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FTX’s Sam Bankman-Fried cashed out $300M during funding spree

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Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#171

Post by slibhb »

gruez wrote: post #170
slibhb wrote: post #167

Earlier quoted context omitted.

The argument is really simple. To restate: Why should I trust my (or other people's) ability to act to maximize long term good when I (or other people) aren't smart enough to avoid landmines like FTX?

1. Why should you trust Newton's works (eg. theory of gravity or calculus) when he isn't smart enough to avoid landmines like the south sea bubble[1]? 2. My previous comment asserts that SBF/FTX was reasonably clean prior to the collapse. If someone seemed reasonably clean, but then it turned out that he was a Bad Person or whatever, should everyone associated with that person be chastised for not being "smart enough…

Simpler? A premise of EA is that people can make choices that maximize the good in the long run. Events like this should make us doubt that premise. The proponents of EA can't do it. Who can? I would say: no one, and serious moral philosophies should take that into account.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#172

Post by acjohnson55 »

jliptzin wrote: post #109
acjohnson55 wrote: post #98

Earlier quoted context omitted.

I'm not sure what your point is. You can invest in whatever you want in the Bahamas without being accredited (as far as I know). If anything, the blowup of FTX seems to justify why investments in unregistered securities in US-based companies aren't allowed to be marketed to unaccredited investors. Are you saying we should allow companies with the level of oversight FTX had more free reign to operate and market their…

I am saying the whole “accredited investor” thing should be abolished

I disagree. It would be one thing if we could say that a person's decision to get into an ultrarisky investment only affected themselves, but that's not true. When investors get scammed or a high risk venture simply fails, there's a blast radius. People getting ruined strains families, social groups, and organizations. Then the government has to step in in all sorts of ways to help clean up the mess.

The most experienced firms in the world got sucked into FTX. That's going to happen from time to time, and they're built to absorb the losses with limited social fallout.

Now, I do think that the rules as they are right now aren't great. They should be focused more on containing risk (we do this with systematically important financial institutions) and evaluating preparedness from a knowledge perspective.

The other thing you could do is try to increase access to registered security status from the venture side, with frameworks for disclosure, reporting, and accountability that don't require hiring millions of dollars worth of professional banking, accounting, and legal services.

[1] https://en.wikipedia.org/wiki/Systemically_important_financi...

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#173

Post by wmf »

jancsika wrote: post #157
gruez wrote: post #126

Earlier quoted context omitted.

1. The underlying logic behind earning to give is sound. You flying over to Africa or whatever to do charitable activities (digging a well?) is obviously going to be less impactful than you working at some high paid white collar job and then donating the money to pay some local laborers to do the same job. 2. Contrary to what you think, there's nothing about effective altruism that requires/wants you to donate to eff…

> 1. The underlying logic behind earning to give is sound. You flying over to Africa or whatever to do charitable activities (digging a well?) is obviously going to be less impactful than you working at some high paid white collar job and then donating the money to pay some local laborers to do the same job. It isn't obvious, and I'm skeptical both by cases like this and by the lack of domain expertise of a white-col…

the lack of domain expertise of a white-collar worker to be able to judge the veracity of charitable activities

That's why the first thing EA did is evaluate which charities are most effective. In a few seconds you can find things like https://www.givingwhatwecan.org/donate/organizations

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#174

Post by srj »

karmakurtisaani wrote: post #30
slap_shot wrote: post #5

> the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals. The most fascinating part of this whole story to me is just how few checks and balances there were in this company. Even without a board, did major investors not get his quarterly financials? If the leaked balance sheet was any indication of their level financial engineering cap…

I think the reason is that he was seen as a financial genius boy wonder who just understood crypto better than anyone from the "old guard". So he got away with wildly inappropriate things. More generally, we (as a society) seem to be worshiping those who make a fortune, and forget that they too are just as faulty as the rest of us. Initial innovative success gets projected to mythical proportions, and once the invest…

Reading about SBF it seems like he was just doing arbitrage trading crypto between Asia and the US. When new players arrived that money fountain dried up and he turned to riskier ventures which blundered. None of that seems particularly brilliant, yet he was perceived as such. Plus he was a billionaire giving his money away. I think people just want heroes and ignore the red flags.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#175

Post by knorker »

p0pcult wrote: post #60
knorker wrote: post #50

Earlier quoted context omitted.

