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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

#571

Post by 1995moz »

wslh wrote: post #288
chlodwig wrote: post #151

From the article: "FTX Chief Executive Sam Bankman-Fried said in investor meetings this week that Alameda owes FTX about $10 billion, people familiar with the matter said. FTX extended loans to Alameda using money that customers had deposited on the exchange for trading purposes, a decision that Mr. Bankman-Fried described as a poor judgment call, one of the people said." In the FTX International terms of service ( h…

How many years could Sam Bankman-Fried get in jail? It is also interesting to read on his Wikipedia profile [1] about "Bankman-Fried is a supporter of effective altruism and claims to pursue earning to give as an altruistic career. He is a member of Giving What We Can and has claimed that he plans to donate the great majority of his wealth to effective charities over the course of his life.". Having direct access to…

Whenever a person in their mental framework have a very high moral goal, it is easy for them to justify to themselves, less-moral actions. Almost impossible for it to not happen.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#572

Post by seanhunter »

eruleman wrote: post #363
wslh wrote: post #288

Earlier quoted context omitted.

How many years could Sam Bankman-Fried get in jail? It is also interesting to read on his Wikipedia profile [1] about "Bankman-Fried is a supporter of effective altruism and claims to pursue earning to give as an altruistic career. He is a member of Giving What We Can and has claimed that he plans to donate the great majority of his wealth to effective charities over the course of his life.". Having direct access to…

Using client funds to go double or nothing is ethical in utilianism. When the ends justify the means, anything goes.

Although this is a common criticism of utilitarianism in the Bentham traditition, it is not in fact how utilitarian ethics work as a whole. For example John Stuart Mill would say that whether or not an act in a specific case is ethical can be decided by whether or not it is in violation of a general rule, and whether or not the consequences of the general rule are positive or not. Taking clients funds and using them to go double or nothing would clearly lead to lack of trustworthiness and the consequences of this would be clearly negative in general so this is very clearly unethical according to Mill.[1]

[1] https://www.britannica.com/topic/utilitarianism-philosophy

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#573

Post by 100001_100011 »

LeafGuild wrote: post #423
siftrics wrote: post #354

Earlier quoted context omitted.

This is not true at all. If you are the only person in the world with the private key to your coins, you are the only person who can move them. Period. FTX is a centralized entity that custodies funds. It has nothing to do with a blockchain, which could have completely prevented this. There are many examples of decentralized exchanges (DEXs) for which it is mathematically impossible to loan out depositor's funds with…

>If you are the only person in the world with the private key to your coins, you are the only person who can move them. Period. This is completely and utterly irrelevant and has not stopped anyone from performing massive fraud. Just look at the long history of crypto scams. They still happened constantly despite blockchains having that feature. It's just impossible for a blockchain to prevent these frauds. It doesn't…

I don't find this argument coherent.

Did someone pay you to come here and write these things?

Are you a lawyer?

Are you a crook?

> This is completely and utterly irrelevant and has not stopped anyone from performing massive fraud.

So is fiat currency.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#574

Post by fellellor »

astrange wrote: post #502
2muchcoffeeman wrote: post #499

Earlier quoted context omitted.

They forked the blockchain right? So the person still has them on the old chain.

And what are they good for there?

It's a democratic decision. Everyone agreed that chain is no good. Just like everyone agrees on the current state of the chain.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#575

Post by rabuse »

leet_thow wrote: post #373
siftrics wrote: post #361

Earlier quoted context omitted.

Literally ~$50 million went straight to the Democratic Party as direct campaign donations. He stated he intended to give up to $1 billion to democrats. Millions more went to various other people in power who will now decide the fate of SBF. Sources: https://www.cnbc.com/2022/10/14/sam-bankman-fried-backtracks... His Wikipedia page.

Interesting. I was reading his bio and noticed the do-gooder activities he and his family are involved with. Funny how they end up defrauding people in the long run.

Him and Hillary Clinton would get along great. Reminds me of her Haiti fraud.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#576

Post by nfw2 »

laluser wrote: post #13

The 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.

This is the part of the thread that killed me: "FTX International currently has a total market value of assets/collateral higher than client deposits (moves with prices!)."

He is counting the 10 billion he loaned to himself and then lost as an asset for FTX that just happens to be illiquid right now. Yeah it's very illiquid lol

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#577

Post by [deleted] »

tru3_power wrote: post #507
vanattab wrote: post #500

Earlier quoted context omitted.

>It is also a regulatory failure, there are reasons this kind of dipping into customer funds is quite illegal in the US. FTX should not have been reachable by US citizens (funding should have been impossible) _or_ FTX should have been sanctioned _by_ the US I wonder if Sam being the 2nd biggest funder of Democrats has anything to due with this...

Source?

[deleted]

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#578

Post by zeven7 »

siftrics wrote: post #358
woah wrote: post #351

Earlier quoted context omitted.

This has nothing to do with Bitcoin or not. Bitcoin was probably one of FTXs largest assets. Every cryptocurrency allows self custody, as this is core to the concept.

It has everything to do with Bitcoin. If this was all done on-chain, users would have sole custody over their funds and no one else in the entire world, including SBF, would be able to move them or loan them out.

It can't be done on Bitcoin.

It can be done on Ethereum.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#579

Post by mirzap »

LeafGuild wrote: post #446
legutierr wrote: post #306

Earlier quoted context omitted.

This is the whole idea behind DeFi. All trading is done autonomously on-chain, and owners retain custody throughout.

That's a marketing line, it's not true. Nobody actually has any custody of anything in crypto. The value of the tokens is completely and totally dependent on a consensus of crypto miners doing their job within the parameters of the system, assuming you want them to maintain a price and trading volume that's favorable to the token holders. If the majority of miners suddenly go bust due to outside circumstances, or the…

You obviously have no idea what you're talking about. Even if all miners right now colluded and tried to take bitcoin from my wallet - they couldn't. Miners can collude and try to double spend the transaction, hurting centralized exchange for example, but they can not ever take funds from a wallet. You own what's in your wallet. Also, price doesn't depend on miners. Very often in these bear markets miners mine with huge loss. Many give up in those circumstances. If they had any impact on price we wouldn't see so many miners go out of the business.

Re: FTX tapped into customer accounts to fund risky bets, setting up its downfall

#580

Post by ralph84 »

TedDoesntTalk wrote: post #517
cmckn wrote: post #436

Earlier quoted context omitted.

It’s the only way any popular token has met trading demand; the vast majority of transactions have to happen off-chain, or the thing would fall over. (but yeah it’s wild)

Brokerage houses and market makers do the same.

Ownership of publicly-traded stocks basically never changes. Cede and Company owns all of the stock.
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