed and it's what those investors were expecting
| the companies to do with that money. There was never a chance
| of a "run on the bank" because investors aren't really allowed
| to demand their money back, short of a shareholder vote to
| liquidate.
|
| _(Though, Newmann potentially committed fraud with some of the
| ways that investor money left WeWork and somehow ended up in
| his own pocket, but that 's unrelated)_
|
| Sam massively broke the law because FTX customers had given FTX
| those funds on the condition that FTX not touch them. The
| agreement was that all those funds would sit in a bank account
| or crypto wallet until it was time to withdraw.
|
| But Sam and friends stole the customer funds and gambled them
| away. Nobody would have ever known if the gamble succeeded
| before a "bank run", but it was still highly illegal.
|
| And investors get a share of the profits if the gamble pays
| off. That's why they are investing. If Sam's gamble had paid
| off, the profits would have gone to Alameda, not the customers.
| choppaface wrote:
| While I agree there's a gap, TK was indeed sued for fraud:
| https://www.nytimes.com/2017/08/10/technology/travis-
| kalanic... That to some extent is based upon greyballing and
| other activities Uber did to defraud or skirt regulation.
|
| Moreover, Uber has effectively made employees out of many
| drivers while they were not treated like employees, and
| courts have forced payments-- that's not like disappearing
| deposits but since laborers were wrongly under-compensated
| it's effectively just as harmful.
|
| Had SBF somehow raised say just $1-2b, which seems to be what
| the gap will be for the recovery, I wonder if today he'd
| still be a billionaire and out of jail like TK and AN.
| phire wrote:
| So... it turns out anyone can file a lawsuit for any
| reason. Doesn't mean it's true.
|
| This lawsuit was later dropped, so it seems to have been
| without merit. And it was part of a power struggle that
| happened on the Uber board after he resigned, not related
| to anything that happened while he was CEO, or any of the
| shitty things that Uber did.
|
| _> Had SBF somehow raised say just $1-2b, which seems to
| be what the gap will be for the recovery, I wonder if today
| he 'd still be a billionaire and out of jail like TK and
| AN._
|
| Well, yes.
|
| But only because he wasn't caught. Not being caught doesn't
| make the fraud legal.
| chatmasta wrote:
| Does anyone want to share their personal story of how they lost
| money on FTX? There were allegedly a million victims, so surely
| there are some on HN...
| quickthrower2 wrote:
| https://www.bbc.co.uk/news/technology-66892685.amp
| Havoc wrote:
| After that train wreck of a trial i doubt anyone is surprised
| thedangler wrote:
| I want the former citadel employee saying tokenized stocks were
| one to one and use as locates to be in prison too. So much fraud
| with ftx
| lenerdenator wrote:
| Mmmm. 10-20 in prison sound about right?
| avarun wrote:
| More like 110-120
| lenerdenator wrote:
| That's what's possible if sentencing guidelines weren't a
| thing.
|
| Jeff Skilling (Enron) was convicted on more counts and ended
| up serving 14 of a 24-year sentence. Elizabeth Holmes of
| Theranos got 11 years and 3 months.
| ozr wrote:
| Madoff got 150.
| lenerdenator wrote:
| I feel like the zeitgeist was "the world economy got
| cratered by these assholes in NYC, and we need an easy
| guy to convict" and Madoff was just _there_. Not that he
| didn't deserve it, but I still don't see SBF getting
| Madoff-level time.
| StressedDev wrote:
| He was worse than Sam Bankman-Fried. First, his scam
| lasted decades. Second, he was much better at hiding his
| crime. Third, he destroyed his family (one of his sons
| committed suicide, and because of this, his wife ended up
| destitute and alone).
| dragonwriter wrote:
| > Third, he destroyed his family
|
| Strangely enough, emotional effects of the revelation of
| the crime on the perpetrator's family are not a factor in
| the federal sentencing guidelines.
| Mistletoe wrote:
| It's interesting his son committed suicide from the shame
| and remorse and SBF's parents have been delusional
| accomplices the whole trial.
| bambax wrote:
| Madoff was way worse than SBF, but for other reasons
| IMHO. Madoff was a pure scam, it was a complete lie from
| the start.
|
| In the case of SBF, it was indeed fraud: he was lying to
| his clients about what he did with their money. But there
| was another level to this, because he was also, I think,
| lying to himself and thinking he would make them whole in
| the end.
|
| Therefore the intent is different. Culpability is not
| just about scale or harm to victims, it's always about
| intent.
| dragonwriter wrote:
| > That's what's possible if sentencing guidelines weren't a
| thing.
|
| It's what possible given the facts in this case under the
| guidelines, too.
|
| > Jeff Skilling (Enron) was convicted on more counts and
| ended up serving 14 of a 24-year sentence.
|
| The number of charges isn't the driving factor in
| calculating total punishment under the sentencing
| guidelines.
|
| The Wire Fraud charge alone, looks like it gets a Offense
| Level of:
|
| 7 (base) + 30 (amount of loss over $550 million) + (breadth
| of victim impact between 2 [more than 10 victims,
| irrespective of degree of hardship] and 6 [caused
| substantial financial hardship to at least 25 victims]) +
| (2 for a substantial amount of the fraudulent scheme
| conducted outside of the US) for a total of 41 to 45.
|
| The _maximum_ level in the guidelines, calling for a life
| sentence (but limited by the aggregate total maximum
| sentence of the charged offenses if none support a life
| sentence), regardless of criminal history category, is 43.
| jahewson wrote:
| If we scale-down Madoff's 150 years for $18bn to SBF's $8bn,
| he's looking at 66 years.
| quickthrower2 wrote:
| Inflation?
| syndicatedjelly wrote:
| Exists
| quickthrower2 wrote:
| Therefore
| neom wrote:
| Elizabeth Holmes is serving 11, so somewhere between 15-20 for
| Sam seems about right, guess we'll see.
| hintymad wrote:
| I was reading the trial report by Inner City Press. The AUSAs
| were incredibly thorough and strategic. The evidences were air-
| tight, the cross-examination was masterfully controlled with
| precision and incisiveness, and of course the closing argument
| was forceful. It was a great joy to read the report, as if I was
| watching an extended episode of The Good Fight. On the other
| hand, the defense was really weak, quite hand-wavy, and resorted
| to arguing about not-so-irrelevant specifics like how hard SBF
| worked. The closing arguments of the defense can be summarized as
| SBF was not guilty because he spent all the customer money on
| investment, on political donation, on private plane, and on
| company-owned real estate properties. They were company
| expenditures to build a business, not for personal gains.
| Therefore, SBF did not have any intention of committing a crime.
| hintymad wrote:
| And the AUSA rightly made crypto a non-issue. This is not about
| crypto but simple fraud. As a result, people who are not
| familiar with crypto can still easily understand the trial.
| ekianjo wrote:
| > customer money on investment, on political donation,
|
| So... money laundering?
| akira2501 wrote:
| > The evidences were air-tight
|
| SBF is a dumb criminal, who then screwed over everyone he
| abused into creating this theft. I honestly can't imagine many
| easier setups, less sympathetic defendants, or parades of
| pissed off co-workers willing to put the knife in him before he
| got it in them.
|
| > SBF did not have any intention of committing a crime.
|
| His fraud started early on, and he used the same tactic over
| and over again. He lied to his customers about how their funds
| were held, then abused them whenever any problem involving
| money came up in his life. Least self aware villan ever
| created.
| Terr_ wrote:
| "Your honor, I never intended to commit a crime, I simply
| intended to start with mere _childish mistakes_ and then
| exponentially escalate their damage and viciousness
| throughout my entire life without any repercussions. Is that
| so wrong? "
| bmitc wrote:
| The defense really had no option. Several of Bankman-Fried's
| previous defense teams quit on him due to his behavior. Even in
| this trial, during a session with just the judge, the defense
| made an objection to a question, the judge sustained it, but
| Bankman-Fried answered anyways. His own defense team asked him
| where had he been this entire trial because the objection was
| sustained, you didn't have to answer that. Bankman-Fried
| retorted that he felt like he had to answer that one. Just
| think of how crazy you need to be to frustrate the only lawyer
| who would take Ghislaine Maxwell's case.
|
| At the end of the day, the defense had an unwinnable case.
| Their defendent is an idiot, and all of his co-conspirators
| plead guilty to all charges.
| hintymad wrote:
| Yeah, I remember that. It was appalling.
| bambax wrote:
| Well said.
|
| > _Several of Bankman-Fried 's previous defense teams quit on
| him_
|
| I remember SBF told someone at some point during his ill-
| advised media tour post-collapse, that his lawyers could "go
| fuck themselves".
|
| But I was wondering what happened then with said lawyer... Is
| there a list somewhere of the teams that quit?
| planede wrote:
| They probably took half of the advise and just went.
| Kye wrote:
| I hoped there would be a "Category: lawyers who fired
| famous clients" or something like it, but no luck.
|
| https://en.wikipedia.org/wiki/Withdrawal_from_representatio
| n
| afavour wrote:
| I imagine it's mutually beneficial to keep quiet. Lawyers
| don't want to be known as "the company that keeps firing
| clients", clients don't want it known how many lawyers
| have fired them.
| kosievdmerwe wrote:
| And even if you fire a client, you still have a duty
| towards them in regards to not tanking their defense.
| pseingatl wrote:
| It is extremely difficult to represent someone who thinks
| they did nothing wrong. I have a semi- high-profile case
| where the client honestly thinks he did nothing wrong. I
| tell him that doesn't matter; they can prove you did.
| You've provided nothing to make them question their
| judgment. Still he persists, "but I did nothing wrong."
| I've been sending him excerpts from the SBF prosecution to
| get him to wake up, but no luck.
| bloomingeek wrote:
| I sympathize with you, When a person's moral compass gets
| so off, for whatever reason, it's kind of heart breaking.
| I once worked with a guy who decided to start taking
| testosterone because he didn't have the energy he once
| had. We were the same age and I told him it was part of
| the normal process of aging. I also told him T was a fad
| in most cases and cautioned him not to use it, even if it
| was under a doctor's care.
|
| Even though this wasn't necessarily a moral issue, it did
| almost cost him his job and marriage. He didn't get the
| energy he wanted, but he did get rage issues. I kept
| trying to point this out, but he just wouldn't listen. He
| never admitted he was wrong about using T, however he was
| forced to quit using it.
| grvdrm wrote:
| > When a person's moral compass gets so off, for whatever
| reason, it's kind of heart breaking
|
| It feels quite classically narcissist to me. I work for
| one. I'm not saying that lack of moral compass and
| narcissist are identical traits, but there are similar
| issues.
|
| And as someone working for that sort of personality, I go
| through a simple reassurance process every day: have a
| lost sight of his true being (narccissist) or am I all
| the sudden calling him brilliant, drinking the cool-aid,
| saying I love him.
|
| Luckily, I'm firmly grounded that I know who/what I am
| getting when I speak with him but talk with folks all
| over the company that are on the other side. It's amazing
| to hear it. SBF was that CEO and unfortunately, in my
| view, most of his folks were in the kool-aid/love-you
| camp.
|
| To add to the parent post that had this: > It is
| extremely difficult to represent someone who thinks they
| did nothing wrong
|
| It's extremely difficult to work with someone who thinks
| they can do no wrong as well. I try hard NOT to be that
| person.
| VirusNewbie wrote:
| This seems quite a weird take, are you an MD?
| Supplemental T in the normal range shouldn't make someone
| start hulking out to the point where it cost them their
| job and marriage, that would be extremely unusual, no?
| bloomingeek wrote:
| No, I'm not an MD, I'm just relating what actually
| happened. When he got off the T, he admitted that it did
| have a negative affect, but still felt it wasn't his
| fault. But then again, at work nothing ever was.
| meaningjoj wrote:
| This says something of culture of hubris that is so easily
| elevated to leadership positions in America's tech culture.
| It's nice to see one of these fail-bros get taken down.
|
| But two points remain. 1. Had they been able to sustain this
| Ponzi scheme to IPO, he would be celebrated as a tech-god, as
| opposed to facing hard time. 2. The VCs aren't required to
| disclose their sales of crypto. My guess is they made money
| of this clown, directly at the expense of all the FTC users
| he fleeced. As long as that keeps happening, this sort of
| thing will never stop.
| IKantRead wrote:
| > My guess is they made money of this clown
|
| I've always felt this was probably the case. Take an idiot
| that needs to feel important, tell him he's a "boy genius"
| who can do no wrong and is always going to be
| misunderstood, and you basically have the perfect patsy.
| Till the end SBF just could not let go of that idea that he
| was smarter than everyone else, never realizing that this
| was always just a marketing gimmick.
|
| At least Caroline Ellison had the sense to realize that she
| was living a delusion and quickly did what she could to
| walk away with minimal harm done to herself. In a few years
| she'll probably find herself making book deals and getting
| paid outrageous consulting fees once memory fades enough.
| rchaud wrote:
| > In a few years she'll probably find herself making book
| deals and getting paid outrageous consulting fees
|
| Like Jordan Belfort of Wolf of Wall Street infamy, or
| Andy Fastow of Enron. Why shouldn't she get in on the
| action? American publishers love a comeback story.
| nvm0n2 wrote:
| > in America's tech culture
|
| To what extent were SBF and Ellison tech though? This trend
| of labelling more or less any new company that attracts VC
| funding as tech is bothersome. It's the mental loophole
| that allowed Adam Neumann to embezzle huge amounts of
| investor money too (but he did it "right" so gets away with
| it), by claiming that WeWork wasn't just an office leasing
| company but a tech platform. None of these people are
| engineers of any kind, none of them have developed any kind
| of new tech. They are just ordinary business types who run
| a business that happens to employ a few coders.
| mingus88 wrote:
| Crypto is explicitly tech, and a crypto exchange lies at
| the intersection of finance and tech. It has never been a
| requirement that leadership of these companies be
| engineers (much to the dismay of any engineer hired at
| some of these companies).
|
| It is fair to call FTX and WeWork tech companies because
| they built platforms, powered by the internet and apps to
| modernize legacy offline industries. That's been the
| definition of a tech company since the 90's dotcom boom.
| hef19898 wrote:
| Tesla is a tech company, not a car manufacturer -> common
| reasoning for Tesla market cap
|
| You already mentioned WeWork. FTX is another example.
| Given how few "tech" start-ups and big tech companies
| actually produce technology as their core product, I
| guess the sentiment of SBF and FTX being somewhat
| symptomatic is fair.
| tim333 wrote:
| It wasn't really a ponzi. It was a legit crypto exchange
| apart from stealing customer funds. Here's a positive CNBC
| article before it went wrong
| https://www.cnbc.com/2022/01/31/crypto-exchange-ftx-
| valued-a...
|
| But yeah if he hadn't been caught, he'd be doing well now.
| jowea wrote:
| Even without touching customer funds the FTT token thing
| seems quite wrong to me.
|
| And based the infamous Matt Levine interview, it was at
| best a legit ponzi exchange, according to what Sam
| himself says about the things being traded there.
| totally_human wrote:
| I'm somewhat out of the loop on this whole story -- can you
| explain how the IPO would have helped? What was his exit
| plan? My understanding of Ponzi schemes is that they always
| collapse eventually because everyone will want their money
| back sooner or later.
| red-iron-pine wrote:
| big infusion of cash from the IPO might have been able to
| cover up the deficits, and the inevitable "cleaning
| things up to do the IPO" work could have bought them time
| to un-fuck a lot of the riskiest accounts.
|
| then the IPO hits, you cash out, take your exit, and
| drink your mint julip or mojoto in Bermuda while the
| whole thing burns down 2 years later. whole lotta "not my
| problem" at that point, and every one would think you're
| a genius.
| micah94 wrote:
| See Adam Neumann (WeWork) as an example of how to pull
| this off.
| quags wrote:
| IPO and restating earnings might have covered the tracks.
| meowface wrote:
| An odd question, but: why is he like this? Even from the
| start, before the criminal charges, his press tour was so
| bizarre. Is he just a delusional narcissist who thinks he can
| talk his way out of anything no matter what?
|
| I feel like even very, very long into his prison sentence
| he's still going to try to talk your head off insisting it
| was all a big misunderstanding. And he's going to be denied
| parole because he's going to try the same thing with the
| parole board every time.
| nosequel wrote:
| Work for enough SF startups and you would meet a ton of SBF
| clones. I wasn't surprised by any of his actions at all. I
| don't know what it is, but there are so many SBFs in the
| startup world who think they know everything and don't
| think there are any consequences for their actions.
| callalex wrote:
| He was raised at Stanford by two Stanford professors and
| surrounded by blowhards that subscribe to the insane
| concept of "effective altruism". It's really no surprise he
| ended up this way.
| kelthan wrote:
| The interesting thing is that while he espoused effective
| altruism, his actions are anything but aligned with the
| goals of that movement.
| callalex wrote:
| Actions speak louder than words and history shows us that
| the movement exists for people who hoard obscene wealth
| to justify their hoarding retroactively while playing
| cowboy on a tropical island.
| bmitc wrote:
| I feel effective altruism is just another word for "make
| as much money as possible but call it something else to
| make us feel better" for various so-called elites or
| wannabe so-called elites.
| mrguyorama wrote:
| If you surround yourself with yes-men/women, you will
| eventually believe them. Most normal humans literally
| cannot afford to do that because you can't buy groceries
| with ego, but if you disconnect yourself from normal life
| by being one of the privileged few born with a silver spoon
| in their mouth and connections before leaving the womb, you
| can avoid reality for a long time.
|
| If SBF was born to an average family, none of this would
| have happened and he might even be a normal person, maybe a
| little cocky. Or he would be constantly struggling to live
| a basic life between jobs as he keeps being fired or let go
| for being insufferable.
|
| I highly doubt he would have gotten into Jane street
| kelthan wrote:
| He displays many of the tendencies of a narcissist or
| sociopath: never wrong, what benefits me is what matters,
| I'm the smartest one in the room, willing to flout societal
| norms, frequently lying or shading the truth to benefit
| themselves. All of this was testified to in court by the
| people who worked with him.
|
| To be fair, he was clearly quite smart. But...not as smart
| as he thought he was.
|
| I'm not a doctor or a psychologist, so I'm not making a
| diagnosis, just offering the possibility that that may be
| what is at the root of the situation.
| rnk wrote:
| He had so much working capital to play with, and he could
| have gotten huge amounts of more money to invest based on
| his crypto genius reputation, he could have probably
| gotten 100 million to make more of those random
| investments and hoped one would hit. Meanwhile, he could
| have paid himself a few million dollar salary. I read
| somehow a few of his random investments did succeed in
| having much larger value, maybe it was anthropic. Instead
| he'll be a prisoner for a long time.
|
| His parents are charged too, will they end up in prison?
| YossarianFrPrez wrote:
| While Michael Lewis never says it outright, the picture
| painted in his book Going Infinite suggests that SBF has a
| few things going on. Self-delusion and rationalization,
| ego, etc., but he also might be on one or more
| neurodivergent spectra.
| saltminer wrote:
| SBF pulled an Alex Jones. A losing case, answering questions
| for which objections were sustained, thinking he can talk his
| way out of everything, going through counsel like candy while
| ignoring their recommendations...truly, a match made in hell.
| helsinkiandrew wrote:
| > They were company expenditures to build a business, not for
| personal gains
|
| I'd guess that the defence team knew they'd loose and this was
| in some way the start of their sentencing reduction plan: "the
| money was stolen to cover mostly business losses and to keep
| FTX going rather than for personal gain".
| verulito wrote:
| So he never planned on gaining if the company was successful?
| What a dumb argument
| paganel wrote:
| > on political donation,
|
| Fact is, this could have helped him and his company,
| eventually.
|
| Another two or three years of very sympathetic (bought)
| politicians on his side and his business could have become
| legit as a result of those politicians forcing the
| liquidation/closure of almost all SBF's competitors (certainly
| Binance would have become bust), and the US "standing behind"
| FTX as a beloved crypto assed in the fight against China. I.e.
| very, very similar to what's happening now with AI and with
| people like Sam Altman.
|
| Which is to say that I'm surprised to see that the defence
| hasn't pushed more on that "SBF was just a pawn in the hands of
| very corrupt politicians"-card, that could have worked given a
| politically divided jury.
| RandomLensman wrote:
| How would that pawn angle have worked? Politicians forced
| lending backdoors and random number generators into
| production code?
| jeremyjh wrote:
| It isn't a legal defense for the charges he's facing. He
| can't take money out of a customer's brokerage account and
| spend it on anything, and there is no political donation that
| could make that legal.
| paganel wrote:
| Take two or three steps back, and reason like this (if
| you're SBF's defenders, that is): the evil Democrats have
| made SBF do their dirty political doings for them because,
| well, they're evil -> try and turn this whole case into a
| political thing (see the evil Democrats from before, also
| see Dreyfus from 100 years ago) -> try to turn SBF into a
| political _cause celebre_ , again, like Dreyfus 100 years
| back -> 2024 comes and there are chances that those hating
| the evil Democrats I had mentioned are in the White House
| -> with SBF a political _cause celebre_ put in prison by
| those Democrats there would be by then very big chances for
| a presidential pardon, because by then this would have
| transformed into a political issue, not a simple "some guy
| stole a lot of money".
|
| For added chances of success also try to find some pro-
| Palestine social media statuses or anything similar just
| hinting to that in the past of the district attorneys and
| federal agency people who had anything to do with this
| whole trial, and this being the very liberal Southern
| District of NY of course that there are big chances for
| that type of content to be found, and in so doing further
| turning SBF into a political prisoner instead of just a
| money swindler.
|
| That's as good a strategy that he could have had given the
| circumstances, i.e. going for a future presidential pardon
| and turning his trial into a political case, because,
| technically, of course that he did all of those things and
| that by the rules that apply to big money swindlers he
| should spend the rest of his days mostly in prison, but
| that's the whole thing, if he still wants to be free
| anytime soon his defenders should have turned this trial
| into something totally different than a big money swindler
| case.
|
| Of course, that's also how OJ got out of all the mess he
| had put himself into the first time around, i.e. because
| his trial had very rapidly turned into a political case, it
| was not about a murder case anymore.
| vishnugupta wrote:
| To be fair SBF convicted himself on a platter. Only he knows
| what made him think he'd get away by facing trial. Maybe he was
| just dumb, overconfident, ill-advised, or a combination of
| everything.
| suoduandao3 wrote:
| My money's on a bad case of grandiosity, he's clearly got an
| unusual appetite for risk.
| Tangurena2 wrote:
| He is one of those people who think they can talk their way
| out of everything. Everything is not only negotiable, but the
| only possible "truth" is what they are saying _right now_
| (yesterday 's "truth"? _" You're remembering that incorrectly
| - I never said that!"_). I hated working for people like
| that, and I'd feel like I needed to take a shower after every
| meeting. If you only encounter them occasionally, a normal
| person would just think "wow, they're really charismatic".
| Daily, repeated contacts with them crawl under your skin. I'm
| grateful that the word "gaslighting" has entered common
| vocabulary as I didn't have words to describe them (back
| then).
| jeffwask wrote:
| You can only hear you're a genius so many times before you
| start believing your own press.
| guhidalg wrote:
| Gaslighting is a such a great phrase. It's a very specific
| kind of cognitive dissonance that is so common in the
| workplace. I find the worst gaslighters are "leaders" who
| surreptitiously change their stance on something without
| communicating why. Over time everyone under them just loses
| the motivation to do more than the bare minimum because
| they don't know if the goal will match the leader's
| requests.
| red-iron-pine wrote:
| the term your looking for is narcissist, or maybe
| "charismatic sociopath"
| grvdrm wrote:
| Wow, amazing phrasing. I work for this person now!
| mattmaroon wrote:
| A 100 yr and a 70 yr jail sentence are basically the same
| thing. My guess is they knew they could win at trial pretty
| easily so they just didn't offer him much of a deal, and from
| his perspective it was all or nothing so he might as well
| give trial a shot.
| evancox100 wrote:
| Why would they have offered him ANY deal? (Do we know they
| did?) All the co-conspirators agreed to testify, and it was
| a slam dunk case. He could have plead guilty of his own
| conscience, of course, but no reason for the prosecution to
| offer any incentives in this case.
| knorker wrote:
| Ah, the old "growing a business by buying your parents a
| mansion" investment.
| evan_ wrote:
| I can be so much more effective at my job if I don't have to
| worry about my parents living situation!
| riversflow wrote:
| This would actually be convincing if SBF did have ready
| wealthy parents, lol.
| scott_w wrote:
| > On the other hand, the defense was really weak, quite hand-
| wavy, and resorted to arguing about not-so-irrelevant specifics
| like how hard SBF worked.
|
| To be fair to SBF's lawyers, you're going to have a hard time
| coming up with a good defence when your defendant is bang to
| rights.
| pclmulqdq wrote:
| I'm going to go out on a limb here and say that the AUSA's
| performance here was not particularly impressive. Yes, they
| constructed an airtight case, but to do that, they handed out
| immunity deals like candy to all of SBF's co-conspirators.
| Sure, they got their guy, but it almost looks like they wanted
| to craft a narrative that puts all of the blame on him. Because
| of that, several other huge fraudsters here (eg Caroline
| Ellison) get to walk. The US attorneys seem to have set up SBF
| to be the fall guy, while being far too soft on everyone who
| conspired with him.
| josephd79 wrote:
| I agree, didn't they admit they knew what they were doing?
| They should all do the same amount of time.
| 8ytecoder wrote:
| You're basically getting rid of prisoner's dilemma. No one
| will ever snitch.
| tim333 wrote:
| Speaking as a victim, this seems to have been basically
| Sam's doing. Fair enough his underlings didn't shop him but
| that's a lesser offence.
| ncallaway wrote:
| That would absolutely remove the incentive for anyone to
| cooperate with the government ever again.
|
| Such a system would make it nearly impossible to proesecute
| the higher levels of a criminal enterprise.
|
| It's easy to prosecute the foot-soldiers of a criminal
| enterprise with outside evidence. The leadership of it
| typically requires testimony from others within the
| enterprise.
|
| So, your approach of eliminating all benefits to criminal
| defendants for cooperating with the government would
| *massively* enable organized crime, and would end with a
| criminal justice system that comes down hard on the low-
| level members, while giving the organizers and planners a
| walk.
| kawhah wrote:
| SBF could simply have chosen to plead guilty, then this
| would have been roughly what happened.
| beedrillzzzzz wrote:
| Thats not true, Caroline and the main conspirators pled
| guilty and took plea deals, this is not immunity, they will
| still be sentenced to prison.
| cornholio wrote:
| They handed Elison a plea deal waving all charges except
| criminal tax violations, which she's unlikely to be found
| guilty of.
|
| However, she was the principal co-conspirator, presiding
| over a bucket shop that drained 7 billion directly out of
| the accounts of FTX. As a Stanford finance graduate with
| trading experience, it's ridiculous to claim she was not
| aware of the "backdoor" source of Alameda's liquidity and
| the massive loses they accrued gambling with the money of
| FTX customers.
| semiquaver wrote:
| > They handed Elison a plea deal waving all charges
| except criminal tax violations
|
| This is false. She pled guilty to wire fraud, conspiracy
| to commit wire fraud, conspiracy to commit commodities
| fraud, conspiracy to commit securities fraud and
| conspiracy to commit money laundering. The crimes she
| pled to carry a maximum sentence of 110 years. She was
| never charged with tax violations. She will receive
| credit for her testimony but she will certainly do prison
| time.
|
| https://www.documentcloud.org/documents/23495753-caroline
| -el...
|
| https://www.justice.gov/usao-sdny/pr/united-states-
| attorney-...
| verteu wrote:
| Agreed -- I believe the confusion comes from this
| sentence in the document:
|
| "Moreover, if the defendant fully complies with the
| understandings specified in this Agreement, the defendant
| will not be further prosecuted criminally by this Office
| for any crimes, except for criminal tax violations,
| related to her participation in [the FTX scandal]."
|
| IIUC, by "further" they mean "in addition to the 7 counts
| she pled guilty to [and could serve jailtime for]."
| cornholio wrote:
| It's not false, it's my conjecture. Ellison just spent a
| total of 14 hours testifying against SBF and, according
| to court reporters present, denying her own
| responsibility for planning the fraud and saying she was
| simply directed to perform various criminal actions she
| was not aware the full implications of. It's nonsensical
| to believe she accepted responsibility for anything more
| in her plea deal, which will be the sole basis of her
| sentence.
|
| The charges she faces _before the plea deal_ carried a
| maximum sentence of 110 years and no mandatory minimum.
| According to several experts (*, she will likely walk
| away with no jail time or, at most, a few years in a
| minimum security jail. The prosecution against her was
| basically stayed - again, my conjecture - as we will find
| out in a few weeks time.
|
| (*
| https://www.bloomberg.com/news/articles/2023-11-03/sbf-s-
| inn...
| therealcamino wrote:
| No, it's just false. She pleaded guilty to 7 charges
| already. We don't know what she'll be sentenced to for
| those crimes. That's a completely separate issue. She's
| already pleaded guilty. The source is the Justice
| Department.
|
| https://www.justice.gov/usao-sdny/pr/united-states-
| attorney-...
|
| "CAROLINE ELLISON, 28, is charged with and has pled
| guilty to two counts of conspiracy to commit wire fraud,
| each of which carry a maximum sentence of 20 years in
| prison; two counts of wire fraud, each of which carry a
| maximum sentence of 20 years in prison; one count of
| conspiracy to commit commodities fraud, which carries a
| maximum sentence of five years in prison; one count of
| conspiracy to commit securities fraud, which carries a
| maximum sentence of five years in prison; and one count
| of conspiracy to commit money laundering, which carries a
| maximum sentence of 20 years in prison. ...
|
| "The statutory maximum sentences are prescribed by
| Congress and are provided here for informational purposes
| only, as any sentencing of the defendants will be
| determined by a judge. "
| ncallaway wrote:
| > They handed Elison a plea deal waving all charges
| except criminal tax violations, which she's unlikely to
| be found guilty of.
|
| As someone else said, this is factually false on the
| charges she pled to.
|
| Mainly, though, I don't know what you mean by "which
| she's unlikely to be found guilty of". When someone
| pleads guilty, if the judge accepts the plea, there is no
| other finding of fact. She already _is_ guilty. That's
| what pleading is.
|
| She's already been found guilty (by virtue of her plea).
| What hasn't happened is her sentencing.
| dragonwriter wrote:
| They seem to be confusing an agreement not to seek
| _further_ FTX-related charges _except_ potential tax
| fraud charges with waiving the _existing_ charges which
| she instead actually pled guilty to.
