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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

#441

Post by jerf »

lern_too_spel wrote: post #294
jerf wrote: post #54

Earlier quoted context omitted.

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…

He did not open his books to investors. https://www.nytimes.com/2022/11/11/technology/ftx-investors-... “Sam Bankman-Fried’s pitch to investors was not much of a pitch: It was a take-it-or-leave-it offer. “In meetings to raise money for his cryptocurrency exchange FTX over the last year, the entrepreneur left little room for negotiation, two investors said. FTX was his company, Mr. Bankman-Fried told them, and he pla…

Is that the whiff of Red Flag perfume I smell?

A meta reply to several of the commentors here is that we're not talking about JoeBob's Angel Investing who got lucky with his bait shack and has a few hundred thousand more than he knows what to do with to throw around. These are nominally the top tech investors in the world, along with lots of other people who should know what they are doing. Investing in a business in a KNOWN risky and volatile area calls for MORE due diligence, not less. If they didn't do it, we are certainly in the position of trying to figure out the exact distribution between stupid and evil. "Oh, poor us, we asked him to show us the books and he said 'no' and we just couldn't help but throw tens of millions of dollars at him" is bullshit. This isn't hopskotch at the local elementary school. The only even remotely sane conclusion to come to in that circumstance is not only "no", but a NO! yelled back over your shoulder as you flee as fast as your feet will take you.

This is failure so profound that your brain is having trouble wrapping itself around it and you are thinking to yourself, surely they knew what they were doing and I'm just not seeing it? No. Have more confidence in yourself and less in others of supposed authority.

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

#442

Post by three_seagrass »

SauciestGNU wrote: post #219
three_seagrass wrote: post #130

Earlier quoted context omitted.

That's at least one strong reason - VCs look at the person as much as the business. Crypto was filled with sleazy car-salesman "investor" types at the time Alameda Research was looking for funding. So when in came someone with a Jane Street background and not a single flashy Ferrari in their driveway, the dam broke on VCs finally being able to pour money into the crypto space on a decent looking founder.

If that's how unsophisticated these VC operations are then I think we'll see a lot of them lose their shirts in the coming macroeconomic environment. Which will consequently make future funding rounds all the more difficult.

VCs only need to roll a crit hit on a 1d20 to stay afloat.

They're not going to lose their shirts, not as long as insanely wealthy people like to gamble.

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

#443

Post by three_seagrass »

boppo1 wrote: post #439
oarabbus_ wrote: post #415

Earlier quoted context omitted.

Just today the Fed governors stated inflation has not been sufficiently curtailed... https://www.cnbc.com/2022/11/17/feds-bullard-says-rate-hikes...

Sure, I'm just curious how we'll deal with interest payments on our debt, especially since our economy has evolved to thrive on low rates. The hikes are necessary, but I think they're going to kill a bunch of BS jobs, meanwhile we'll have to raise taxes to service the debt. Gonna be real interesting.

Nation debt isn't like a personal checkbook. As long as the economy grows just as fast or faster than the debt over time, then they're okay.

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

#444

Post by three_seagrass »

nullc wrote: post #291
three_seagrass wrote: post #130

Earlier quoted context omitted.

That's at least one strong reason - VCs look at the person as much as the business. Crypto was filled with sleazy car-salesman "investor" types at the time Alameda Research was looking for funding. So when in came someone with a Jane Street background and not a single flashy Ferrari in their driveway, the dam broke on VCs finally being able to pour money into the crypto space on a decent looking founder.

SBF had huge sleaze vibes, so I don't know if your logic applies. > and not a single flashy Ferrari the article mentions his $30 million dollar penthouse ... It seems the only place the flashy assets didn't exist was in the press coverage put out by organizations SBF gave money to...

SBF branding himself as an effective altruist and even purposely dressed in the silicon valley "genius" attire. His condo in the bahamas was after he hit it big and needed to be close to Washington to work on crypto regulation.

There's a huge gap between that and the majority of crypto founders at the time.

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

#445

Post by lern_too_spel »

jerf wrote: post #441
lern_too_spel wrote: post #294

Earlier quoted context omitted.

He did not open his books to investors. https://www.nytimes.com/2022/11/11/technology/ftx-investors-... “Sam Bankman-Fried’s pitch to investors was not much of a pitch: It was a take-it-or-leave-it offer. “In meetings to raise money for his cryptocurrency exchange FTX over the last year, the entrepreneur left little room for negotiation, two investors said. FTX was his company, Mr. Bankman-Fried told them, and he pla…

Is that the whiff of Red Flag perfume I smell? A meta reply to several of the commentors here is that we're not talking about JoeBob's Angel Investing who got lucky with his bait shack and has a few hundred thousand more than he knows what to do with to throw around. These are nominally the top tech investors in the world, along with lots of other people who should know what they are doing. Investing in a business in…

This isn't an isolated incident. Theranos had no product. Many investors invest in founders instead of the idea, thinking that good founders know when to pivot. Occasionally, a founder doubles down on a bad idea and hides that they've figured out it was a bad idea from investors, but it is hard to predict if a founder will do this ahead of time.

That said, my own opinion is that anybody who invests in the crypto space is either a scammer or a rube.

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

#446

Post by boppo1 »

three_seagrass wrote: post #443
boppo1 wrote: post #439

Earlier quoted context omitted.

Sure, I'm just curious how we'll deal with interest payments on our debt, especially since our economy has evolved to thrive on low rates. The hikes are necessary, but I think they're going to kill a bunch of BS jobs, meanwhile we'll have to raise taxes to service the debt. Gonna be real interesting.

Nation debt isn't like a personal checkbook. As long as the economy grows just as fast or faster than the debt over time, then they're okay.

Sure, but we made the economy grow by keeping debt cheap. Now debt will be expensive and all signs point to the economy not growing in such an environment.

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

#448

Post by smegger001 »

moneycantbuy wrote: post #28

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

it a symptom of underlying economic issues. There is so much economic disparity between the top of the economy and the economic have nots. the 0.001% are running out of places to put money. Money is being poured into iffy startups and new economic vehicles, crypto being at the intersection of those is particularly attractive to those with more money than they know what to do with. place like FTX WeWork and Theranos and more have millions thrown at them with little oversight or due diligence because why not they have to put money somewhere. bond interest rates have been historically low for years to the point where some governments were issuing negative interest rate bonds. If you have hundreds of millions and your alternative is to loose money twice over (once to interest rates and again to inflation) Why not throw it at long shot investments with potentially high returns, especially when you may be able to liquidate your shares before they companies crash.

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

#449

Post by johnsimer »

dqft wrote: post #131
vkou wrote: post #108

Earlier quoted context omitted.

It's strange to see EA credited as both the reason for why this went on for so long with no oversight, and then damned in a 'ding dong the witch is dead' manner after it fell apart. When a confidence man and thief loudly and proudly shouts out a religious affiliation as his guiding star, we generally don't go ahead and condemn the religion for his behavior. (Doing so is a great way to get canceled. At most, we blame…

Because "EA" as a thing is stupid and redundant even after you recognize that altruism alone is overrated. Its just obvious moralistic garbage.

Altruism is overrated?

If you were poor or otherwise suffering would you not want help from someone richer than you?

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

#450

Post by [deleted] »

jerf wrote: post #160
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 inte…

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