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SBF scheduled to testify tomorrow at US House hearing on FTX collapse

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Re: SBF scheduled to testify tomorrow at US House hearing on FTX collapse

#81

Post by stouset »

zeven7 wrote: post #76
stouset wrote: post #70

Earlier quoted context omitted.

Having also followed this unfolding drama, I can say this is sadly a reasonably accurate take. I'll add my own opinion which is that he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once. I say this because I…

> These controls were skipped because SBF was convinced he was doing something extremely novel and complicated and such old-school concepts would only hinder his ability to execute on his brilliant ideas. Don't let him sell the story that it was all very complex and he made a bunch of mistakes and he should have done better. They used Snapchat for company messaging so there wound't be records. This wasn't a mistake d…

I agree. It wasn't very complex, he made a bunch of basic mistakes that nobody with even a passing familiarity with finance should have made, and to say that he should have done better is an understatement of almost comical proportions.

I just also think that these things were (at least initially) due to absurd levels of hubris and incompetence rather than outright malicious intent. The guy thought his shit didn't stink but anyone even vaguely paying attention could smell what was up from miles away. He still doesn't think he did anything wrong other than making some justifiable mistakes in his rush to build something great and surely anyone can see that if he just explains himself for the thousandth time.

Re: SBF scheduled to testify tomorrow at US House hearing on FTX collapse

#83

Post by AlexandrB »

raiyu wrote: post #25

If you are testifying remotely, I suppose you are still under oath and have serious consequences for perjury ?

There are theoretical consequences for lying to congress, but I can't recall a high profile case of them being applied to anyone. Famously James Clapper, then director of the NSA, told congress that the NSA does not collect data on Americans[1] which is what inspired Snowden to leak the info on NSA data collection. Despite this, he went on to continue serving as head of the NSA right up until the end of Obama's term in office.

[1] https://en.wikipedia.org/wiki/James_Clapper#Testimony_to_Con...

Re: SBF scheduled to testify tomorrow at US House hearing on FTX collapse

#84

Post by MuffinFlavored »

throwthere wrote: post #50

Having followed a lot of the SBF discussion since he keeps giving interviews, here's the FAQ-- 1) How did you lose $5ish billion of customer deposits? - They were deposited to Alameda, a totally independent hedge fund run by an unrelated party (my ex-girlfriend who lives with me). We credited Alameda without properly debiting Alameda on FTX. 2) Why didn't you track them? - There was a bug in the dashboard. I made a b…

> - There was a bug in the dashboard. I made a boneheaded mistake. Oopsies.

Will this hold up in court? Can you go to jail for bugs in dashboards?

Re: SBF scheduled to testify tomorrow at US House hearing on FTX collapse

#85

Post by TotoHorner »

stouset wrote: post #70
throwthere wrote: post #50

Having followed a lot of the SBF discussion since he keeps giving interviews, here's the FAQ-- 1) How did you lose $5ish billion of customer deposits? - They were deposited to Alameda, a totally independent hedge fund run by an unrelated party (my ex-girlfriend who lives with me). We credited Alameda without properly debiting Alameda on FTX. 2) Why didn't you track them? - There was a bug in the dashboard. I made a b…

Having also followed this unfolding drama, I can say this is sadly a reasonably accurate take. I'll add my own opinion which is that he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once. I say this because I…

> he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once

Yeah, I strongly disagree here.

He's just a pathological liar and he's currently on an interview spree where he's lying out of his mouth to try and avoid jail time.

If you want evidence that he a liar, look at the DMs he sent to his friend (apparently he forgot she was a reporter?) that got published to Vox.

He clearly explained his strategy of lying about his left-leaning political views to get brownie points with the media.

He intentionally wanted to defraud people from the start. When he started FTX, they went through multiple jurisdictions (first Hong Kong, then Singapore and finally the Bahamas) to find the country that would give him the least regulatory oversight so he could run his ponzi.

He intentionally had staff message him using Signal with disappearing messages to minimize the paper trail. Same thing with hiring the Ultimate Bet guy.

He had a clear backdoor that allowed him to send customer funds over to Alameda and he put some some BS "FTX collateral" to serve as a veneer. He bought companies like BlockFi to get more customer funds so he could keep the ponzi going. Spent fucktons on advertising in arenas, F1, superbowl, etc. because your customer LTV calculation changes when you can just steal the user's deposits and use them to lever up your hedge fund.

