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The United States of America vs. Samuel Bankman-Fried Indictment [pdf]

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Re: The United States of America vs. Samuel Bankman-Fried Indictment [pdf]

#541

Post by eternalban »

nradov wrote: post #514
kjellsbells wrote: post #473

Earlier quoted context omitted.

Helpfully, sequoia list who they are investing in, e.g. https://www.sequoiacap.com/our-companies/?_categories=fintec... or https://www.sequoiacap.com/our-companies/?_categories=crypto And of course you should all enjoy this while you can: https://www.sequoiacap.com/companies/ftx/

It's hilarious how they describe the problem at FTX as a "liquidity crunch”. Liquidity was the least of their issues. What a bunch of clowns.

Not fair. They ran a "rigorous diligence process" at the time of their investment.

https://pbs.twimg.com/media/FhKq6zQUoAIUJ1W

These two sources claim Ramnik Arora played a "crucial role":

https://diyatvusa.com/2022/11/24/meet-ftx-insider-ramnik-aro...

https://podcasts.apple.com/us/podcast/who-is-ramnik-arora-th...

There is that Moonstone Bank thingie again: Ramnik was there too:

https://www.crunchbase.com/person/ramnik-arora

https://www.crunchbase.com/organization/moonstone-bank

Fluent Finance & Moonstone Bank issue "US+ Stable Coin":

https://www.globenewswire.com/en/news-release/2022/10/24/254...

"Fluent Federation of Member Banks":

https://www.fluent.finance/

https://www.fluent.finance/team [includes the "inventor of CBDC" ..]

There are so many rabbit holes here. FTX is the tip of something bigger imo.

Re: The United States of America vs. Samuel Bankman-Fried Indictment [pdf]

#542

Post by mewse-hn »

pseingatl wrote: post #127

Can we discus recovery? The Madoff trustee was able to recover something like 90% of the Madoff Ponzi. Alameda and FTX's real estate purchases have value, as do their VC investments, purchases of bank stock, etc. In other words, it's not all gone. My understanding is that even some of the political contributions can be clawed back. FTX's purchases of IOU's (i.e., crypto) that declined in value are not likely to be re…

> FTX's purchases of IOU's (i.e., crypto) that declined in value are not likely to be recoverable. But Bitcoin still has substantial value.

This was kind of what Matt Levine focused on in his coverage of FTX - where did the money go? It wasn't just that they invested in crypto assets, they created their own crypto asset, assigned it a huge value, and put it on the balance sheet at an imaginary price. Used those "assets" as collateral to borrow real money. Then they spent real money on Bahamian property, political contributions, charitable contributions, naming an arena, and the KILLER - bailed out Alameda repeatedly using real money.

Re: The United States of America vs. Samuel Bankman-Fried Indictment [pdf]

#543

Post by totalZero »

coffeebeqn wrote: post #520
jacquesm wrote: post #478

Earlier quoted context omitted.

> I don’t see how you respect Sequoia’s judgement after this. Same for a16z, Softbank and all the others that jumped on the crypto bandwagon without doing their jobs as board members and during the run-up to the deal and after investing. Ironically, the VCs will position themselves as the victims.

Did anyone respect SoftBank even before this? Their claim to fame was the botched WeWork money hole and a few other insanely overpriced rounds on unscalable/unprofitable(even in theory) businesses.

Yes. SoftBank has been extremely effective in the mobile telecommunications investment space. Look up Vodafone KK and their investment in Sprint.

SoftBank was SoftBank before its unprofitable/weird investments in businesses like WeWork and Boston Dynamics.

Re: The United States of America vs. Samuel Bankman-Fried Indictment [pdf]

#544

Post by breck »

voganmother42 wrote: post #515
breck wrote: post #494

Earlier quoted context omitted.

Quoted post unavailable.

Curious why you believe sbf has earned the benefit of the doubt?

The software was good, so I was surprised it was fraud. But then my funds were frozen, so I thought it was fraud. But now he says he didn't freeze the funds, and this Ray guy seems suspicious.

