This seems to be a slam dunk for prison time.
Only thing I can think of is if these companies are international so he doesnt get prosecuted in the US under US laws. Thats his only hope.
FTX tapped into customer accounts to fund risky bets, setting up its downfall
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Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#42The Twitter thread from SBF is even better where he admits he messed up. And still trying to throw jabs at Binance here and there like it’s their fault they’re here. Unbelievable.
Even Saul Goodman would have told him to shut up.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#43Earlier quoted context omitted.
>ponzi scheme This is not a ponzi scheme. This is a good old "not firewalling your customer's money and your investment money" that everyone suffered from in 2008. The situation is cataphoric enough without people mis-using terms.
> "not firewalling your customer's money and your investment money" that everyone suffered from in 2008 ... cite for this, please. I don't recall there being any significant client money problems in that period.
You are right. Even though there were cases in 2008 they weren't significant contributors to the great recession.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#44Quoted post unavailable.
Just two days ago he claimed that they were not investing customer funds. A few hours ago he deleted that Tweet.
That moves it into fraud territory.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#45Quoted post unavailable.
It's different in a lot of ways. The most important one that you've missed is that banks don't need to have enough liquidity to cover customer deposits, but they do need to have enough assets. If a bank's assets ever drop below its liabilities, it is immediately liquidated, the shareholders lose everything, and insurance steps in to fix any gaps.
SBF has neither liquidity nor assets sufficient to cover its deposits, because most of his assets was a pile of worthless fartcoin that he printed for himself, but pretended that it was worth billions. And because he was not properly audited[1], his equity wasn't immediately liquidated to cover the gap, when the gap could still be covered.
... Also, reserve requirements have nothing to do with this particular failure case. They have everything to do with issuing loans, and the rate at which money is created (inflation!), but this wasn't a failure caused by issuing loans.
[1] It's weird how VC due diligence seems to go out the window as soon as their money starts funding a hot new crypto scam. It's almost as if they are playing a heads-we-win-big, tails-we-lose-nothing-but-our-investment game...
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#46> Alameda’s CEO is Caroline Ellison, a Stanford University graduate who like Mr. Bankman-Fried previously worked for quantitative trading firm Jane Street Capital. Alameda is based in Hong Kong, where FTX was headquartered before relocating to the Bahamas last year. Are the folks at Jane Street making money because they are smart, or because they use that perception to perpetuate some scam? I interact with a lot of H…
But you actually can make money honestly by finding mispricings in the market. Eg Buffet, or Burry during the housing crisis. You can also make money through arbitrage or other brief financial blips that occur in the market. These things aren't really scams in the normal sense.
> honestly by finding mispricings in the market. Eg Buffet, or Burry during the housing crisis.
Like who wants to be on the other side of a Jane Street transaction? Absolutely fucking nobody. If you're talking about "mispricings" during the "housing crisis," my dude, nobody wanted to sell their house to these dumb fucks! They were going to starve, they had no choice! How does that not seem like a scam of some sort to you? That's not honest money!
Those 20 year olds with Math degrees from Harvard. They don't fucking know anything dude, they did not discover a model, they did not make a model with a price that says price is lower than this other price, then persuade some people to make some bet. That's a parallel reconstruction, that's to justify whatever actual scam is going on. How do you not see that?
There's no common sense reason Math 55 equips you with some magical vision into pricing that actually winds up meaning anything. When it does, it might as well be random.
If the Mercers were good people, would they be Republicans? No dude. C'mon, use common sense. Don't get hung up on "normal sense." Use common sense.
If Sam Bankman-Fried was a good person, would he fuck $10b out of his own god damned customers' money?
No dude, he's made some unspecific, previously-bankrupt-and-now-literally-bankrupt promise to donate some money to something somewhere in the future, to whitewash the fact that he just went around fucking everyone.
I mean get a grip Effective Altruists, whose guts I hate too, and whose energy is the stereotype of the student I am talking about - the same students! - where they get this readily packaged "religion" that happens to align exactly with their meaning-bankrupt approach to life.
So don't even get on it with the "honest" money. I can find the venture capitalists who take some dumb person's money and then hand it over to something risky and interesting: I see how VC is honest, it's just not necessarily intelligent, but it's redeemable. But the Jane Street people: No dude. Not Warren Buffet, not Burry, none of those vultures.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#47Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#48> Alameda’s CEO is Caroline Ellison, a Stanford University graduate who like Mr. Bankman-Fried previously worked for quantitative trading firm Jane Street Capital. Alameda is based in Hong Kong, where FTX was headquartered before relocating to the Bahamas last year. Are the folks at Jane Street making money because they are smart, or because they use that perception to perpetuate some scam? I interact with a lot of H…
Income is a combination of two main factors: 1. The value you add to the economic 'stream' flowing around you 2. The amount you're able to divert out of that and into your own control These are influenced by a number of secondary factors: 1. Starting capital to buy tools and resources to increase your ability to contribute 2. The ability to help others increase their contributions, or less charitably, the ability to…
> 1. The value* you add to the economic 'stream' flowing around you
*Real or imagined value.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#49All these kids should be chucked in jail and seized of their assets. I don't care how smart they are.
Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall
#50This is one of the reasons downturns in markets are good. If the market would've just kept growing then SBF likely could've kept his ponzi scheme afloat without anyone noticing. The 2008 recession is what really stopped Bernie Madoff.
>ponzi scheme This is not a ponzi scheme. This is a good old "not firewalling your customer's money and your investment money" that everyone suffered from in 2008. The situation is cataphoric enough without people mis-using terms.
Even in 2008 that is not what happened.
Tell me which retail brokerages lost their customers assets because they gambled them away?
There is no glossing over the fact that all these crypto explosions are a result of largely re-implementing a pre-Fed, pre-FDIC, pre Great Depression style banking system with all its long-patched defects.