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SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

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Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#21

Post by MrPatan »

nikanj wrote: post #16
pavlov wrote: post #6

It's sort of curious that this SEC action is to protect the venture capital investors like Sequoia who invested in FTX shares directly. If I were a retail investor who lost my savings in FTX, I might be feeling upset that the government is rushing to action in defense of billion-dollar funds whose own due diligence failed massively, while seemingly nothing is being done to help those who invested in crypto based on F…

The various players in crypto space have written a ton of EULA mumbo-jumbo explaining that the coins are not securities (as they want the freedom to pump&dump/front run orders/etc). If they admitted the cryptos are securities, all sorts of pesky regulations would apply

Stealing securities you're supposed to store for me is a crime.

Stealing non-securities you're supposed to store for me is also a crime.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#22

Post by nradov »

rundmc wrote: post #17
pavlov wrote: post #6

It's sort of curious that this SEC action is to protect the venture capital investors like Sequoia who invested in FTX shares directly. If I were a retail investor who lost my savings in FTX, I might be feeling upset that the government is rushing to action in defense of billion-dollar funds whose own due diligence failed massively, while seemingly nothing is being done to help those who invested in crypto based on F…

He essentially admitted this in recent calls so it's a 'safe' charge that the SEC used to get him arrested in Bahamas and presumably his personal assets will also now be frozen while they assemble the rest of the consumer fraud and other charges.

The SEC didn't get SBF arrested in the Bahamas. That was done by the DOJ. The SEC has brought a separate parallel civil enforcement action.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#25

Post by master_crab »

MrPatan wrote: post #21
nikanj wrote: post #16

Earlier quoted context omitted.

The various players in crypto space have written a ton of EULA mumbo-jumbo explaining that the coins are not securities (as they want the freedom to pump&dump/front run orders/etc). If they admitted the cryptos are securities, all sorts of pesky regulations would apply

Stealing securities you're supposed to store for me is a crime. Stealing non-securities you're supposed to store for me is also a crime.

Yup. At the end of the day, this isn’t complicated. The man directed assets (whatever you label them) that were clearly meant for the use of the owner only into SBFs investment vehicle for his use (Alameda).

He stole coins, period.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#26

Post by quanticle »

janandonly wrote: post #14

Quoted post unavailable.

    Everyone who bought and held on to their bitcoins in their wallet instead of
    storing the coins with a custodian (exchange or otherwise) is still in full
    possession of said coins. not your keys, not your coins as the saying goes.
"Not your keys, not your coins" is probably the single largest blocker to crypto adoption, in my opinion. With every other financial asset, custodial accounts just work. Putting a hundred dollars into a bank account is, thanks to bank regulation and the FDIC, the same as putting a hundred dollar bill underneath my mattress. I've traded a bunch of stocks, and not once have I ever thought about acquiring an actual stock certificate, because thanks to regulations and the SIPC, having stock in a custodial account is the same as having a physical stock certificate in a safe at home.

"Not your keys, not your coins" is viable only in some kind of libertarian fantasy. In the real world, regulated, insured custodial accounts are useful and available for pretty much every security available to individual investors... save crypto.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#27

Post by [deleted] »

rundmc wrote: post #17
pavlov wrote: post #6

It's sort of curious that this SEC action is to protect the venture capital investors like Sequoia who invested in FTX shares directly. If I were a retail investor who lost my savings in FTX, I might be feeling upset that the government is rushing to action in defense of billion-dollar funds whose own due diligence failed massively, while seemingly nothing is being done to help those who invested in crypto based on F…

He essentially admitted this in recent calls so it's a 'safe' charge that the SEC used to get him arrested in Bahamas and presumably his personal assets will also now be frozen while they assemble the rest of the consumer fraud and other charges.

[deleted]

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#28

Post by Aicy »

janandonly wrote: post #14

Quoted post unavailable.

More large crypto businesses are likely to collapse because they were highly leveraged and now with their debtors failing (other crypto firms like FTX) and their assets falling (crypto) they will be forced to sell their assets to cover losses (crypto) which will push the crypto market down even more.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#29

Post by Frost1x »

ethanbond wrote: post #13
pavlov wrote: post #6

It's sort of curious that this SEC action is to protect the venture capital investors like Sequoia who invested in FTX shares directly. If I were a retail investor who lost my savings in FTX, I might be feeling upset that the government is rushing to action in defense of billion-dollar funds whose own due diligence failed massively, while seemingly nothing is being done to help those who invested in crypto based on F…

Whoa, are you trying to tell me all the big fish hyping up the Regulators Are Evil Economy get near-total legal protection of a regulated market, but all the little people who got taken in by it are going to get screwed? An incredible and unforeseeable development! Surely there will be more charges over time but the end result isn’t going to change much. The wealthy people who’ve been boosting all of this will take t…

I always find it interesting how in our implementation of capitalism here in the US, wealth is able to insulate and protect itself from many of the very measures capitalism is supposed to peel away and counter (in the interest of society at large).

It's almost like it there are fundamental inherent flaws that need to be fixed to continue on and we can't keep treating things like business is usual if we want to enable continued growth vs stagnation due to power concentration like we've seen in non-capitalist systems in the past.

You're going to see the big players like Sequoia get some retribution here and to a magnitude that's significant enough to be usable and recoverable, meanwhile you're going to see all sorts of others life savings evaporate, resulting in a far less recoverable scenario, with little to nothing recovered--at least that's how this tends to play out, historically. Everyone will of course lose, but you'll see disproportionate losses and disproportionate recoverability. Disproportionate wealth as a proxy to power does this.

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