It wouldn't be an indictment of DeFi/cryptocurrencies if it weren't for... you know... this being basically the main pattern used in all of DeFi/cryptocurrencies. https://web3isgoinggreat.com/

You're conflating coin count with their relative size. This is not the main pattern in either BTC or ETH.

I think it is fair to BTC and ETH, just by saying MtGox and DAO split.

The former was, what, 4% of all BTC that will ever be, and the latter was socialism for those close to the developers, capitalism for everyone else.

Those were really big deals. It's just that they happened when it was less mainstream. Doesn't make it not a pattern.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#176

Post by bmitc »

thepasswordis wrote: post #42

Just a general statement on people commenting on this saga: Sam wasn't doing effective altruism. He was lying about doing effective altruism. It's weird to me that people talk about this as an indictment of EA...but this rings similar to me as claiming that this is an indictment of DeFi or cryptocurrency generally. Sam/Caroline weren't doing DeFi, and neither were they really doing anything related to cryptocurrency.…

This type of scam likely couldn’t have happened for so long in today’s world with standard currencies and securities because those are tightly regulated and controlled. So yes, their scam does have something to do with cryptocurrencies, especially since they were minting their own in FTT.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#179

Post by LeafItAlone »

0xy wrote: post #153
threeseed wrote: post #124

Earlier quoted context omitted.

Sequoia was also backing Musk's takeover of Twitter. Not sure if they ended up investing. If they did then their record is looking pretty poor right now.

Twitter is at peak MAUs and according to previous financial statements should be cash flow positive after personnel changes. Seems like they invested in a business which was almost immediately switched into a profitable enterprise on an upward trajectory. What am I missing? Or are you making a prediction that is the opposite of available evidence?

Peak MAU means nothing if they can’t keep investors or get those people to pay (to make up for the advertisers they may be losing).

It is likely at peak MAU because a lot of people want to be “in” during what they _think_ is the crash (think of crypto a year ago when it was a peak, but now it’s way down). Current MAU may or may not be reflective of MAU in a month or two since the reason is so weird.

The old financial statements are probably meaningless at this point given how much has changed and how many advertisers have reportedly pulled out.

Not saying that I think Twitter will “fail” or even that it won’t be profitable. Just saying your metric is likely meaningless and is just a snapshot of a weird time.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#180

Post by 0xy »

LeafItAlone wrote: post #179
0xy wrote: post #153

Earlier quoted context omitted.

Twitter is at peak MAUs and according to previous financial statements should be cash flow positive after personnel changes. Seems like they invested in a business which was almost immediately switched into a profitable enterprise on an upward trajectory. What am I missing? Or are you making a prediction that is the opposite of available evidence?

Peak MAU means nothing if they can’t keep investors or get those people to pay (to make up for the advertisers they may be losing). It is likely at peak MAU because a lot of people want to be “in” during what they _think_ is the crash (think of crypto a year ago when it was a peak, but now it’s way down). Current MAU may or may not be reflective of MAU in a month or two since the reason is so weird. The old financial…

Isn't your metric of "some advertisers pulled out" meaningless? There's actually zero evidence revenue declined at all. Ads still seem to be running, and they have more eyeballs than ever. Someone's paying.

If salary expenses are halved, the company is cash flow positive next year.

I guess what I'm saying is, I'd rather trust financial statements than CNN articles about how Twitter is supposedly burning to the ground (CNN is a direct competitor and has a conflict of interest).

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