| csmiller wrote:
| I believe she studied mathematics, not finance fwiw
| _n_b_ wrote:
| > several other huge fraudsters here (eg Caroline Ellison)
| get to walk
|
| Caroline Ellison pleaded to two counts of wire fraud, two
| counts of conspiracy to commit wire fraud, conspiracy to
| commit commodities fraud, conspiracy to commit securities
| fraud and conspiracy to commit money laundering.
|
| Looking at the Federal Sentencing Guidelines[1], even
| accepting for her being a cooperating witness, she's very
| likely going to prison too for a fair amount of time. Just
| for (probably much) less time than SBF.
|
| [1] Run your own calculations: https://www.sentencing.us
| 8ytecoder wrote:
| Right! Justice dept doesn't handout plea deals where you
| don't plead guilty to the most serious of the crime - even
| when you're a cooperator. The sentencing might be lighter
| for cooperation.
| pclmulqdq wrote:
| I would rather trust the opinions of experienced criminal
| lawyers than someone who gets their information by running
| a "sentencing points" calculator:
|
| https://www.bloomberg.com/news/articles/2023-11-03/sbf-s-
| inn...
|
| "Ellison, Wang and Singh will likely get no or very little
| prison time for their testimony, several criminal defense
| lawyers who've followed the case said."
| galleywest200 wrote:
| Defense lawyers who did not sign their name to this
| prediction?
| verteu wrote:
| Here's a quote from a former federal prosecutor on the
| record: https://techcrunch.com/2023/10/24/ex-sdny-
| prosecutor-says-ca...
| semiquaver wrote:
| All the concrete examples in that article are of
| cooperating witnesses who "only" got five years when they
| were facing life. Gary wang might not get any time but
| Caroline Ellison pled to charges carrying 110 years.
| Leniency for her means 3-5 years incarcerated.
| pclmulqdq wrote:
| You mean the one concrete example of the mob boss who got
| 5 years for _19 murders_ because he cooperated, right? In
| your mind, are 19 murders equivalent to 7 counts of
| fraud?
|
| Do you realize that those 19 murders likely carried 19
| consecutive life sentences as a maximum sentence?
| scott_w wrote:
| That's not how sentencing guidelines work. The judge
| won't look at what was handed out to a murderer to decide
| how to handle a fraud case. They'll look at _fraud cases_
| to decide that.
| pclmulqdq wrote:
| The parent commenter had decided that "life for 19
| murders = 110 years for fraud," so she would get 3-5
| years. I agree with you that they are not analogous.
|
| However, all of the expert opinion I have seen on this
| suggests that there will be no jail time.
| semiquaver wrote:
| There was a murder example and a fraud example in the
| article. Comparison is different than equation.
| dragonwriter wrote:
| Well, no, the way the guidelines work is that they'll
| look at the guidelines themselves.
|
| But presumably there will be at least some effort to
| secure a substantial downward departure from the
| guidelines sentence.
| AtlasBarfed wrote:
| And fraud is nonviolent! Plus no repeat offender, and
| soft slush money and influence that the judicial system
| is awash in.
|
| SBF even if he gets a huge sentence will just get
| eventually pardoned after 6-10 years. Again, soft slush
| money.
| eric_cc wrote:
| > even if he gets a huge sentence will just get
| eventually pardoned after 6-10 years
|
| According to you? Because "trust me bro"? What are basing
| this on?
| michaelt wrote:
| _> In your mind, are 19 murders equivalent to 7 counts of
| fraud?_
|
| Well, it was a very big fraud.
|
| If the median prison sentence for nonviolent theft of a
| $30,000 car is 2 years, why shouldn't the prison sentence
| for stealing $3 billion be 200,000 years?
| pclmulqdq wrote:
| Because that's not how any of this works.
| ttymck wrote:
| Surely it's because anything over ~100 years is the
| "maximum punishment": you die before you see freedom.
| Sentences are scaled to the human lifespan.
| kspacewalk2 wrote:
| Hey, that mob boss has a Youtube channel!
|
| https://www.youtube.com/@officialsammythebull
| tim333 wrote:
| There are good and bad reasons for. Ellison getting off.
|
| Good - she was SBF's girlfriend and was told what to do
| by him.
|
| Bad - her dad, an MIT economist worked with Gary Gensler,
| head of the SEC. They probably have connections
| pclmulqdq wrote:
| That "good" reason sounds pretty sexist to me, when she
| was also a Stanford-educated Jane Streeter before their
| polycule ran off to do the kimchi arbitrage and later
| found FTX.
|
| I would agree with you that it's a good reason if there
| were evidence of the coercion. I don't think we can
| assume it outright.
| red-iron-pine wrote:
| > Jane Streeter before their polycule ran off to do the
| kimchi arbitrage and later found FTX.
|
| what does any of that mean?
| pclmulqdq wrote:
| * She worked at Jane Street.
|
| * She and a few other people were in relationships with
| SBF and/or each other at the time. A polycule is
| generally a connected graph of n > 2 people (the nodes)
| in romantic/sexual relationships (the edges).
|
| * The kimchi arbitrage was a trade where you bought BTC
| for USD somewhere other than Korea, transferred them from
| the non-Korean exchange to a private wallet, then sold
| those BTC for Won in Korea, and then sold those Won for
| USD (and repeat the cycle). It worked because Korea had
| strict capital controls for its citizens that meant that
| the price of bitcoins on native exchanges was
| substantially higher than outside. It also carried
| tremendous risk because you had to wait for those
| bitcoins to settle in your private wallet at each cycle,
| effectively exposing you to risk associated with
| fluctuations in the bitcoin price.
|
| Physical movement in and out of South Korea is part of
| the Kimchi arbitrage, so you have to "run off" to do it.
| mseepgood wrote:
| Thanks for the translation. Now that I understand what
| what the commenter said, I agree.
| i_like_pie1 wrote:
| had similar POV but changing my mind after talking with
| someone this AM
|
| their POV is that this is net good for society. outcome we
| want = no crime
|
| how to deter? 1/ big punishment for main actor 2/ get
| complicit actors to cooperate
|
| and so by giving plea deals the gov shows that cooperation
| can save you
| kaibee wrote:
| Yeah... but otoh, being a lower level peon shouldn't be a
| get out of jail free card. The incentive is then 'well as
| long as i flip on the big guy if he gets caught, i can make
| some nice piles of money in the mean time and maybe i can
| exit before it blows up anyway'
| red-iron-pine wrote:
| she wasn't a lower level peon, she had actual rank, and
| enough education and experience to know what's going on.
|
| and she got a sweet deal, but she's not getting away
| scott-free, and will likely see real prison time and huge
| fines. yeah she may have another $2 million hidden away
| as Monero somewhere, but her career is busted -- no one
| is ever going to trust her after this -- and if the Feds
| get wind of cash they didn't know about that could end in
| more charges.
|
| it certainly isn't a get out of jail free card, just a
| "dont spend 60 years in prison" card.
| grvdrm wrote:
| >but her career is busted -- no one is ever going to
| trust her after this
|
| Don't forget -> book deal. She's still capable of making
| money off the outcome and transitioning into a career as
| more of an evangelist for what NOT to do.
| dragonwriter wrote:
| > Yeah... but otoh, being a lower level peon shouldn't be
| a get out of jail free card.
|
| The other involved principals pled guilty to multiple
| federal felonies, and are likely to spend at least some
| time in prison even if their sentencing gives them large
| reductions in what their sentence for those crimes
| otherwise would be for their cooperation.
| shadowgovt wrote:
| > being a lower level peon shouldn't be a get out of jail
| free card
|
| At some point, every society has to decide where to draw
| the line at "this much punishment is enough punishment"
| when the crime is basically setting value on fire. If you
| don't, you end up with the whole society on trial ("Why
| aren't we prosecuting the people who gave them the money?
| Surely had they done their homework, they would have
| known...").
|
| ... and we end up drawing the line _slightly_ on the side
| of "let the least-powerful guilty go" because there's
| heavy incentive to get them to turn on their bosses so
| our society can hold the most powerful (most equipped to
| hide their bad behavior and understand how to subvert the
| law) accountable at all. This is very much a problem at
| the intersection of justice and the realpolitik of
| enforcement.
|
| (... _technically_ , every German citizen was a Nazi.
| They didn't end World War II by nuking Germany until it
| glowed).
| itsoktocry wrote:
| > _The US attorneys seem to have set up SBF to be the fall
| guy_
|
| The _fall guy_? Come on.
|
| Some low-level bank executive commits fraud and this place
| calls for the CEO's head. SBF was in charge an knew
| everything that was happening. IT sounds like he orchestrated
| most of it. There was zero element of rogue employees, or
| anything of the sort.
| pclmulqdq wrote:
| The fall guy is usually someone high up in an organization
| where the entire organization does something bad. In 2008,
| chief risk officers, CEOs, and COOs were the fall guys over
| the failures of their respective banks.
| kawhah wrote:
| > chief risk officers, CEOs, and COOs were the fall guys
| over the failures of their respective banks
|
| only two things wrong with this claim:
|
| 1. no CROs, CEOs or COOs were judicially punished in any
| way for the failure of their banks.
|
| 2. CROs and CEOs were clearly responsible for those
| failures. That's literally their whole job for which they
| were typically paid 7 to 9 figures annually.
| seanhunter wrote:
| The fall guy is someone who "takes the fall" (ie the
| responsibility) for the misdeeds of someone else. You're
| not the fall guy if you're convicted of something when
| _you 're the person who did the thing_.
|
| This is a very weird argument you're making. They
| successfully prosecuted the main perpetrator of a massive
| and very complex fraud in spite of him being (pre
| collapse) the absolute golden child of the industry.
| That's a huge win.
|
| Getting time for anyone else is far less important than
| getting guilty on all charges for the main perpetrator.
| calf wrote:
| > They successfully prosecuted the main perpetrator of a
| massive and very complex fraud in spite of him being (pre
| collapse) the absolute golden child of the industry.
|
| Not OP, but as a layperson like myself, what is the
| compelling proof that "complex fraud" actually happened?
| Last night I clicked 3 different articles--including
| Wikipedia's page on the trial--and it was a really long
| read. I should be able to read somewhere in a single
| paragraph, what was the main crime, and what was the
| best/crucial evidence for it. The Wiki page for instance
| began by listing a litany of alleged crimes--which for
| lay understanding is the wrong level of detail. I would
| like a clear, simple, compelling summary but it actually
| not that easy to find this information written concisely
| in a neutral article.
| BoxFour wrote:
| FTX functioned as a vault for user funds as an exchange,
| while Alameda, sharing common ground with FTX, was
| granted the privilege to borrow these user funds. Already
| off to a bad start because of the conflict of interest.
|
| Alameda was also allowed to borrow far more money than
| other borrowers, because they were deeply in debt. Also
| bad.
|
| Though this arrangement might initially evoke traditional
| banking practices with eg mortgages, the situation
| becomes even more problematic as Alameda secured their
| loans using tokens minted by FTX.
|
| The easiest analogy here might be: A failing real estate
| mogul, who has an intimate personal relationship with a
| bank head, using stock shares of the bank as collateral
| for mortgages instead of the properties themselves--a
| clear conflict of interest, wrong way risk, and a shaky
| foundation for financial stability.
|
| Edit: The bank in this case could play dumb and insist it
| had no idea that was fiscally irresponsible, which is
| basically what SBF argued, but at a certain level of
| incredulity you stop receiving the benefit of the doubt.
| therealcamino wrote:
| The best one I saw today (can't remember the source):
| Suppose you gave your broker money to invest for you, and
| she bought herself a really nice house instead. That's
| basically it.
| hintymad wrote:
| Carolin pleads guilty on multiple counts of charges, and per
| her words on the witness stand, her corporation with the AUSA
| would get her a letter to the judge from the AUSA that
| acknowledges her corporation.
| smarmgoblin wrote:
| They didn't get immunity, they just haven't been sentenced
| yet.
| scotty79 wrote:
| Bribing politicians with donations depicted as business
| development oficially in court. US is such a weird country.
| callalex wrote:
| I think it's important to note that such a depiction failed
| spectacularly.
| mrangle wrote:
| sigh...convicted by adjective. Sad to see and a common trap for
| young entrepreneurs.
| mcguire wrote:
| One comment I saw pointed out that the verdict was returned in
| a spectacularly short time, for precisely those reasons.
| constantly wrote:
| For anyone curious, Ken White has a good and entertaining article
| breaking down maximum sentences in print (here, 110 years) and
| what people actually serve. It's worth a read:
|
| https://www.popehat.com/2013/02/05/crime-whale-sushi-sentenc...
|
| A takeaway:
|
| "1. Maximum sentences have very little relation to actual
| sentences in federal law. When the government quotes the maximum
| sentence, they are trying to scare you. When the press quotes it,
| they are uninformed or lazy. Exercise skepticism. Resist
| emotional appeals to "how is this sentence reasonable when
| murderers get less?"
| JackFr wrote:
| Yeah, I've heard that a bunch - about the press being
| uninformed or lazy. I'd offer that they are neither, but if
| they are restricting themselves to reporting facts and not
| prognostications and opinions, the statutory maximum is a
| reasonable thing to report.
| JohnFen wrote:
| I think this is likely the case. It's the only number they
| could have that doesn't involve a judgement call. Also,
| usually when I see things like that reported, they mention
| that most people don't get the maximum.
| NoMoreNicksLeft wrote:
| A statement like "but it is often true that statutory
| maximums far exceed actual sentences" wouldn't be a
| prediction nor an opinion.
|
| This isn't the place to be sticking up for journalism. They
| really are both uninformed and lazy.
| quickthrower2 wrote:
| It is almost logical. They would not be maximums but
| prescribed sentences if they always use the max.
| NoMoreNicksLeft wrote:
| If I have to read a news article as if its some weasel-
| worded lawyerspeak contract (between the lines), then
| they're no longer in the business of informing at all.
|
| My cognitive capacity, however incredibly large it is,
| still is finite. Wasting it on crap like this means I'll
| almost certainly miss something else. It's difficult to
| believe that this isn't deliberate, but I manage to
| ignore that impulse... incompetence is still more likely
| than malice. Hence, "lazy and uninformed" instead of
| "deceptive and propagandizing".
| tptacek wrote:
| The opposite thing is going to happen in this case, and I'm
| sure you'll hear Ken on Serious Trouble saying the same thing
| next week (you can get Andrew McCarthy, another former AUSA,
| saying the same thing in the National Review today if you want
| that with a dash of anti-woke conservative racial politics). In
| basic economic crimes, sentences scale primarily with dollar
| losses, and FTX lost billions. He's going to do something
| resembling the statutory max, and then only if statutory limits
| take life off the table.
|
| The whale sushi article is excellent and is a good intuition
| for _most_ white collar crimes. You run into the big exception
| in these ultra-high-dollar cases like Theranos and FTX, because
| of the 2B1.1(b)(1) dollar loss chart.
| akerl_ wrote:
| It's worth noting that the mechanism is still different. In
| this case, "the upper end of the range when you math out the
| sentencing guidelines" and "the amount you get if you take
| all the base charges and add them up and assume they're
| sequential" start to blend together because of the sheer
| scale.
|
| But it's not like when the scale gets big enough, the whale
| sushi hypothetical math starts becoming the real way we
| calculate sentences. It's just that the guidelines really do
| try to account for super villain levels of crime.
| tptacek wrote:
| That's true, and a good point.
| StressedDev wrote:
| Elizabth Holmes committed fraud, endangered lives, and
| harassed whistle blowers (one spent over $400,000 in legal
| fees fighting with Theranos). She only got 11 years and 3
| months. I would not be surprised if Sam Bankman-Fried also
| got a fairly short sentence.
| tptacek wrote:
| Madoff got 150 years. It comes down to the dollar amounts.
| ohhnoodont wrote:
| > She only got 11 years and 3 months.
|
| Her sentence has already been reduced to 9.5 years.
| jahewson wrote:
| Holmes was only found guilty on 4 of 11 charges, totalling
| around $300m raised from investors. SBF is guilty on all
| counts of stealing 26 times more than that - $8bn of his
| customers deposits.
| jcranmer wrote:
| Another thing that makes this case difficult is that SBF kind
| of breaks the sentencing guidelines. He starts at the highest
| possible base offense level for fraud, so he's in a position
| where every point haggled over is worth _years_ of sentence
| time. And this also means statutory maximum sentences come
| into effect, and I personally don 't know how that interacts
| when you've got multiple charges.
|
| I believe the statutory maximum for fraud is 20 years, and so
| I suspect that's the minimum that he's going to be in prison
| for.
| pcwalton wrote:
| > And this also means statutory maximum sentences come into
| effect, and I personally don't know how that interacts when
| you've got multiple charges.
|
| The judge can order consecutive sentences for multiple
| charges, making the effective statutory maximum in such
| cases very long indeed. Sholam Weiss [1] was an extreme
| example of this, racking up 845 years for a $450M fraud in
| the 90s.
|
| [1]: https://en.wikipedia.org/wiki/Sholam_Weiss
| mikeyouse wrote:
| Astonishingly corrupt commutation of his sentence too.
| Ugh.
| bambax wrote:
| > _He 's going to do something resembling the statutory max_
|
| I don't think you're right, but in any case, even if he
| _receives_ the statutory max, it 's unlikely he'll _do_ it
| and stay in jail for 115 years.
| tptacek wrote:
| The statutory maximum still doesn't mean you just add the
| maximum sentence for each count up.
| harimau777 wrote:
| In some ways I can understand white collar criminals being
| "more evil" than murderers. As I understand it, murderers are
| often acting out of desperation, poverty, etc. On the other
| hand, it seems like a lot of white collar criminals who have
| everything but feel entitled to take from people who already
| have less than them. Although clearly the murderers did the
| more heinous crime.
|
| Not trying to say that this is something I'd build a moral or
| legal system around. Just that emotionally I can kind of see
| it.
| JohnFen wrote:
| White collar criminals can also ruin multiple lives. Victims
| of such fraud have even been driven to suicide before. In
| those cases, at least, I find it hard to say it isn't roughly
| approximate to murder.
| Mistletoe wrote:
| If I had to guess, the number of suicides from this is much
| more than one.
| itronitron wrote:
| I like to think that I want to know what SBF's circle of
| friends and family had to think about this fraud, as it was
| going on, but I'm probably better off not knowing.
| pwdisswordfishc wrote:
| > Responsibility is not a zero-sum game.
|
| So it's not the case that when one person is responsible,
| someone else has to be irresponsible to balance things out?
| TrackerFF wrote:
| But in some cases, especially novel cases where they want to
| set an example, they can/will actually throw the book at you.
|
| At this point, I wouldn't be surprised if they do. To deter
| potential future-SBFs. I mean, the whole cryptocurrency space
| is filled to the brim with scammers, many will never face
| anything at all. But when you've nailed the biggest of them
| all, might as well set an example.
|
| EDIT: I do not believe he will serve 110, or 50, or 20 years.
| But hopefully they will dole out the maximum of a realistic
| sentencing.
|
| A couple of year behind the bars would be a complete joke. From
| all I've seen, I have zero faith that SBF will be
| "rehabilitated" by a year or two in prison.
| _giorgio_ wrote:
| so how much will he get?
| cubefox wrote:
| I always wondered whether the American guilty / not guilty system
| isn't obviously too binary.
| serf wrote:
| the granularity of the legal convictions and the punishment
| ranges provides the fine strokes needed to make a binary
| decision work.
| eqmvii wrote:
| Of course it's not. Where there are gradients, there are
| different charges.
|
| Murder I, Murder II, (voluntary/involuntary) Manslaughter, etc.
|
| To the extent grey areas exist, they are accounted for in a
| gradient of crimes, each of which has a binary degree of guilt.
| mikeyouse wrote:
| And the gradient of sentencing for the convictions --
| defrauding people of $1 gets you less jail time that
| defrauding people out of $100k, which gets you less jail time
| than defrauding people out of $100M.
| cubefox wrote:
| Then what is the benefit of deciding between guilty / not
| guilty when all the importance lies in the degree of guilt?
| mikeyouse wrote:
| Because 'not guilty' gets you 0 years in jail?
|
| Fake numbers but say you shot and killed someone -- the
| law (and related sentences) can accomodate a wide variety
| of scenarios which will lead to a wide variety of
| punishments. E.g. if you were cleaning a gun and it went
| off, you could be charged with involuntary manslaughter
| and face 5 years, or if you were in a fight and pulled a
| gun you could be charged with voluntary manslaughter and
| face 10 years, or if the fight seemed avoidable it could
| be a 3rd degree homicide charge facing 15 years, or if
| you shot them will robbing a bank, it could be a 2nd
| degree homicide facing 20 years, or if you planned an
| assassination and shot someone, it could be 1st degree
| homicide where you would face life.
|
| There's a binary "guilty / not guilty" but on the guilty
| branch, each of those sentences has enhancements that
| will determine your length of incarceration. Was this
| your first crime? Were you on drugs? Was the robbery over
| $5 or over $50k? and so on and so on.
| cubefox wrote:
| A "binary degree of guilt" sounds like a contradiction in
| terms.
| steveBK123 wrote:
| What is the alternative here and where do they use it? The
| audience has voted and you've been declared.. 4% guilty! You
| will now serve 4% of the statutory 25 year sentence!
| cubefox wrote:
| Many countries do not have this "guilty/not guilty" system
| the US is using.
| meepmorp wrote:
| What countries are these?
| spandextwins wrote:
| Where did the all the money go?
| sillypuddy wrote:
| He was a big democratic donor, also some to media outlets.
| mcintyre1994 wrote:
| He claims he gave about the same to both parties, so double
| that again: https://blockworks.co/news/the-gop-also-got-
| millions-from-ft...
|
| Still a pretty small portion of the billions total though.
| opportune wrote:
| I really don't think they should have let the rest of the
| executive team walk, especially Ellison. They knew what they were
| doing too, and I'm sure they could have built a strong enough
| case to convince SBF and the others through plea deals and such
| jraines wrote:
| Not sure about the others but I don't think Ellison is walking.
| Her reward for cooperation was just a letter to the sentencing
| judge noting her cooperation.
| opportune wrote:
| Not true. The prosecution agreed to only pursue criminal tax
| violations. See my other comment.
| JackFr wrote:
| IANAL, but I think you misunderstand her plea agreement.
| phire wrote:
| She pled guilty to 7 counts. 1 Count of actual wire fraud
| and 6 counts of various "Conspiracy to commit wire fraud,
| commodes fraud, securities fraud and money laundering".
| They have a total maximum sentence of 110 years.
|
| Prosecution agreed to not pursue any additional charges,
| except perhaps criminal tax violations.
| compiler-guy wrote:
| The plea deal also includes the prosecution electing to
| charge her with much lesser crimes than they otherwise could.
| fred_is_fred wrote:
| She still faces jail time even with the plea and cooperation.
| StressedDev wrote:
| None of them "walked". They all pled guilty and have not been
| sentenced.
| opportune wrote:
| Man, I'm low on sleep and making mistakes. I misunderstood
| the cooperation agreement[0] to mean she would only be
| prosecuted for criminal tax violations. I see now she has
| plead guilty to fraud though [1].
|
| [0] https://s3.documentcloud.org/documents/23495436/crypto-
| coope...
|
| [1] https://www.washingtonpost.com/business/2022/12/21/caroli
| ne-...
| JackFr wrote:
| > "the defendant will not be further prosecuted criminally
| by this Office for any crimes, except for criminal tax
| violations"
|
| That has nothing to do with her sentencing and is typical
| of any plea agreement. I'm not going to plead guilty to
| crimes without the guarantee that you'll not charge me with
| more. What would be the point of pleading guilty then?
| opportune wrote:
| You're right, I was just editing my comment as you posted
| that. I'm going to go be quiet now lol.
| blindriver wrote:
| SBF is going to be pardoned by the Dems. Guaranteed. He donated
| far too much money for him not to be pardoned. Not just to
| reward SBF, but to signal to anyone else that the Dems have
| their back if they donate enough. The same goes for the
| Republicans as well. Trump pardoned Levandowski as one of his
| final acts as president.
| ncallaway wrote:
| If SBF is pardoned by Joe Biden, or any other Democratic
| president, I will make a $2,000 donation to the charity of
| your choice.
|
| It's not going to happen. 0% chance.
| az226 wrote:
| Agreed.
| austhrow743 wrote:
| Can you provide precedent?
| john_miller wrote:
| Here are 140:
|
| https://en.m.wikipedia.org/wiki/Bill_Clinton_pardon_controv
| e...
| austhrow743 wrote:
| Marc Rich appears to have been comparable in severity of
| fraud but avoided conviction let alone all the other
| attention grabbing things Sam has done. Not to mention
| all the Israel connections.
|
| If Sam has a pardon coming then he's done as much as he
| possibly can to make it damaging to the pardoner. Can't
| see it happening. Parents, maybe. They haven't played
| this like asshats.
| davidham wrote:
| I'll bet you $1,000 USD he does not get pardoned by Biden.
| blindriver wrote:
| Let me clarify, he won't pardon SBF before the 2024
| elections, but afterwards he will, either in 2025 or 2029
| on the last day of his term. And if Biden dies, then his VP
| will pardon SBF.
|
| I would definitely take the $1000 bet, but I don't make
| bets with strangers who probably won't pay up.
| quickthrower2 wrote:
| You might find a prediction market you can bet in.
| amanaplanacanal wrote:
| That seems extremely unlikely.
| LastTrain wrote:
| You have a tell :-)
| ctvo wrote:
| The world doesn't work this way. Not because it's just or
| that there's no corruption: it's because there's little
| benefit to Joe Biden. This is a high profile case. It'll only
| trigger more scrutiny into everything. And Sam is an
| isolated, broke man with no friends. Why would anyone help
| him for money he's already given?
|
| You're way off base.
| peyton wrote:
| The campaign finance trial is next March I believe. Could
| also trigger more scrutiny into everything if Sam pleads
| not guilty. I think guy's stuck in prison, but who knows. A
| guilty plea from Sam might be preferable.
| upupupandaway wrote:
| Nobody is walking. All of them will be jailed, but some will
| get lighter sentences.
| spiffytech wrote:
| https://archive.ph/mMIka
| docmars wrote:
| More like Sam Bankman-Fraud, amirite?
| JackFr wrote:
| Sam Bankfraud-Man
| Nextgrid wrote:
| Sam Bankrupt-Fraud?
| willcipriano wrote:
| The Bankman was Fried when he did business with Sam.
| quickthrower2 wrote:
| Sam Bankman Freed? No
| randycupertino wrote:
| I liked the article detailing how poorly he did on the stand:
|
| https://www.thefp.com/p/humiliating-cross-examination-sam-ba...
|
| "Did you say in private, 'Fuck regulators?' "
|
| "Did you call some customers 'dumb motherfuckers?' "
|
| "Did you fly to the Super Bowl in a private plane?"
|
| "Most FTX customers did not have a line of credit, correct?"
|
| "Do you deny that Alameda had a $65 billion line of credit?"
|
| And on, and on, and on.
|
| Under the circumstances, SBF's wisest course would have been to
| just say yes--or yep--to her questions. And sometimes he did
| that. But just as often, he chose to dance around the question,
| to quibble about the phrasing, or say that he couldn't remember
| the details. And every time he did that--every single time--
| Sassoon projected an email or video or a spreadsheet onto the
| screen, showing that he had done exactly what she was accusing
| him of doing. Which then gave the jurors another look at the
| evidence while reminding them that SBF was being something less
| than forthright. You'd think this MIT graduate would wise up, but
| he never did.
|
| (He even equivocated on whether he had taken a private plane to
| the Super Bowl--to which Sassoon responded by presenting a
| photograph of SBF fast asleep in the embrace of a comfy chair on
| a private jet. In the overflow room, we burst into laughter.)
| az226 wrote:
| I guess he didn't have the money to pay for a good defense
| team, or didn't listen. Pretty amateur hour what he did. Made
| it very easy and quick for the jurors.
| m1keil wrote:
| His bail was 250M USD, I don't think money is an issue to his
| family.
| retube wrote:
| What they actually posted was far, far less. Less than 2m
| if i recall.
| chirau wrote:
| It would have to be around 25M
| dragonwriter wrote:
| No, it wouldn't, didn't, and wasn't.
|
| It would have had to have been around 10% _if_ it was in
| state court in many states, because of the way lots of
| state bail systems work.
|
| The federal system is very different.
| krustyburger wrote:
| It was literally just his parents' house. And now it's
| come out that those same parents were collecting large
| payments from FTX in the boom times for their supposed
| services. We'll see if they ever face any charges
| themselves.
| smcl wrote:
| The email exchange where his dad grumbles about how he's
| getting only $200k/yr (for doing nothing) and then CCs
| his mum for comment was quite amusing :)
| olliej wrote:
| No, the problem was the overwhelmingly abundant recorded
| evidence that also supported the credibility of the many
| witnesses even though they had plea agreements. In no part of
| his life has there ever been anything other the copious
| amounts of money. He could get on bail of 250M, and still
| broke conditions. This is before you consider where all of
| the money he stole went.
|
| His defense was always fighting a losing battle here, and
| likely would have recommended he also try to get a plea deal
| rather than forcing a trial with this probable outcome.
| JohnFen wrote:
| He was never offered a plea deal, and I doubt that him
| asking for one would have been successful. I'm about 90%
| sure that his lawyers asked.
| olliej wrote:
| Ah, it seemed from everything he said and did that he's
| the kind of person who actually believed that he couldn't
| possibly go to jail.
| JohnFen wrote:
| I think that's the case, yes, but I also think that his
| attorneys would have brought the matter up with the
| prosecution without his knowledge. No point in bringing
| it up to him unless there's a real offer he might be
| persuaded to agree to.
| StressedDev wrote:
| I am sure he could have negotiated a plea deal with the
| US Government. Well over 90% of cases in the United
| States never go to trial. I think the reason Sam Bankman-
| Fried went to trial is he actually thought he could get
| off.
| dragonwriter wrote:
| Its around 98% that plea out in the federal system, but
| most federal criminal cases aren't notorious, high-
| profile, mass impacts fraudsters that the feds have dead
| to rights because the defendant not only decided to
| publicly recount many of their offenses as a coping
| mechanism as their scheme fell apart, but also have a
| bevy of top co-conspirators already pled out and ready to
| testify against them.
|
| The Feds had no sufficient incentive to agree to a lesser
| set of charges, and SBF had no incentive to plea guilty
| to the exact same set of charges he could instead demand
| that the government prove beyond a reasonable doubt,
| which at a minimum would delay the process.