I'm guessing his plan was that he would use the FTX user deposits to take a huge long position on crypto, ride the bull wave and become the richest person in the world. He thought he'd be able to time it right and get out before the bear market with his profits but he timed it incorrectly and Alameda blew up.

Now, he just wants to make it seem like it was an accident and due to poor management by him. No, it was 100% intentional and he knew exactly what he was doing.

Re: SBF scheduled to testify tomorrow at US House hearing on FTX collapse

#86

Post by zeven7 »

stouset wrote: post #81
zeven7 wrote: post #76

Earlier quoted context omitted.

> These controls were skipped because SBF was convinced he was doing something extremely novel and complicated and such old-school concepts would only hinder his ability to execute on his brilliant ideas. Don't let him sell the story that it was all very complex and he made a bunch of mistakes and he should have done better. They used Snapchat for company messaging so there wound't be records. This wasn't a mistake d…

I agree. It wasn't very complex, he made a bunch of basic mistakes that nobody with even a passing familiarity with finance should have made, and to say that he should have done better is an understatement of almost comical proportions. I just also think that these things were (at least initially) due to absurd levels of hubris and incompetence rather than outright malicious intent. The guy thought his shit didn't st…

It is complex, but that doesn't mean it's not malicious. Let's use a simpler example.

Sam runs a horse racing operation and allows you to place bets on horses. Before the race begins, Sam collects $1,000,000 from various people placing bets on the race. During the race, Sam runs across the street to the casino and puts the $1,000,000 he's holding on black at the roulette table. If he wins the bet, Sam plans to take the $2,000,000 back, pay off customers at his race track, and then walk away with an extra $1,000,000 in his pocket.

Unfortunately, it comes up red, and Sam walks out of the casino with nothing. Realizing he won't have money to pay his customers back, he tries to find someone who can buy his race track and take on the debt, but nobody wants to inherit a $1,000,000 debt.

This is malicious. Sam willfully defrauded customers. Yeah, it could have worked out, but it didn't, and nobody consented to risking their money on the roulette table.

Now change $1,000,000 to $10 billion and replace "race track" and "casino" with complex finance mumbo jumbo.

Re: SBF scheduled to testify tomorrow at US House hearing on FTX collapse

#87

Post by stouset »

TotoHorner wrote: post #85
stouset wrote: post #70

Earlier quoted context omitted.

Having also followed this unfolding drama, I can say this is sadly a reasonably accurate take. I'll add my own opinion which is that he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once. I say this because I…

> he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once Yeah, I strongly disagree here. He's just a pathological liar and he's currently on an interview spree where he's lying out of his mouth to try and avoi…

You could be right. But if this interview spree is a calculated move to avoid jail time, he's doing a truly awful job of it. But this wouldn't be the first time he did an awful job of something due to misjudging his own competence.

Re: SBF scheduled to testify tomorrow at US House hearing on FTX collapse

#88

Post by TotoHorner »

stouset wrote: post #87
TotoHorner wrote: post #85

Earlier quoted context omitted.

> he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once Yeah, I strongly disagree here. He's just a pathological liar and he's currently on an interview spree where he's lying out of his mouth to try and avoi…

You could be right. But if this interview spree is a calculated move to avoid jail time, he's doing a truly awful job of it. But this wouldn't be the first time he did an awful job of something due to misjudging his own competence.

> But if this interview spree is a calculated move to avoid jail time, he's doing a truly awful job of it. But this wouldn't be the first time he did an awful job of something due to misjudging his own competence.

Yep, I think that's exactly it.

In his mind, it's either

- do not do any interviews. The outcome is a 90% probability of life in prision

- do the interviews and try to shift public opinion to it being an accident. He knows he still has some influence over the media because of his past donations. Maybe 50% probability of life in prison if he can shift public opinion?

Re: SBF scheduled to testify tomorrow at US House hearing on FTX collapse

#90

Post by AlexandrB »

rubyist5eva wrote: post #82

The fact that this guy has not been arrested just goes to show how completely f*cked America is.

The question of jurisdiction is interesting. Technically FTX was not operating in the US or for US citizens but, as I understand, there were many workarounds. FTX US did operate in the US, but I'm not sure how fucked they are relative to the main FTX exchange.

It's also notable that FTX customers (at least the "in-crypto-for-the-ideology" ones) and investors wanted this. They wanted a financial system that was out of the reach of the US legal system - none of them had a problem dealing with an exchange that was based in the Bahamas for legal reasons until the whole thing fell apart. So it's interesting to hear so many calls for SBF's arrest by US authorities.

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