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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]

#571

Post by nullc »

phphphphp wrote: post #423
nullc wrote: post #390

Earlier quoted context omitted.

If we limit ourselves to depositor funds -- who morally ought to be superior creditors to investors-- I wouldn't be shocked if the recovery percentage was quite a bit larger than that. One thing that made 90% recoveries of Madoff possible were that they first backed out all the fake gains that the customers thought they had but never actually had. This will be harder to do with FTX, but I expect that once all the bog…

I think that might have been true a year ago but at the time of FTX’s collapse, most market participants were underwater, especially the laypeople. The amount of money in the crypto market is definitely not anywhere near the supposed market cap, but if we look at USDC’s 50bn we can say with reasonable confidence that there’s at least 50bn of USD in the crypto market. If FTX was 10% of the market then 5 billion seems…

My wild ass guesstimate before learning about the mobilecoin (the signal integrated crypto) apparent fraud would have been 1-2 billion lost, so I guess I should update that to 3 billion lost-- though there is probably reasonable odds on recovering the mobilecoin funds since there were probably only a few people who could have had access to enough mobilecoin to hit a billion worth even at $67/coin.

It's quite possible that I'm just being bubbled/hopeful. I don't personally know anyone who lost money in FTX even though I know a lot of cryptocurrency people and I thought it was obviously sketchy from when I first heard of it, so these are probably influencing my perspective on how big it actually was.

> If FTX was 10% of the market

I'm dubious about 10%. We know in hindsight that FTX was faking their size in multiple respects (including e.g. faking their valuation by MTMing illiquid coins that they created and never circulated) -- probably every claim we've seen about their size based on their own figures was just lies.

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

#572

Post by ericd »

vkou wrote: post #557
0cf8612b2e1e wrote: post #461

Earlier quoted context omitted.

> Other folks got money out of Madoff during his scam years, and the trustee says “I’m taking that money back to pay back others.” What’s the limit on that? Dollars or time? I would be beyond furious if I was expected to help make someone else whole.

> I would be beyond furious if I was expected to help make someone else whole. Such are the wages of being a beneficiary of a ponzi scheme. It would be a good incentive to do better research.

How are you supposed to get enough insight from any working fund manager to determine whether something is a ponzi? It’s not like they give you access to the books.

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

#573

Post by vishnugupta »

joeblubaugh wrote: post #455

Is there going to be any reckoning for the VCs who poured money into this ridiculous business? I don’t see how you respect Sequoia’s judgement after this.

Their money is gone. Their reputation is tarnished among founders and LPs alike for the next 2-3 years. The partners/analysts who were in awe of SBF have become a laughing stock. I'd say VCs have greatly suffered. But then they will brush it under the carpet in the pretext of "that's the risk we are willing to take while chasing 1000x returns" and I guess that's fair. They voted with their money and reputation and lost both.

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

#574

Post by anonporridge »

b800h wrote: post #569
anonporridge wrote: post #435

Earlier quoted context omitted.

You're right, that sentence is bad. Maybe I should have said it isn't obviously bad or some new, modern evil that we just invented. It's how human social groups that take care of their non productive elderly have always operated.

The futurology trackers have "breakdown of intergenerational solidarity" as a possibility with no given time frame. It really didn't occur to me how implicated the nation state is in this until you pointed out the fact (in retrospect, glaringly obvious) that this function of family life has been subverted by government.

Do you mind dropping a link to what you're referencing? I haven't heard of it.

But yeah, I do see it as a potential systemic problem. Because the care for the old has become so massively socialized, we also find ourselves in a situation where it becomes individually advantageous to not do the personal sacrifice of having and raising children. Not only is having children a huge financial burden, but it's also a huge time commitment. And when you don't get to primarily benefit from you own children's productivity, that burden isn't as highly rewarded as it has been in the past.

I think we're starting to see this break down in many first world countries that don't have a replacement birth rate. I could see the reactions being one of...

1) start penalizing the childfree. There's a long history of this solution going back to as far as ancient Rome, https://en.wikipedia.org/wiki/Bachelor_tax.

2) increase the social reward for having and raising children. We already do this to some extent, e.g. the child tax credit.

3) develop non family oriented baby mills. Basically state run institutions that raise (and possibly even incubate with artificial wombs) children at an industrial scale. Brave New World is a classic example of this taken to the extreme. We already do this to some degree with public schools and face increasing calls to expand it with free preschool. If we can figure out how to produce healthy, well adjusted members of society with the greater efficiency of 1 adult "parent" to 30 children, like we do in school, rather than 2 parents to 1-5ish children, then we'll probably do it. Currently, it doesn't appear that we can do that, judging by the outcomes of orphanages.

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

#576

Post by anonporridge »

c22 wrote: post #567
anonporridge wrote: post #413

Earlier quoted context omitted.

> Historically children were the retirement plan They still are. It's just that the retirement plan has been socialized to the level of the nation state. The labor of the young takes care of the old. This is literally true in the case of social security which is funded by taxing current productive labor. This isn't necessarily bad, because it's the way it's always been. But it is something like a multi-generational p…

The last generation will have a lot more to worry about than who will take care of them in retirement.

That's exactly the point. The last generations will have done their jobs supporting their elder predecessors, but won't have anyone to come after them who will take care of them.

Left holding the bag.

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

#577

Post by lmm »

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?

Ever wondered where the money to make crypto go up was coming from?

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

#578

Post by 0cf8612b2e1e »

vkou wrote: post #557
0cf8612b2e1e wrote: post #461

Earlier quoted context omitted.

> Other folks got money out of Madoff during his scam years, and the trustee says “I’m taking that money back to pay back others.” What’s the limit on that? Dollars or time? I would be beyond furious if I was expected to help make someone else whole.

> I would be beyond furious if I was expected to help make someone else whole. Such are the wages of being a beneficiary of a ponzi scheme. It would be a good incentive to do better research.

Madoff operated for close to twenty years before being exposed. He was regularly lauded for being the best by well informed people. What is an amateur supposed to do?

If the argument is, “Nobody is that good, you should know better”, does that mean Buffet’s scheme will start crumbling any day now?

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

#579

Post by aliswe »

totalZero wrote: post #414
massysett wrote: post #395

Earlier quoted context omitted.

The problem is opportunity cost. People invested in Madoff to grow their money. So if I invest $100 in Madoff and ten years later they say “we recovered $90, congrats,” yeah that’s better than nothing. But if I had put that into a legitimate investment, maybe I’d have $180. Other folks got money out of Madoff during his scam years, and the trustee says “I’m taking that money back to pay back others.” So much of crypt…

Shkreli got hard time even though investors didn't lose money due to his fraud. There isn't a performance threshold beyond which fraud ceases to be criminal.

Was that trial a bit politicized yu think? serious question

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

#580

Post by gamblor956 »

hprotagonist wrote: post #372
gamblor956 wrote: post #336

Earlier quoted context omitted.

If the police are asking you questions, they're not lying to you...they're just asking questions. And if the police say something seemingly benign that causes you grief, you can look forward to a large-ish settlement to make up for your troubles. People on HN rarely interact with the police and it seems they have an unrealistic, media-driven perception of how cops actually act. For point of reference, it's the same a…

they’re not .. not lying to you, either. Maybe! https://reischlawfirm.com/police-allowed-to-lie/

That's mostly FUD from a criminal defense firm trying to scare people into hiring them.

Cops are not as bad as people think they are. Cops behaving badly (in the U.S.) is news because it is the exception and not the norm.

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