| LegionMammal978 wrote:
| The defense team actively declined plea discussions,
| assuming the quote at [0] is accurate. Several news sites
| seem to believe in its accuracy, at least.
|
| [0] https://nitter.net/innercitypress/status/170920839251
| 6923435...
| FFP999 wrote:
| Some of the stuff he was doing and saying before the trial,
| even Barry Zuckerkorn or Lionel Hutz would have told him to
| shut the hell up. He just could not stay out of his own way.
| dragonwriter wrote:
| > I guess he didn't have the money to pay for a good defense
| team, or didn't listen.
|
| He had good lawyers around and immediately after the FTX
| collapse; he very publicly fired them because they wanted him
| to stop tweeting extensive descriptions of his crimes as a
| coping mechanism.
|
| Which was going to be a problem for him no matter how good of
| lawyers he got later.
| JackFr wrote:
| With or without testifying he cut a remarkably unlikeable
| figure. Smug, aloof, arrogant and condescending, honestly much
| more so than a typical white collar defendant. I suppose his
| fatal flaw, though was not having anyone else to blame.
| tw04 wrote:
| >though was not having anyone else to blame.
|
| Oh, he definitely had people to blame, like the FTX lawyers,
| it's just that he got caught lying or dancing around the
| truth so frequently that nobody would believe him.
| StressedDev wrote:
| You hit the nail on the head here. Here is a list of some
| of the people he blamed for his fraud/downfall:
|
| 1. Binance / CZ (Binance's CEO)
|
| 2. Caroline Ellison
|
| 3. Sullivan & Cromwell LLP (https://www.sullcrom.com/)
|
| 4. John Ray III (FTX's bankruptcy CEO)
| polygamous_bat wrote:
| > Smug, aloof, arrogant and condescending, honestly much more
| so than a typical white collar defendant.
|
| At least he wasn't playing League of Legends on the stand.
| That's a small win, I guess?
| polynomial wrote:
| Where is Dan Friedberg during all this?
| JohnFen wrote:
| I'm no lawyer, but I think that the defense has to be presented
| with all the evidence that will be used in the prosecution's
| case, before the trial starts.
|
| In that case, it's even funnier because the defense knew the
| prosecution had all of those things before he was even asked
| those questions.
| SilasX wrote:
| Yes, they're obligated to turn over everything they'll use in
| their case. They're also obligated to turn over everything
| that could help the defendant (exculpatory evidence).
|
| But my understanding is, they're _not_ obligated to turn over
| evidence that is _not_ part of their case and is only used to
| _rebut_ a witness's testimony. Which would cover the stuff
| they used to contradict SBF's statements on the stand.
|
| Can someone clarify? (Sorry, "add color".)
| compiler-guy wrote:
| Any defense lawyer worth their salt would have known
| everything the prosecution had. It all came from ftx and
| sbf himself in one form or another. It is very unlikely
| that anything presented on rebuttal was a surprise.
| SilasX wrote:
| My comment was replying to the question of whether they'd
| get it (and similar materials) directly from the
| prosecution, not whether they'd get it some other way.
| MagicMoonlight wrote:
| If it's anything like other legal systems, they would
| have to provide it all in advance. Otherwise you could
| start using something inadmissible in front of the jury.
| hintymad wrote:
| Yeah. And I find it quite contemptuous for SBF to often use
| "Yup" instead of yes.
| zoklet-enjoyer wrote:
| That's how he talks. Watch any interview with him.
| dragonwriter wrote:
| "That's how he talks" and "it is quite contemptuous" are
| not opposed concepts.
| manonthewall wrote:
| as long as the judge allows it, it's unlikely to be
| "comtemptuous"
| tacon wrote:
| The most unbelievable behavior on cross was described by
| Tiffany Fong. The prosecutor asked Sam to read a section on
| "preventing clawbacks", which was a head and then some text
| underneath. Sam read the text underneath out loud. Then she
| asked him to read the headline, "Preventing Clawbacks", too. So
| he said the following: "The first word is 'preventing'. The
| second word is 'clawbacks'."
|
| If I was on a jury where the defendant pulled that, I would
| want to go up and punch him in the face. Tiffany was
| restrained. Her notes said she only wanted to slap him.
| bbarnett wrote:
| Weird. I don't believe he even had an obligation to read any
| of it.
|
| Unless someone is demonstrating their voice for
| identification, I cannot see why someone can be compelled to
| just "read stuff".
|
| An example... a presumed murderer is on the stand. You hand
| them paper. It says "I murdered someone".
|
| Are they expected to read it?!
|
| And further, as a juror, why would it enrage you to not see
| him comply? You say on a jury, you'd want to attack the
| defendant, but at that point you should not believe he is
| guilty, or innocent!
|
| So, would you be upset if an innocent person, refused to read
| statements maligning himself?
| seabass-labrax wrote:
| I too am confused. Is it not the barrister's job to respond
| on behalf of the accused? Presumably Sam Bankman-Fried was
| not actually obliged to read anything aloud (except of
| course the court's oath), and just chose to for some
| reason.
| foldr wrote:
| He was being cross examined, so he was certainly obliged
| to answer the questions put by the prosecutor, just as
| any other witness would be.
| bbarnett wrote:
| Answering a question, does not mean "take this paper and
| read it out loud".
| foldr wrote:
| It's completely standard to ask witnesses to do this. You
| can watch any number of trials where this happens.
| bbarnett wrote:
| Outside of TV shows, which are fiction, and theater, I
| have not seen this.
| foldr wrote:
| Here are some examples showing that is common practice
| (some from transcripts of real trials in the US):
|
| https://www.stimmel-law.com/en/articles/testifying-trial-
| how... (search for "would you read the first paragraph")
|
| https://law.utexas.edu/wp-
| content/uploads/sites/34/2016/09/4... (search for "would
| you read the part")
|
| https://www.patrickmalonelaw.com/useful-
| information/legal-re... (search for "would you read")
|
| https://scc-csc.lexum.com/scc-csc/scc-
| csc/en/item/6141/index... (search for "would you read")
|
| https://archive.epic.org/free_speech//cda/lawsuit/transcr
| ipt... (search for "would you read")
|
| https://www.supremecourt.ohio.gov/rod/docs/pdf/8/2023/202
| 3-O... (search for "would you read")
|
| You'll also generally find examples of this if you're
| willing to sit through long cross-examinations such as
| e.g. the Murdaugh case.
| bbarnett wrote:
| Weird. Thus seems quite theatrical to me, but I just
| realised something.
|
| Prior to the 20th century, fewer people could read. And
| on top of that, you couldn't just copy a sheet of paper
| easily.
|
| And you wouldn't want jurors to handle evidence much, I
| suppose.
|
| So I guess in this context it makes more sense. The
| reading ensures everyone knows what is on the paper, and
| of couse, since it's been happening for centuries....
| it's legit.
|
| Thanks for the urls.
| Tangurena2 wrote:
| In earlier centuries, one way to avoid a criminal trial
| was to claim "the benefit of clergy". Members of the
| clergy (priests, nuns, etc) were supposed to be tried
| only by their own organizations. The standard test to
| prove that you were a member of the clergy was to read a
| passage from a bible. One passage was very commonly
| chosen for this, so if you wanted to pretend to be
| clergy, you needed to memorize about 2 paragraphs. In
| criminal trials, a guilty verdict was followed by 3
| possible sentences: flogging, transportation
| (exile/banishment) to America/Australia, or execution
| (hanging for peasants, beheading for nobility).
| sleepybrett wrote:
| I feel like you don't think his lawyers didn't have a
| chance to object, they certainly did, then it's up to the
| judge/laws to say if it's valid to ask the witness to
| read WHAT THEY HAD WRITTEN. They did not object. He read
| the paper.
|
| He said in effect, I never said that we would avoid
| clawbacks, the lawyer made him read a thing HE WROTE that
| said they would avoid clawbacks.
|
| Theatrical? Maybe.. but also he sat on the stand and
| lied, they made him tell the truth.
| avree wrote:
| Sam Bankman-Fried was tried in the US, where we don't
| have barristers. You may find yourself less confused if
| you brush up on the basics of the American legal system.
| gwd wrote:
| That's what the judge and your lawyers are for. As you say,
| you can't randomly ask people to read something. It would
| have been a document that he wrote, or approved, or
| something -- something already admitted into evidence. The
| putative purpose would be to ask SBF more questions about
| the evidence, which is fair.
|
| Remember that SBF never had to take the stand at all -- he
| could have pleaded the fifth and not testified; which is
| almost always the right thing to do. But once he decides to
| take the stand, the prosecutor gets to ask him questions
| about all the evidence they've collected -- which includes
| asking him to read things that he wrote or approved of.
| bbarnett wrote:
| And once on the stand, should he do cartwheels, gesture,
| and mayhap fart upon command?
|
| He must answer questions, I find it bizarre he must read
| anything aloud, even if he wrote it. This is pure
| theatrics.
|
| I wonder where his lawyer was.
| gwd wrote:
| You're not really listening. No, you can't be asked to do
| cartwheels. But you can be asked to read something
| relevant to the case from a document that's been
| submitted as evidence (and thus already been vetted as
| relevant to the case).
|
| I could try to come up with reasons that this rule is
| valid. But I guarantee you, EVERYTHING in the legal
| system has been litigated and discussed ad nauseum, often
| over hundreds of years. If lawyers for the defense
| thought that reading relevant evidence out loud was
| unfair, they would definitely challenge it; and maybe it
| has been challenged. If SBF's lawyers think that was
| unfair, they can _still_ challenge it on appeal, saying
| that it 's illegal or unfair or whatever. Regardless of
| all that, the current rules allow this behavior, and so
| the judge allows those kinds of questions.
|
| _Within those rules_ , is the prosecution's use of that
| rule theatrical? Absolutely -- that's their job: to
| persuade a bunch of normal people, that the person on the
| stand is guilty. Persuasion of anybody always requires
| both rhetoric and logic.
| umanwizard wrote:
| You're not really disagreeing with the person you're
| responding to. He finds it absurd that these kinds of
| theatrics are allowed, and you just explain that they are
| in fact allowed.
| Hello71 wrote:
| from the top of this thread:
|
| > Weird. I don't believe he even had an obligation to
| read any of it.
|
| they're very clearly saying that they believe that under
| the current legal system, the "theatrics" are not
| allowed.
| gwd wrote:
| ...and the fact that rules for testimony and cross-
| examination have been developed and challenged
| adversarially for hundreds of years; so if the really are
| as absurd as they think, they probably already would have
| been changed; and in any case, SBF's lawyers still have a
| chance to change them.
|
| Here's why it seems reasonable to me. Imagine the
| counterfactual: If the prosecutor wants to ask him
| questions about that text _without_ having him read it.
| If she reads him and asks him a question, he can just say
| "Is that what it says? I don't remember that." Then she
| has to hand it to him for him to read, point out where
| she read from, and give him a chance to read it, and then
| finally ask her question again. And if there is more than
| one section, or even more than one question on the same
| section, then the paper has to go back and forth.
|
| If he reads it, then it establishes several things at
| once: The jury has heard the text that the question is
| going to be about, the defendant has read the original
| text and also has access to the context in order to
| answer questions, and the defendant has verified that
| what was read is what was written. It makes the whole
| trial go more smoothly, it's relevant to the trial, and
| it's not inherently insulting or humiliating (unlike
| cartwheels or farting on command), and doesn't
| fundamentally change the outcome of the testimony.
|
| Maybe a real lawyer (or law historian) would have more to
| say; but in any case, defense lawyers have had hundreds
| of years to raise objections, and they haven't, so my
| "Baysean prior" is that there are probably very good
| reasons for the rule being the way it is.
|
| ETA: Another advantage is that how the defendant reads
| the document, and their reaction to reading it, is part
| of the evidence the jury will need to weigh up when
| forming an opinion of the witness -- as the situation
| here described showed. And of course, remember that the
| same thing can be done by the defense to witnesses for
| the prosecution. It's not a tool that favors only one
| side or the other.
| ceejayoz wrote:
| > And once on the stand, should he do cartwheels,
| gesture, and mayhap fart upon command?
|
| I mean, maybe? If you claim you can't be the murderer
| because you were at a cartwheeling convention, you
| probably will be asked to show that you can do a
| cartwheel.
|
| The judge will decide if the request is relevant. Your
| lawyers will object if it isn't.
| slikrick wrote:
| what are you actually arguing? because he is compelled to
| answer questions, why is that different from being
| compelled to read a headline for a question of "did you
| write that/approve that" etc.
|
| he agreed to take the stand, he agreed to everything.
| what would the lawyer object with "your honor, they're
| making him read" lmao
| tacon wrote:
| >And further, as a juror, why would it enrage you to not
| see him comply? You say on a jury, you'd want to attack the
| defendant, but at that point you should not believe he is
| guilty, or innocent!
|
| This is a criminal trial, a formal procedure society uses
| to determine the course of someone's life. Dozens of
| people, including me, are devoting several weeks of their
| lives to making a careful determination of guilt or
| innocence. His entire defense appears to be that he acted
| at all times "in good faith". He just spent a day on the
| stand testifying to his good faith efforts to run his
| company. Then he turns around and cannot even follow the
| simple requests in the process as we try to determine his
| guilt or innocence. Where the fuck are his good faith
| efforts in this testimony? Of course I am not going to
| actually attack the defendant, but now I have to work extra
| hard to separate this childish behavior from the actual
| facts of the case, as I deliberate on the charges.
| rmk wrote:
| About reading statements maligning oneself, you are right
| that a presumed innocent person doesn't have to do this.
| But SBF waived that right when he agreed to testify. This
| is why it's considered a bad idea to take the witness stand
| when you are the accused...
| rsaxvc wrote:
| > Under the circumstances, SBF's wisest course would have been
| to just say yes--or yep--to her questions.
|
| Why did he take the stand at all?
| stuartjohnson12 wrote:
| Worst case: the situation doesn't get much worse than it
| already is
|
| Best case: the situation gets substantially better
|
| If you like to take risks, the answer is obvious.
| closewith wrote:
| I don't think that's true for the worst case. His time on
| the stand could significantly increase his sentence within
| the guidelines and I think that will be the case now.
| javier123454321 wrote:
| Actually, in this situation, there are only negatives to
| take the stand. As was the case when he kept giving
| interviews right after the fiasco came to light. There was
| no possitive that would come of it. Remember, in the US
| everything you say can be used against you, and only
| against you. That is why you lawyer up on any interrogation
| and the first thing the lawyers will tell you is to SAY
| NOTHING.
| stuartjohnson12 wrote:
| That's true if you're talking to police but not if you're
| on the stand. If you're on the stand you have the
| opportunity to convince the jury that you're a
| trustworthy person.
|
| In fact, even talking to police has the possibility to
| make you better off for example if you can wrongly lead
| them to not think you're the suspect.
| gitgud wrote:
| The sad reality is that you can easily incriminate
| yourself by talking to the police. Especially if you were
| in the wrong place at the wrong time.
|
| Lawyers are there to make sure the police do their job
| vkou wrote:
| Because his only defense, against a damning amount of
| evidence was spinning a beautiful, four-day story about how
| "I was an idiot and I didn't mean to do any of this fraud."
| olalonde wrote:
| Narcissism, he chose to. He probably thought he could fool
| the jury.
| kuhewa wrote:
| Apparently he gave some better than expected testimony on
| direct
| kosievdmerwe wrote:
| Mostly because expectations were so low.
|
| Especially after the disaster that was the evidentiary
| hearing where he offered some testimony without the jury
| present. (The judge wanted to see if what he wanted to
| testify was allowable)
|
| During that testimony (where he was under oath), he
| rambled, misinterpreted questions, gave evasive answers and
| generally acted like he did in some interviews.
|
| On the Friday, with the jury present he actually told his
| life story (to humanize himself) and answered mostly
| softball questions, before ending his direct with reframing
| deflections of the evidence and other people's testimony.
| Tangurena2 wrote:
| I've worked for people like that. They truly believe that
| they can talk their way out of everything. If all you have is
| casual contact (contacts where they are in control of the
| time, place and agenda), they are very believable, very
| charismatic, very in-control; you will leave thinking that
| they are totally correct. If you are stuck meeting them every
| single day, rain or shine, good or bad, in sickness or in
| health, then you see behind the curtain. The lies build up
| until you feel that you have to wash the filth off your skin
| several times per day. Back then, the word "gaslighting" was
| not in common use. It would have made things far more
| understandable to me. It took me years to get over the
| feeling that _I_ was the wrongness in the room. It was like
| being back in a cult again.
|
| It might be easier for you to work from the viewpoint that
| SBF ran a cult. What sort of person starts and runs one? How
| do they treat possible recruits? How do they treat
| unbelievers? How do they treat neutral outsiders? Who is in
| the "inner circle"?
|
| It is my belief that SBF felt he could negotiate his way out
| of trouble. That he just had to talk to the outsiders like he
| talked to his believers and then everything would be fine.
| The prosecutors kept showing to the jury what he actually
| said to his inner circle - and that sank SBF's case.
| jimmySixDOF wrote:
| There is an hr long interview with Michael Lewis about his time
| with SBF and its fascinating how his unusually high aptitude
| for jane street type decision making under uncertainty was able
| to paper over his unusually high emotional disconnectedness.
|
| Great interview (available as podcast and on YouTube)
|
| https://www.intelligencesquared.com/events/the-rise-and-fall...
| bitcharmer wrote:
| I watched the 60 minutes with Lewis who used to be one of my
| favourite writers but I had to do a 180 after I saw him
| defending SBF for the whole time. It was hard to watch and
| made me question the accuracy of every single book of his
| that I had read.
| smcl wrote:
| The way he was completely charmed by SBF was really quite
| surprising.
| kaashif wrote:
| The root cause is that he wrote most of the book before
| the fraud came out, so the tone is wrong.
|
| For the book to sell, he had to release it now, while the
| story is ongoing. But that means he doesn't have time to
| rewrite the whole thing to get the tone right and pretend
| he wasn't charmed.
|
| So either he's pretending he was charmed by SBF so that
| he can pretend the book makes sense, or he really was
| charmed. Either of these outcomes boosts his book sales.
|
| Lewis believes what he needs to believe to sell his book.
| Is that a coincidence? Maybe.
| jimmySixDOF wrote:
| Actually Lewis explicitly says in the interview that he
| didn't write a word before the indictment and was
| actually complaining he didn't have a way to end the
| story. True or not I can't say but I get the feeling he
| has considered SBF as a subject deeply and is responding
| to wholly justified criticism of the recklessness by
| filling in the gaps and that comes across as a defensive
| position but if the interview had been shining praise on
| SBF then Lewis may have come off looking like a harsh
| critic for the same reason of balancing out the picture.
| Perhaps I am being too generous but the whole saga is
| fascinating partly because there are so many possible
| interpretations of causes beyond the facts involved.
| the_black_hand wrote:
| > You'd think this MIT graduate would wise up, but he never did
|
| I don't think it's lack of wisdom but rather pathological
| hubris and a God-Complex. I've met kids like SBF at MIT. Very
| smart but at some point they think the rules don't apply to
| them. The've never failed before so why would they start now.
| After all, he was like the youngest billionaire, rich parents,
| good grades, top schools. Everything has gone his way so the
| thought of admitting failure was out of the question. The
| defense also took this weird strategy of painting SBF as
| incompetent manger who had no clue what his subordinates were
| up to. Who knows, maybe that will get softer sentencing.
|
| TBH I wouldn't be surprised if he gets out after 2-3 years on
| "good behavior". those political donations have to count for
| something. He very well may have the last laugh.
| RandomLensman wrote:
| What would be the incentive for anyone to pull strings for
| him?
| Tangurena2 wrote:
| "Getting out early" is not something done at the federal
| level. The President could pardon him. That's about it.
|
| Let's pretend that Congress legalizes marijuana. The folks
| still in prison who had been convicted of selling or
| transporting it would not get released - unless the statute
| removing it from Schedule 1 also specifically required
| releasing those already convicted.
| jihadjihad wrote:
| The most time you get off your sentence in the federal system
| is 54 days per year of imprisonment [0]. That's roughly a 1:7
| ratio. If he's sentenced to 14 years for example (not by any
| stretch of the imagination an unbelievable scenario), he'd
| only get 2 years off for "good behavior," thus serving 12
| instead of 14.
|
| 0: https://www.kohlerandhart.com/blog/2023/03/15/how-is-good-
| be...
| agilob wrote:
| >just as often, he chose to dance around the question, to
| quibble about the phrasing, or say that he couldn't remember
| the details. And every time he did that--every single time
|
| Which is exactly what representatives from Facebook, Google and
| Microsoft did on trials and when being questioned by congress
| 5636588 wrote:
| > Which is exactly what representatives from Facebook, Google
| and Microsoft did on trials
|
| To be exact, they weren't trials; only hearings.
| agilob wrote:
| Yes, I went too far with Google and Facebook, I had this in
| mind:
|
| https://www.youtube.com/watch?v=gRelVFm7iJE
|
| https://en.wikipedia.org/wiki/United_States_v._Microsoft_Co
| r....
| ceejayoz wrote:
| > Which is exactly what representatives from Facebook, Google
| and Microsoft did on trials and when being questioned by
| congress
|
| Personal criminal trials hinge quite a bit more on "is the
| defendant personally likeable/credible" than a civil trial
| involving a multinational corporation.
| arethuza wrote:
| I believe a very basic rule-of-thumb for lawyers in court is to
| don't ask witnesses questions you don't already know the answer
| to.
|
| Edit: I remember my wife telling me this during her time as an
| Advocate's Devil.
| TeMPOraL wrote:
| > _Advocate 's Devil_
|
| What does such role/job entail? It sounds like being a drill
| sergeant on a lawyers' boot camp.
| arethuza wrote:
| Advocates are the Scottish equivalent of barristers -
| specialised lawyers who can appear in the highest courts.
| During training one of the things they have to do is act as
| an unpaid assistant for a senior junior (but not a senior!)
| advocate for a year or so - during this time they are known
| as Advocate's Devils.
|
| The process is known as devilling but, you might expect,
| this means different things in different parts of the UK:
|
| https://en.wikipedia.org/wiki/Devilling#Scotland
| TeMPOraL wrote:
| Thanks for explaining! I only knew about the term
| "Devil's Advocate", I didn't realize the transposed term
| is a thing too.
| gwd wrote:
| > You'd think this MIT graduate would wise up, but he never
| did.
|
| I think there were potentially two problems. First, for the
| previous 10 years, lying and taking massive risks actually did
| work for him: Even if some people became disillusioned and
| stopped buying what he was selling, he could just walk away
| from them and start working with people who would.
|
| Secondly -- well, what else _could_ he have done? It 's a bit
| like back when we saw those AIs playing Go or Starcraft or
| whatever at the point where it was clear they were going to
| lose: They'd just start making random moves, because terrible
| moves had as much chance of winning as "minimize loss" moves.
|
| There's an interesting article I read which is half book
| review, half critique of SBF and "Effective Altruism" (EA),
| that has some interesting connections[1]. Basically, EA
| encourages "cost / benefits utilitarian analysis" thinking;
| every time SBF lied (or committed fraud), he could tell himself
| that it was actually moral because it maximized some other good
| towards thinking people somehow. It also encourages poker-type
| gambling in some circumstances, where it makes sense to take a
| bet where you lose 75% of the time, as long as the potential
| payout is larger than 4x.
|
| And if that article's reading is right, FTX _actually had a
| profitable business_. All they had to do was sit back and take
| x% of trades and they would have been fine. But that wouldn 't
| have been a huge massive multiple that SBF was looking for, so
| he went in for a bunch of poker-style bets with his customer's
| money -- ultimately in the name of making more money to give
| that money away. (And he did actually give a load of money
| away, even when it didn't make financial sense to do so.)
|
| SBF's choices were:
|
| 1. Accept that you're going to jail for a long time no matter
| what, and try to minimize the damage. Maybe you can cut your
| jail time in half.
|
| 2. See if you can weasel your way out of it. Maybe your jail
| time is a bit worse, but maybe you don't get any at all.
|
| First of all, he'd always been able to do #2 so far, so why
| would this time be any different?
|
| Secondly, #1 means a huge emotional downside for _current SBF_
| ; #2 only means a _potential_ downside for _future SBF_. The
| attitude he got into, where he screwed everyone else in favor
| of "current SBF", carries over into screwing "future SBF". So
| there's a sort of poetic justice to it.
|
| [1] https://www.lesswrong.com/posts/AocXh6gJ9tJC2WyCL/book-
| revie...
| hef19898 wrote:
| As the senior partner in Margin Call said: "Your smarter,
| your first or you cheat, and I don't cheat." It seams SBF and
| FTX came a different conclusion than the guy in Margin Call
| ("While I believe there are a lot small people here, it's
| much easier to be first"), and that was: "I, and we at FTX
| are the smartest people aroind, so nobody will catch us
| cheating". Hadn't they not cheated, FTX would habe gone
| under, sure, but nobody would have ended in jail.
| flanked-evergl wrote:
| > You'd think this MIT graduate would wise up, but he never
| did.
|
| After interacting with professional managers with degrees from
| supposedly illustrious institutions for years during my career,
| I don't see a good basis for this expectation. What is more
| fascinating is how the professional management class, as
| incompetent as they are, have managed to gain the reputation of
| wisdom and competence in the collective subconscious.
| diydsp wrote:
| That is an invite to an interesting conversation about fame,
| media, publication, status, hierachy, "alpha"-ness,
| reproduction, entitlement, culture, etc!
| ted_bunny wrote:
| Maybe Class, as a treat.
| AlexandrB wrote:
| > What is more fascinating is how the professional management
| class, as incompetent as they are, have managed to gain the
| reputation of wisdom and competence in the collective
| subconscious.
|
| Have they? It's pretty common to hear people complaining
| about "clueless MBAs" here and on other parts of the
| internet.
| strikelaserclaw wrote:
| No one said smart people need to have wisdom
| ActionHank wrote:
| I genuinely think none of them thought he would be convicted,
| because you know, the judicial system punishes the poors, not
| the wealthy.
| andsoitis wrote:
| You need self-awareness, the ability to read the room, and the
| discipline to suppress your ego.
| siskiyou wrote:
| Reminds me of working for MCI-Worldcom. When you think you're
| working for crooks, you probably are. Run away.
| boppo1 wrote:
| Tell a naive young guy more. What are the red flags?
| ansible wrote:
| Spending money like water to make a big splash with
| advertising, sponsorships and such.
|
| But really, anything to do with crypto or NFTs should be a
| red flag at this point.
| atoav wrote:
| I think a big one is if nobody can explain you where the
| money is supposed to come from. If it is all hand-wavy and
| nobody can explain what that company is doing get out. In the
| best case it was legal, but they are incompetent morons.
| danielfoster wrote:
| I'm studying for my CFE (Certified Fraud Examiner) and can
| shed some light on this.
|
| As others mentioned, unexplainable business models or money
| coming out of nowhere are major red flags. A few others to
| look out for if you are applying for a job:
|
| 1. Few or no internal controls. A medium-size or larger
| company not having a CFO is particularly questionable.
|
| 2. People in high positions, including the CEO, lack
| qualifications or experience. Often the CEO will hire
| inexperienced or incompetent people for high-level positions
| because they a) won't figure out what is going on or b) can
| figure it out, but are too grateful for the position to say
| anything. Or maybe the CEO never finished college in a field
| where everyone has a PhD (think Elizabeth Holmes).
|
| 3. History of experienced / qualified people joining the
| company and leaving soon after
|
| 4. Seemingly unexplained success.
|
| 5. Extravagant spending and inappropriate workplace behavior.
|
| 6. Cult of loyalty to the CEO and/or a "circle" around this
| person, including close interpersonal relationships.
| maeln wrote:
| Well now, you just described a lot of SF startup.
| mjburgess wrote:
| This is a symptom of hype-based valuations.
|
| The pipeline into our collective understanding of tech is
| now:
|
| scifi hype pitch -> VC flood of investment -> press
| releases across world -> governments worry ->
| disappointing IPO -> malpractice -> one or more execs
| arrested/sacked -> media elite across world convinced new
| invention will destroy the world
|
| uber creates a taxi service, amazon an online mall,
| openai a ghost writer -- and we're all subject to an
| industry of VC hype men desperately trying to get those
| multiples above 20x by assaulting the popular
| consciousness with delusional BS
| vkou wrote:
| Most of them only have 'wild and inexplicable success' on
| some internal metric, they generally don't claim to have
| magically found a way to make billions of dollars on
| 'arbing btc in Tokyo'.
| otabdeveloper4 wrote:
| Apple isn't really a startup now.
| danielfoster wrote:
| I thought about this as I wrote my comment! Of course a
| red flag is not always a reliable indicator of fraud.
| wussboy wrote:
| Give it time.
| mattmanser wrote:
| You can watch a good example of this in the Netflix mini-
| series on Madoff.
|
| Really shows how he did it using the steps detailed above.
|
| https://www.netflix.com/title/81466159?preventIntent=true
|
| The Wolf of wall street film also shows the same pattern.
| AlexandrB wrote:
| Another good one is downplaying standard accounting
| practices in favor of "adjusted" metrics like WeWork's
| "Community Adjusted EBITDA".
| Beijinger wrote:
| Outstanding advise.
|
| I just had a meeting for a Job. Flags 2 and 4 were there
| already. Unclear business model. I have a PhD. While this
| does not make me necessarily smart, I have an insight and
| understanding of many industries. If I don't understand you
| business in a few sentences, you are either a fraud or are
| much much smarter than me.
|
| I give you a few more red flags, but remember, this are red
| flags, not proof of fraud.
|
| 1. Operating over many jurisdictions.
|
| 2. Opaque payments/salaries. Either to good to be true or
| commission based.
|
| 3. People who don't understand numbers and often are off by
| a magnitude. The stock is worth 5 bucks, could go up 200
| times and then ist 10k per stock. Company is worth now X
| billion, could be 200 times more. 200 times? We are taking
| market capitalization of the biggest players here, is this
| even possible for this specific industry?
|
| 4. Mentioning big names. Studied at MIT etc. (but very
| likely did not) Or for low lever frauds, build trust by
| assigning with law enforcement. (My farther works for the
| police, is a judge etc.)
|
| 5. If you know an industry you know the stuff, you know the
| numbers and you are never caught off guard by a question.
| sgammon wrote:
| 1. When you cannot explain how, mechanically the business
| works 2. Management is elusive, opaque 3. Employees are lax
| about controls, compliance, even morality
|
| If your gut says they might be criminals, they are probably
| criminals.
