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Sam Bankman-Fried tries to explain himself

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Re: Sam Bankman-Fried tries to explain himself

#321

Post by skybrian »

oldgradstudent wrote: post #41

OMG. "The dog ate my homework" would have been a better excuse. > like, "oh FTX doesn't have a bank account, I guess people can wire to Alameda's to get money on FTX" > ....3 years later... > 'oh fuck it looks like people wired $8b to Alameda and oh god we basically forgot about the stub account that corresponded to that and so it was never delivered to FTX' So they "basically" forgot about $8B not transferred to FTX…

It doesn't make sense and could all be lies, but to try to interpret it: they saw that the money arrived in the "poorly labelled account" and increased the customer's balance. But in some sense, the money never got to FTX and was still with Alameda. Or alternatively, FTX and Alameda commingled funds using the "poorly labelled account" and it was used for whatever payments either company needed to make, like withdrawals. This lack of separation means the balances were never really backed and it was a Ponzi all along.

Re: Sam Bankman-Fried tries to explain himself

#322

Post by lazide »

notch656a wrote: post #182
moralestapia wrote: post #164

Earlier quoted context omitted.

Judges won't side with him, like, at all. >The point is to argue that he was sloppy or inattentive, not a fraudster. If that's going to be his strategy there's still a lot of laughs to have at his expense. If only it were that easy, "oh I didn't knew I was crossing the border with a hundred pounds of cocaine in my car", like, how come they never thought of THAT? LOL

Is that not a valid defense? It's my understanding it's not uncommon for criminals to plant stuff on a marks car and then secretly grab it after it crosses the border. Possession of something should require your intent to control/keep it or at least knowledge it exists.

It is not - drug possession is a strict liability crime for that reason.

That said if it is some random retired couple with zero idea what is going on and 10 kilos of coke in their spare tire, as long as they co-operate, most gov’ts wouldn’t prosecute them.

Re: Sam Bankman-Fried tries to explain himself

#323

Post by bhouston »

HWR_14 wrote: post #318
DebtDeflation wrote: post #185

>Bankman-Fried says his No. 1 priority now is to try to raise $8 billion to make account holders whole. So, basically start up a new Ponzi. Because that's exactly what raising money from new investors to pay off existing investors is. Note he did NOT say "generate $8B in profit". At this point he needs to STFU, stop posting on social media, stop giving interviews in the media, and do whatever his lawyers tell him to.

No, this part isn't a ponzi. He has a lot of crypto and he wants someone to buy it all for $8 billion, so he can return that $8 billion to his customers. He says it's worth $9 billion down from $14 billion two weeks ago, so it's a great deal. Now, I would say it's worth far less, maybe hundreds of millions. This part is "if I firesale all the crypto, can I get enough fiat to pay back my customers so that there's no c…

I am not sure. If I owe $8B and I raise $8B and then give it to the people whom are owed $8B, what exactly am I giving the investors? Basically he has an $8B hole and let's say everything else nets to zero (e.g. assets - liabilities = -$8B.) No one in their right mind would give $8B to get what is otherwise worth nothing. This is a non-starter, especially now that the brand is also completely tarnished.

Re: Sam Bankman-Fried tries to explain himself

#324

Post by naveen99 »

expazl wrote: post #124

It this real? Is he really THAT stupid? His defense against "you took user deposits and gambled the money" is "No, I took user deposits, loaned them to myself and then gambled the money". I mean this is like nested layers of stupidity. You'd be stupid to do this, you'd be stupid to think it's not a major crime, you'd be stupid to think that this was in any way acts as a defense of your crime and you'd be stupid to ac…

Market makers on stock exchanges are allowed to naked short with abandon (more leverage than retail). Almeda was a market maker on an exchange that allowed 100x leverage to retail. leverage on margin is a loan. The shocking part is they took on so much leverage and lost, not that they were extended margin like any other market maker or even market participant on ftx.

Really not so different from archilego/ hwang or London metals exchange fiasco or gilt fiasco or oil going negative or cds fiasco or LTCM.

