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FTX used corporate funds to purchase employee homes, new filing shows

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Re: FTX used corporate funds to purchase employee homes, new filing shows

#91

Post by lordnacho »

moneycantbuy wrote: post #28

how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?

I've had one of the mentioned firms invest in a place I was a partner at, and it surprises the hell out of me. I remember the investment guy would tell the rest of us "on Wednesday, wear a shirt and tie, X big name is coming" and that's what we'd do. And millions of questions about the strategy, though didn't know much about those details.

Current theory is there's some sort of investment U shape curve. Either people look the part and talk the part and get the part, or they look like they care so little that they must be the real deal. Wish I'd known this, because I am also able to play video games badly while wearing a T-shirt.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#92

Post by thefaux »

gruez wrote: post #68
ilrwbwrkhv wrote: post #9

Earlier quoted context omitted.

Nah. They have already siphoned enough money through shell companies to buy many houses. International money trails are almost impossible to disentangle.

>Nah. They have already siphoned enough money through shell companies to buy many houses. Is there any evidence of this? Sure, maybe wearing a t-shirt and flip-flops, driving a Corolla, and sleeping on beanbags is some sort of act to divert attention, but the simpler explanation is that he just fucked up. Not everything has to be a heist.

I don't know. We live in a society in which PR is king. Fake it til you make it. It seems that what FTX was really selling was the wunderkind genius, SBF. The beanbag, disheveled appearance, mit education and league of legends playing on pitch meetings all helped sell this image. Whether or not he was doing this consciously, he was playing this part to perfection and many people ate it up. My guess though is that if it hadn't been SBF, it would have been someone else who embodied this archetype in some other way. You can't disentangle SBF from the surrounding environment that enabled his rise.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#93

Post by pessimizer »

gruez wrote: post #83
ingenieros wrote: post #67

Earlier quoted context omitted.

Sam used the EA card and his generous donations to places like MIT's Media Lab in the same way Epstein did. This not only earned him tons of goodwill from the scientific community, but it also allowed him to rub shoulders with the likes of Tony Blair and Clinton. Who wouldn't want to invest in someone who is helping to make the world better and has all these aforementioned personalities and institutions helping to pr…

How does this relate to effective altruism as a whole? SBF does these things... therefore this kind of behavior is endemic in the effective altruism community?

That its community idealized and gathered around a man with no moral center who thought their entire movement was both a joke and a way to avoid scrutiny for his ongoing frauds. That, at the least, gives an indication that its intellectual underpinnings are not solid.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#94

Post by jaywalk »

Tenoke wrote: post #86
_fat_santa wrote: post #20

Earlier quoted context omitted.

My impression is Coinbase is the thing that FTX was claiming to be, a well run exchange. Looking back, them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. It's very easy to see the celebrity endorsements, puff pieces and the companies name plastered over a stadium as endorsements of how solid the business is, after all, a bunch of kids…

FTX wasn't just like Coinbase, they were a better exchange than Coinbase with more products. They just ruined that by using the exchange's money to bail out Alameda's unrelated investments. As far as I can tell if they hadn't done that Alameda would've died and FTX would've just kept being a good exchange.

They had to bail out Alameda because Alameda was propping up FTX. I have seen nothing that indicates FTX would have been fine standing alone, and plenty to indicate the opposite.

It was a giant scam. All of it.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#96

Post by [deleted] »

w23j wrote: post #74

Those are some candid remarks by the new CEO. "I have over 40 years of legal and restructuring experience. [...] Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of in…

[deleted]

Re: FTX used corporate funds to purchase employee homes, new filing shows

#97

Post by tqi »

jerf wrote: post #54
moneycantbuy wrote: post #28

how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?

That's one theory. Of course, given the depth of financial depravity on display here and the incredible thinness of the financial defense, one must also entertain the theory that they did do the due diligence, they were aware of how dangerous this was, and they invested anyhow for other reasons. And that those reasons are probably not good. There have been many cases where companies go to great lengths to do accounti…

Agree that while "they got swept up in the moment" is a reasonable theory (Hanlon's razor and what not), it also seem very plausible that they knew it was risky but not how risky, and felt like there was still a positive expected value because they would be able sell their coins early (I saw a tweet about how a16z is still up 5x on it's crypto investments because of this[1]).

[1] https://twitter.com/mims/status/1592934095117426689

Re: FTX used corporate funds to purchase employee homes, new filing shows

#99

Post by jaywalk »

gruez wrote: post #68
ilrwbwrkhv wrote: post #9

Earlier quoted context omitted.

Nah. They have already siphoned enough money through shell companies to buy many houses. International money trails are almost impossible to disentangle.

>Nah. They have already siphoned enough money through shell companies to buy many houses. Is there any evidence of this? Sure, maybe wearing a t-shirt and flip-flops, driving a Corolla, and sleeping on beanbags is some sort of act to divert attention, but the simpler explanation is that he just fucked up. Not everything has to be a heist.

Unless you think the new CEO's findings are incorrect (highly doubtful) or that FTX was buying houses for everybody except SBF himself (possible, but again doubtful), there is evidence right in front of you.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#100

Post by rchaud »

moneycantbuy wrote: post #28

how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?

They did plenty of due diligence to protect their own interests.

Their term sheets gave them a big chunk of the "limited supply" tokens. So even if the business model was trash, they could cash out well before the market for that coin collapsed.

It is similar to when investment banks underwrite stock issues; they purchase a chunk of the stock directly from the company at an agreed-upon price. The company gets guaranteed funds, and the bank is free to sell the shares on a secondary market and potentially pick up a profit.

What's missing in crypto are the safeguards that ensure that banks + companies do not collude on pump and dumps in the securities markets. These include quarterly financial audits and oversight from a watchdog agency like the SEC. Obviously they are far from perfect, but considering the anti-regulation nature of US business (even after the Great Depression), the fact they even exist is a small triumph.

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