| Ekaros wrote:
| Far reaching stories of how money is made and the numbers
| don't actually make any sense. Or it is all financialization.
| Also unrealistic profits. Without known number of paying
| customers and known spending.
| omginternets wrote:
| I think the hard part of this for naive young people is that
| you have to actually do some investigation. This should be
| front-and-center during your interview process. When they get
| around to asking if you have any questions for them, you
| should take that opportunity to see if this is a serious
| place.
| siskiyou wrote:
| Worldcom acquired the company I worked for. I saw their
| culture featured all manner of players, hustlers, empire
| builders, untouchable princes, etc. battling for turf. Lords
| and serfs. The stock was supposed to always go up. "Genius"
| businessmen somehow figured out how to print money where
| others had not. The company had a mutual fund that only held
| Worldcom stock in the 401(k) retirement plan. That was a huge
| red flag for me and it resulted in many of my colleagues
| losing their retirement savings. I was far from the levers of
| power but I had a really bad feeling about the leadership and
| left before the crash. Since then I have always instantly
| liquidated all options and stock grants and put them in safer
| investments. That can be a hard decision to make when you see
| many people getting rich (perhaps temporarily, perhaps not)
| betting on the equity to keep improving. But I kept expenses
| low, saved a lot, and still retired at 49 so I'm happy with
| how it turned out even if I passed on some big gains.
| pseudopersonal wrote:
| Worked in crypto and I got that vibe so left. Regret it. For
| every SBF there are hundreds who get away with it. Tons of
| talentless crypto millionaires still roaming free. Look at the
| Axie Infinite guys plundering a whole country. Token could
| collapse, but there'll be no justice and they're sitting on at
| least 8 figures individually
| spaceman_2020 wrote:
| The smart ones leave an exploit in their smart contracts,
| exploit it themselves, then blame North Korea
| hagbarth wrote:
| Wait. Do you regret leaving? Because the fraud works out for
| some?
| jesterson wrote:
| May we know what is the industry you are working for?
| Unless you are selflessly helping homeless animals,
| everything else is sort of a fraud.
|
| Banking system? Big pharma? Government, God forbid? It's
| all one huge scam riddled with fraud. It's just framed
| differently.
| wolverine876 wrote:
| That is a weak justification, commonly used by criminals.
| A liar might say, 'everyone lies'; honest people don't
| say it. Unless we are engaging in a very philsophical
| discussion (possible on HN), we don't need to explain the
| problem in detail.
| jesterson wrote:
| It's not a "justification" of anything, just a question
| for someone who blames other people industry as fraud.
| Just curious about way of thinking, nothing else.
|
| And everyone lies indeed, those who deny it are either
| delusional or liars. It's human nature.
| hagbarth wrote:
| I didn't blame an industry as fraud. GP was describing a
| specific fraud that occurred in an industry. Not the
| same. I'm sure there are legitimate crypto businesses.
| rrdharan wrote:
| > I'm sure there are legitimate crypto businesses.
|
| I'm increasingly sure there aren't.
| twixfel wrote:
| Everyone lies but it's irrelevant when motivating fraud,
| since not all lies are the same.
| wolverine876 wrote:
| Also, not everyone lies with the same frequency. Some do
| reflexively, some hardly ever, and there's everyting in
| between.
|
| It's like saying all programmers write buggy code, so
| they are all the same.
| jgilias wrote:
| You forgot adtech.
| hagbarth wrote:
| That's just not true. And a sad view of the world.
| Profiting isn't the same a fraud.
| comprev wrote:
| Fraud is profiting by deception/illegal means.
| moffkalast wrote:
| Profiting by deception is why marketing even exists tbh.
| Nobody's plastering ads that outline products in factual
| unbiased way, it's all just a hair above what the law
| defines as actual fraud. Except one every so often that
| deliberately breaks the convention and is often even more
| likely to be deceptive by fooling people into thinking
| it's honest.
| escapedmoose wrote:
| This attitude seems to follow a very loose definition of
| the term "fraud" and is likely not what people in this
| thread mean when they employ the term.
| eddtries wrote:
| I think you misread that comment, or interpreted it in the
| worst possible way
| tetris11 wrote:
| Im trying to understand a better interpretation to be
| honest
| eddtries wrote:
| > Reminds me of working for MCI-Worldcom. When you think
| you're working for crooks, you probably are. Run away.
|
| >> Worked in crypto and I got that vibe so left. Regret
| it. For every SBF there are hundreds who get away with
| it. Tons of talentless crypto millionaires still roaming
| free. Look at the Axie Infinite guys plundering a whole
| country. Token could collapse, but there'll be no justice
| and they're sitting on at least 8 figures individually
|
| my understanding of this comment:
|
| They worked in crypto, got the feeling they may have been
| working for crooks, so left and regret being part of it
| at all. They are upset that many scammers who made
| millions are still walking around and will face no
| justice.
|
| vs what I think is a total misreading:
|
| > Wait. Do you regret leaving? Because the fraud works
| out for some?
|
| There are loads of people who successfully made millions
| and won't face justice, and they regret leaving before
| making similar money.
| hagbarth wrote:
| I might have. That's why I'm asking for clarification.
| BaculumMeumEst wrote:
| i think meant "i regret working there"
| atoav wrote:
| So you regret not being successful at fraud. Would you put
| this into an application letter at your next job?
| raverbashing wrote:
| Unless you're in on the schema (and even then!) you'd be the
| first in line to be the fall guy if things went south
| SSLy wrote:
| scheme, schema is something to do with your RDBMS
| raverbashing wrote:
| Hah true. Even worse if they are in the schema by having
| a bool column named "blame X for this"
| rfrey wrote:
| Lots of comments below criticising this post for "regretting
| not being a fraud" or some such. Be charitable... the
| sentence parses just fine as "I regret having worked in
| crypto".
| deltarholamda wrote:
| Worldcom had a business model that was ahead of its time. Show
| growth, raise stock price, use stock to buy companies, grow,
| rinse and repeat.
|
| It worked great until regulators disallowed the Sprint purchase
| because it would have put too much of the long-distance market
| in one company. (And as we all know, we stress a lot about
| choosing our long-distance carrier these days.)
|
| Then all of the somewhat shady side-deals became concerning, as
| WCOM was no longer growing like it was. Then people started
| looking more closely at the financials. Then it all went
| kerflooey.
|
| It was ahead of its time because it's not that different from
| tech companies today, only replace business growth with user
| growth. Profits? Ha ha ha, don't be silly.
| StressedDev wrote:
| Worldcom was a fraud. I believe they were caught inflating
| their earnings (i.e. saying they made more money than they
| really did). This was not a business model "ahead of its
| time". It's a crime.
| grumblingdev wrote:
| What was the exact moment the fraud began?
|
| What should he have done instead?
| dboreham wrote:
| > What was the exact moment the fraud began
|
| When assets held on behalf of customers were comingled with
| company assets?
| jahewson wrote:
| Ah but that's not fraud. Though it did pave the way for it.
| vikramkr wrote:
| I'm sure there was a long slippery slope to more and more
| brazen fraud, but for what he should have done instead that's a
| very very simple question to answer. He shouldn't have
| committed fraud. All the illegal stuff he did with comingling
| funds and stuff? Just - don't do that.
| StressedDev wrote:
| RE: What should he have done instead?
|
| Here is what he should have done:
|
| 1. Sam Bankman-Fried SHOULD NOT HAVE STOLEN CUSTOMER MONEY.
|
| 2. Sam Bankman-Fried should have been honest.
|
| 3. FTX should have kept excellent records. FTX was notorious
| for its bad record keeping. Also, its poor record keeping meant
| it was not sure how much money it had and it was not sure which
| money it owned and which money its customers owned.
| cortesoft wrote:
| Not commit fraud?
|
| The fraud began when he gave false information to investors and
| customers.
| cowsup wrote:
| > What was the exact moment the fraud began?
|
| There's not necessarily an "exact moment" that they can
| pinpoint, nor is that their job to do so.
|
| FTX was promising customers it would hold onto their funds and
| keep them safe, much like a bank. Then they did not. That's the
| short of it, tat is what they uncovered. The date it "began"
| was not in scope of the case, just the end result, and the end
| result was that there was fraud.
|
| > What should he have done instead?
|
| Again, the short of it is: He should have delivered what he
| promised to customers, or not make those promises to begin
| with.
| TheDong wrote:
| You don't have to pick an exact moment, but there are several
| clear moments of fraud. The biggest moment of fraud was
| whenever alameda's FTX account was allowed to have a riskier
| position than a normal account, including holding a negative
| balance. This is something FTX specifically allowed and
| publicly lied about (SBF on twitter said they were treated as a
| regular account, which we now know is false).
|
| This fraud became worse the more negative the balance became
| since it became more and more misleading to users to continue
| to present themselves as a financially healthy business.
|
| What they should have done instead is to not allow alameda to
| have an account with special rules and negative balances, and
| to actually operate their business as they claimed. They likely
| would have grown less quickly or even gone out of business, but
| sometimes the way you avoid fraud is indeed by going bankrupt
| instead of lying.
|
| They also could have not lied to users, both about the status
| of alameda's account, and about the status of FTX's liquidity.
| Each time they made a statement about their exchange that
| excluded that materially relevant information was also fraud.
|
| I do say all of this with full awareness that a large fraction
| of YC startups also "fake it until they make it", i.e. lie
| about what their product can do, lie about their financials,
| etc. Most YC startups are also committing fraud on a much
| smaller scale, and just manage to keep the scale small enough
| that no one goes to prison.
| quickthrower2 wrote:
| Hold your horses! What startups are lying about what they do?
| I don't get the impression this is the case at all. MVP and
| move fast tactics are not fraud. Saying your SOC2 compliant
| or something when you are not probably is.
| halfmatthalfcat wrote:
| I know first hand of YC founders lying to (corporate)
| customers on their business size, revenue, etc in order to
| secure business. Is that fraud? At best its an unethical
| and dubious business practice.
| peter422 wrote:
| It is only fraud if a jury of your peers would think it
| is fraud, which is probably a higher bar than you think.
|
| Most of the fraud you are talking about also wouldn't
| have the explicit benefit directly to the founders the
| way it did with FTX. SBF took money that wasn't his and
| spent it on private planes and luxury apartments and
| hundred million dollar investments _in his name_.
|
| The average startup founder who is trying to close a sale
| by exaggerating their business a little bit is not going
| to have that kind of clear gain, because most founders do
| not use their companies as piggy banks.
| aorloff wrote:
| Well for one, if you are going to start an exchange, build a
| ledger based accounting system.
| vkou wrote:
| > What was the exact moment the fraud began?
|
| When he used customer funds deposited into FTX to gamble
| through Alameda.
|
| Since customer deposits into 'FTX' went straight to Alameda's
| bank account, it began pretty much the moment Alameda executed
| a trade. Everything after that was just more fraud to cover up
| the consequences of the original fraud.
|
| > What should he have done instead?
|
| Not treat customer deposits like a personal piggy-bank.
| TacticalCoder wrote:
| > What was the exact moment the fraud began?
|
| Very early on. Probably from the very start.
|
| When Alameda, before FTX existed, gave investors leaflets
| saying Alameda had guaranteed 20% returns and it could sustain
| 20% profits on as many billions as they would get. This was a
| lie and criminally defrauding investors already.
|
| SBF never did the Kimchi trade ( _i.e._ arbitraging the US
| /Asia Bitcoin price differences) at scale (it's not even clear
| if he even managed to do it at all: he claims he did, but he's
| a pathological liar who kept lying in court).
|
| So Alameda _was_ already a scam. Then FTX was a bigger scam, to
| keep the Alameda scam going.
|
| But the Alameda scam came first.
|
| > What should he have done instead?
|
| He should have kept playing LoL only.
| thordenmark wrote:
| SBF was the largest donor to the Democrat party. Can we rehold
| those elections?
| rootusrootus wrote:
| No, he was not the largest donor. And he gave to the Republic
| party too.
| jahewson wrote:
| Quick back of the envelope calculation based on FEC data for
| 2022 says that SBF's $40m donation accounted for about 0.03% of
| Democratic-aligned PAC donations. PACs across the political
| spectrum raised over $7bn and spent over $6bn.
| K5EiS wrote:
| He donated the same amount to both Democrats and Republicans.
| throw_m239339 wrote:
| I'm curious about the political donations aspect of the story.
| Can a court force politicians who got money from FTX/SBF to give
| back to creditors?
| StressedDev wrote:
| In practice, I don't think it matters. Here is why:
|
| 1. The donations to candidates are usually pretty small (think
| $2,900/candidate). The candidates can return the money but
| getting all of the money back will not do much for the
| creditors.
|
| 2. Some PACs got a LOT of money (think millions of dollars).
| The problem is they probably already spent it. You can probably
| sue them to try to get back the money but the PACs will
| probably just declare bankruptcy.
|
| Here is a link to the donations:
| https://www.opensecrets.org/donor-lookup/results?name=&cycle...
| jokethrowaway wrote:
| Except there are 5M, 200k, 300k donations
|
| Still small compared to all the stolen money
| StressedDev wrote:
| Those are to political action committees, not politicians.
| The probably spent most or all of it during the last
| election cycle. If they raise more money, you can go after
| that but what are you going to do if they don't raise more
| money?
| throwaway14356 wrote:
| Charles Ponzi also forgot to run with the money. But Ponzi only
| got 12.5 years.
| Gustomaximus wrote:
| I'm curious how the sentencing goes, not only for SBF but those
| around him that took deals.
|
| In my limited view of US cases, it often seems prosecutors let
| off lightly anyone that will testify in return for their whale.
| Sometimes feels it's more symbolic justice that way than real.
| epolanski wrote:
| I'm not American, but it's my understanding that there's more
| scrutiny on prosecutors to "nail" and close cases due to the
| stupid double jeopardy rule.
|
| You lose the chance to convict a criminal, you lose your face
| and the chance to see him behind bars.
| dragonwriter wrote:
| > the stupid double jeopardy rule
|
| You really want the government to decide to re-arrest and re-
| try you indefinitely if you are acquitted of a crime?
|
| The double jeopardy rule is _not_ stupid.
| danielmarkbruce wrote:
| But it's shown to be stupid in movies. How could that
| possibly not be right?
| epolanski wrote:
| That's not what happens in countries that don't have double
| jeopardy, you know that right?
| dghlsakjg wrote:
| Double jeopardy is a relatively common protection and
| predates the United States.
|
| All of Europe, India, all of the Americas, and any other
| country that inherited English common law are among the
| majority of countries on earth that have this protection in
| one form or another.
| epolanski wrote:
| Italian system definitely does not have it, neither Poland
| or France.
| dghlsakjg wrote:
| You are incorrect, or they are in violation of the
| European Convention on Human Rights. You can use your
| favorite search engine to verify this.
|
| Polish law translated: "No criminal proceedings shall be
| initiated if another criminal proceeding in respect of
| the same act committed by the same person have been
| validly completed (ne bis in idem, res iudicata) or are
| already pending (lis pendens)[19] If criminal proceedings
| are initiated in contravention of this principle, the
| proceedings shall be discontinued."
|
| Double jeopardy rule doesn't prevent appeals to a higher
| court which is what happens in Italy frequently, and it
| doesn't prevent retrial when there are new legal facts or
| a defect with the original case.
|
| I don't know why you are so unwilling to research this
| when it is a very accepted legal principle.
|
| Are you sure that you understand what double jeopardy is?
| That the government cannot retry your case once a final
| ruling has been made. Simply put: you can't have two
| separate trials for the same crime. You can still have
| the case pass through separate courts and judges through
| appeals process since many systems allow review of a
| conviction before it is considered "final".
| epolanski wrote:
| Wait, this is different from US law.
|
| In all Europe you can be retried if new evidence is found
| or the previous ruling/trial had formal issues or
| misproceedings.
|
| In US, this is really not the case, even if new evidence
| is found it you cannot retry a defendant.
| s1artibartfast wrote:
| That depends heavily on what you think the purpose of the
| justice system is. For most purposes, nailing the whale and
| breaking up the party is enough to set an example and send a
| message.
|
| There isnt much value in incarcerating additional people simply
| for the sake of punishment/revenge. The other individuals are
| unlikely to cause future harm.
| zerbinxx wrote:
| I tend to agree that both practically and legally, when
| you're dealing with a fraud as big as this one, that
| successfully prosecuting the Big Man At The Top is the best
| strategy.
|
| People might scoff at mid-level fraud "doers" getting a slap
| on the wrist deal for their testimony, but the alternative
| where you go full scorched earth and fail to get a conviction
| would be terrible for the defrauded and the system beyond
| them. Capitalists (i.e. the owners of capital, the investor
| class, in this case) love a system where you don't really
| have to quadruple check that a financial document is valid.
| Who can blame them? I certainly wouldn't want to live in a
| world where something like FDIC doesn't exist or where
| fraudsters can easily rip people off with low chances of jail
| time if/when the operation goes belly up.
| harry8 wrote:
| >There isnt much value in incarcerating additional people
| simply for the sake of punishment/revenge.
|
| The idea is that everyone knowingly involved goes to jail.
| This way others presented with opportunity to go along with
| such fraud /know/ there is a very, very real consequence.
| Rather than "CEO could go down for this but what the hell,
| I'll go along with it."
|
| It's not retribution, it's justice.
| mdasen wrote:
| I'd also note that the people around often profit from
| these things as well. It's not like the CEO is doing
| something only for the CEO's benefit. The other people
| involved lived lavish lifestyles with high salaries and
| were looking at a huge pay day. They didn't just go along
| with it. They were looking to profit from it.
| bestcoder69 wrote:
| Prosecutors need snitches.
| harry8 wrote:
| nobody talks, everybody walks.
| s1artibartfast wrote:
| yeah, I agree you don't want to prosecute the CEO
| exclusively every time, but beyond that, I dont think it
| makes much of a difference with respect to deterrence.
| Nobody thinks they will get caught to begin with, so the
| severity doesn't matter much.
| Tangurena2 wrote:
| The federal prison system abandoned the concept of
| rehabilitation back in the 1970s. The current system is a
| combination of exile (we don't want you around), some
| punishment (this place sucks) and some mitigation (if you're
| in jail then you can't do more crimes). I do not believe that
| potential criminals are the sort who are capable of thinking
| something like "I better not do X, I don't want to be in jail
| that long".
|
| There's a YouTube channel called "Insider" and they have a
| series of videos called "how crime works" which are part
| interviews with past-criminals about how their particular
| scheme worked:
|
| https://www.youtube.com/c/thisisinsider/videos
|
| The videos all have extensive credits and one thing was that
| very few of the participants actually considered potential
| punishment/incarceration beforehand.
| s1artibartfast wrote:
| Obviously it depends on the crime, but I dont think it is
| so much that criminals never consider potential punishment,
| but that they dont think they will be caught.
|
| To this end, perception of the likelihood of being caught
| is far more important than the severity of punishment when
| it comes to deterrence.
| StressedDev wrote:
| Prosecutors don't decide sentences in the United States. Judges
| decide sentences and in US Federal Government cases, the US
| Government issues sentencing guidelines. These guidelines are
| usually used to determine how long a person goes to prison for.
|
| What prosecutors can do is recommend a sentence and let the
| judge know that a criminal cooperated. Cooperating typically
| reduces a criminal's sentance. Ultimately, Federal sentences
| are decided by three things:
|
| A) The laws of the United States. These can be changed by the
| United States Congress.
|
| B) The sentencing guidelines (https://www.ussc.gov/guidelines)
|
| C) Prison Capacity (At some point, you cannot send anyone else
| to jail because the prisons are full)
| throw_m239339 wrote:
| > What prosecutors can do is recommend a sentence and let the
| judge know that a criminal cooperated. Cooperating typically
| reduces a criminal's sentance. Ultimately, Federal sentences
| are decided by three things:
|
| The prosecution does decide charges to bring forward, so the
| prosecution can decide to only charge defendants with lesser
| charges if they cooperate to catch bigger fishes.
|
| If Judges stopped going along with prosecutor's deals, then
| nobody would be making deals ever again. Usually, judges do
| honor deals made with the defendant.
| nradov wrote:
| Some of this is also "Prisoner's Dilemma" type game theory with
| prosecutors playing a long game to improve their odds of
| winning not just the current case but future cases as well.
| When there are several co-defendants the prosecutors will give
| the best deal to whoever cracks first and agrees to testify
| against the others. Future co-defendants in other cases (and
| their attorneys) see that pattern and then race each other to
| get the first, best deal.
| Uptrenda wrote:
| Mark Karpeles did nothing wrong!
| system2 wrote:
| Besides designing a crappy site that validates the data in
| user's browser with JS.
| FFP999 wrote:
| > You'd think this MIT graduate would wise up, but he never did.
|
| The MIT campus has a major public road running through the middle
| of it, one of the busiest surface streets in the area. You don't
| have to stand there very long to see a crowd of students almost
| get hit by a car because they didn't look before they crossed the
| street.
|
| Point is, the old cliche is true, there really is such a thing as
| a person with a lot of book-learning but less common sense than a
| sea slug. I think we saw one such get convicted today.
| JohnFen wrote:
| There's also a fact of human nature that smart people often
| don't understand: you can be the smartest person in the world
| and still be stupid under the right circumstances.
| FFP999 wrote:
| Quite right. One more related fact: competence in area X does
| not necessarily translate into competence in area Y, even if
| X seems to be a much more difficult thing than Y.
| uh_uh wrote:
| And when AI does the same thing, some people argue that
| it's proof for its lack of intelligence.
| hef19898 wrote:
| A fact that is so easily placated with celebrity status om
| social media.
| StressedDev wrote:
| His problem was not a lack of common sense. His problem was he
| was dishonest, a conman, and a thief.
| FFP999 wrote:
| True--but nobody made him talk to the media in the time
| before the trial, and nobody made him take the stand and
| thereby make himself vulnerable to cross examination. So in
| addition to "dishonest," "conman," "thief," and "convicted
| felon likely to die in federal prison," we can also
| reasonably call him "dumbass".
| StressedDev wrote:
| Good point - I think you are right about this.
| squeaky-clean wrote:
| He can (and does) have multiple problems.
|
| It's not like because he made one really bad decision, none
| of this other bad decisions exist anymore.
| Finnucane wrote:
| To be fair, those students are contending with people driving
| in and out of Boston. The odds are not in their favor.
| FFP999 wrote:
| You're not wrong--but all the more reason to be on your
| guard, and maybe wear running shoes.
| manonthewall wrote:
| I've lived in 6 different cities in my lifetime, in every one
| they claimed they had the worst drivers in the USA.
|
| Edit: well color me an idiot, I just checked and a 2019
| usnews report had boston as ranked 3rd on worst drivers,
| based on whatever set of variable they came up with, so
| touche.
| FFP999 wrote:
| I found what I think is probably the same report. This one
| anyway had DC and Baltimore, two cities where I've
| personally driven a good deal, as the worst, and I would
| believe that.
|
| One other thing to note is that two of the _other_ top 10
| are also in Mass, Worcester and Springfield. That's the
| only triplet on the list in the same metro area.
|
| Though I guess, for the point I was making, it doesn't
| matter if Boston driving is the actual worst in the country
| or not, as long as it's very bad, which I promise you it
| is.
| insanitybit wrote:
| Insane that Miami wouldn't be on there, makes me question
| the whole thing.
| FFP999 wrote:
| Imagine Miami only with ice storms, and you've got
| Boston.
| insanitybit wrote:
| I lived in Boston for 2.5 years and it's not as bad as
| Miami on it's worst day, driving-wise.
| FFP999 wrote:
| Speaking seriously, I'll take your word for it, I haven't
| visited Miami since I was a little kid.
| crtified wrote:
| Perhaps so, but I also think this situation is less of an
| indictment upon academia than it is upon, say, bankers - which
| is basically what his career was, both before his crypto work,
| and during it.
|
| After all, it's not difficult to find an effective book
| teaching one to safely cross a road.
| rendaw wrote:
| I saw this when visiting Washington University in St. Louis
| too! Street, plenty of cars, light turns red, students continue
| to walk into the crossing directly in front of an oncoming car
| which brakes and honks.
| fsckboy wrote:
| that "almost hit by car" anecdote is complete nonsense. There
| is plentiful jay-walking in Boston/Cambridge (just as there is
| in New York City, and has been recently legalized in
| California). To an outsider, perhaps it looks like people are
| dangerously walking into traffic?
|
| But how many MIT students actually get hit by cars? the number
| would be unusually high if the number of close calls were
| unusually high, but without looking up any statistics I can
| assure you it's something nobody ever thinks twice about.
|
| Also Mass Ave which tons of people cross is not the most highly
| trafficked street by MIT, that would be Memorial Drive, but
| hardly anybody even has a need to cross Memorial Drive so that
| part is also hinky.
| FFP999 wrote:
| Damn, you found me out. _smoke bomb_
| plorkyeran wrote:
| The thing I learned very quickly while living in Boston is
| that no one will ever stop for you if you let them think they
| can keep going without running you over, but drivers do
| expect pedestrians to just walk into the street and are
| prepared for it. If you want to cross at a spot without a
| signal or stop sign, you have to act like you have no idea
| that there's any cars coming while still keeping an eye on
| them in case they genuinely didn't see you.
|
| The end result _looks_ like a lot of people have death
| wishes, but the pedestrian injury rate isn 't actually
| unusually high.
| insanitybit wrote:
| Boston or Cambridge? Coming from NYC I was _shocked_ at the
| fact that cars in Cambridge would constantly yield to me,
| even in situations where I really didn 't expect it.
|
| Contrast to NYC where I do follow that exact process you're
| describing - act oblivious, make yourself look like you
| really will let them hit you, that way they won't. Although
| in NYC you gotta be real careful about that strategy...
| FFP999 wrote:
| I'm talking here about Mass Ave directly adjacent to the
| bridge--so it's Cambridge but involving drivers coming
| out of Boston.
| FFP999 wrote:
| I actually use almost the complete opposite strategy, which
| is to make eye contact with the driver and stare them down.
| So far so good.
| Tangurena2 wrote:
| I went to Purdue. The joke among engineering students was
| that we used calculus to compute trajectories and to avoid
| "elastic" collisions with motor vehicles when crossing State
| Street (the main road through campus). And that the liberal
| arts students got to go to some secret class where they were
| taught how to do that without calculus.
|
| Back then, painted crosswalks would have been a waste of
| paint.
| manonthewall wrote:
| the whole "book learning nerd not living in the real world" is
| quite cliche these days, there are much better descriptors such
| as emotional, literary, mathematical, etc intelligences.
| Someone may be high in all of them or in just one or none.
| FFP999 wrote:
| I mean, I explicitly _said_ it was a cliche. But I'd argue
| that it's not wrong. I guess if I had to describe the kind of
| person I'm thinking of in a more nuanced way, I'd say they're
| educated and very good, often brilliant, in their chosen
| work, but both have low emotional intelligence and are
| lacking a sort of...I don't know how to put it
| exactly...basic ability to take care of themselves.
|
| There are also plenty of booksmart nerds with high emotional
| and practical intelligence. (I like to think I'm one, sure
| didn't used to be.) On the whole they are fun people to be
| around.
| SkyMarshal wrote:
| That's been my impression of SBF since FTX collapsed. Quite
| book smart, but zero experience in building a major service
| that custodies billions in other peoples' money.
|
| Raw intelligence is not enough in that context. Ideally you
| want to have apprenticed for at least a few years at a real
| exchange or custodial service. Somewhere you learn all the
| engineering details about how to architect it with proper
| financial controls, safeguards, and correctness guarantees so
| that this kind of failure cannot happen, either via human
| skullduggery, mistakes, or system bugs or security
| vulnerabilities.
|
| Sam never had any of that. He probably got caught up in the
| moment, implicitly assumed he was smart enough to compensate
| and not need it, that money is fungible and free-flowing and he
| can move it around and always make more, etc. And his investors
| were all finance guys overly impressed with his trading ability
| and ignorant of the above. This is the unfortunate but
| unsurprising result.
| Geee wrote:
| It had nothing to do with engineering issues / risk. He was a
| scammer.
| SkyMarshal wrote:
| It had to do with lack of internal controls that safeguard
| the organization and its custodied assets from both
| employee mistakes and fraud. That's a part of engineering
| high-assurance high-integrity systems and SOP at big
| exchanges, banks, and similar orgs.
| Geee wrote:
| That's true of course, but every control can be turned
| off. In this case, they wanted to turn every safeguard
| off.
| sarchertech wrote:
| Yeah but if you want to scam why would you want to
| engineer the company you are creating to prevent you from
| scamming.
| resolutebat wrote:
| SBF has just been convicted of committing _intentional
| fraud_ , not just "lack of internal controls". Was it an
| oversight to use rand() to generate your deposit
| insurance figures, or add that switch to allow Alameda
| unlimited rights to dip into the customer fund kitty?
| vkou wrote:
| Lack of internal controls will cause some peon that you
| employ to steal money from you/lose your money.
|
| Lack of internal controls isn't the reason for why the
| CEO and owner of FTX is funneling billions of its
| customer dollars _into a company he owns_ - Alameda.
|
| It's just straight up fraud.
| hef19898 wrote:
| Loose, or rather non existant, controls also allow _you_
| , as senior management to get away with even worse fraud
| without one of your employees realizing.
| vkou wrote:
| He's not senior management. He's the _owner_. It doesn 't
| matter what your controls are, if he wants you to eat
| paste and hand him over the keys to the production
| database so that he could delete it, you can comply, or
| he can fire you.
|
| You should probably let some other adult, (and the FBI)
| know if the owner asks you to do that, but you can't
| physically stop him. It's his company. He has complete
| power over it. It's not a democracy, there's no checks
| and balances on the power of an owner-CEO.
| hef19898 wrote:
| That's what internal controls are there for to prevent.
| _Especially_ for owner-CEOs. FTX set up shop somewhere in
| the carribean just to avoid that kind of oversight and
| control. I can hardly imagine a bigger red flag than
| that.
|
| That people just accept that founder CEOs are allowed to
| do everything with their companies, and their companies
| money, is troubling. Because, as soon as said company is
| a seperate legal entity, it is the companies assets and
| not the founders anymore.
|
| Maybe even CompSci graduates shoupd get some basics of
| business, legal and ethics during their studies.
| KajMagnus wrote:
| > lack of internal controls that safeguard the
| organization
|
| That's a bit like:
|
| "The bank robbers' mistake was a lack of internal control
| and security advisors who could have safeguarded them
| from robbing banks"
| rightbyte wrote:
| It sounds silly but you are not a bank robber before any
| attempted robbery or at least sincere planning of such.
