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A software change allowed FTX to use client money

reuters.com

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Re: A software change allowed FTX to use client money

#51

Post by dereg »

alar44 wrote: post #31
hn_throwaway_99 wrote: post #23

> Only Singh, Bankman-Fried and a few other top FTX and Alameda executives knew about the exemption in the code, according to three former executives briefed on the matter. A digital dashboard used by staff to track FTX customer assets and liabilities was programmed so it would not take into account that Alameda had withdrawn the client funds, according to two of the people and a screenshot of the portal that Reuters…

Really? I feel like intent would be really hard to prove. "Hey, due to the way our accounting works I need you to subtract X from our dashboard." "Ok boss." Are programmers expected to know finance law? If I build a program for a dairy farmer am I supposed to know the laws of the interstate dairy trade? I can't believe that would be the case.

This is why Caroline is an important witness for the prosecution. It seems like most of the nefarious stuff occurred in Signal.

Re: A software change allowed FTX to use client money

#54

Post by dieselgate »

akavi wrote: post #15
andirk wrote: post #6

Earlier quoted context omitted.

The fact that the software was not audited speaks more about the big names who invested in this clown than the clown himself. So weird how he publicly touted the EXACT OPPOSITE of everything he did and stood for. He may ask the judge for a rebase.

I've been at many startups during a fundraising round, and I don't think I've ever seen or heard of an investor auditing the codebase.

Neither have I but read some stuff about Tesla devs checking out the Twitter codebase or something? It’s ridiculous but that’s the only data point known to me

Re: A software change allowed FTX to use client money

#55

Post by dieselgate »

ratg13 wrote: post #41

This has Dan Friedburg’s fingerprints all over it and is reminiscent of Ultimate Bet’s “god mode”. Would not be surprised if this move was advised by their legal counsel.

Good reminder - SBF really dodged the questions related to “Why Dan Friedburg?” asked by coffeezilla

Not that we didn’t see that coming or anything

Re: A software change allowed FTX to use client money

#56

Post by kasey_junk »

akavi wrote: post #15
andirk wrote: post #6

Earlier quoted context omitted.

The fact that the software was not audited speaks more about the big names who invested in this clown than the clown himself. So weird how he publicly touted the EXACT OPPOSITE of everything he did and stood for. He may ask the judge for a rebase.

I've been at many startups during a fundraising round, and I don't think I've ever seen or heard of an investor auditing the codebase.

I’ve been apart of many code audits as part of acquisitions and fundraising rounds on both sides.

I don’t know how prevalent it is but I’ve done it enough times that I don’t bat an eye when it comes up.

Re: A software change allowed FTX to use client money

#57

Post by nullc »

gcr wrote: post #44
gruez wrote: post #29

Earlier quoted context omitted.

There's many reasons to hate smart contracts, but this isn't one of them. The article is talking about changes to a codebase that's closed source and deployed with little scrutiny. None of this is applicable to reputable smart contract projects, which are open source and require some sort of consensus and/or vote for code changes. Using this as an argument against smart contracts makes as much sense as using the elec…

Your very post says it -- "reputable." In this field, no matter the technology, reputation and trust are everything amidst fears of rug pulls and scams, and smart contracts don't replace the need for social trust. It's hard to name any crypto organization that was seen as more reputable than FTX before this happened. If we can't even trust someone with SBF's track record, what's left?

thats so wtf to me-- from my perspective it was obviously squirrly from the start.

The guy showed up out of nowhere... suddenly being promoted by throwaway reddit accounts, claiming to have made more than ten billion on trades where claiming a million dollar payoff would have been surprising and dubious.

Their exchange specialized in offering almost anonymous retail traders access to leveraged trading on the most dubious of cryptocurrencies stuff popular exchanges won't carry and they carry a lot of bullshit. They even had varrious weirdo products 'index funds' including one called 'shitcoin index'.

When FTX acquired a derivatives clearing house I used, I pulled 95% of my account value out right away. I also warned my friends to stay away from FTX or anything related when I had the chance-- which wasn't often because it wasn't something most bitcoiners I encountered were particularly aware of (as mentioned, their service was more of a casino than an exchange-- big leverage for the most volitile crap).

So while I get how people that might have been in the right media bubbles might have thought it was reputable... but generally? Not a chance, at least not from my perspective.

Was the media critical? No-- there are reports that negative stories about SBF and FTX were actively suppressed in some newsrooms and it's already the case that scamcoiners are actively suing people who criticize them, so that's a big incentive to say nothing when you see a fraud.

Re: A software change allowed FTX to use client money

#58

Post by 8note »

tpankaj wrote: post #43
meindnoch wrote: post #42

Earlier quoted context omitted.

ignorantia juris non excusat

My understanding is they would have to prove criminal intent.

If there's a duty of care, negligence.

But that's why software "engineers" have quotes around "engineer"

Re: A software change allowed FTX to use client money

#59

Post by gurchik »

BurningFrog wrote: post #40
swiper_lux wrote: post #17

Brings up a question: what is the chance of blaming some of this on an "innocent" coding error? Can you get jail for not writing unit tests, swallowing an exception, a type conversion you did not expect?

Interesting. The perfect crime would be to add a natural looking bug in the code that can be exploited by someone else, and then we split the money!

> The Underhanded C Contest is an annual contest to write innocent-looking C code implementing malicious behavior. In this contest you must write C code that is as readable, clear, innocent and straightforward as possible, and yet it must fail to perform at its apparent function. To be more specific, it should perform some specific underhanded task that will not be detected by examining the source code.

> Every year, we will propose a challenge to coders to solve a simple data processing problem, but with covert malicious behavior. Examples include miscounting votes, shaving money from financial transactions, or leaking information to an eavesdropper. The main goal, however, is to write source code that easily passes visual inspection by other programmers.

http://underhanded-c.org/

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