Re: Sam Bankman-Fried tries to explain himself

#325

Post by naveen99 »

hn_throwaway_99 wrote: post #140
dragontamer wrote: post #130

Earlier quoted context omitted.

> I imagine my question would be "hey, where'd all the deposits go?" But we know where they went. To Alameda Research. Then Alameda Research sent them somewhere else. The money isn't coming back, and Alameda Research's collateral of FTT tokens is worthless. So that's that, its done. Its actually quite a simple story here. FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that oth…

> FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that other group lost the money One minor clarification: "lent" should be "stole". If I can't pay my mortgage, I'm not allowed to go break in to my neighbor's house to steal some cash that I'll "borrow" in the hopes of paying back later. FTX's Ts&Cs we're very clear - customer deposits were not FTX's to lend. This is a simple, s…

How do you think margin works ?

Re: Sam Bankman-Fried tries to explain himself

#326

Post by cuteboy19 »

zach_garwood wrote: post #221
c7DJTLrn wrote: post #173

Earlier quoted context omitted.

I'm wondering if there is some kind of mass insanity occurring in the world right now with this and the behaviour of numerous influential figures.

Money is a helluva drug!

cheap money and low interest rates, to be precise

Re: Sam Bankman-Fried tries to explain himself

#327

Post by idontwantthis »

expazl wrote: post #124

It this real? Is he really THAT stupid? His defense against "you took user deposits and gambled the money" is "No, I took user deposits, loaned them to myself and then gambled the money". I mean this is like nested layers of stupidity. You'd be stupid to do this, you'd be stupid to think it's not a major crime, you'd be stupid to think that this was in any way acts as a defense of your crime and you'd be stupid to ac…

“That’s as good as cash”!

Re: Sam Bankman-Fried tries to explain himself

#328

Post by smsm42 »

fasthands9 wrote: post #209
roywiggins wrote: post #193

Earlier quoted context omitted.

Oh absolutely, it's just weird when that tone leaks into the text of the article. A sort of winking style that expects the reader to read between the lines, which is fine as far as it goes! But imagine beginning an article about Bernie Madoff in the weeks after his Ponzi's collapse pretending that you just wanted to learn more about his ethical principles.

I think its more akin to asking a religious leader who turns out to be a con artist what his true beliefs are. SBF's beliefs were integral to his success and the only reason some like me had every heard of him. Madoff actually did raise a lot of money by appealing to Judaism (hence the large investment by Brandeis) and I'm sure Jewish publications covered that angle of it right after it happened. A lot of people (inc…

> Madoff actually did raise a lot of money by appealing to Judaism

Affinity fraud, one of the oldest and truest tools in the conman's toolbox.

Re: Sam Bankman-Fried tries to explain himself

#329

Post by genmud »

superfrank wrote: post #250
ceejayoz wrote: post #240

Earlier quoted context omitted.

If they could afford to hire an on-staff performance coach, they probably could and should have hired an on-staff accountant to manage literally billions of dollars rather than having the CEO put things in a spreadsheet.

Agreed. He absolutely could have caught this if he had cared to, but my guess is he was too caught up in the "move fast and break things" mindset to really give a shit and that's why I fully support him going to jail for this. I don't think he intentionally lost peoples' money, but I think he was intentionally reckless and for that reason he should be prosecuted.

IIRC during some of the interviews with Madoff, he didn’t “intentionally” lose peoples money either. Fraud like this is often many little “well, I just need to $x and everything will be OK”.

Re: Sam Bankman-Fried tries to explain himself

#330

Post by chaosbolt »

Honestly I've been saying lots of bad things about him, but at least he dropped the facade and was a little honest, the thing he said about other exchanges and even traditional finance is true, a bank run on any exchange would cause the same result, do you think Coinbase just won't do fractional reserve? Of course they are... and people experience it at every single market fluctuation where withdrawals get paused for 6 hours at times, and of course traditional finance is even worse, they print trillions, lend them to the government who then gives it to Blackrock to buy company bonds, and Blackrock loves ESG, and even SBF knows that shit is a meme. Then we get to pay interests on that printed loan through taxes, but also through inflation... But hey like Carlin said, it's a big club and you're not in it.
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