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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]

#581

Post by ShredKazoo »

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?

One blogger's estimate of their losses:

>Voyager/BlockFi acquisition: 1.5b

>LUNA exposure: 1b

>KCG-style algo crash: 1b

>FTT/SRM collateral maintenance: 2b

>Venture capital: 2b

>Real estate, branding, other frivolous spending: 2b

>FTT drop from $22 to $4: 4b

>Discretionary longs going bad: 2b

>Total: 15.5 billion

https://milkyeggs.com/?p=175

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

#582

Post by lern_too_spel »

roland35 wrote: post #525
lern_too_spel wrote: post #433

Earlier quoted context omitted.

Because he's stupid and didn't read anything the company's lawyers wrote. That's the whole defense. Saying he loaned money to another company because he didn't know any better works better as a stupidity defense to get a more lenient sentence than what coffeebeqn wrote.

I mean, it's not like this was some super fine print detail here though... It (we hold your money/crypto for you 1:1 isolated and separated) was basically the entire point of the product.

I thought the whole point of the product was easy access to margin trading. https://help.ftx.us/hc/en-us/articles/360046850054-Spot-Marg...

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

#583

Post by HWR_14 »

massysett wrote: post #395
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…

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…

While Tom Brady's endorsement has little economic value, it was money paid to him. I believe a bankruptcy court can undo past transactions, so that cash might be recoverable.

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

#584

Post by HWR_14 »

factsarelolz wrote: post #537
nlh wrote: post #499

Earlier quoted context omitted.

It's infuriating for sure, but unfortunately it's the reality. If you gained from a Ponzi scheme that means you literally were given other peoples' money (directly). I fully empathize with the absolutely epic degree it must SUCK to get a call and be told "yeah that 10% you've been earning for the past 20 years was actually someone else's money, you need to give it back."

Assuming you cashed out, wouldn't it be something like "that 10% you earned 10 years ago" because if you never cashed out then you're not liable. My reply would be along the lines of: "Sorry lost it all in MtGox/FTX/Crypto/Vegas/Horses"

I mean, if the courts say you owe the money, you owe the money. If you lost it, looks like you got some debt to repay somehow.

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

#585

Post by jacquesm »

anon7725 wrote: post #551
jacquesm wrote: post #527

Earlier quoted context omitted.

It appears that his goose is fried, not cooked. As a lawyer he really should have known better.

That’s what gets me about this whole thing: two law professor parents. A gaggle of young, incredibly wealthy people who all had their tickets pre-punched with prestige schools, A-list jobs like Jane Street, etc. I have to admit, this story has pissed me off more than most of these corporate frauds.

It's never enough I guess. Holmes is another case like that.

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

#586

Post by racingmars »

aliswe wrote: post #579
totalZero wrote: post #414

Earlier quoted context omitted.

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

Not particularly. He had gained notoriety due to other behavior (raising drug prices to fund other drug research, his attitude during his Congressional testimony and media appearances, etc.), but it sounds like his fraud [or whatever he was specifically found guilty of] was very cut-and-dry against SEC and other relevant rules.

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

#587

Post by juiiiced »

bogwog wrote: post #493
sam345 wrote: post #480

Earlier quoted context omitted.

I'm just enjoying their humiliation and reputation hit. Enjoying only so much as it is the correct free market result of betting big without [edited] due diligence. Some of it is result of fed priming the economy with free money. With so much money being dropped from the helicopter there's no time for due diligence. You win some you lose some so in that sense it was a rational bet I guess but not an intelligent one.

On the one hand, sure, but on the other hand, this was literally a case of fraud. A fraudulent business is going to go out of its way to hide the fact that it's committing fraud.

Serious question: If Binance knew something was up why didn’t Sequoia?

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

#588

Post by HWR_14 »

Panzer04 wrote: post #446
phphphphp wrote: post #138

Earlier quoted context omitted.

I’d be absolutely shocked if more than 25% can be recovered. They spent multi-billions on venture investments that were not just high-risk due to their early stage nature but also inextricably linked to ftx by way of the cryptocurrency market as a whole and thus about as undiversified as humanly possible. There’s a few of their investments that have value and value could be recovered through sales but almost all of t…

I'd imagine there's a huge problem in that FTX did not declare bankruptcy until the vast majority of their liquid assets had been removed by the bank run. If they had declared bankruptcy before the run, most people might have gotten out with a 50% haircut. Instead, after the run, those left over will get nothing and those who got out will got 100%.

Those who got out will be told they need to give back 50% (assuming you are right that that is how much was left).

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

#589

Post by ravel-bar-foo »

anonporridge wrote: post #410
Aunche wrote: post #409

Earlier quoted context omitted.

This is mainstream media being sensationalist per usual. This is what the original Coindesk article wrote. "They appeared to oscillate between dejection and defiance, at times holding their heads in their hands and clasping their hands. Bankman-Fried’s mother audibly laughed several times when her son was referred to as a “fugitive” and his father occasionally put his fingers in his ears as if to drown out the sound…

Lol. When Coindesk is bringing more nuanced news reporting than CNBC, you know things are whack.

They both make money by selling ad space and attracting eyeballs to that space, but the audience of Coindesk is going to be much more interested in the financial details, whereas the more general audience of CNBC is going to be less interested in getting the details of the story right, and more likely to read a story that is lightly sensationalized.

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

#590

Post by akiselev »

stickfigure wrote: post #563
jacquesm wrote: post #491

Earlier quoted context omitted.

It will be a long wait, unfortunately. More likely: Sequoia will be shouting from the rooftops that they too are victims.

They... literally... are? The SEC has charged SBF over exactly that.

IANAL but that depends on what their agreements with LPs were, doesn’t it? The managing partners have a fiduciary duty to the fund so couldn’t they be held criminally liable if they failed to do some due diligence stipulated by an LP?
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