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

cnbc.com

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

#151

Post by jjulius »

bkishan wrote: post #40
bluedevil2k wrote: post #11

Earlier quoted context omitted.

They’re not impossible any more and with this getting so much press and the US government likely looking to make an example of SBF, look to get a very detailed trail of where all the $ went. I mean, do you really think, factoring in that he had no accountants and no compliance at all, that he somehow had some of the best money launderers and embezzlers in the world? I highly doubt it, it was probably as amateur as th…

> the US government likely looking to make an example of SBF. Considering the silence from top officials, I don't think this is going to be true. Don't forget he donated ~$50M to the democrats for the mid-terms and was the second biggest dem donor.

>From 1991 to 2008, Bernie and Ruth Madoff contributed about $240,000 to federal candidates, parties, and committees, including $25,000 a year from 2005 through 2008 to the Democratic Senatorial Campaign Committee.[1]

The "Government access" portion of Madoff's Wikipedia page goes on to detail high-level government connections akin to what SBF had. There's historical precedence for them burning someone just like SBF.

[1]https://en.wikipedia.org/wiki/Bernie_Madoff#Government_acces...

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

#152

Post by memish »

TheAlchemist wrote: post #129

How can anybody be surprised ? The 2 biggest players - Tether and Binance are much worse and still very well alive. Both are several times bigger (on paper) than FTX. Binance is already banned in most countries and without headquarters. Do anybody believes they have a proper gouvernance ? Tether was proved to lie about it réserves several times, recently started publishing attestations about reserves - attestations t…

What's interesting is how little scrutiny was applied to FTX and they're the one who lost people's money. Tether has been under intense scrutiny for years and is still working just fine. No one has lost their money in Tether despite huge outflow events.

There's a lesson in here.

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

#153

Post by mikeyouse »

gdw2 wrote: post #126
boh wrote: post #114

In a separate article Ray also said: “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,” And this is the same man who oversaw the liquidation of Enron. "Ray said he had found at FTX international, FTX US and Bankman-Fried’s Alameda Research trading company “compromised systems integrity”, “faulty regulatory o…

I wonder if this could result in another round of costly SOX-like regulations?

I really doubt it - it was just a dumb unregulated offshore startup doing a bunch of stuff that's already illegal. SOX wouldn’t help since FTX apparently didn’t have anything resembling audited financials vs Enron, a public company that abused GAAP to generate misleading financials. It would be a much different story if FTX had gone public or if they had a reputable audit firm vouching for them.

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

#154

Post by PragmaticPulp »

gdw2 wrote: post #126
boh wrote: post #114

In a separate article Ray also said: “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,” And this is the same man who oversaw the liquidation of Enron. "Ray said he had found at FTX international, FTX US and Bankman-Fried’s Alameda Research trading company “compromised systems integrity”, “faulty regulatory o…

I wonder if this could result in another round of costly SOX-like regulations?

Why would it? FTX wasn’t playing by existing US regulations anyway.

Even the most basic regulations would have squashed FTX’s entire fraud from the start. They weren’t bothering to play by any rules because they knew they could get away with it.

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

#155

Post by shawabawa3 »

anotheracctfo wrote: post #145
bluedevil2k wrote: post #66

Earlier quoted context omitted.

It was never well capitalized. They used their own made up token as an asset and assigned a fake inflated valuation to it.

It's wild to me that they can basically print counterfeit USD and put it on their SEC filings, and the Treasury is just okay with it.

SEC filings? They never made any SEC filings

The vast majority of their business was based in the Bahamas and Antigua to avoid US regulators

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

#156

Post by shawabawa3 »

rightbyte wrote: post #137
emehex wrote: post #22

Earlier quoted context omitted.

Here it is! https://d1e00ek4ebabms.cloudfront.net/production/7ab64a3b-6c...

"Poorly labeled account"? Like, he claims he forgot some liabilities existed? With about the same size as their customers' founds?

From the latest bankruptcy filing it seems like they had an Alameda bank account that they used for FTX deposits to save time as there was no FTX bank account at the time

It seems all $8B of deposits to this account were double credited to both FTX and Alameda

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

#157

Post by PragmaticPulp »

memish wrote: post #152
TheAlchemist wrote: post #129

How can anybody be surprised ? The 2 biggest players - Tether and Binance are much worse and still very well alive. Both are several times bigger (on paper) than FTX. Binance is already banned in most countries and without headquarters. Do anybody believes they have a proper gouvernance ? Tether was proved to lie about it réserves several times, recently started publishing attestations about reserves - attestations t…

What's interesting is how little scrutiny was applied to FTX and they're the one who lost people's money. Tether has been under intense scrutiny for years and is still working just fine. No one has lost their money in Tether despite huge outflow events. There's a lesson in here.

FTX is younger than Tether and it was actually subject to scrutiny.

Tether has also been subject to scrutiny and was found, at the time, to be lying about their reserves and backing. And this was before they printed a lot more! It doesn’t make sense to write them off as having withstood the test of time when they literally failed to stand up to the first legal scrutiny that got access to their books.

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

#158

Post by whatshisface »

PragmaticPulp wrote: post #154
gdw2 wrote: post #126

Earlier quoted context omitted.

I wonder if this could result in another round of costly SOX-like regulations?

Why would it? FTX wasn’t playing by existing US regulations anyway. Even the most basic regulations would have squashed FTX’s entire fraud from the start. They weren’t bothering to play by any rules because they knew they could get away with it.

Regulations didn't stop Enron.

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

#159

Post by HDThoreaun »

pessimizer wrote: post #93
gruez wrote: post #83

Earlier quoted context omitted.

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.

SBF got tons of pushback in the EA community. He gave jobs to some of the actual thought leaders so they tried to give him some credit, but there are tons and tons of posts on the EA forum about how Sam's extreme focus on long termism made EA too easy to meme on, and even more posts about how his political shenanigans were likely to cause major issues for the movement.

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

#160

Post by jerf »

boh wrote: post #114

In a separate article Ray also said: “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,” And this is the same man who oversaw the liquidation of Enron. "Ray said he had found at FTX international, FTX US and Bankman-Fried’s Alameda Research trading company “compromised systems integrity”, “faulty regulatory o…

The filing is amazing: https://pacer-documents.s3.amazonaws.com/33/188450/042020648...

Don't forget to read this with the "diplomatic/legal/lawyer" mindset. These are not internet comments, these are legal filings. Sentences like "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 inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented." are not the words of someone seeking updoots, this is a very serious individual in a serious legal filing. Read this way this entire filing is filled with zingers and knee-slappers. Truly an amazing work.

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