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FTX – The fraud was in the code

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Re: FTX – The fraud was in the code

#31

Post by SilasX »

hn_throwaway_99 wrote: post #29
chubot wrote: post #25

Earlier quoted context omitted.

It's also funny to me that they just use Github and Google docs. It seems like if you were committing massive fraud, you'd want to avoid leaving permanent records of it on someone else's systems. But I think this is generational thing. If you grew up when web browsers were already prevalent, a "text file on your hard drive" probably means almost nothing. It's just not the way you use computers. I also like this bit f…

I mean, the reason the fraud looks so brazen now is because they were obviously true believers - they never expected to get caught . If crypto had gone up and up and up forever as intended, the fraud would never have been discovered. Of course, the other possibility is that at least having this amount of visible paper trail was intentional - the CTO probably had a little voice in the back of his head going "Umm, mayb…

I made an earlier comment explaining it as SBF coming to believe that his tricks kept working so consistently that he regarded them as some kind of fundamental aspect of reality, that he could always find another investor to give him a reprieve, he could always find another sucker to buy FTT at an inflated value (sorry, “exit liquidity”).

https://news.ycombinator.com/item?id=33973023

Re: FTX – The fraud was in the code

#32

Post by zinekeller »

shrimpx wrote: post #27

Was the exchange actually running on Python? Or was Python used for less intensive stuff?

Python usage != incompetent financial institution.

1) even before the speedups done now on CPython, PyPy has always existed (and NumPy was HW-accelerated)

and more importantly 2) It has a native arbitrary-precision decimal type. Even other languages seriously used in financial institutions like OCaml (https://discuss.ocaml.org/t/ocaml-needs-an-arbitrary-precisi...) doesn't even provide it natively.

Re: FTX – The fraud was in the code

#33

Post by injeolmi_love »

cuteboy19 wrote: post #23
thsksbd wrote: post #20

Earlier quoted context omitted.

How would we know? The code is not open source

The code is not relevant. The fund position is transparent to the regulators

The position is visible to regulators via code - if the code is fraudulent or buggy, the regulators will believe false information.

Re: FTX – The fraud was in the code

#34

Post by thrwy_918 »

bmitc wrote: post #15
jhobag wrote: post #9

Earlier quoted context omitted.

Sequoia led their one of their rounds, everyone assumed sequoia did enough due diligence, everyone goes in and fills the round; it's assumed its a trustworthy platform for retail

I honestly feel Sequoia should be held partially responsible for funding and marketing such a blatant criminal enterprise. I'm a little tired of these venture capitalists claiming all innonence when they should have a burden of responsibility. They want all the upsides and none of the downsides to throwing millions at people.

>They want all the upsides and none of the downsides to throwing millions at people.

I see what you're getting at, but this is a bit of a silly statement. The obvious downside of "throwing millions at people" is that you lose millions of dollars.

Re: FTX – The fraud was in the code

#36

Post by nyokodo »

fallingknife wrote: post #28
bmitc wrote: post #15

Earlier quoted context omitted.

I honestly feel Sequoia should be held partially responsible for funding and marketing such a blatant criminal enterprise. I'm a little tired of these venture capitalists claiming all innonence when they should have a burden of responsibility. They want all the upsides and none of the downsides to throwing millions at people.

The downside of throwing millions of dollars at someone is losing those millions, which they did. You are basically suggesting that a fraud victim should be punished more than the money they lost because they were too stupid to see the fraud.

> You are basically suggesting that a fraud victim should be punished more than the money they lost

Their actions brought in more victims, and therefore investors ought to be wary of listening to them in future. They ought to be also punished by a hit to their reputation i.e. by being held partially responsible.

Re: FTX – The fraud was in the code

#37

Post by smt88 »

injeolmi_love wrote: post #33
cuteboy19 wrote: post #23

Earlier quoted context omitted.

The code is not relevant. The fund position is transparent to the regulators

The position is visible to regulators via code - if the code is fraudulent or buggy, the regulators will believe false information.

Financial audits of public firms are not done through code. They're done by CPAs who copy files and generally run everything through generic Microsoft applications that aren't going to commit fraud for a bank.

Re: FTX – The fraud was in the code

#38

Post by morsch »

fallingknife wrote: post #28
bmitc wrote: post #15

Earlier quoted context omitted.

I honestly feel Sequoia should be held partially responsible for funding and marketing such a blatant criminal enterprise. I'm a little tired of these venture capitalists claiming all innonence when they should have a burden of responsibility. They want all the upsides and none of the downsides to throwing millions at people.

The downside of throwing millions of dollars at someone is losing those millions, which they did. You are basically suggesting that a fraud victim should be punished more than the money they lost because they were too stupid to see the fraud.

We punish banks for failing to do proper KYC even when they're also victims of fraud.

Re: FTX – The fraud was in the code

#39

Post by peyton »

ethanbond wrote: post #10
porkbeer wrote: post #8

All banking is becoming like a casino where the house alone knows the code.

No, this is just extremely blatant fraud. Banks in general don’t do this.

I believe every U.S. global systemically important bank has engaged in bid rigging or rate rigging.

Re: FTX – The fraud was in the code

#40

Post by bmitc »

fallingknife wrote: post #28
bmitc wrote: post #15

Earlier quoted context omitted.

I honestly feel Sequoia should be held partially responsible for funding and marketing such a blatant criminal enterprise. I'm a little tired of these venture capitalists claiming all innonence when they should have a burden of responsibility. They want all the upsides and none of the downsides to throwing millions at people.

The downside of throwing millions of dollars at someone is losing those millions, which they did. You are basically suggesting that a fraud victim should be punished more than the money they lost because they were too stupid to see the fraud.

It's a bit strong to call Sequoia "fraud victims". They were at a minimum incompetent and at a maximum intentionally misleading to other investors. You shouldn't write an article like this (https://archive.ph/GQkCp) unless you have done your research. Did they do literally any due diligence prior to leading a massive investment round?

Just because they stand to lose millions doesn't excuse their responsibility and influence. Venture capitalists have no one to blame but themselves for the risky companies out there. They are effectively snake oil salesmen, just looking to siphon off relatively short-term profits under the guise of "changing the world".

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