Re: The United States of America vs. Samuel Bankman-Fried Indictment [pdf]

#545

Post by richardwhiuk »

HPMOR wrote: post #529
trident5000 wrote: post #418

Earlier quoted context omitted.

Best years? More like all the years.

He should not go to prison for life. Nobody should ever go to prison for life, for wasting money. Money is literally made up. Sure, opportunity cost is real, but seriously nobody should ever lose their life for money.

What happens if they money was someone else's means to pay for their health care?

Money is made up - that doesn't mean it doesn't have consequences.

Re: The United States of America vs. Samuel Bankman-Fried Indictment [pdf]

#546

Post by jacquesm »

dlkf wrote: post #519
jacquesm wrote: post #482

Earlier quoted context omitted.

> But if I had put that into a legitimate investment, maybe I’d have $180. Or maybe zero. Investing is a casino unless you are very closely supervising your investments and have a thorough understanding of the underlying market dynamics. So better do your homework if you want to see some or all of your money back, preferably with a premium.

Yeah, you have to be a real genius to make money buying the sp500.

I think it was obvious that we weren't talking about index investing.

Re: The United States of America vs. Samuel Bankman-Fried Indictment [pdf]

#548

Post by jacquesm »

austenallred wrote: post #535
jacquesm wrote: post #478

Earlier quoted context omitted.

> I don’t see how you respect Sequoia’s judgement after this. Same for a16z, Softbank and all the others that jumped on the crypto bandwagon without doing their jobs as board members and during the run-up to the deal and after investing. Ironically, the VCs will position themselves as the victims.

A16Z didn't invest in FTX

No, but they've been all over crypto:

https://a16zcrypto.com/

Re: The United States of America vs. Samuel Bankman-Fried Indictment [pdf]

#549

Post by ericbarrett »

panarky wrote: post #447
this_user wrote: post #398

Earlier quoted context omitted.

People have already looked into this, and the claims on FTX' debt were valued at 5c on the dollar. Alameda has burned through billions, and most of what was left were illiquid shitcoins and other worthless junk. Madoff, at least, was dealing with real assets.

> burned through billions If Alameda lost the billions, then who won the billions? Who was on the other side of those trades?

Matt Levine has speculated that a bunch of the money was lost via market-making with insufficient controls (margin enforcement etc.). For example, as reported by the Financial Times (via Levine's Dec. 5 newsletter, "Crypto had a Credit Bubble"):

[begin quote]

In April 2021, a crypto token called MobileCoin — used for payments in the privacy-focused messaging app Signal — suddenly spiked in price from about $6 to almost $70, before crashing back down again almost as quickly.

The wild moves came after a trader on FTX had built an unusually large position in the little-known token. Two people familiar with the matter said that when the price rose, the trader used the position to borrow against it on FTX, potentially a scheme to extract dollars from the exchange.

Alameda was forced to step in and assume the trader’s position to protect FTX. The trading company’s loss on this deal was at least in the hundreds of millions of dollars, the people said, and as high as $1bn, according to one of the people, wiping out a large share of Alameda’s 2021 trading profits.

[end quote]

...So whomever was on the other side of positions like that. Savvy outsider or well-informed insider? Who knows! Maybe it can be reclaimed, or maybe it's long dispersed down a chain of dozens of crypto exchanges, tumblers, offshore fiat accounts, and so forth. I expect we'll learn a lot more over the next few weeks as the federal case ramps up and the bankruptcy executor delivers more findings.

Re: The United States of America vs. Samuel Bankman-Fried Indictment [pdf]

#550

Post by coffeebeqn »

panarky wrote: post #447
this_user wrote: post #398

Earlier quoted context omitted.

People have already looked into this, and the claims on FTX' debt were valued at 5c on the dollar. Alameda has burned through billions, and most of what was left were illiquid shitcoins and other worthless junk. Madoff, at least, was dealing with real assets.

> burned through billions If Alameda lost the billions, then who won the billions? Who was on the other side of those trades?

The crypto market? You can’t just unwind the markets by a few months to fix things
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