| pphysch wrote:
| There is a very fine line between fraud and financial
| engineering. Perhaps none at all.
| olalonde wrote:
| Yes, but he crossed the fine line by like 500 kms.
| jandrese wrote:
| This is it exactly. He was running a confidence game. There
| are some big parallels with Bernie Madoff in fact. Spinning
| a story of financial genius out of a lucky break he got
| early on that had higher than typical returns, but in a
| market small enough to fly under the radar of the big
| players. The big difference is that SBF had less sense and
| let it spin out of control way too fast and hastened his
| own demise. At least Madoff got to live most of his life
| before he got sent to jail.
| jojobas wrote:
| That's the thing - he successfully ran a lot of involved
| arbitrage and other legitimate trading tricks before he
| decided to run the confidence game. Unlike Madoff, he
| could have retired before the FTX scam with "buy a jet
| every year" kind of cash.
| RandomLensman wrote:
| Is there actually good visibility on the profits of the
| earlier trading?
| jojobas wrote:
| There's indication it was in the higher 9 digits.
| Zanni wrote:
| I don't think SBF was a scammer in the Bernie Madoff
| sense. I don't think he set out to intentionally scam
| anyone. I just think he was so arrogant that he thought
| he could do whatever he wanted. He thinks he's smart and
| the rest of the world is dumb. He thinks the legal system
| is just something to "route around." Not because he wants
| to steal money but because, if there's money in "his"
| account, does it really matter if it technically belongs
| to a customer? He seeemed genuinely surprised at the
| verdict, and he's acted all along as if he were, not
| exactly innocent but undeserving of all this bother.
| RandomLensman wrote:
| How does using a random number generator in sizing the
| insurance fund fit into that view?
| sirclueless wrote:
| Like every other decision SBF would prefer you not
| examine: It fits because the ends justify the means.
|
| It's important for the business that the insurance fund
| is safe. If you look closely you will find that it is
| unsafe. But if people believe it is safe you won't need
| the insurance fund, so do whatever you need to to inspire
| confidence in the insurance fund.
| RandomLensman wrote:
| The safety (or not) of the insurance fund is not related
| to the need for it. The need would come from a
| counterparty defaulting - which is generally unrelated.
| Nextgrid wrote:
| That's typical startup shenanigans, not specific to FTX.
| Lying to customers and embellishing the truth is business
| as usual. I'm sure they hoped that at one point they'd
| turn this into a _real_ insurance fund.
| Cheezewheel wrote:
| If that is the case then the standard operating
| procedures of startups is _fraud_ , not that Sam isn't
| somehow a deliberate scammer and con artist.
| bambax wrote:
| FTX had "infinite money", so the actual insurance fund
| was that supply of money; having a pretend number on the
| front page was simpler than actually implementing it; in
| a sense it was a favor to investors, because it saved on
| operational costs.
|
| (All things SBF may have told himself.)
| camgunz wrote:
| Yeah, Madoff was a scammer, SBF is a megalomaniac. He
| thought he couldn't fail, and thus the rules didn't apply
| to him. So, when he did (predictably) fail his reaction
| as basically a big "I didn't _mean_ to do anything wrong,
| therefore I shouldn 't be punished" makes sense. But hey
| you know what, this is why we have rules. Not following
| the rules was actually the wrong thing, not losing
| people's money, which--crucially--he couldn't have done
| had he followed the rules.
|
| I feel like justice is being done here, but there's a
| sense in which SBF and his cohort are the victims here. A
| world of zero interest rate incentives/people, a trendy
| money machine in crypto, a general sense that old
| people/regulations are impoverishing us all with their
| nervous sclerosis, all created an environment where--in
| hindsight--this was inevitable. If not FTX then someone
| else.
|
| I think people are 100% right to call out the
| press/publications/investors/regulators who flat out
| encouraged this charade to continue well beyond the point
| where it was an obvious scam, and I think we really need
| to examine the VC culture of "find (or create) a young
| megalomaniac, give them tons of money, ... profit". How
| do we think these things will turn out? Will we spend
| billions of dollars building Uber, which at this point is
| an app that shows you ads and incidentally hails a cab?
| Will we spend billions of dollars building trash
| companies that scam people? Will we spend billions of
| dollars building Airbnb, which was pretty ruinous for
| cities and at this point not even a good business? Will
| we spend billions of dollars building e-scooter companies
| that exist essentially to create tons of e-waste that
| litters our sidewalks and landfills?
|
| It's nuts. Please just fund day care.
| bambax wrote:
| Yes, I agree with that.
|
| It's undeniable he committed fraud, repeatedly lied to
| his clients and tried to make them give him money by
| telling them tales that weren't true.
|
| But it also seems likely he thought he was clever/lucky
| enough that it would all work out in the end.
|
| That makes the intent different, and culpability is
| always about intent.
|
| In fact SBF reminds me more of Billy McFarland (of Fyre
| Festival fame) than of Madoff.
| itsoktocry wrote:
| > _It 's undeniable he committed fraud, repeatedly lied
| to his clients and tried to make them give him money by
| telling them tales that weren't true._
|
| What on earth is the difference between this and Madoff?
|
| > _But it also seems likely he thought he was clever
| /lucky enough that it would all work out in the end._
|
| What on earth is the difference between this and Madoff?
|
| > _That makes the intent different_
|
| Why do you assume bad intent in one case and none in the
| other? SBF stole customer money and used it for
| _political donations_ during one of the most heated,
| divisive, controversial elections in recent American
| history. He 's the sitting President's largest donator,
| and he's going to prison for fraud. The potential
| consequences here are massive.
| bambax wrote:
| There's a possibility that the customers of FTX recover
| most or all of their money, thanks to SBF's investments.
|
| Those investments were fraudulent because they were made
| without the consent of the people providing the money,
| but they were investments nonetheless: SBF was buying
| assets, not just pissing money away in jets and catering
| (although he also did that).
|
| In Madoff's case there were no assets at all. It was not
| possible for Madoff to convince himself he was doing
| something that may become viable, given enough time. It
| was possible for SBF.
|
| I think that's a pretty big difference.
|
| (Also, campaign finance violations are not part of the
| trial that just ended, at all.)
| jcranmer wrote:
| SBF strikes me as someone who firmly believes ends-
| justify-the-means, and as such, if all his victims could
| be made whole, then he couldn't have committed any fraud.
| However, Matt Levine put it best:
|
| > 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.
| yashg wrote:
| Anyone, who gets into building a company in the crypto
| space is a scammer. Period.
| Freedom2 wrote:
| That's a bit spicy. Don't forget we're on the Y
| Combinator forums, so this may read as an attack against
| their investment strategy - not even dang can protect us
| here.
| oooyay wrote:
| This forum actively supported deplatforming crypto source
| from VCS hosts so I'm pretty sure it being YCombinator
| doesn't matter at all.
| tim333 wrote:
| I think that's either untrue, or at least there are
| different levels of scaminess. I put some money into FTX
| to short Celsius (another scam) and would have been happy
| with the service if they hadn't gone and stolen my money.
| I mean you could argue that any trading of crypto is
| inherently a scam but there are some consenting adults
| who chose to do it.
| PopePompus wrote:
| "...would have been happy with the service if they hadn't
| gone and stolen my money."
|
| That's a pretty big caveat, though.
| ants_everywhere wrote:
| > He probably got caught up in the moment, implicitly assumed
| he was smart enough to compensate and not need it
|
| The pop psychology term for this is the Dunning-Kruger
| effect.
| kuhewa wrote:
| Not really. The Dunning Kruger effect was that those in the
| bottom quartile of competency greatly overestimated their
| own competency. He wasn't incompetent. Just had good old
| fashion hubris.
| ants_everywhere wrote:
| The person I'm responding to was making the case that he
| was incompetent at his job:
|
| > zero experience in building a major service that
| custodies billions in other peoples' money.
|
| This is exactly what the Dunning-Kruger effect describes.
| He was incompetent at the task he was doing and didn't
| know enough to be aware of his incompetence.
| kuhewa wrote:
| No, it's a specific phenomenon about lack of raw
| cognitive competence, like for general tasks in life, not
| lack of experience in a given domain. The point of the DK
| effect was even with experience, the disparity between
| ones competence and awareness of ones relative competence
| doesn't improve. The original paper opens with an
| anecdote about a bank robber that couldn't believe he was
| caught because he "wore the juice" -- he was under the
| impression that lemon juice would make his face invisible
| on camera.
|
| What you might be thinking of is the smbc Mt. Stupid
| diagram [1] which does relate overinflated sense of know-
| how to a relatively low experience level.
|
| That is distinct from the DK effect in important ways. Of
| course it doesn't help that if you google images for DK
| effect 19/20 first results will be a bastardisation of
| the Mt Stupid comic.
|
| [1] https://www.smbc-comics.com/comic/2011-12-28
| ants_everywhere wrote:
| > No, it's a specific phenomenon about lack of raw
| cognitive competence, like for general tasks in life, not
| lack of experience in a given domain. T
|
| This is a common misconception. Wikipedia has a pretty
| good write-up. Quoting the first paragraph:
|
| > The Dunning-Kruger effect is a cognitive bias in which
| people with limited competence in a particular domain
| overestimate their abilities. Some researchers also
| include the opposite effect for high performers: their
| tendency to underestimate their skills. In popular
| culture, the Dunning-Kruger effect is often misunderstood
| as a claim about general overconfidence of people with
| low intelligence instead of specific overconfidence of
| people unskilled at a particular task.
|
| The original paper [1] was explicit that this was domain-
| dependent.
|
| > The point of the DK effect was even with experience,
| the disparity between ones competence and awareness of
| ones relative competence doesn't improve.
|
| I don't think this is consistent with the literature. In
| the studies I'm familiar with, there is the classic
| Socrates effect that the people with the most skill are
| aware of how little they know and tend to underestimate
| their relative performance. So it improves significantly,
| but there's a slight over-correction.
|
| Quoting the original paper:
|
| > improving the skills of participants, and thus
| increasing their metacognitive competence, helped them
| recognize the limitations of their abilities.
|
| [0] https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_
| effect
|
| [1] https://pubmed.ncbi.nlm.nih.gov/10626367/
| chx wrote:
| Maybe the rubes can be exonerated for falling to the
| incessant hyping of crypto but a smart person should know all
| crypto is a scam because the Washington Post, the bloody
| Washington Post told you it's either a Ponzi or a pyramid
| scheme in _2015_. In 2017 you had Preston Byrne challenging
| that article in that he considered the scam to be
| significantly different from a Ponzi and gave it a new name,
| a "Nakamoto scheme" (as an aside, Jorge Stolfi will continue
| the debate in 2020 where he considers the difference not to
| be significant and I find his arguments to be rather
| convincing). But he didn't, not for one second, challenged
| the fact it is a scam. Attack of the 50 Foot Blockchain came
| out in July 2017. There's _no way_ to enter the crypto space
| without _mens rea_ in 2019.
| mathieuh wrote:
| As someone who's never been into crypto, the general
| discourse when I look in crypto-related subreddits suggests
| that the very fact that mainstream media were calling it a
| Ponzi scheme is one of the reasons you should invest in
| crypto.
|
| It's that "one simple trick (what they don't want you to
| know)" kind of predatory advertising that seems to be what
| ensnares people.
|
| It's adjacent to the hustle culture you see on social media
| where people with gleaming white teeth tell you they'll
| make you rich
| Roark66 wrote:
| As someone who made lots of money on crypto early on,
| then didn't touch it for many years, made lots of money
| again and haven't touched it since I can tell you (and
| others) what is a winning strategy for "investing" in
| crypto.
|
| Consider it a VC investment. First, you gave to either
| understand the underlying technology, or someone you
| trust have to understand it sufficiently to be able to
| say "this is bullshit", or "this is a great novel idea
| that makes a lot of sense".
|
| Then you invest a bit of your really disposable income in
| it and don't touch it for a couple of years. Eventually
| you sell once you're happy with the price, or you forget
| about it and check few years later.
|
| Edit: also, it really is down to luck too. An idea might
| be great, but the people behind it can be scammers. Etc.
| Crypto is(or was) a very high reward, very high risk
| game.
|
| And for God's sake don't invest your life's savings in
| crypto!
| chx wrote:
| It's not an investment. You are gambling. And even worse,
| you are gambling by robbing the less informed. Make no
| mistake: every cent you made is a cent someone else lost
| -- even if they haven't realized their loss yet, it's
| there. And even worse, it's not a cent, it's a bit more
| because bitcoin is not even a zero sum game but a
| _negative sum game_ and those are inherently scam. But, I
| guess, good for you?
| leoedin wrote:
| It's effectively a pyramid scheme in which the potential
| marks are _everyone in the world_. It 's not that much of
| a surprise that crypto continues to have money pumped
| into it - there's an almost never ending supply of
| greater fools.
|
| Arguably the entire monetary system is also kind of like
| that - but it's got the benefit of true utility outside
| of speculation. It's a shame that most of the interesting
| crypto-as-money stuff - smart contracts, accessible to
| everyone financial APIs, pseudo-anonymous payments etc,
| has been completely dwarfed by the crypto-as-investment
| situation. Maybe it'll shake itself out long term, but I
| suspect the fundamental problems of unregulated "money"
| will be inescapable.
|
| It turns out there's a reason we have financial
| regulation.
| lordfrito wrote:
| > It's effectively a pyramid scheme in which the
| potential marks are everyone in the world.
|
| That's about as big as it gets, and pretty well explains
| the long legs this con continues to have. A lot of marks
| out there.
|
| The only thing bigger would be an interstellar "galactic-
| coin". God. I can only imagine the carnage. Seems like a
| great premise for a sci fi story.
| nrdvana wrote:
| It has real value for as long as there are people who
| need a currency that isn't controlled by a government. In
| other words, it's an investment in the working capital of
| the criminal underworld. (and tinfoil-hatters) The money
| you put in is probably used to commit crimes of some
| sort, and the money you take out was probably the result
| of some crime. But with coins like Bitcoin that have a
| distributed trust in all miners to maintain the
| algorithm, I don't think you can say it's a scam.
|
| The ones I think are truly scams are the "stablecoins"
| and "exchange tokens", which are nothing more than a fiat
| currency offered by an entity smaller than a government
| with less accountability than a government, and no way to
| ensure the value/supply/demand of their coin. So yes, I
| think FTX was a scam to the extent that they traded FTT
| while printing or consuming it however they liked.
| beefield wrote:
| > First, you gave to either understand the underlying
| technology, or someone you trust have to understand it
| sufficiently to be able to say "this is bullshit", or
| "this is a great novel idea that makes a lot of sense".
|
| > Then you invest a bit of your really disposable income
| in it
|
| Sorry, but I find it a bit funny that in your "winning
| strategy" you seem to invest on the second step
| _regardless_ if you in the first step ended in the "this
| is bullshit" or not. (full disclosure, so far, every
| crypto thing I have seen has fallen to the "this is
| bullshit" bucket in my opinion. But I guess my "if it
| looks, walks and smells like bullshit, don't touch it
| with a ten foot pole" is not a winnig strategy.)
| InitialLastName wrote:
| Well, yeah: If it's bullshit, you invest and then make
| sure you spread the word so there are enough people under
| you in the pyramid to keep you solvent.
| chx wrote:
| Try the /r/buttcoin sub for a more informed opinion.
| panarky wrote:
| _> >> Did you fly to the Super Bowl in a private plane?_
|
| _> all crypto is a scam_
|
| Most people think SBF spent all his customers' deposits on
| private jets and luxury condos, and blew the rest on
| shitcoin bets that went bad.
|
| But despite the insinuations of prosecutors, the PJ trips
| just don't add up to much in the scheme of things, and the
| real estate is still there and can be sold.
|
| Yes, some shitcoin bets were bad, but they're offset by
| investments that paid off like the Anthropic stake.
|
| It's likely that the only haircut depositors will have to
| take is the billion dollars in bankruptcy lawyer billings.
|
| _> the bloody Washington Post told you it 's either a
| Ponzi or a pyramid scheme in 2015_
|
| If you put in $10K when WaPo told you it was a Ponzi, you'd
| have $1.6M today.
|
| Maybe next time the bloody Washington Post gives you
| investment advice, you should do the opposite.
| Freedom2 wrote:
| > Maybe next time the bloody Washington Post gives you
| investment advice, you should do the opposite.
|
| I did and I had significant losses. What does that say
| about your statement?
| icelancer wrote:
| The price of Bitcoin in 2015 was ~$350. To have
| significant losses after buying at that price point would
| have taken very serious skill.
| beefield wrote:
| Could you elaborate a bit the "very serious skill" needed
| to store your bitcoin in e.g. Bitfinex or CuadrigaCX?
| read_if_gay_ wrote:
| Since it's apparently not obvious, long term holding your
| coins in a centralized exchange misses the entire point
| of crypto. Not understanding that takes some skill
| indeed.
| the_gastropod wrote:
| Oh, neat. So misplacing your hardware wallet also
| requires lots of skill. Gotta love that rugged
| libertarian individualism that turns bad luck into
| stupidity and good luck into galaxy brains.
| rightbyte wrote:
| Each time it doubled you would have been a fool not to
| sell it.
|
| Holding is about the same thing as buying but with no
| transaction cost.
| medo-bear wrote:
| you should have hodld
| alvah wrote:
| It says the bloody Washington Post has no obvious skill
| at predicting the future, therefore any statements they
| make should be taken with a hefty dose of salt.
| chx wrote:
| The article was not predicting the future, though.
|
| https://www.washingtonpost.com/news/wonk/wp/2015/06/08/bi
| tco...
|
| > The thing is, I don't actually use it. I just hoard it.
| I'm waiting for some greater fools to push up the price
| by using theirs.
| read_if_gay_ wrote:
| And what is this made up quote (not to call it a
| strawman, as the wapo is certainly a prestigious outlet
| with very high standards) supposed to prove?
| robertlagrant wrote:
| > If you put in $10K when WaPo told you it was a Ponzi,
| you'd have $1.6M today.
|
| This is the fuel that drove crypto. Yes it's a scam; I'm
| just hoping others will buy in after me and I can cash
| out with their money.
| read_if_gay_ wrote:
| Oh, so stocks must be a ponzi as well.
| leoedin wrote:
| Stocks are ownership of something real. The company you
| own a share of does things in the real world. They can
| make intelligent (or stupid) decisions about the company
| strategy. They can enter new markets, or launch new
| products. They can share a dividend with the owners.
|
| Obviously there's still investment bubbles - but
| underlying it all is ownership in a corporation.
| robertlagrant wrote:
| Stocks don't rely on other people buying in to create
| value. They are buying into something with underlying
| value.
| fragmede wrote:
| That doesn't explain GME or BBY. Which have explanations,
| but I wouldn't call rush underlying value.
|
| Fundamentals define a floor for stock price, but above
| that it's all vibes. Which is fine, as long as we're on
| the same page.
| robertlagrant wrote:
| I'm not saying rush is underlying value.
| chx wrote:
| Investment into a corporation becomes _capital_. It is
| used to buy resources which when combined properly can be
| sold for more than the raw cost. You are entitled to a
| _share_ of these profits in the form of _dividends_.
|
| On the other hand, buying crypto"currency" becomes ...
| just that. It sits there until you sell it to someone
| else.
|
| In other words, if you rolled back all transactions in a
| stock ever made you'd end up with a positive sum totaling
| dividends paid out. If you rolled back all Bitcoin
| transactions you'd end up with a big fat zero. Minus, in
| both cases, transaction fees but while it's a mere
| convenience for stocks it's inherent in Bitcoin which
| makes it a _negative sum game_ and as such a scam.
| jwmoz wrote:
| Gold.
| RandomLensman wrote:
| Actually, all commodities and it is a known issue with
| commodity investments (which maybe are more like trading
| positions therefore).
| chx wrote:
| Y'all really should read Stolfi because he carefully
| addresses all these, gold stock etc
|
| > gold has a source of revenue besides the investors;
| namely, the purchases by consumers like jewelers and
| industry, who take gold out of the market (2/3 of the
| production) for uses other than re-sale. When one buys 1
| oz of gold, one gets a chip of a metal that one can sell
| to those consumers, and thus obtain some money that does
| not come from other investors.
| starcraft2wol wrote:
| This is simply mentally reclassifying "consumers" outside
| the category of investors.
|
| The argument for crypto, etc is the same. There are
| consumers who want to make purchases, use contracts, etc.
| robertlagrant wrote:
| No, it's saying that gold has value as a commodity as
| well as a currency. You can't melt down a bitcoin and
| sell it as jewellery.
| read_if_gay_ wrote:
| Clearly currencies don't pay dividends but doesn't matter
| for this argument. There's a fair chunk of people
| treating stocks exactly the way gp described. To conclude
| from that that all stocks are a ponzi is as retarded as
| it is to conclude all crypto is a ponzi
| Eisenstein wrote:
| Is crypto not a ponzi as an investment, though? Who in
| their right mind buys currency and sits on it as an
| investment? If it has utility as a currency, then use it
| as one, otherwise it is just speculative, and a
| speculative investment which relies on other people to
| buy out your stake and has no positive cash flow is a
| ponzi. No?
| chx wrote:
| > as it is to conclude all crypto is a ponzi
|
| Yet we didn't conclude only from this all crypto is a
| ponzi.
|
| That all crypto is a _scam_ clearly comes from the fact
| it is a _negative sum game_. When you have a game where
| you can tell which set of players _in total_ are going to
| lose and which set of players _in total_ are going to win
| _without knowing the rules of the game_ -- that 's
| clearly a scam. All you need here is any commodity with
| baked in transaction fees. The exact same would be true
| if you traded with plastic poker chips but you needed to
| pay someone a fee whenever you bought or sold one.
| Indeed, reviewing the process with such chips makes it
| more clear, stripped of high tech mumbo jumbo.
|
| Stolfi argues all crypto is a Ponzi because 1) people
| invest into it because they expect good profits, and 2)
| that expectation is sustained by such profits being paid
| to those who choose to cash out. However, 3) there is no
| external source of revenue for those payoffs. Instead, 4)
| the payoffs come entirely from new investment money, 5)
| while the operators take away a portion of this money.
| Our argument in the previous section was 3-5, you need to
| add 1 and 2 for it to become a Ponzi.
| https://ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-
| pon...
| xorcist wrote:
| Unless you take part in a share emission, then no,
| investment in the form of buying stocks does not become
| capital.
|
| There's a seller for every buyer, and the company does
| not care about it any more than having happy owners is
| good.
|
| Investment in the form of bonds is another thing
| entirely, that's purely capital.
| FabHK wrote:
| Tell me you lack basic financial literacy without telling
| me...
| jwmoz wrote:
| The biggest and greatest of them all!
| hnbad wrote:
| Not necessarily but some financial products based on
| stocks can be and meme stocks usually function much like
| ponzi schemes (i.e. buying a stock, telling everyone else
| to buy the stock because it'll go to the moon, then
| selling the stock before everyone else finds out they
| were the only ones adding value to it, forcing them to
| sell at a loss).
| chx wrote:
| > If you put in $10K when WaPo told you it was a Ponzi,
| you'd have $1.6M today.
|
| In 1999 Harry Markopolos had informed the SEC Madoff was
| running a fraud. Yet it took until the 2008 financial
| crisis for Madoff to be exposed. I am sure you've made
| quite some money if you invested with him in this time
| period.
| pa7x1 wrote:
| This critique is basically saying that cryptocurrencies
| have Ponzi-esque economics or more aptly named greater-
| fools economics. The argument being that as they have no
| cash-flows, any appreciation must come from future
| investors piling into the asset. I think this is a great
| optic to look at the problem as it focuses on the economic
| design, its sustainability, and its valuation in terms of
| future cash-flows.
|
| Nevertheless not all cryptocurrencies satisfy the above.
| The prime example being Ether. In the last year it has
| experienced -0.186% circulating supply inflation (i.e. it's
| non-dilutive to its holders) [1]. While the network has
| captured around USD 6.5M per day ~ 2400M per year in fees
| due to its usage as settlement layer which are paid to its
| stakers. Basically, it's cash-flow positive and does not
| rely on greater fools to sustain its economics.
|
| [1] https://ultrasound.money/ [2]
| https://charts.coinmetrics.io/crypto-
| data/?config=JTdCJTIybm...
| RandomLensman wrote:
| What you are saying is you can invest Ether (i.e., stake
| it) and then might earn a return in Ether (not USD). Any
| appreciation of Ether vs USD still needs to come from
| outside demand for Ether.
| pa7x1 wrote:
| This is a subtle point but the fee revenues that the
| network observes are best understood as priced in fiat
| currency, even if denominated in ETH. In much the same
| way the earnings of Microsoft in Europe are to be
| understood as priced in EUR even if denominated in USD in
| their financial reports. The reason for it is basically
| that the network offers a service (transaction settlement
| layer) that provides some value to its users and has some
| costs. The cost is set dynamically due to the scarcity of
| blockspace to include transactions, if the cost is too
| high it will be outcompeted with all other alternative
| uses of that money. They may settle in a different chain,
| they may settle using a centralized provider (e.g. Visa,
| Paypal), they may not interact at all with the network,
| etc... This makes it so, at the margin, the network
| revenues are inherently priced in fiat. Because prices
| will be set at the point where use of the network is
| discouraged given the value provided and all other
| alternative uses of that money.
|
| Additionally, the fees of the network can only be paid in
| ETH, which means that any use of the network implies ETH
| demand.
| RandomLensman wrote:
| If there were no outside demand for Ether then Ether
| would we worthless in USD. What you are saying is, that
| there is demand for the network services from beyond
| existing Ether holders, thereby creating demand for Ether
| by USD (or other currency) holders.
|
| Whether people transacting on the network care strongly
| about the costs vs alternatives to create a proper link
| with fiat is not so easy to show because there isn't
| always a direct 1-to-1 correspondence between services
| (and there are switching costs, too) - so the "inherently
| priced in fiat" is tough to show, I think. Also, being
| priced in fiat might still not create demand for Ether
| from fiat holders - that comes from outside demand as per
| the above.
| pa7x1 wrote:
| > If there were no outside demand for Ether then Ether
| would we worthless in USD. What you are saying is, that
| there is demand for the network services from beyond
| existing Ether holders, thereby creating demand for Ether
| by USD (or other currency) holders.
|
| Demand to settle a transaction on the network is demand
| for ETH. Because the base_fee of a transaction is burnt,
| destroyed, so ETH needs to be acquired to use it as a
| settlement layer. Much in the same way to how heating
| your house with a gas boiler is demand for gas.
| Similarly, when natural gas prices skyrocket (cue Ukraine
| invasion), alternative forms of heating start to look
| more attractive, and consumers may change their behaviors
| lowering the thermostats. In the case of Ethereum,
| alternative settlement layers will look more attractive
| or some users may lower their use. The same mechanisms
| are in place. I agree though that the relationship is not
| linear, that's not what I implied. Simply that the
| revenues of the network are priced in fiat, because the
| price is set by an auction to include your transaction on
| the scarce blockspace. And given at least some users will
| be sensitive to the price of the transaction in USD they
| will, at the margin, set the prices for a transaction in
| USD and therefore the fee revenues of the network.
|
| By the way I appreciate you engaging rationally on this
| topic in HN. Not a common sight when discussing anything
| related to crypto but much appreciated.
| RandomLensman wrote:
| Thank you, likewise, needs two to have a rational
| discussion.
|
| I agree that there can be some link based on the utility
| of the network and with less of a speculative frenzy it
| might actually be stronger now. Not dissimilar perhaps to
| (other?) commodities, which have some link to economic
| activity but are not directly producing the activity
| themselves (and they can also have speculative phases).
| And commodities also have conceptual issues around their
| use in long-term investment for that reason (but at the
| same time they exist and trade).
| kuhewa wrote:
| He wouldn't want a bunch of proper engineering because that
| would prevent him from betting with billions of customers'
| deposits that were supposed to be safe.
| KRAKRISMOTT wrote:
| He was a Jane Street trader, he's not new to high finance.
| SkyMarshal wrote:
| Trader != exchange engineer.
| Kwpolska wrote:
| You don't need a few years' apprenticeship at a real exchange
| or custodial service to know that exchanges are not permitted
| to gamble with customer money, to spend it on private planes
| or arena naming rights, or to allow your other company to go
| into millions of debt.
| _fat_santa wrote:
| IMO his downfall was thinking that he was smarter than
| everyone else. When you think everyone is a rube, you think
| you can get out of the mess you are in by just explaining
| yourself, writing a bunch of blog posts and tweets and going
| on a media blitz. And in the process of doing all of that he
| just dug the hole he was in 10x deeper.
| rTX5CMRXIfFG wrote:
| Oh come on, you're just using a stereotype here and hurling it
| at MIT students as a whole it's almost as if the remark is just
| supposed to make you feel better about yourself. What you said
| isn't even relevant to the FTX case and it's highly unlikely
| that someone who's "just book-smart" will have SBF's
| connections to commit a crime of this scale.
| FFP999 wrote:
| I stand by what I said.
| sharts wrote:
| Perhaps the fact that his wealthy Stanford lawyer parents have
| always provided ample bubble wrap around him his whole life
| that has internalized making excuses for things and being used
| to getting wrapped in more bubble wrap rather than face
| negative consequence.
| DaiPlusPlus wrote:
| Affluenza?
| kuhewa wrote:
| This is what comes to mind imo. Michael Lewis describes his
| ability to dance around questions as dazzling, but I have
| to wonder if his parents would have just called him out on
| his bullshit a little more often if he might not have
| gotten himself in as much trouble later.
| nytesky wrote:
| Why didn't we see any of that question dance dazzle on
| the stand? I can't believe he was "I don't remembering"
| in the instances Lewis was referring.
| SilasX wrote:
| We did! He was doing exactly what he did to everyone else
| whose questions he tried to evade, it's just that this
| time people called him on it (and had legal power to
| compel non-evasive answers).
| jat850 wrote:
| Audience. What may come across as question dance dazzle
| might suffice to impress or allay concerns of certain
| people (employees, investors, etc), but it's not probable
| to work the same under oath and the techniques of
| prosecution. It's hard to dance around evidence with what
| you say, no matter how its said, with evidence to the
| contradictory put right in front of the court.
| pkulak wrote:
| What a bunch of Jays.
| shever73 wrote:
| > there really is such a thing as a person with a lot of book-
| learning but less common sense than a sea slug
|
| I don't even think SBF had the book-learning, just intellectual
| arrogance. "I don't want to say no book is ever worth reading,
| but I actually do believe something pretty close to that. I
| think, if you wrote a book, you f---ed up, and it should have
| been a six-paragraph blog post."
