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The Sam Bankman-Fried empire crumbled. What happened?

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Re: The Sam Bankman-Fried empire crumbled. What happened?

#181

Post by porknubbins »

seertaak wrote: post #78
akgerber wrote: post #22

Earlier quoted context omitted.

Reminds me of the documentary Weiner, which was supposed to be a comeback film about Anthony Weiner's run for NYC mayor but instead became an intimate portrait of a man's life (as well as that of his unfortunate wife) utterly collapsing.

True, only that Weiner was surprisingly endearing in that documentary. Despite at the time being a staunch republican, it's hard not to like the guy, and when the fall comes you're almost rooting for him. But SBF? The last interview I saw him give was I think with Levine; it was shocking because SBF was describing whence crypto derives its value. And Levine remarked that SBF was describing a Ponzi scheme. For me, tha…

Sometimes when you see a guy like SBF who fits the MIT hacker/ disheveled smart guy quant stereotype a little too perfectly you have to ask yourself “how much of this is an act?” Most real geniuses I know look unremarkable or boring. One place where people are masters of dressing and acting the part to get rich is Wallstreet though.

Re: The Sam Bankman-Fried empire crumbled. What happened?

#182

Post by neural_thing »

moralestapia wrote: post #148
dabeeeenster wrote: post #14

https://twitter.com/SBF_FTX/status/1590709172936798208 "5) The full story here is one I'm still fleshing out every detail of, but as a very high level, I fucked up twice. The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users' margin. I thought it was way lower." Amazing

Does he has absolute no good counselors? Does he get advice from his roomies in the Bahamas? This twitter thread, plus some others tweets he has deleted now, could get him into some real trouble.

His legal and compliance team quit

Re: The Sam Bankman-Fried empire crumbled. What happened?

#183

Post by diab0lic »

qeternity wrote: post #176
diab0lic wrote: post #162

Earlier quoted context omitted.

Nobody ever claimed they did, but it is an investment, with insurance. If you want something more financial a short vertical spread [0] is a strategy in which you are purchasing insurance on the risk (investment) you just took (made). There are many such investments of this form. [0] https://www.optionsplaybook.com/option-strategies/short-call...

What? Shorting call spreads is not how most people would protect a position. Perhaps you're thinking of a collar? (short calls to fund puts?)

I’m not saying people sell these for insurance. One of the two options in this spread IS insurance.

A short call spread is someone selling calls (option A in the link) and buying insurance on said sale (option B in the link).

Re: The Sam Bankman-Fried empire crumbled. What happened?

#184

Post by moistly »

labrador wrote: post #42

I'm having a hard time understanding why organizations like the Ontario Teachers’ Pension Plan has money in uninsured crypto funds. Somebody has some explaining to do. Sequoia Writes Off Entire $210MM FTX Investment; Here Are All The Other Funds That Are Losing Billions In FTX https://www.zerohedge.com/markets/here-are-all-funds-are-abo... Edit: 25 billion dollars up in smoke Ontario Teachers’ Pension Plan faces a hi…

Because it's a tiny, infinitesimal part of their porfolio, a fraction of a percent, but one that has a many orders-of-magnitude potential gain.

When dealing with as much money as the OTPP has, you have to form a very broad risk profile: for every super-secure, government-guaranteed dollar, spend a fraction of a penny on a super-risky but absolutely humongous payoff.

Re: The Sam Bankman-Fried empire crumbled. What happened?

#186

Post by brycelarkin »

mewse-hn wrote: post #139
labrador wrote: post #42

I'm having a hard time understanding why organizations like the Ontario Teachers’ Pension Plan has money in uninsured crypto funds. Somebody has some explaining to do. Sequoia Writes Off Entire $210MM FTX Investment; Here Are All The Other Funds That Are Losing Billions In FTX https://www.zerohedge.com/markets/here-are-all-funds-are-abo... Edit: 25 billion dollars up in smoke Ontario Teachers’ Pension Plan faces a hi…

He said the investment was part of Teachers’ strategy to learn about the crypto business and whether it gives the right balance of risks and returns. “I don’t think we have the answer to that question yet,” Mr. Taylor said. Holy shit.. they were openly investing in something they don't understand??