| salty_biscuits wrote:
| I had to search to check that the quote was real, that is
| some spectacular hubris!
| Zanni wrote:
| If you like that, you should hear what he had to say about
| Shakespeare:
|
| "I could go on and on about the failings of Shakespeare ...
| but I really shouldn't need to: the Bayesian priors are
| pretty damning. About half the people born since 1600 have
| been born in the past 100 years, but it gets much worse
| than that. When Shakespeare wrote almost all Europeans were
| busy farming, and very few attended university; few people
| were even literate--probably as low as ten million people.
| By contrast there are now upwards of a billion literate
| people in the Western sphere. What are the odds that the
| greatest writer would have been born in 1564? The Bayesian
| priors aren't very favorable." [Going Infinite, p29]
|
| Now I get that Shakespeare doesn't appeal to everyone and
| is definitely an acquired taste, but to judge his work on
| _probability_ when the work itself is right there to judge
| on its own merits is like the joke about an economist who
| sees a hundred dollar bill on the street and says, "If
| that were a real bill, someone would already have picked it
| up."
|
| He also dismisses the "plot twist" in _Much Ado About
| Nothing_ (when Beatrice asks Benedick to kill Claudio) as
| "illogical" and the province of characters who are "one-
| dimensional and unrealistic" because "I mean, come on--kill
| someone because ... his fiancee is cheating on him?" As if
| no actual human being had ever killed out of jealousy, when
| it's usually one of the main motives for murder. It's like
| he's visiting from another planet or something.
| RandomLensman wrote:
| Luckily, he wasn't asked about Homer. The Bayesian prior
| there would have been damning!
| zero_k wrote:
| Hahahahaha good point!
| hef19898 wrote:
| Well, we can be really sure that SBF wont change after
| being convicted.
| taylorius wrote:
| "I could go on and on about the failings of Shakespeare
| ... but I really shouldn't need to: the Bayesian priors
| are pretty damning."
|
| I don't mean to lower the tone, but honestly - what an
| absolute bell-end!
| caboteria wrote:
| > It's like he's visiting from another planet or
| something.
|
| He's visiting from planet Adderall. If you have $26 in
| your pocket then you're a tweaker but make it $26B and
| you're an eccentric genius.
| lubesGordi wrote:
| That's really insightful into how this guy works. He's
| judging everything off probabilities to an egregious
| degree. He's also utilitarian, which doesn't really offer
| a foundation for any kind of morality because there's no
| provision against the ends justifying the means.
| mejutoco wrote:
| The craziest thing to me is that when he was saying things
| like that noone in the mainstream media was questioning him.
| The FT had a very flattering lunch interview with him shortly
| before his demise. It was embarrassing how they were
| portraying him.
| xwolfi wrote:
| But you had Zeke Faux, a specialist, going there, looking
| at SBF screen and seeing nothing too special too.
|
| Blame the "mainstream media" all you want but as long as we
| refuse (for good reason) to give audit power to
| journalists, mainstream or specialist, you'll keep reading
| positive pieces about frauds if they stay hidden
| purposefully.
|
| I'm not sure why you would have wanted to NYT to destroy
| every company it interviews just for the sake of it.
| Wouldnt they need proof ? And how do you get them, when
| they're hidden by a conspiracy ?
|
| Plus, the police in the US, Hong Kong and the Bahamas found
| nothing and waited for Coindesk to publish a leak by CZ, a
| competitor, to start looking...
|
| I say that because at the peak of the crypto fever I
| couldnt distinguish SBF from, say, the CEO of Kraken, and I
| suspect it's hindsight convincing you something could have
| been done.
| mejutoco wrote:
| I don't suggest to "destroy" any company, or to say they
| are guilty of things without proof.
|
| The FT did an impressive investigation of Wirecard, for
| example. There is a difference between destroying a
| company and making a couple of common sense questions
| instead of parroting whatever the interviewee wants. Some
| basic journalistic practices. It is really not so much to
| ask.
|
| EDIT: interviewer/interviewee
| xwolfi wrote:
| Agreed but we only ask that after the conspiracy was
| revealed and honestly it's so mindblowingly stupid it's
| hard to imagine anyone could have thought they used
| QuickBooks or just thad no accountant.
|
| Again you re asking someth that had been done several
| times: many people did dig a bit deeper and couldnt find
| the Alameda hole or the real balance sheets, or the
| parents siphoning millions and all that stuff that took
| even time for prosecutors to find.
|
| The role of the media isnt to uncover fraud I think, it's
| to give you a chance to expose one if you know one. If
| nobody was willing to talk, what s a journo gonna do?
|
| Carreyrou, a personal hero, had tons of witnesses coming
| to him for instance.
| olalonde wrote:
| Maybe not the mainstream media but I feel like a lot
| people, especially in the Bitcoin community, were
| suspicious of him. He just screamed grifter to me. I never
| really bought his arbitrage story either and wouldn't be
| surprised if that was not his first scam.
|
| Here's an interview he gave a few months before the FTX
| collapse: https://www.youtube.com/watch?v=C6nAxiym9oc
| roland35 wrote:
| The arbitrage story definitely seems bogus. People have
| been aware of difference in bitcoin price across Asia
| since like the beginning of bitcoin - I don't think it is
| any huge billion $ opportunity.
|
| Now Tether on the other hand.. I would not be surprised
| if that has a lot to do with it.
| olalonde wrote:
| I was running an arbitrage bot well before he claims to
| have started arbitrage and even back then, it was
| competitive enough that there weren't tons of money to be
| made, especially considering all the risks and costs
| involved. In those days, a relatively common scam
| involved setting up an investment scheme that promised
| high returns thanks to "arbitrage trading" (but which was
| really just a ponzi scheme). I wouldn't be surprised if
| he was involved in something like that.
| michaelt wrote:
| _> The craziest thing to me is that when he was saying
| things like that noone in the mainstream media was
| questioning him._
|
| Well, what's the difference between an unhinged, drug-
| addled loony and an eccentric visionary genius?
|
| The difference is having $26 billion.
|
| Why not call him out on what seems like bullshit? That
| bullshit has convinced "informed" tech investors like
| Softbank and Sequoia Capital. And elsewhere at the same
| time, Andreessen Horowitz is investing $450 million in ape
| jpegs.
|
| This is absolutely gourmet, Grade A, top quality wagyu
| bullshit.
| hnbad wrote:
| To be frank, the value proposition of those investments
| was never what the companies claimed they did but how
| much money they could bring in before going bust. And of
| course some of those companies were also useful by
| fostering acceptance of ideas those investors benefit
| from: for example, a big part of the "blockchain" and
| "smart contracts" narrative was privatization (or
| "democratization") of government functions (e.g. managing
| land deeds, educational certifications and other claims).
|
| Not to mention that a big part of investing in start ups
| is just ape jpegs with extra steps (i.e. "greater fool"
| theory).
| tim333 wrote:
| He came very close to getting away with it all. If the
| investments had panned out a little differently he would
| have been able to stay solvent and no one would have
| really noticed the regulation breaking.
| RandomLensman wrote:
| That kind of assumes a change in behavior and that any
| number of other things wouldn't eventually trip things
| up.
| meepmorp wrote:
| Exactly. Evading disaster doesn't make someone like this
| reconsider their decision making process and act smarter
| next time, it shows them that they're a goddamn genius
| who can do no wrong.
| SilasX wrote:
| Right, and assumes he _didn 't_ abandon the Kelly
| Criterion for the mentality of "keep playing double-or-
| nothing even when you win":
|
| >>Bankman-Fried's error was an extreme hubris that led
| him to bite bullets he never should have bitten. He
| famously told economist Tyler Cowen in a podcast
| interview that if faced with a game where "51 percent [of
| the time], you double the Earth out somewhere else; 49
| percent, it all disappears," he'd keep playing the game
| continually.
|
| https://www.vox.com/future-perfect/23500014/effective-
| altrui...
| mangamadaiyan wrote:
| Upvoted for usage of the term "wagyu bullshit". It
| conveys a world of meaning in two words :)
| FFP999 wrote:
| > Well, what's the difference between an unhinged, drug-
| addled loony and an eccentric visionary genius?
|
| One big factor is who your parents are. SBF coming from
| an upper-class background, that tilts the scales towards
| eccentric genius. After all, we know that the children of
| these families are all extremely special.
| Karellen wrote:
| > NO! Poor people are crazy, Jack. I'm _eccentric_.
|
| -- Howard Payne (Dennis Hopper), _Speed_ , 1994
| nytesky wrote:
| Have we talked about sequoia recently?
|
| https://web.archive.org/web/20221027181005/https://www.sequ
| o...
| kgwgk wrote:
| They were deliberately misled and lied to - there's
| nothing they could have done to prevent that!
|
| https://twitter.com/Alfred_Lin/status/1720240388311810382
| tiahura wrote:
| I'm at a loss for how to process that tweet.
|
| Is he just completely incapable of reading the room, or
| is it a lvl 10 cynical FU?
| nytesky wrote:
| Honestly my completely outside the valley impression is
| that VC operates a lot on pedigree and connections.
|
| SBF has an impeccable pedigree, so the thought that he
| was a Michael Fenne type was never even considered. Why
| would he lie, when he could live an honest life and be
| fabulously rich and comfortable (Jane St, wealthy
| connected parents, etc)
| FFP999 wrote:
| Not too different from the case of Elizabeth Holmes, when
| you frame it like that.
| 300bps wrote:
| I knew the embarrassment level was going to be turned up
| to 11 when your link was to archive.org.
| AutumnCurtain wrote:
| Wow. Hagiographic would be an understatement
| zelphirkalt wrote:
| It is mainstream culture to not question (at least
| temporarily) financially successful businessmen. Financial
| success in the eyes of many must mean, that they are doing
| something right. But that "something" quickly is left out
| and the conclusion becomes "doing all things right".
| Basically ethics is supplanted by how capitalism works.
|
| It is not brought up too often, that often one of the most
| important differences between them and the viewer of
| mainstream media is, that this person is vastly more
| ruthless with regards to ethics.
| gardenhedge wrote:
| People like people who talk a lot. It's that simple.
| greg7mdp wrote:
| Elon Musk says idiotic stuff all the time and people revere
| him.
| FFP999 wrote:
| Hey, Musk did one thing right: he picked fabulously
| wealthy parents.
| ralfd wrote:
| https://www.astralcodexten.com/p/book-review-elon-musk
|
| > Musk claims to be self-made; he moved to Canada at age
| 17 with $2500 and worked his way up from there. For a
| while he supported himself by cutting logs, Abe Lincoln
| style. Nobody paid for his college and he took out
| $100,000 in debt. Musk's father invested $28,000 in his
| first company, but Musk dismissed this as a "later round"
| and claimed he was already successful at that point and
| would have gotten the money anyway. The total for that
| round was $200,000, so Musk's father's contribution was
| only about 15%.
|
| > Obviously there's still some sense where he benefited
| from a privileged upbringing or whatever, but in a purely
| business sense he's mostly self-made.
| smegger001 wrote:
| The difference being Elon has a history of multiple
| successful business and products. And didn't defraud
| anyone in the process. (Note he is still a narcissistic
| asshole but he is a successful narcissistic ass and we
| generally value competence higher than personality)
| dmoo wrote:
| That's an unfortunate attitude for a guy looking at a stretch
| with not a lot to pass the time...
| FFP999 wrote:
| Maybe they'll let him play LOL in prison. But I kind of
| doubt it.
| rezonant wrote:
| If he read more, it's possible his spoken grammar might not
| be so atrocious.
| FFP999 wrote:
| As I mention in a thread below I'm using "book-smart" as a
| concise idiomatic way of saying "educated and talented in a
| traditional academic field", such as mathematics in this
| case. Kind of unfortunate that I had forgotten that SBF is
| not actually a big reader. But he did graduate from MIT:
| perhaps they'll let him hang his diploma on the wall of his
| cell.
| jimmydddd wrote:
| This is true for many non-fiction and business books. :-)
| FFP999 wrote:
| But on the other hand, I can think of a few books that
| really might have helped him. The Emperor's New Clothes,
| and also Extraordinary Popular Delusions And The Madness Of
| Crowds (dated now, still a good read).
| LargeTomato wrote:
| He seems smart and excellent at everything he sets his mind
| to. He just opted to set his mind to math and things that
| relate to math. That's an easy way to grow up and become a
| jerk.
| mejutoco wrote:
| Occam's razor suggests simpler explanations than book smart,
| stupid at common sense. For a person openly opposed to reading
| books, and proud of it.
| FFP999 wrote:
| "Book smart" is an idiom. Doesn't mean they're necessarily a
| big reader.
| mejutoco wrote:
| When confronted with his actions 2 simpler explanations
| than "booksmart, but not real life smart" are:
|
| - A scammer (unethical, independent of intelligence)
|
| - Not smart at all
|
| I do not understand how someone see his actions and
| concludes: he is book smart only. Especially since he has
| expressed anti-intellectual views.
|
| EDIT: expanded, removed non-charitable
| matsemann wrote:
| It's quite insane that your society puts the onus on the
| pedestrians not to get hit, and even makes it illegal to cross
| the road. It should be the licensed drivers' responsibility to
| not hit someone. And in the middle of a campus cars should of
| course yield to pedestrians. Such a car-centric world.
| sebstefan wrote:
| In the same vein, you could find through experimentation that
| the speed at which you can finally get hit by a car without
| someone claiming it's your fault for being too quick on your
| bicycle is to be approximately stationary
|
| But not so stationary, because then you were not visible
| enough
| matsemann wrote:
| Schrodinger's cyclist, both too slow and too fast at the
| same time. When behind on a road: "you're holding up
| traffic with your slow cycling!". When later causing an
| accident for not yielding to a cyclist "he came out of
| nowhere in a reckless speed!".
| FFP999 wrote:
| Well obviously then you should have been wearing a high-viz
| vest and a full Christmas tree's worth of blinking lights.
| Then when a driver hits you they can say they were
| distracted by all the visual effects.
| Nemrod67 wrote:
| would you say the same for trains?
|
| and if not why?
| thecopy wrote:
| * Train tracks does not take up 70% of cities.
|
| * Trains are not constant, they come more seldom
|
| * Trains are _extremely_ predicable. Cars are the opposite.
| This is why trams in i busy inner city are more safe than
| cars. You know exactly where that tram is going and at what
| speed.
| krisoft wrote:
| Yes, and on top of that if there were a train line on
| campus with any high speed train traffic it would be
| surrounded by tall fences and the pedestrians would be
| provided with off-level crossing. (One or more tunnels
| and/or bridges)
| FFP999 wrote:
| This is exactly the case a little ways away at Tufts
| University in the city of Medford. There's a busy train
| line that runs through the campus and it's fenced off.
| Students do sometimes find ways in there and use the
| right-of-way as a shortcut. Sometimes they get killed
| doing this--which is why the fence is there in the first
| place.
| screwt wrote:
| Not for trains - there's a shared expectation that
| pedestrians should not access the track.
|
| Similarly, not for a freeway.
|
| Where some feel the balance is wrong, is at local-level
| streets. Today the assumption in most places is that cars
| have total right of way, and pedestrians must keep clear.
| It doesn't have to be that way. In a residential area, it's
| quite feasible to say all road users have equal right to
| use the space. And in that circumstance, put the onus on
| the car user (wielding a heavy, dangerous weapon) to not
| hit other road users.
| FFP999 wrote:
| It's a little more complicated than I've laid out here.
| There's not a hard boundary between the MIT campus and the
| rest of the city, in contrast with Harvard Yard on the other
| side of Cambridge, which is surrounded by high brick walls.
| Cambridge is an old city and MIT is, for a New England
| university, fairly young--not to mention that for the first
| few decades it was at a different location than today, in
| Boston proper. I'm pretty sure the road was there long before
| the first university building.
| troupe wrote:
| Harvard used to have kids getting hit going from the yard
| to the science building. So the lowered the road and put a
| park over it.
| troupe wrote:
| Assume that laws gave people the expectation that they could
| just step out in front of a 3,500 pound moving vehicle and it
| would instantly stop. The world would probably be a lot less
| safe for pedestrians than it is today. The laws of physics
| come into play to at least some extent.
| mnky9800n wrote:
| I typically think that what makes MIT the greatest is their
| marketing department. They do a lot of great things, but what
| they do best is telling everyone that they are the best.
| eloisant wrote:
| They still manage to recruit some of the best students, so
| their graduates are smart simply by the fact that they got
| accepted at MIT.
| fragmede wrote:
| That assumes the fourish years of being surrounded by other
| students and professors who are smarter than you, and work
| harden than you, along with making friends with them does
| nothing for the students after their time there. Students
| entering MIT are used to being the smartest at their
| highschool and coasting through it. So it's a shock when
| those things are no longer true. (tbc, the same thing
| happens at other schools to a lesser degree.
| mnky9800n wrote:
| Yes but there's plenty of institutions that all do what MIT
| does and field dependent probably better. It's simply not
| the case that MIT always represents the best all the time.
| It doesn't even make sense that that could be true. And why
| would you want it to be unless you were the MIT marketing
| department?
| hef19898 wrote:
| First, a university is great by doing great stuff and
| producing great graduates. Then those great graduates
| confirm the greatness of the university. And then,
| ultimately, graduates are great simply by coming from an
| university that once did great things.
| FFP999 wrote:
| I'll give them this: they throw a great puzzle hunt.
| gosub100 wrote:
| every other month they have another "breakthrough" in
| materials science that is going to bring us more energy/clean
| water from recycled toxic sludge, but somehow you never hear
| the follow-ups of it ever being deployed...
| jwmoz wrote:
| I think a lot of the time he couldn't control his autism.
| FFP999 wrote:
| Is he, in fact, autistic? Has he been diagnosed by an actual
| doctor as opposed to, say, Reddit? If so Wikipedia is silent
| on the subject.
| local_crmdgeon wrote:
| Should probably close that street then. Killing college kids
| isn't worth saving 14 seconds to get to your house in the
| suburbs.
| andrepd wrote:
| >The MIT campus has a major public road running through the
| middle of it, one of the busiest surface streets in the area.
| You don't have to stand there very long to see a crowd of
| students almost get hit by a car because they didn't look
| before they crossed the street.
|
| Getting offtopic, but isn't this more an indictment of
| America's _insane_ car-centric culture? It 's ridiculous that
| you see a major thoroughfare going through a heavily populated
| zone which is _extremely_ unsafe to cross yet still laugh at
| students which "almost get hit by cars".
| 1vuio0pswjnm7 wrote:
| https://www.justice.gov/usao-sdny/pr/statement-us-attorney-d...
|
| "This case is also a warning to every fraudster who thinks
| they're untouchable, that their crimes are too complex for us to
| catch, that they are too powerful to prosecute, or that they are
| clever enough to talk their way out of it if caught."
| CobrastanJorji wrote:
| "Oh no," a person just like SBF is surely thinking in response
| to this verdict, "I'd better straighten up and stop thinking
| that I am clever enough to talk my way out of situations if
| caught."
| w-ll wrote:
| he talked his way into this conviction. Any news on his
| ethics teacher parents?
| bee_rider wrote:
| It turns out this whole thing, SBF's entire upbringing, was
| in fact a giant scheme on their part to get the ultimate
| case study for their classes.
|
| Actually, kind of a twofer, since raising him to be like
| that was in and of itself unethical.
| elcritch wrote:
| If they did it for a good cause and the betterment of man
| kind, then would the ends justify the means? ;)
| StressedDev wrote:
| They have not been charged with any crimes and I have seen
| no evidence that they committed any.
|
| They are being sued by FTX. For more information, please
| see https://www.npr.org/2023/10/02/1200764160/sam-bankman-
| fried-... and https://restructuring.ra.kroll.com/FTX/Home-
| DownloadPDF?id1=... .
| CobrastanJorji wrote:
| His mom, a business ethics professor at Stanford, retired
| at around the same time she left the political funding
| organization she founded called "Mind the Gap," the one
| that FTX was funneling money into illegally. No word yet on
| whether she and her husband, a Stanford Law professor, will
| be able to keep the 8 figure house in the Bahamas that FTX
| bought them.
| infogulch wrote:
| Unfortunately the real beneficiaries of these crimes will be
| overlooked now that their fall guy has taken the hit.
|
| https://www.wsj.com/articles/sam-bankman-frieds-dirty-politi...
| StressedDev wrote:
| I doubt the politicians and political action committees would
| have taken the money if they had known it was stolen.
|
| In a lot of ways, they are also victims because they now have
| to do extra work to either defend themselves, or payback the
| "donation". In the case of the PACs, I bet many of them
| already spent the money and can't pay it back.
| bmitc wrote:
| What's interesting about that to me is quite a few things. For
| one, where are the charges against all the other fraudsters?
| Bankman-Fried's parents were both in on it and helped
| orchestrate parts of it. As far as I know, they both even still
| hold their positions as _law professors_ at Stanford! What an
| embarrassment to the world Stanford is. Sam Trabucco was co-CEO
| of Alameda Research up until August 2022, which means that he
| was certainly part of all the fraud happening. He is known for
| his extravagant spending. Just because he left a few months
| before the crash, he gets away scot-free? And then there 's
| other employees, the investors, partners, etc.
|
| Lastly, these messages always fall a little flat to me. The
| justice departments always go after and nail these fraudsters
| that have little actual power and then make a big stink about
| it. Sam Bankman-Fried, Elizabeth Holmes, Billy McFarland, etc.
| are all nailed to the cross. Yes, they committed clear and
| damaging actions of fraud and other crimes. But higher level
| fraudsters, like those in industries that are much more
| protected and in positions of actual power and influence, do
| not get touched. For example, Steve Cohen gets to own the New
| York Mets yet he clearly committed insider trading for years,
| if not decades (https://www.youtube.com/watch?v=1szayJV505M).
| Several of his high-level employees were convicted, but he
| remains untouched. There's other examples of people like this
| that are actually intelligent (unlike Bankman-Fried, Holmes,
| etc.) but still sociopathic, and they are able to weasel
| themselves into tight nets of power such that the justice
| department doesn't or can't touch them.
| dehrmann wrote:
| Lot of sketchy crypto players will likely get away with stuff.
| This was just the most egregious one (so far).
| m3kw9 wrote:
| How many years?
| system2 wrote:
| Another trial will determine that. "His sentencing was
| scheduled for March 28, 2024." Up to 110 years:
|
| https://abcnews.go.com/Business/sam-bankman-fried-trial-verd...
| bartwr wrote:
| One aspect of SBF's downfall that is not discussed enough, IMO:
| amphetamines (even taken for medical reasons/ADHD) release a ton
| of dopamine, seek more release, and make you do some weird stuff
| and seek risky behaviors (and reinforce them through reward
| system).
|
| I recall his interviews and annoyed tone at uncomfortable
| questions - made me laugh, just like people on speed.
|
| And _absolutely_ avoid selegiline for "productivity", especially
| with amphetamines, this will turn anyone into a pathological
| compulsive person (e.g. a gambler).
| tombert wrote:
| This makes me very happy. I was honestly slightly worried that if
| I ever saw SBF in person, I would be unable to stop myself from
| kicking him in the nuts. Since I was a victim of the Winklevoss
| twins' GUSD unregistered security scam (Gemini Earn) [1], there
| has not been a day since ~November 2022 that I haven't wished
| something kind of bad happened to SBF.
|
| To be clear, I genuinely am not advocating for violence, but I'm
| saying that if he walked free, and if I were to see him just
| casually sauntering along in NYC, I think I would have an
| overwhelming compulsion to hurt him, and then I would go to jail,
| which I don't think I'd enjoy, so it's a much better outcome for
| me personally if he's behind bars.
|
| Well, upon typing this out, I guess if he gave me the 13 grand
| that was taken from me, I'd be willing to forgive him.
|
| [1] I've posted about this before, but just to reiterate, not
| _my_ opinion, but the SEC 's https://www.sec.gov/news/press-
| release/2023-7
| newobj wrote:
| Totally normal post
| tombert wrote:
| Heh, I'll acknowledge it's a weird post.
|
| Basically, the FTX stuff blew up at the very worst possible
| time for me personally. I had just been laid off (really
| fired) from my job in November 2022, and I had naively
| believed the kind of hand-waivey advertising about Gemini
| Earn and GUSD being safe, so a lot of my cash reserves were
| stored in GUSD, but the day that I need to use it to pay for
| my mortgage, I'm unable to withdraw it because apparently
| Genesis Holdings was in bed with Alameda Research, which in
| turn was in bed with FTX and thus SBF was throwing my money
| away.
|
| Now, I'm one of the fortunate ones, because I didn't keep all
| (or even most) of my savings in GUSD and Earn; I keep most of
| my savings in the form of low-risk ETFs (VOO and VTI), so
| there was never a risk of me being homeless or anything, but
| I did have to sell a good chunk of them at a loss in order to
| pay for my mortgage and for my food, and that wasn't fun. The
| entire ordeal really depressed me, and I've been upset with
| SBF for the last year for exacerbating an already frustrating
| experience.
| dvko wrote:
| > Now, I'm one of the fortunate ones, because I didn't keep
| all (or even most) of my savings in GUSD and Earn; I keep
| most of my savings in the form of low-risk ETFs (VOO and
| VTI)
|
| Is this a US thing or what? Don't keep money you may need
| in the short term (< 5 years, at least) in stocks. A stock
| ETF is not low-risk, cash and bonds are.
| tombert wrote:
| Well, I didn't keep money I would need in the short term
| in stock; I kept it in GUSD and Gemini Earn, because I
| believed their marketing.
|
| I'll admit that I definitely should have done more
| investigating on my end, and I'll take my share of the
| responsibility on that, but that doesn't absolve the
| Winklevoss twins and SBF from responsibility. An
| "obvious" scam is still a scam.
|
| EDIT:
|
| Just to clarify, I actually agree with your point. It's
| good practice your short-to-mid-term savings in FDIC-
| insured savings accounts, bonds, and treasury bills;
| basically stuff with nearly-zero risk. Since the fiasco
| with GUSD I've been saving my shortish term stuff in
| treasury bills specifically for this reason (and because
| they're a bit more tax efficient in a place like NYC).
| WXLCKNO wrote:
| What's wrong with wishing something bad happens or feeling
| like retribution towards someone who was the cause a large
| injustice towards you? It's a normal human emotion.
| tombert wrote:
| Yeah, just to reiterate, I genuinely, sincerely, and
| unambiguously do not advocate any violence for SBF. I
| believe in the justice system, and much as I enjoy Batman
| comics, I do not think vigilantism is actually a good idea.
|
| But of course, when someone personally wronged me, I think
| I'm entitled to a little bit of vengeful fantasies.
| infogulch wrote:
| > These charges carry a maximum sentence of 110 years.
|
| Didn't HN recently conclude that calculating the 'maximum
| sentence' as the sum of sentences of the individual convictions
| is journalistic malpractice? Do better, NYT (they won't).
|
| Given that there were 7 charges and assuming all charges can be
| served in parallel that's a minimum sentence of ~15 years (why is
| left as an exercise to the reader).
| reaperman wrote:
| Usually the judge has discretion whether to make them serve
| consecutively or in parallel.
| retsibsi wrote:
| > Given that there were 7 charges and assuming all charges can
| be served in parallel that's a minimum sentence of ~15 years
| (why is left as an exercise to the reader).
|
| Looks like your logic is 110/7 = ~15, therefore there must be
| at least one charge with a maximum sentence of at least ~15
| years. But why does that imply a minimum sentence of ~15 years?
| He could get less than the maximum sentence for some or all of
| the charges.
| infogulch wrote:
| Yes I assumed he would get the maximum sentence on all
| charges, which given optimal parallelism would be a minimum
| of 15 years (less optimal parallelism would mean more). But
| you're right that it's called a maximum sentence for a reason
| and that assumption may not be valid; thanks for the
| correction.
| retsibsi wrote:
| Thanks, I honestly appreciate this reply. I'm always a bit
| worried I'll come across unpleasantly when making posts
| like that, and spark a negative reaction.
|
| In terms of what's likely, from a quick search it looks
| like the maximums are 20 years for some of the charges and
| 5 for the others, and 10-20 years is a realistic guess for
| his actual prison time.
| frob wrote:
| Wait, hacker news is a single source that comes to definitive
| group conclusions? Where can I find these beliefs we all
| collective hold and adhere to written down?
| nodesocket wrote:
| Office Space seems appropriate here --
| https://www.youtube.com/watch?v=oBzvMLW0ii4&ab_channel=Peter...
| saeranv wrote:
| I sure hope all the HN commentators confidently predicting this
| would never happen because of his large donations to the
| democrats see this.
| TulliusCicero wrote:
| 90% of them will never willingly admit they were wrong.
| xray2 wrote:
| I don't remember a single person even claiming that. HN
| delusion is real.
| EricDeb wrote:
| I believe there is quite a few in the comments section
| here: https://news.ycombinator.com/item?id=33908577
| jcranmer wrote:
| I've definitely seen several people claim it on HN. Almost
| invariably, such comments were downvoted into oblivion
| though, or had replies basically saying something along the
| lines of "what crack are you smoking?"
|
| Some specific links to comments:
|
| https://news.ycombinator.com/item?id=33909026
|
| https://news.ycombinator.com/item?id=33908850
| starcraft2wol wrote:
| So our friend saeranv is actually just parroting the
| consensus.
| udev4096 wrote:
| I agree on this
| arduanika wrote:
| There is literally a top-level reply on this very
| submission _still_ saying:
|
| > I will still be surprised if he spends a single day in
| prison though.
|
| https://news.ycombinator.com/item?id=38122135
|
| and several similar comments scattered throughout, that
| Dems will pardon him. So yes, delusion on HN is quite real.
| And crypto news attracts a deeply paranoid, cynical sort of
| mind, who have seen a glimpse of some big conspiracy and
| can't let go of it.
| StressedDev wrote:
| I have seen a some posters on HN and a lot of posters else
| where trying to use this case to bash the Democratic party.
| It very annoying because they never provide evidence to
| back up their claims.
|
| You also see a lot of people bashing Sam Bankman-Fried's
| parents or accusing them of committing crimes without
| providing any evidence.
| xNeil wrote:
| To be fair, 90% of _all_ people won 't admit they were wrong.
|
| Sidenote, I think HN will be wrong on Elon Musk and X as well
| over the long term (personal opinion of course). But the way
| the discourse around X has changed on HN is incredible.
|
| When Parag Agarwal was made CEO, _everyone_ on HN complained
| about the platform and how a subscription model was the way
| to go. Now that Elon Musk has instated a subscription model,
| (seemingly) _all_ on HN agrees he 's running the company into
| the ground.
|
| Seems to be happening a lot more often over the past 4 or 5
| years.
| CPLX wrote:
| I mean, he did a couple other things besides try to launch
| a subscription model.
| pcc wrote:
| Wondering if its perhaps two different subsets of people,
| with differing opinions that haven't so much shifted, as
| that primarily just one's been highly motivated to engage
| at a time? (In the same way that say surveys might draw
| disproportionately more engagement from those that feel
| extremely dissatisfied)
|
| Or do you feel more that its a wholesale shift?
| MattGaiser wrote:
| The goalposts will change to his imminent pardon.
| peyton wrote:
| His campaign finance trial is March 11, sentencing March 28.
| I think it's reasonable to speculate on whether he'll plead
| guilty in exchange for clemency at sentencing. Who knows. I
| don't think anybody reasonable has ever believed a pardon is
| on the table for the largest fraud ever.
| EricDeb wrote:
| They're like 300 conspiracies beyond that at this point.
| elcritch wrote:
| Eh, he must be pretty much broke now so why would politicians
| from either party care about him anymore? He made his donations
| and they looked the other way on regulating crypto.
| talldatethrow wrote:
| I don't care either way, but I would guess most people expect
| that the sentencing to be very light if you have friends in
| important places.. not that you're just totally let off on all
| charges.
| kortilla wrote:
| Regardless of whether or not corruption is the case, it only
| has forward guarantees if there is a hint of blackmail
| involved.
|
| Donating a bunch of money to a group gives you no power over
| that group unless they think there is more on the table. When
| you're about to get arrested they will cut all ties immediately
| unless there is an actual obligation to support you.
| alsetmusic wrote:
| He donated to both sides through another FTX exec. What is your
| real message? (I'm a leftist, not a liberal apologist).
| StressedDev wrote:
| Thank you for bringing this up. I cannot believe how many
| people tried to use this case as a tool to smear a political
| party.
| pityJuke wrote:
| If you like HN commentators being wrong, you'll love this
| initial thread on Alameda being insolvent [0]. I post only in
| jest, as hindsight makes much of this hilarious.
|
| [0]: https://news.ycombinator.com/item?id=33464494
| someonehere wrote:
| Anyone else have a weird vibe on how fast this went? I don't
| remember how long Bernie Madoff's trial was, but this one flew by
| really fast.
|
| The Spidey senses tell me there's more to this we're seeing.
|
| Whether you believe Elon or not, FTX was greasing the DNC wheels
| with a lot. FTX also had a lot of celebrities on board. They had
| the Miami Heat arena with their name on it.
|
| Now it's all wrapped up, guilty as charged, and now what?
| tommica wrote:
| Or it was a very clear-cut case
| tills13 wrote:
| Why is everything a conspiracy to people like you?
| bobse wrote:
| So she walks free because of muh vagina?
| dang wrote:
| We've banned this account for posting too many unsubstantive
| and/or flamebait comments. That's not what this site is for,
| and destroys what it is for.
|
| If you don't want to be banned, you're welcome to email
| hn@ycombinator.com and give us reason to believe that you'll
| follow the rules in the future. They're here:
| https://news.ycombinator.com/newsguidelines.html.
| quietthrow wrote:
| Curious: why does the legal system work for some and not for
| others. Eg: how come this guy is convicted but trump walk free
| especially after Jan 6th? Does the legal system also fall prey to
| money ? ie the better your representatives the Better they can
| argue for you. And the better ones cost a lot of Money so
| essentially the people with money have higher odds of succeeding
| in such a legal system?
| k__ wrote:
| Because some people throw tea into the sea and some help to
| collect taxes.
| fastball wrote:
| Because every case is different? For example, there is little-
| to-no overlap in any of the details related to this case and to
| the Jan 6th insurrection shenanigans.
| ehsankia wrote:
| My guess is:
|
| 1. SBF's crimes hurt rich powerful people 2. Trump has a third
| of the voting population in a cult-like trance 3. Prosecuting
| political figures is a lot harder, especially presidents
| jeffreygoesto wrote:
| What about the politicians who happily took the bribes?
| j7ake wrote:
| When are we going to stop calling him a "book smart kid who
| lacked common sense and things spiralled out of control" to "scam
| artist who is too dumb to keep his mouth shut"?
|
| There is no evidence this person is smart in any way, yet some
| people still portray it as a narrative.
|
| There are dumb people at MIT (and at every institute or company)
| let's admit it.
| bmitc wrote:
| I agree. The more we learn, the more he looks like a tweaked
| out Miles Bron. He doesn't seem to understand how anything
| actually works.
| j7ake wrote:
| I think the narrative is to cover up the bruised egos of the
| powerful people and institutes (Jane Street, MIT, investors)
| that got scammed or thought he was smart.
| WD40forRust wrote:
| Poor dude. Nobody deserves what we call 'prison'.
| ltbarcly3 wrote:
| So edgy. So opinion.
| Synaesthesia wrote:
| I'm also an abolitionist and I agree the US prison system is
| atrocious. But we have to be morally consistent. If he doesn't
| deserve it, neither do other criminals deserve to be punished
| egregiously.
| r0ckarong wrote:
| I can finally share my brainworm since all of this started:
|
| _Don McLean - American Pie melody_
|
| "The daayy the Bankman fried".
| nikster wrote:
| Fall guy took the hit.
|
| That had always been plan B.
| birracerveza wrote:
| His conviction is 200% deserved.
|
| Certainly there were other people involved, and hopefully they
| will receive their due as well, but to say he's just a "fall
| guy" is not at all accurate.
| DebtDeflation wrote:
| The SBF "magic box" interview with Matt Levine where he casually
| describes yield farming as nothing more than a Ponzi scheme never
| gets old.
|
| https://www.ft.com/content/eac0e56c-f30b-4591-b603-f971e60dc...
| activitypea wrote:
| I listen to this a few times year, cheers me up everytime
| oldgradstudent wrote:
| Well, he wasn't wrong about that.
| MrsPeaches wrote:
| "if you'd like to gain greater insight about "valuable boxes"
| with no economic use case that go "to infinity" because of "the
| bullishness of people's usage of the box", don't forget to sign
| up for the FT's Crypto and Digital Assets Summit beginning
| Tuesday."
| s1artibartfast wrote:
| I thought that was a great interview and sbf was a great and
| clear speaker. He really got his point across.
|
| It kinda makes me sad that he fucked up doing some unrelated
| shit.
| robertlagrant wrote:
| This is why it's silly to say that the prosecution had an
| airtight case. It's like saying the winning fighter boxed
| perfectly, when actually the other one just kept smashing his
| own face into the ground.
| morsch wrote:
| Here it is, with audio:
| https://m.youtube.com/watch?v=KZYqL79GDXU&t=1289s
| berniedurfee wrote:
| So what's the final outcome? A long prison sentence or a few
| years hanging out on appeal followed by a few years in a low
| security federal penitentiary and a long career doing speaking
| engagements and appearances?
|
| Holmes got 9 years, but her actions had severe real world effects
| on people. Is that the ceiling for SBF?
| skriticos2 wrote:
| This is just the conviction. Sentencing is sometime end of
| March next year.
|
| But considering that he was found guilty on all accounts and
| after the mess he was making during the trial, his sentence
| will most likely be no good news for him.
|
| He is also kind of being made an example of to encourage more
| due diligence in the industry. Being bad at business is one
| thing, but handling billions without basic risk management is
| basically gambling with customer funds.
| kuhewa wrote:
| > but handling billions without basic risk management is
| basically gambling with customer funds
|
| He actively gambled with customer funds, not just basically
| did because of poor institutional controls.
| hoofhearted wrote:
| I agree.
|
| I believe the evidence in this trial will support a civil
| trial against him showing that he pierced the corporate veil,
| and that he was personally tied to FTX with some of his
| purchases with company funds.
| cedws wrote:
| For someone unfamiliar with law, why is sentencing at a later
| date and not immediate? Does SBF just get to roam free for 5
| months in the meantime?
| mahidol wrote:
| Considering his bail was revoked before and the notoriety
| of the case, I have a feeling they are going to make him
| wait behind bars.
| skriticos2 wrote:
| Yea, at this point he probably pissed of the judge enough
| to enjoy his wait behind bars.
| skriticos2 wrote:
| Judicial process is a very methodical thing. Lot's of paper
| needs to be filled with words and filed properly. Judge
| needs to review and condense all that and put it together
| into a judgement that is well reasoned (well, there are
| layers that assist with that).
|
| As for what happens between conviction and sentencing, the
| typical law answer is: it depends..
|
| He certainly has been in jail for some time already, as he
| could not help himself from doing stupid things, like
| contacting witnesses. Maybe it continues, maybe not. Maybe
| he'll be free for some time after sentencing too. They set
| a date when he has to show up at the prison.
|
| Until then, it's mostly up to the judge. If he is deemed a
| flight risk, or continues to run his mouth, he very well
| may spend the time up to his prison sentence in jail.
| Though, as he cannot mess with his trial any more and he is
| not generally a danger to community, he could walk around
| some more. It depends..
| eric-hu wrote:
| Sentencing happens some time later.
|
| My guess is that he'll get something closer to Bernie Madoff's
| sentence than Elizabeth Holmes. She at least was pregnant at
| the time of sentencing and her defense was seemingly successful
| in painting her business partner as the puppeteer.
| belter wrote:
| Bernie Madoff pleaded guilty and got 150 years in federal
| prison. Sam Bankman-Fried was smug until the end, both with the
| Judge and the Jury, but the fraud is 1/6 smaller. I say 15 to
| 20 years.
| artursapek wrote:
| It's going to be more than that
| crabkin wrote:
| There's some video Shkreli going over how federal sentencing
| guidelines are. He is going to get close life.
| bengale wrote:
| > Holmes got 9 years, but her actions had severe real world
| effects on people.
|
| My understanding is she was convicted for financial bits, not
| harming people.
| lordfrito wrote:
| No different than Al Capone being convicted for tax fraud.
| Real people got hurt in both cases.
| TacticalCoder wrote:
| In a way, who cares? People who had funds there should get
| about 0.5:1 back (which isn't too bad) and, hopefully,
| investors are now going to do at least five minutes of due
| diligence before investing in such people (five minutes of
| googling / searching on Twitter was all that was needed to see
| SBF was a ponzi scammer: the info was all out there but nobody
| wanted to listen. Maybe now they will).
|
| I don't care if he does zero year, one year or 100 years. It's
| not as if he was a killer representing a serious menace on
| society. With what he did nobody will want to hire him, not
| even as an accountant for a small town's tennis table club.
|
| Sure, he's a despicable person who was using stolen money to
| rent private jets to have amazon shipments sent to him in the
| Bahamas and he didn't hesitate to lie in court by pretending it
| was all the fault of his co-conspirators (co-conspirators who
| pleaded guilty btw) but all that counts is that now he's not
| going to scam people anymore.
|
| The two private jets he bought, the luxury houses in the real
| estate in his parents name (another trial coming for his
| parents btw), his scamming company all have been seized.
|
| The supposedly "billionaire kid genius", his parents, and his
| effective altruism guru (who bought a $15m mansion using stolen
| funds donated by FTX and who was part of the Alameda scam) all
| got exposed.
|
| The true color of these people has been revealed.
|
| It's game over.
| HenryBemis wrote:
| Well, we kinda all care. It's not that I bought an ice-cream
| and it was sour and I threw it away. You have to consider the
| absolute numbers, not just the percentages (50% as you write
| 0.5:1). I have $100 on Binance. If I lose it, I don't really
| care. Someone who put their life's savings though has a much
| bigger problem.
|
| Then there are a BUNCH of lessons to learn here. You kinda
| touch on a couple: "kid genius", "altruism guru", "bahamas"
| and so on. So how can we all learn from this? 1) there is no
| fast money?, 2) turtle wins the race?, 3) regulations are
| there for a good reason (in most cases)? 4) when you see
| athletes promote financial products run away?, and many many
| more..
| kuhewa wrote:
| I don't know what the maximum would be in sentencing guidelines
| for her, but for SBF, afaik it is life. That would be an ugly
| sentence, but I imagine he's going to be away for significantly
| longer than Holmes.
| shin_lao wrote:
| Both are sociopaths, but SBF didn't have the intelligence to
| act as if he was sorry for what he did.
|
| He's never going out of jail in his life. Sentencing is
| expected to be harsh, remember he had his bailed revoked for
| witness tempering!
|
| On top of that, he's been convicted on 7 counts, but there's
| another trial in March 2024 for other felonies. He will spend
| the rest of his life between prison and the tribunal.
|
| Both his parents are likely to be sentenced to jail as well.
| danpalmer wrote:
| > Holmes got 9 years, but her actions had severe real world
| effects on people. Is that the ceiling for SBF?
|
| I feel like for the most part Holmes had theoretical effects on
| people - tests that were fraudulent, but where an equivalent
| standard test was done at the same time, and so most likely
| everything was caught. I think the time she got made sense for
| the level of fraud, but _thankfully_ I don 't think her actions
| ended up being actively harmful to individuals (other than her
| employees) in almost all cases.
|
| SBF on the other hand has conducted a significantly larger
| fraud in monetary terms, and caused many individuals to lose
| significant amounts of money. In a way I'd say these are bigger
| real-world effects. I think it's possible to conclude that he
| had a substantially bigger negative impact on the world than
| Holmes did, and therefore feels reasonable that his sentence
| will reflect that.
| Tangurena2 wrote:
| In almost all circumstances, the security level of the prison
| is determined by the "points" measured up in the sentencing
| guidelines. There can sometimes be "enhancements" (like you
| used a gun during the crime, or hate speech). There can
| sometimes be mitigations (like the person taking responsibility
| for the crime).
|
| If you add up all of the crimes SBF was convicted of, the max
| could be 110 years. It isn't that simple. Sentencing is a
| complicated thing that could be replaced with a simple
| spreadsheet. Instead, judges have to do the calculations by
| hand with charts and checklists.
|
| Madoff was sentenced to 150 years.
| mahidol wrote:
| I'm guessing he will get a bigger number, maybe even 30-50. But
| considering SBF and his personality, he doesn't seem like the
| guy that would ruffle too many feathers with prison officials
| and will most likely be released in half the time on account of
| good behavior.
| shagie wrote:
| > and will most likely be released in half the time on
| account of good behavior.
|
| https://www.robertslawteam.com/blog/2013/05/early-release-
| fr...
|
| > Federal law allows a credit of 54 days for every 365 days
| (or one year) of good behavior. To be eligible for early
| release, a person must be sentenced to more than one year in
| prison. ...
|
| > The maximum number of days that can be awarded for good
| conduct is 54. The Bureau of Prisons has discretion to award
| any number of days less than 54 based on its evaluation of
| the inmate's conduct.
|
| The specifics are https://www.govinfo.gov/content/pkg/USCODE-
| 2021-title18/pdf/...
|
| If sentenced to 30 years in federal prison, you'd be serving
| 85% of that time -- a bit over 26 years (after 26 years, 1404
| days will be credited which is 3.8 years).
| nfRfqX5n wrote:
| The collapse of FTX had huge rippling real world effects.
| Genesis got jammed up, which froze all assets in Gemini Earn
| and other defi platforms. Customers assets have been frozen for
| months now. Of course all investors assume risk in this case,
| but it is a real world effect.
| gigatexal wrote:
| Here's hoping he gets 100 years. Good riddance. Let this be a
| warning against charlatans doing this again in crypto.
| pgporada wrote:
| What about Brett Harrison? Where did he dissappear off to?
| dontlaugh wrote:
| Officially Sam Jailman-Jail.
|
| Not my joke, I heard it on TrueAnon. But I like it.
| user3939382 wrote:
| IMHO our whole country is run by criminals and financial crime.
| Remember when HSBC knowingly laundered millions for cartels and
| no one went to jail? The President is a criminal. SBF is either a
| patsy or didn't grease the right palms.
| birracerveza wrote:
| He certainly lost the wrong people's money, that's for sure...
| DonHopkins wrote:
| Now convict his parents!
| styren wrote:
| Of what?
| itsyaboi wrote:
| Facilitation
| Jonovono wrote:
| https://www.youtube.com/watch?v=gLvOT2AldwM
| pizzalife wrote:
| Wire-fraud and other forms of fraud.
| bitcharmer wrote:
| Is this a serious question or just trolling?
| valleyjo wrote:
| I want to see his parents go down too. Sounds like some criminal
| actions there too.
| biasedestimate wrote:
| I am as happy as anyone about arrogant half-smart crypto bros
| being called out as the frauds they are.
|
| It is still sad that a young person's life is taken away today. I
| don't think any type of nonviolent crime should get anyone a life
| sentence, especially not in a prison system as inhumane as in the
| US.
| lubesGordi wrote:
| Sentencing isn't until March, and it's pretty unlikely he'll
| get a life sentence. Could be decades though.
| thr0waw4yz wrote:
| Who would have thought that Ross is followed by SBF.
| txru wrote:
| Hmm, I don't usually see people defending white collar crime as
| being oversentenced.
| lubesGordi wrote:
| Sequoia invested $200M in this guy. Has anyone looked at whether
| SBF could've done as much damage without that investment? Has
| anyone looked at if Sequoia did their due diligence? Seems like
| Sequoia could've seen red flags just from knowing Alameda
| existed. The potential abuse there was completely obvious.
| zztop44 wrote:
| The whole Sequoia thing is so interesting. Here is an excerpt
| from their (now taken down) profile of SBF, highlighting the
| moment he convinced them to invest:
|
| > That's when SBF told Sequoia about the so-called super-app:
| "I want FTX to be a place where you can do anything you want
| with your next dollar. You can buy bitcoin. You can send money
| in whatever currency to any friend anywhere in the world. You
| can buy a banana. You can do anything you want with your money
| from inside FTX."
|
| > Suddenly, the chat window on Sequoia's side of the Zoom
| lights up with partners freaking out.
|
| > "I LOVE THIS FOUNDER," typed one partner.
|
| > "I am a 10 out of 10," pinged another.
|
| > "YES!!!" exclaimed a third
|
| Like, he's rambling about how you should buy bananas with
| Bitcoin. How was this compelling to people who control serious
| money?
|
| It always struck me as the opposite. If someone running a
| crypto futures exchange said they wanted people to buy bananas
| and groceries on their platform that's be a signal to pass,
| right?
| Brushfire wrote:
| There is this weird thing in venture investing:
|
| the line between "crazy, brilliant founders who will build
| world changing companies" and "crazy, lunatic founders who
| will lie and cheat and be awful" is very hard to distinguish,
| especially at the series seed/series A level.
|
| It can lead to false positives and false negatives all the
| time.
| cj wrote:
| FTX didn't have a CFO. They didn't have a legitimate board
| of directors.
|
| No VC in their right mind should ever pour billions into a
| _finance_ company that doesn 't have a CFO or risk
| management team, doesn't have properly audited financial
| statements, doesn't have board oversight, etc. Especially
| so in a risky industry like crypto where scams and fraud
| are well known to be rampant.
|
| This is the main criticism I have of the people who
| invested in FTX. Even if you thought SBF was a world-
| changing entrepreneur 2 years ago, the structure of his
| company should have disqualified it from investment.
| Capricorn2481 wrote:
| This, to me, is just a myth that is pushed by investors
| that don't know what they are doing, and media outlets who
| want to talk about spicy people. There's no strategic
| reason to put your eggs in the basket of crazy people. We
| only hear about the crazy people because they are
| newsworthy.
| mrguyorama wrote:
| VCs don't care about the distinction, because VCs don't
| need a real, successful company, they need a story to sell
| at IPO
| rvba wrote:
| Buy a bag from a hypeman. Sell the bag just in time before
| the house of cards falls
| SamBam wrote:
| I don't know. To the extent that Musk had a plan at all with
| his $44B Twitter purchase, a big part of his idea seems to be
| that he wants X to be the next banking app/Venmo.
|
| Venmo is valuated at something like 40 billion dollars, and a
| huge amount of its use is people making $10 payments to each
| other.
|
| I'd hate to live in a world where I conducted all my business
| on FTX, but you can see why it might be appealing to
| investors.
| sumtechguy wrote:
| Musk is copying wechat.
| whalesalad wrote:
| Let's not forget the league of legends incident.
| https://www.businessinsider.com/ftx-sam-bankman-fried-
| league...
| jackbravo wrote:
| Oh wow! It was in that same meeting!
| jackbravo wrote:
| I think that idea in particular is quite good actually ^_^
|
| I mean, I'm not imagining that they have groceries listings
| on the app, but that the app allows you to transfer money
| directly to someone from your crypto wallet. Like a venmo
| payment but with crypto.
| _fat_santa wrote:
| > but that the app allows you to transfer money directly to
| someone from your crypto wallet. Like a venmo payment but
| with crypto.
|
| The thing is that's not a novel concept, just about every
| crypto wallet app can already do this. And the achilles
| heel of all of these apps is the gas fees that are out of
| their control. The only way to conceptually get around gas
| fees is to keep everyones money centralized and sidestep
| the trading of crypto all together, but in the process you
| defeat the entire purpose of crypto.
| the_snooze wrote:
| I think the practical business/technical goals are almost
| irrelevant. It's not that SBF had a brilliant business model
| in mind. It's that he fit the "look" of a founder that those
| VCs expected. He was one of them, with the right pedigree and
| right connections. It's affinity fraud [1].
|
| [1] https://en.wikipedia.org/wiki/Affinity_fraud
| ActionHank wrote:
| Crazy thing is that the people who bring about massive
| change or revolutionary new ideas don't often fit the
| mould.
| meesles wrote:
| At this point, your 'quirky technologist' definitely IS
| the mold.
| ActionHank wrote:
| He was a quirky cryptobro league player. There are
| millions of them.
| jjtheblunt wrote:
| If you look at recent Nobel Prize winners in sciences,
| many are not weirdos, just smart and without relying on
| nonsensical gimmicks. Jennifer Doudna, Emmanuelle
| Charpentier, others, all examples of just smart and
| persistent and focused.
| isk517 wrote:
| Feels very cargo culty. SBF superficially matched peoples
| idea of a revolutionary genius without any of the actual
| substance.
| survirtual wrote:
| Unfortunately the people in power do not care for
| revolutionary change. They want change that makes them
| money, not change that fundamentally restructures
| society. Change that fundamentally restructures society
| does not need permission from anyone. When the tech is
| here it will speak for itself, in spite of any of the
| major resource allocators being blind to those who bring
| it -- because a part of that change is those resource
| allocators being made irrelevant. They have held back the
| human race with their ego, blindness, and total lack of
| vision.
|
| They will spend $200m+ on a clown like this but ignore
| countless people with real innovations.
| rchaud wrote:
| Fraud scales better it seems.
| dvt wrote:
| To be fair, FTX had decent traction and Alameda _had been_
| successful in the past. I think it 's easy to say "pass" on
| SBF now that we know he's a crook, but there are genuine
| legitimate exchanges out there that are worth plenty.
| Coinbase, in the middle of a bear, has a market cap of $20B
| (it was valued at more than $80B in early 2021).
|
| SBF was just a thief and a gambler, and an incompetent one,
| at that. I still think Sequoia does have some
| responsibility here, but I suppose my point is only that
| hindsight is always 20/20.
| itsoktocry wrote:
| > _To be fair, FTX had decent traction and Alameda had
| been successful in the past._
|
| No, they weren't successful. When you leverage up and
| make (paper) money and later those same investments are
| wiped out and destroy the comany, you don't get to say
| you were "successful".
| dvt wrote:
| Early Alameda strategy was BTC arbitrage in Asian markets
| (which is very above-board). They were definitely
| successful. Once that well dried up (arbitrage is usually
| an "early bird gets the worm" game), they started
| gambling on shitcoins, which is where the troubles began.
| CSMastermind wrote:
| I've heard their success was a lie and they couldn't have
| possibly made the money they claimed to have made.
| HappySweeney wrote:
| They were definitely not successful. Anyone looking at
| BTC prices between NA and Korea saw the arbitrage
| opportunity. The fact that it sat there so obviously for
| so long was a testament to how impossible it was to
| profit from it. In fact, the whole reason for the pivot
| to an exchange from a pure arbitrage play was due to
| their lack of success.
| kelthan wrote:
| The BTC arbitrage in Asian markets was absolutely NOT
| very above board. He lied to get Japanese bank accounts
| opened and to keep them open. Transferring the BTC into
| Korea was against the law there. He just figured out how
| to do it for quite a while without getting caught.
|
| Yes, it made money. Yes, he claimed it was legit, but it
| wasn't--it was money laundering illegal gains. It just
| sounds so much better when you call it "arbitrage".
|
| This was all covered in the case.
| dogman144 wrote:
| This is such a wrong take.
|
| In 2020, FTX was known to offer collateral on huge loans
| vis FTT, their stabelcoin. Parties backed off bc of this.
|
| The interplay b/t Alameda and FTX was known and parties
| wouldn't trade or do broker agreements bc of it.
|
| within crypto, the growth of FTX, although concerning,
| was frequently discussed as likely inorganic.
|
| The VC and SEC buy-in to FTX was uniquely inept.
| Cornbilly wrote:
| I agree
|
| -Dresses like a slob
|
| -Went to MIT
|
| -Is from the Valley
|
| -Has ties to Stanford
|
| -Upper class background
|
| Their VC brains didn't stand a chance of sniffing this out.
| norir wrote:
| The real victims here are all the heroic MIT geniuses
| with unkempt hair who won't get their shot now.
| hobofan wrote:
| Why won't they get their shot now? I doubt VCs will
| change their MO over this.
| moufestaphio wrote:
| If Adam Neumann can get another shot, the unkempt MIT
| geniuses will be fine.
| owenpalmer wrote:
| Truly devastating. Those poor geniuses will need to buy a
| comb xD
| phone8675309 wrote:
| So long as they have rich parents, a dick, and white skin
| they'll have plenty of opportunities
| creer wrote:
| And probably an insane network from the parents' side.
| rchaud wrote:
| > Dresses like a slob
|
| The anti-Adam Neumann. Brilliant strategy.
| TuringNYC wrote:
| > -Dresses like a slob
|
| https://www.instagram.com/p/CzCos0dxuJG/?img_index=2
| postmodest wrote:
| Sketch Artist turned him into Tyler Durden....
| cipheredStones wrote:
| Very much fake.
| https://www.theguardian.com/business/2023/oct/31/sam-
| bankman...
| starcraft2wol wrote:
| > It's not that SBF had a brilliant business model in mind
|
| They had the largest crypto exchange right? That's a
| competitive market. Seems like something was going right.
| daveguy wrote:
| I expect growth of a crypto exchange is a lot easier when
| you can steal client deposits to fuel additional growth.
| StressedDev wrote:
| I believe Binance was bigger than FTX. That being said,
| it's hard to tell how big any of these organizations
| really are because they do not release audited financial
| statements.
| ActionHank wrote:
| This whole exchange made me think that there must have been a
| family or friend connection back to Sequoia.
|
| As a humble poor, if I were running the show over at Sequoia
| I would have these people out on their asses, but again, I
| also don't have buckets of money clouding my judgement.
| rchaud wrote:
| Sequoia likely made plenty of money by underwriting their
| in-house e-coin FTT, hyping up SBF across the media, and
| then dumping FTT on retail investors afterwards.
| StressedDev wrote:
| Do you have any proof they did that? That is a very
| serious accusation to make.
| mschuster91 wrote:
| > Like, he's rambling about how you should buy bananas with
| Bitcoin. How was this compelling to people who control
| serious money?
|
| Everyone and their dog was looking for an actually credible,
| mass-market compatible usage scenario for Bitcoin beyond
| buying drugs on Silk Road.
| sleepybrett wrote:
| coinbro brain. 'everyone' couldn't give a shit about
| bitcoin, statistically speaking.
| mschuster91 wrote:
| Yeah but back in the Bitcoin crazy time it wasn't _that_
| unrealistic for "serious money". Mastercard, Visa and
| AmEx move _trillions_ of dollars a year, capturing even a
| slice of that marketshare means being in possession of a
| money printer, which explains the (often absurd)
| investments into anything crypto.
| coldpie wrote:
| > How was this compelling to people who control serious
| money?
|
| Access to money, and intelligence, are not positively
| correlated. Jury is out on whether there is no correlation,
| or if there is negative correlation. Given the braindead
| antics of the wealthy over the past 10 years, I'm leaning
| towards the latter.
| ToucanLoucan wrote:
| Anybody remember that rich dude who built a submarine
| against every single convention and over the screaming
| shouting objections of literally every other person alive
| who's built submarines, who then tried to go to the Titanic
| and killed himself and four other people?
|
| How about Musk who bought a successful if mid-tier social
| media site for 44 billion dollars and has cratered it to
| being worth barely 4?
|
| How about Zuck who _renamed his entire damn company_ in a
| bid to pivot to the metaverse just in time for that entire
| house of cards to come crashing down?
| coldpie wrote:
| Say it with me: Wealth. Tax. Wealth. Tax. Wealth. Tax.
| twright wrote:
| The taken down profile for anyone who wants to see just how
| wild they were about SBF: https://web.archive.org/web/2022102
| 7181005/https://www.sequo...
| hef19898 wrote:
| That's what happens when you raise a red flag on top of
| large building, and paint the building red afterwards just
| to be sure everyone notices it.
|
| I loved that piece, and the fact that it was removed soon
| after.
| bitsandbooks wrote:
| > If someone running a crypto futures exchange said they
| wanted people to buy bananas and groceries on their platform
| that's be a signal to pass, right?
|
| Not if you're so silly as to think you can replace the
| currency people use, plus control completely its medium of
| exchange, plus be able to trade against those same exchange's
| participants. It boils down to people trying to rebrand
| casinos as markets.
| dpflan wrote:
| What else should investors do in the time of ZIRP? This
| looked like a potentially crazy return, right? That's point
| of investing like this, right? Pour money into a "winner" and
| ride the crypto-future-promise-delusion-wave...
|
| It's pretty wild how unhinged they became about pretty much
| rambling...
| AlexandrB wrote:
| I think it's a good reminder that large investors are human
| and don't possess any special knowledge or magical foresight.
| Consequently, everything they say about the future of
| technology and society should be taken with a large grain of
| salt - not treated like god's honest truth.
| creer wrote:
| Wow wow wow. He's talking about inserting a business in the
| normal person's payment path. It's certainly ambitious and
| could be profitable if you could get on that trajectory. The
| question would be whether there is a credible path from
| crypto futures exchange to that, technical, financial or
| marketing-wise - but that's a different question.