Investing a small amount in an industry to learn about it is pretty common with institutional investors.

Re: The Sam Bankman-Fried empire crumbled. What happened?

#187

Post by tartoran »

brycelarkin wrote: post #186
mewse-hn wrote: post #139

Earlier quoted context omitted.

He said the investment was part of Teachers’ strategy to learn about the crypto business and whether it gives the right balance of risks and returns. “I don’t think we have the answer to that question yet,” Mr. Taylor said. Holy shit.. they were openly investing in something they don't understand??

Investing a small amount in an industry to learn about it is pretty common with institutional investors.

But no more than $100

Re: The Sam Bankman-Fried empire crumbled. What happened?

#188

Post by adamisom »

wombatpm wrote: post #134
adamisom wrote: post #96

Earlier quoted context omitted.

One remark I have on anti-"ends justify the means" is they always ignore the ends. The "ends" might literally be saving real people's lives, whose lives have value. I'm sure there are good arguments against the idea, but you must engage with the ends that you propose we forsake, or you're just not serious.

If curing cancer for the rest of humanity now and forever required knowingly experimenting on and absolutely killing a certain number of people now, how many people could you justify with an Effective-Altruism ethical framework?

Not meaning to be inflammatory but the same scenario exists in flipped terms: how many people would you let die of cancer rather than, idk, eat the downside of running riskier experiments.

There’s no privileged neutral really. Consequentialism just owns that. Now, that might be a separate question from whether society should act as if there’s a privileged neutral (ie be nonconsequentialist).

Re: The Sam Bankman-Fried empire crumbled. What happened?

#189

Post by ETH_start »

antasvara wrote: post #52
ARandumGuy wrote: post #11

I think this should be a warning to anyone still invested in other crypto companies or exchanges. Everything seems like it's going well, until the music stops and the exchange is insolvent. FTX is not unique. A lot of crypto exchanges are doing just as much shady stuff. When you put your money with these companies, you're betting that "no really, this one is above board!" That's an extremely risky game to play when t…

In a lot of ways, crypto is just relearning the basic lessons of finance that banks and corporations learned decades ago. Things like "don't allow customers to use your company's assets as collateral" and "using a bunch of leverage on volatile crypto" are much less frequent in traditional finance, specifically due to regulation or the fact that these strategies have tried and failed before. This isn't to say that dec…

>>This isn't to say that decentralized finance is exactly the same as traditional finance, because it isn't.

This has nothing to do with decentralized finance. FTX was a traditional centralized financial institution catering to crypto.

The leading DeFi apps have had no problems this cycle, and that's because they're fully on-chain, with every transaction validated atomically/in-real-time to ensure its business logic integrity. DeFi's transparency and accountability is what the best CeFi firms strive for.

The big risk with DeFi is the possibility of a smart contract vulnerability, but this diminishes over time as these apps have their source code reviewed by more people and go through more real world battle-testing.

Re: The Sam Bankman-Fried empire crumbled. What happened?

#190

Post by jasonwatkinspdx »

dfghbbjiiugb wrote: post #117
seertaak wrote: post #78

Earlier quoted context omitted.

True, only that Weiner was surprisingly endearing in that documentary. Despite at the time being a staunch republican, it's hard not to like the guy, and when the fall comes you're almost rooting for him. But SBF? The last interview I saw him give was I think with Levine; it was shocking because SBF was describing whence crypto derives its value. And Levine remarked that SBF was describing a Ponzi scheme. For me, tha…

Sorry but this reads to me like someone who doesn't really know what they're talking about. First, I think you have totally mischaracterized or misunderstood that interview. Second, he is obviously a smart guy; I'm not claiming he's a unique generational genius but there are plenty of third party validations of intelligence (MIT, Jane Street) even if you can't tell from the way he speaks. Finally the comment "the rea…

A Phd is a liability not an asset on wall street. Source: my brother was convinced to abandon his PhD ABD by two friends who did the exact same thing a year or two ahead of him.

The real "badasses" if you insist on calling them that, work about a dozen years for a fund, hit their number, and promptly retire to do whatever the hell they want for the rest of their life. You don't read much about them vs the obsessive people who keep playing the game for the high score contest though, because there's no drama to cover.

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