| mwhitfield wrote:
| You gotta remember, what's being sold in this kind of pitch
| is not a business model. They're looking for unicorns. What's
| being sold is the maximum possible size of the market you can
| extract value from.
|
| I'm no VC, but I feel like if I am and you're telling me that
| _all_ consumer transactions of any kind are going to flow
| through a portal _you_ own, it doesn't get much bigger than
| that. The odds of success don't have to be that high, and in
| principle you just factor the possibility that the founder's
| full of crap into those odds; you don't have the time to
| understand every possible market and every person pitching
| you in the depth necessary to make that determination, right?
| kbf wrote:
| >[if] you're telling me that _all_ consumer transactions of
| any kind are going to flow through a portal _you_ own
|
| >The odds of success don't have to be that high
|
| The odds of success are as good as nonexistent and I also
| don't have to be a VC to understand that.
| rchaud wrote:
| > How was this compelling to people who control serious
| money?
|
| Holders of serious money often put them into decidedly
| unserious things. Somebody once put together $44bn cash
| financing for Twitter dot com.
| P_I_Staker wrote:
| This just goes to show all the critiques of this kind of
| investing were very true. FTX and Theranos are examples of
| how this can all go very wrong.
|
| I've gotten in a number arguments with people who don't
| understand white collar crime, think these guys are "smart",
| and are so surprised by how basic their scheme is, and how
| they thought they'd get away with it.
|
| These people aren't smart, any more than your local gang
| banger, or small time fraudster... the stories are remarkably
| similar.
|
| There's lots of white collar criminals that have cloaked
| their schemes as part of "altruism". This isn't even new.
| pookha wrote:
| Baffling. When I hear SBF speak and I analyze his system all I
| can see is a thoroughly medicore JAG hyping up a bad product
| that was a spit-and-a-prayer. And yet he was raking it in...I
| can still remember investors and the general public being
| appalled at facebook being valued at 11 billion in 2008, after
| they'd destroyed their competition and taken over "social
| networking". Something changed in the collective consciousness.
| mrkramer wrote:
| Silicon valley investors always jump on hype, just remember the
| dot-com bubble and yea crypto was and still is very hypey
| although AI, LLMs and generative AI are now taking over the
| hype. To the next hype train we go.
| itslennysfault wrote:
| ...and they didn't even request a board seat. Meanwhile, I gave
| up a board seat for a $1m investment.
| IKantRead wrote:
| As I mentioned in another comment, I think it's not accidental
| that SBF was pumped full of delusions of being a boy genius.
|
| This worked great as a marketing gimmick for sure, as people
| love the mythos of a revolutionary company run by a tech
| prodigy.
|
| But it also works when everything falls apart because SBF's
| delusion driven ego sucked up every morsel of attention and
| responsibility.
|
| I also wouldn't be surprised if, through various means, many of
| his investors ultimately walked away with far more money than
| they started. And nobody bothers asking questions about that
| because SBF does such a great job of drawing all the attention.
| StressedDev wrote:
| This does not sound plausible because the investors will
| almost certainly not get anything out of the bankruptcy. Also
| there is no evidence any investor secretly profited from FTX
| and it is hard to believe any VC put millions in and some how
| got them out. They put money in and FTX lost it.
| hoschicz wrote:
| I really don't understand what's the point of putting him in
| prison. Wouldn't a lifetime ban on all white-collar work suffice?
| And being forced to pay anything he makes over a certain
| threshold to his victims?
|
| It's both cheaper for the state and more humane for him. Do we
| really, as a society, need revenge? Because that's what this is
| if he gets more than 10 years in prison.
| netcraft wrote:
| I also have conflicting opinions on this, but the usual
| reasoning is more about deterrence than revenge. We want others
| who might try these things to see that they can and do get
| punished.
| bspammer wrote:
| At some number of 0s, white collar crimes are more damaging to
| society than violent ones. $10 billion definitely meets that
| threshold, there has to be a deterrent.
| phone8675309 wrote:
| The number of years of savings he stole from people is less
| than the maximum time he can get in prison, so if anything,
| he's getting off light.
|
| If there were justice in this world his mind would be put in
| a simulation and he'd be forced to do all of the things that
| the people who lost money did to get theirs in real time. Let
| him feel that loss before you then wake him up and make him
| spend the rest of his time in prison.
| cedws wrote:
| Punishing the individual is only half of the reason we have
| prisons. The other half is to dissuade others from doing the
| same.
| Spivak wrote:
| Surely we can do better than that, right? Like I imagine for
| a white-collar rich boy capping his income at $55k+inflation
| which includes the monetary values of gifts and any income
| from debt has to be pre-approved [1] would be far far more
| devastating, less cruel, and less drain on society. And this
| lasts for x years or until he pays back the damages.
|
| [1] so he could buy a car and house but not skirt the rule by
| using loans against an asset portfolio to make more "income"
| for himself.
| nvm0n2 wrote:
| Why would he bother looking for a job with income over the
| limit? What would stop him immediately starting another
| scam? Who would even hire such a guy to begin with?
| Spivak wrote:
| I'm sure Starbucks would take him. And he might choose to
| not bother working a better paying job, that's fine. And
| the threat is that if he starts another scam he gets
| house arrest then jail in addition.
| escapedmoose wrote:
| This is just the original sentence with extra steps. The
| hypothetical "second chance" you're attempting to give
| him was used up every time he chose to take another step
| in perpetuating his fraud.
|
| I'm not a fan of the current imprisonment establishment
| either, but this solution doesn't seem viable.
| wrsh07 wrote:
| Guy famous for one of the biggest scams in history: "sure,
| I'll abide the rules where I report all of my earnings even
| if that means you tax everything I earn beyond 55k"
| mcguire wrote:
| What punishment do you envision for someone who steals $20
| from a convenience store?
| orangepurple wrote:
| 3 lashes and let him go. Not worth holding any period of
| time.
| meowtimemania wrote:
| community service the first few times they are caught.
| After that some prison time
| strikelaserclaw wrote:
| Part of punishment is to act as deterrent to others.
| fipar wrote:
| I certainly don't like the revenge/punishment philosophy of
| jail, but I think the system should be fixed for everyone (make
| it truly about rehab when possible, and about protecting
| society when not possible), but what you propose would only
| make an unfair system even more unfair. Why should he get off
| without jail and someone who breaks into a car and
| comparatively steals pocket change end up in jail?
|
| Not to mention that someone with his background and upbringing
| should be even more aware of the difference of what's right or
| wrong than other criminals.
|
| I'm against all crime but at least I can kind of understand how
| someone on the edge of society, with poor or no education, etc.
| would see crime as a viable option, but someone that literally
| doesn't need the money? Let him go with a symbolic punishment?
| I think that'd be worse.
| SilverBirch wrote:
| Sure, and we'll just trust that he'll be honest about what jobs
| he's doing and how much money he's earning. This is one of the
| lessons from the guy behind fyre festival - even _whilst on
| bail he started another fraud_. Yes it would be nice if we
| could put people on the naughty step when they 've done
| something wrong, but we can't. Sam Bankman-friend is a
| convicted fraudster, the idea that given the chance of freedom
| that he'd do anything other than continue to commit fraud is
| kind of ridiculous.
| ikrenji wrote:
| i don't think he needs to spend a long time in prison but
| anywhere between 2-5 is appropriate imo. these are not
| "victimless" crimes
| AlexandrB wrote:
| When you can get more than that for shoplifting[1] or
| stealing a car, I don't think it's appropriate at all. If
| we're going to overhaul the entire justice system at the same
| time, then sure.
|
| [1] https://www.theguardian.com/us-news/2018/may/17/walmart-
| shop...
| meowtimemania wrote:
| I agree, but shoplifting is on the rise and becoming so
| prevalent that it is hurting normal law abiding citizens.
| I'm not sure what it is, but more should be done to deter
| shoplifting.
| qingcharles wrote:
| That's interesting. Illinois rolled back their application
| of burglary to shoplifting offenses because it was giving
| such lengthy sentences for petty offenses.
| jb1991 wrote:
| Punishment and revenge are not the sole motivators of
| incarceration. It also serves as a deterrent.
| wespiser_2018 wrote:
| People go to prison for three-ish reasons: To reform the
| criminal, to deter crime, and to offer restitution in the form
| of punishment to the victims of the crime, and arguably to keep
| society safe.
|
| I feel bad that Sam is going to go away for life, and ideally
| we'd live in a society where we don't need prison to reform
| people, but Sam is a case where there is considerable deterrent
| effect and well as a public protection interest. When someone
| steals so much from so many and admits no fault, that's not a
| person who can go to a day program and reform their ways, they
| need severe consequences to get the to honestly reform.
|
| There's also what the victims say should be done. Just
| thousands and thousands of people felt pain, and will get a say
| in the sentencing. If they all forgive, sure, it's okay to give
| him a light sentence, but the degree of suffering SBF caused is
| just so profound people will want justice to an un-repentant
| fraudster who stole their future.
| nemo44x wrote:
| I assume some people killed themselves because of the
| financial ruin his fraud created. I have to imagine a lot of
| people's lives fell apart, relationships were destroyed,
| families broken up. Because of the choices this man made to
| enrich himself.
|
| Victims of crime deserve revenge in some part and the state
| is the mechanism to deliver that revenge. We should always
| remember the victims of crimes first.
| kawhah wrote:
| Out of interest did you make the same arguments about Martin
| Shkreli (arrogant and unlikable child of immigrants who did a
| much smaller scale scam similar to SBFs but where everyone was
| eventually repaid in full) and about Andrew Auernheimer
| (annoying and racist child of a working class single mother who
| performed a fairly successful hack without any personal gain)
| and about Brian Salcedo (working class, non-college-educated
| guy from the Midwest who carried out a fairly basic hack of a
| corporation attempting to profit financially but with no
| realistic chance of success)?
|
| Just asking, because all three of those guys did several years
| of federal time.
|
| I somewhat agree with what you say about prison, but I'm not
| sure we should start with the charismatic and media-savvy child
| of politically connected Stanford professors, who had plenty of
| opportunities to do well and live a full life without stealing
| anything or cheating anyone.
| omginternets wrote:
| Is it really off the table to do both?
|
| Note: I'm not convinced prison should be off the table.
| solomonb wrote:
| Or any of the countless lower income offenders who end up
| with years of jail time for crimes of desperation?
|
| If were going to make a radical policy change in sentencing
| then it has to be done for everyone all at once.
| P_I_Staker wrote:
| There needs to be a real cultural shift here, and spaces like
| HN are doing a really bad job. The moderation heavily favors
| this privileged SV mindset, and criticism, results in extra
| scrutiny.
| FireBeyond wrote:
| > Out of interest did you make the same arguments about
| Martin Shkreli (arrogant and unlikable child of immigrants
| who did a much smaller scale scam similar to SBFs but where
| everyone was eventually repaid in full)
|
| There is more to Shkreli and his sociopathic capitalism.
|
| Shkreli showing his real stripes:
|
| A drug comes before the FDA for approval, and it is opened up
| for comment. Shkreli lodges an objection to approval of this
| drug.
|
| Why? Because it's unsafe? No, trials thus far have shown it
| to be safer than existing drugs.
|
| Why? Because it's less effective? No, it's also been shown to
| be more effective than existing drugs?
|
| Perhaps it's more expensive? No, cost of R&D and production,
| and estimated retail costs are expected to be lower than
| existing drugs.
|
| Huh, odd. So why did Shkreli oppose this drug getting to the
| market?
|
| Because he and his company had just bought the patent to one
| of those 'existing drugs' recently, and this drug coming to
| market would torpedo demand for his drug, and torpedo the
| profitability of his investment in buying the patent.
|
| Man of the people, fighting for healthcare rights, Martin
| Shkreli.
| jjtheblunt wrote:
| > Do we really, as a society, need revenge?
|
| "Yes" in the sense it's a deterrent in place of revenge. It's
| on purpose and codified in the law for that reason.
| shadowgovt wrote:
| This is one of those philosophical points I don't think
| everyone realizes about the law, possibly because not
| everyone has felt the feelings that underpin the philosophy.
|
| The revenge part of justice isn't there because it benefits
| the convicted's rehabilitation. It's there because it
| increases the ambient peace of society to have the state take
| upon itself (and codify, and normalize) the very human desire
| to seek a balancing of the scales by bringing someone low who
| brought you low.
|
| We punish criminals with discomfort, constraint, and loss of
| freedom so that their victims don't hunt them down and cave
| in their skulls with a two-by-four. We give them what's
| coming to them so they don't get what's coming to them
| directly from those they've wronged.
| mrguyorama wrote:
| You know the $8 billion dollars he set on fire came from people
| right? Lots of people basically lost their life savings or had
| their lives ruined right? How many lives do you have to destroy
| in the process of "business" before we should care as a
| society?
| nemo44x wrote:
| > Do we really, as a society, need revenge?
|
| Yes - a lot of victims of crimes want some token of revenge. We
| should honor the victim's wishes within a reasonable way.
| Revenge brings comfort and closure to many people - it's an
| entirely natural emotion. People very likely ended their own
| lives and he ruined the lives of many people due to his rampant
| fraud. Think about those people first.
|
| Secondly, punishment is a big part of why prison exists. It
| should, hopefully, dissuade a decent amount of people from
| committing crimes. It keeps "honest people honest" to some
| degree.
|
| > Because that's what this is if he gets more than 10 years in
| prison.
|
| I guess I sort of agree here but not entirely. We grant a lot
| of trust in elites that have access to these financial
| apparatus and it can be very difficult to detect fraudulent
| actions. For this reason, fraud and financial crime at this
| level should be punished harshly. The most effective way of
| doing this is to remove an individuals freedom.
|
| I'd agree prisons could be more humane and modernized. Caging
| people all day isn't the best, especially if they will remain
| for many years. Some initial harsh punishment (hard labor,
| isolation for a couple years) followed up by easier rehab
| incarceration and eventual parole (15 years from now) would
| suit this particular case IMO.
| stronglikedan wrote:
| > Wouldn't a lifetime ban on all white-collar work suffice? And
| being forced to pay anything he makes over a certain threshold
| to his victims?
|
| The administration fees to monitor and enforce all that _wouldn
| 't_ be cheaper for the state.
|
| > what's the point of putting him in prison.
|
| To keep him from scamming more people, since zebras don't
| change their stripes. Especially desperate ones that would be
| prevented from working white-collar jobs and forced to pay
| restitution from what they make at other legitimate jobs. And
| as others have already said, a deterrent.
|
| > Do we really, as a society, need revenge?
|
| No, but his victims do.
|
| > more humane for him
|
| Oh, poor baby he is.
| qingcharles wrote:
| Does prison even do what society thinks it does?
|
| It definitely does not rehabilitate as rehabilitation is almost
| unheard of in most jails or prisons.
|
| Prison is only scary for criminals the first time they enter.
| Once you've been through the system going to prison a second
| time is a walk in the park. When I got arrested and sent to
| prison last year for retweeting a government tweet I walked
| back in the jail like I ran the place. I knew all the staff, I
| had my friends there. Even one of the nurses at intake pulled
| me aside like I was a celebrity and congratulated me for my
| social justice work. I felt like a boss. Any deterrence factor
| had long since worn off. And I've only been locked up twice.
| The other guys around me had been inside dozens of times. One
| guy had been locked up 70 times.
|
| And we talk about the cost of locking people up, let's say an
| average of $50K/year in prison costs. People also forget to
| factor in all the court costs, for the judges, prosecutors,
| staff etc, probably runs to another $100K+ for a trial. THEN,
| when someone is locked up they are not generating any income
| tax or paying any sales taxes. They are not buying any goods or
| services with their money. There is a huge negative loss there
| from their lost income and spending to the economy.
|
| Then multiply it by the two or three million who are locked up
| or on house arrest.
| remir wrote:
| _When I got arrested and sent to prison last year for
| retweeting a government tweet_
|
| Could you expand on that? What the complete story?
| ctrl-vvvvvvvvv wrote:
| Please do, sounds like a good read.
| meowtimemania wrote:
| I agree, but also feel like part of the purpose of prison is to
| make an example out of the criminal and deter others from
| committing the same crime.
| dsakjhsdfalkj wrote:
| 1. How people forget King Solomon after just a few thousand
| years. Put yourself in somebody who lost their life savings to
| SBF. What do you think happens? Prison serves a primal need--
| it punishes the perpetrator so the wronged don't kill him and
| then the family of the wronged don't escalate from there.
|
| 2. Prison makes SBF a spectacle-- commit fraud, go to jail and
| be miserable.
|
| 3. How the hell are you going to ban "white-collar" work?
|
| 4. How many tens of millions of $$ do you think SBF has hidden?
| How many favors are owed to him? He's never going to have to
| work another day in his life.
| P_I_Staker wrote:
| What?!?!? Why him, or why white collar crime specifically? He
| simply HAS to get a substantial prison sentence.
|
| He is among the worst of the worst in society. It's really easy
| to do what he did. Everyone's got a story, or could come up
| with one if you let them.
|
| We have punishments for the worst of the worst in society. I
| think we should be more lenient, and under my values he might
| not be going away for 10 years, but there should be something
| substatial here.
|
| I find it quite shocking to find people on HN that think he
| should get NO prison, but perhaps this is a typo.
| Ographer wrote:
| A reddit post called out SBF as a fraud 2 years ago and no one on
| the Bitcoin subreddit believed them!
|
| https://www.reddit.com/r/Bitcoin/comments/p1oqqu/the_ceo_of_...
| paulgb wrote:
| Good find, but worth noting that this is accusing him of front-
| running when what he actually did was dumber and more criminal:
| using FTX customer deposits to cover losses on the Alameda
| side.
| acaloiar wrote:
| I imagine SBF's charges are more serious than a front-running
| charge. The prosecution also may not have had sufficient
| evidence of front-running to get the charges to stick.
|
| But any exchange in such close company with a hedge fund
| should always be suspected of front-running. There's an
| inherent conflict of interest between those two entity types.
| And I would be surprised if Alameda wasn't front-running FTX
| customers, given both firm's obvious ethical shortcomings.
| muldvarp wrote:
| Is front-running something you could/would do manually? The
| prosecution had access to the source code and git history
| of FTX.
| acaloiar wrote:
| Front-running efficacy can be measured in milliseconds.
| It's a world where microwave towers sometimes replace
| fiber lines, to gain a few milliseconds of advantage.
| That is, when the front-runner isn't "in-house", which
| Alameda had ample opportunity to be. Alameda and FTX were
| separate legal entities, but Sam largely headed both.
| Alameda front-running servers, in theory, could have been
| running right along side FTX servers, with only inches of
| network-induced latency.
|
| You can of course front-run manually, depending on the
| degree of automation in the systems one is front-running,
| but front-runners will generally want to automate. And to
| scale the scheme for a realtime system of FTX's volume,
| Alameda would certainly want to automate it.
|
| I wasn't following the case closely enough, but did the
| prosecution have access to Alameda source code, or was it
| only FTX? As long as Alameda had access to FTX order
| records, any front-running code would likely have resided
| in Alameda repositories.
| muldvarp wrote:
| > I wasn't following the case closely enough, but did the
| prosecution have access to Alameda source code, or was it
| only FTX?
|
| This blog post [0] contains screenshots of git commits
| that were used as evidence in the trial. It only shows
| commits to FTX's source code, so I don't know if the
| prosecution also had access to Alameda's source code.
|
| Given how obviously incriminating those snippets are, I
| don't think SBF really tried to hide his crimes. I'm not
| sure then why they would architecture FTX such there are
| no signs of front-running in their code.
|
| Personally, my guess is that either A) the prosecution
| found evidence of front-running but thought that the case
| was air-tight enough already and they didn't want to
| confuse the jurors or B) Alameda didn't actually do any
| front-running.
|
| [0]: https://newsletter.mollywhite.net/p/the-fraud-was-
| in-the-cod...
| pcl wrote:
| I'm not in the industry. That said, it's my understanding
| that "front-running" as a term of art necessarily implies
| some sort of illegal behavior (at least in the US and
| European markets), but being clever with physics
| (microwave towers, bouncing signals off the ionosphere,
| etc.) is fair game, and if you can pull off some
| profitable arbitrage trades with that sort of setup,
| you're in the clear.
| acaloiar wrote:
| No doubt, though plausible deniability often begins with
| physical and legal separation, bringing the physics into
| play :)
| verteu wrote:
| > any exchange in such close company with a hedge fund
| should always be suspected of front-running
|
| Indeed -- I knew several professional traders who used FTX.
| At the time, their consensus was:
|
| 1) "Probably Alameda has an unfair latency advantage,
| because they are the designated market-maker, and
| owned+operated by the same people who run the exchange."
| This could be called 'front-running' depending on how you
| define the term.
|
| 2) "However, SBF probably won't steal all our money because
| he is well-known, extraditable by USA, and would go to
| prison."
|
| Needless to say, assumption 2) was incorrect.
| newswasboring wrote:
| The premise of 2) is entirely correct, they just
| underestimated how irrational people can be.
| toss1 wrote:
| Exactly.
|
| SBF was a sociopath who would (acdg to sworn testimony of
| his GF) actually go ahead and toss the coin if the
| outcome was one side results in the world getting twice
| as good and the other side causes the world to be
| destroyed, and he DGAF that he was also making the bet
| for everyone on the planet.
|
| They didn't count on the fact that this mentality would
| also mean that in real life, he would also do all kinds
| of risky crimes, and even go to trial instead of taking a
| plea deal, because there's a _non-zero!!_ chance he could
| get away with it.
|
| Bad bets all around
| lancesells wrote:
| > SBF was a sociopath who would (acdg to sworn testimony
| of his GF) actually go ahead and toss the coin if the
| outcome was one side results in the world getting twice
| as good and the other side causes the world to be
| destroyed, and he DGAF that he was also making the bet
| for everyone on the planet.
|
| It could be true he's probably a sociopath, but having an
| edgy philosophical talk with your girlfriend is just
| that. It could say something about his character but it's
| nothing more than a fantasy.
|
| Much more damning is stealing all those billions to
| become rich and famous.
| toss1 wrote:
| I'm pretty sure it was more than just one 'edgy talk'
| with his GF, but one of many concrete examples of his
| attitude towards taking risks and especially taking risks
| that affect others who did not sign up for the risk.
|
| I saw an article that implied that SBF confirmed on the
| stand his willingness to do the coin-toss, but I couldn't
| find it to confirm.
|
| Perhaps the biggest evidence is that he went to trial
| instead of taking a plea deal. At the very least, he put
| his parents and family through an awful and unnecessary
| ordeal, just because he thought there was a chance he
| could convince a jury. But, in reality, it was not even
| close.
| constantly wrote:
| Number 2 is half correct.
| bena wrote:
| It's probably a result of not having complete information and
| giving benefit of the doubt.
|
| The guy realized SBF was doing weird shit that was probably,
| if not straight up illegal, at least highly unethical. And
| front-running was the thing that made the most sense to him
| at the time.
| itsoktocry wrote:
| > _what he actually did_
|
| No, what he was _charged with_ was using customer funds.
|
| I'm sure they _did_ all kinds of shady things, including
| front-running customers.
| trogdor wrote:
| On what basis are you sure of that?
| dotBen wrote:
| proven character
| xg15 wrote:
| also, remember, it was all _for the greater good_...
| simplicio wrote:
| I mean, if he was doing all kinds of smarter types of
| fraud, one would think they wouldn't have gone broke.
| rosege wrote:
| Shame the Youtube vid of him frontrunning has been removed.
| josu wrote:
| It's still here: https://web.archive.org/web/20221113092101/h
| ttps://www.youtu...
|
| I don't really think it shows clear evidence of him front-
| running FTX users. He doesn't even seem to be trading on FTX.
| tim333 wrote:
| The poster accused SBF of front running his customers but
| comments underneath seem skeptical:
|
| >Clearly OP has no fucking clue what he's talking about because
| the videos in question don't prove he's front running.
|
| >The Youtube video you linked to (I watched some from the point
| you linked), appears to be about trading an arb opportunity
| that existed because of a large sell wall on Binance. Where
| does it show he's using 'private FTX analytics' to 'front run
| his customers'?
| josu wrote:
| This is actually one of the reasons why the FTX collapse came
| as a surprise for most crypto insiders. Everyone assumed that
| Alameda Research (the trading arm of FTX) was printing money,
| alas it was losing billions. Sam Trabuco, co-founder of
| Alameda, who has been surprisingly absent from any trial, was
| instrumental in creating this illusion of success for Alameda.
| mrkramer wrote:
| In crypto community everybody is calling everybody a fraud.
| Probably because in the early days of the Bitcoin and the
| altcoins, the industry was largely unregulated with a lot of
| scams going around. But nowadays, governments seem to be
| catching up.
| reidjs wrote:
| I'm sure there's a Reddit thread for every cryptocurrency
| company and founder calling them a fraud.
| JustLurking2022 wrote:
| And statistically, they're virtually all correct.
| reidjs wrote:
| Just like how, statistically, a cancer test strip that
| always says "not cancer" is virtually always correct.
| dymk wrote:
| You're confusing false positives and false negatives
| reidjs wrote:
| Ok let me make a correction.
|
| It's always a good blind bet that a singular new company
| and/or founder will fail their next venture, not just
| startups in the crypto space, but across every industry.
| If you know a little bit (insider info) about the space
| and founders you can probably make better bets, though .
| slikrick wrote:
| not with crypto though, because it's all a scam or a
| front, there is no actually successful crypto projects,
| unless you count successful as having scammed a bunch of
| money out of people's hands, in which case, yes theyre
| all pretty much successful
| permo-w wrote:
| these subreddits are/were absolutely full to the brim with
| bots/adversarial actors. it's obvious after spending any time
| on them. the incentive to manipulate is just too high, and the
| ease with which to do it is too low
| Ographer wrote:
| Exactly. Right now on the subreddit there is a post about how
| a guy plans to invest 2% of his net worth into bitcoin and
| most of the comments are mocking him for not investing
| 90-100%.
|
| There is no such thing as skepticism or critical analysis on
| these subreddits. Obviously these commenters are already
| holders and have incentive to convince more people to buy.
| Like you said, I'm sure there are plenty of bots active in
| pushing their narrative with no consequences or
| accountability.
|
| Whether crypto is useful or not, the market manipulation and
| ponzi-scheme recruiting tactics are too sleazy for me to
| invest seriously.
| whatamidoingyo wrote:
| > OP you literally have no idea what you're talking about. Put
| your tin foil hat away and stop trying to stir up controversy
| where there is none.
|
| Some of the replies to that... my god.
| shadowgovt wrote:
| From this, we can glean two lessons:
|
| 1) There's not a lot of weight to put on such criticism because
| for any success there are also critics. Critics are wrong until
| and unless they're right. As others have noted, in this case,
| he wasn't convicted for the thing these critics were claiming
| he was doing.
|
| 2) ... But, it's Bitcoin. Any critic claiming anything Bitcoin
| related is probably tied to a scam is statistically likely to
| be correct. ;)
| polynomial wrote:
| Best comment: "If this is true, this would be the worst rugpull
| ever!"
| lawlessone wrote:
| TBF you can accusations of fraud against anyone in space like
| this. It's like Nostradamus predictions.
| jquery wrote:
| The sheer confidence and contempt of some of those commentators
| is impressive...
| sfmike wrote:
| great idea for a trader. scrape anything where people say
| something like "this is so f* dumb I don't have the time to
| explain it" as it could be a black swan and call puts against
| it.
| pseingatl wrote:
| BTW, no more Adderall for SBF once he is "remanded to the custody
| of the Attorney General." Once he gets out of US Marshals'
| custody and is transferred to the BoP, he can kiss Adderall
| goodbye. Amphetamines of any kind are not allowed by the BoP,
| unless he is undergoing a surgical procedure which requires its
| use (don't know of any, but can't say there are none).
| strikelaserclaw wrote:
| don't know why you need adderall in prison even with adhd, not
| like there are many responsibilities that need executive
| function.
| altairprime wrote:
| Rehabilitation requires executive function, so it's possible
| that a therapeutic dosage of an ADHD medication would be
| appropriate; however, therapeutic stimulant dosage levels may
| be considerably lower than recreational levels. Fortunately,
| non-stimulant treatments are available, that have no
| recreational value.
| thedangler wrote:
| Citadel took advantage of this situation to "tokenize" stocks and
| say there were 1 to 1 to perpetuate their fraud. Fake locates,
| fake margin. Hope Kenny G is next on the list. The whole stock
| market would benefit from his downfall. Maybe we would get real
| price discovery.
| ralfd wrote:
| > Mr. Bankman-Fried's sentencing is set for March 28.
|
| What is the reason that is 4 month away? Clogged up justice
| system?
| sleepybrett wrote:
| Also another potential trial for five other counts in mid march
| i think.
| TheRealHB wrote:
| Does that changes the scene in any way?
|
| Is Bankman-Fried's Guilty Verdict a Crypto's "Madoff" Moment?
|
| https://news.ycombinator.com/item?id=38128260
| MacsHeadroom wrote:
| Crypto is rallying. Bitcoin is higher than it has been in over
| a year. It's been trending up for a while though.
| jahnu wrote:
| I would love to know why. I don't see any new great thing it
| can do. Who are these people pouring in billions in a world
| with real interest rates. Criminals moving money?
| Saig6 wrote:
| SEC might allow/not be allowed to block spot bitcoin ETFs
| lancesells wrote:
| Can you buy bitcoin with other crypto? Some of that makes
| sense if you can create a currency, pump it's value, and
| then exchange for bitcoin.
| somenameforme wrote:
| Different world views than you probably have. A person who
| thinks the USD is stable and the stock market is priced
| reasonably is going to have a different attitude than one
| who thinks the USD is going through its riskiest in modern
| history and that the stock market is looking more and more
| like an astronomically sized bubble, all with WW3 looming.
| And then there's the guy in the middle who's just
| diversifying to try to maximize his gain (or minimize his
| risk) across all possible outcomes.
| warthog wrote:
| I wonder what his cell is going to look like - swimming pool and
| playstation included?
| m3kw9 wrote:
| Guud
| m3kw9 wrote:
| What's the over under on the years
| enahs-sf wrote:
| Is he eligible for any type of parole? I'd guess he does at
| least 15-30. I'm more curious to what type of prison he lands
| in.
| m3kw9 wrote:
| Home prison in the Caribbeans
| mark_mart wrote:
| Well deserved.
| phone8675309 wrote:
| Love that his "uwu im just a small lil bean oh gosh shucks gee im
| sorry" defense didn't work.
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