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Phone interview with Sam Bankman-Fried [audio]

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Re: Phone interview with Sam Bankman-Fried [audio]

#21

Post by wyldfire »

RC_ITR wrote: post #16
wyldfire wrote: post #14

Earlier quoted context omitted.

Is it at all possible that SBF is "merely" inept (yet still culpable)? Or is there any way to know whether SBF knew what he was doing was making FTX insolvent?

No. His resume shows he's smart enough to understand how market-making and trading works, he just bought into his own mythos and thought he could out-trade the world. If he was actually as skilled as he thought, his strategy could have made him unimaginably wealthy, but he wasn't. I'd compare it to a magician throwing swords at an assistant on stage. You better be sure that you know what you're doing before you do it…

So that bonkers "magic box" interview he gave - was he deliberately planning a naivety defense while executing theft of the deposits?

Re: Phone interview with Sam Bankman-Fried [audio]

#22

Post by [deleted] »

krosaen wrote: post #15
RC_ITR wrote: post #10

A very important nuance for everyone following this. SBF keeps saying there was a liquidity crisis at FTX, which is 100% not true. A liquidity crisis implies that he took deposits, flipped them into good, but illiquid investments, and ran into trouble because people asked for more cash than FTX had on hand. FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (m…

> where he took deposits, put them in completely inappropriate investments It's not just that they were inappropriate, taking assets from FTX to prop up Alameda is fraudulent and should never have happened right? He claimed there was a firewall between the organizations.

[deleted]

Re: Phone interview with Sam Bankman-Fried [audio]

#23

Post by [deleted] »

skippyboxedhero wrote: post #18
ilrwbwrkhv wrote: post #2

Also Coffeezilla's take on the interview with more context: https://www.youtube.com/watch?v=0rL35_WV3lE

That video was remarkable. Apparently the guy couldn't code but worked as a trader at JS for three years. In my own head, that almost reflected worse on JS than SBF. I think everyone assumed Alameda were doing something clever. In reality, they were just idiots stealing from and front-running their customers. Lol. These moments when you see the man behind the curtain, it is just ludicrous and shakes your faith in the…

[deleted]

Re: Phone interview with Sam Bankman-Fried [audio]

#24

Post by jeffbee »

memish wrote: post #19

There's another part of the interview where SBF says he donated about the same to Democrats and Republicans, contrary to the public record. https://youtu.be/6DezodR9hNI?t=775 His explanation and reasoning is that Democrat donations would be treated favorably by the media so those were done publicly, while "reporters would freak the fuck out" about Republican donations. So he made those in the dark.

The party breakdown doesn't seem very interesting to me. A huge chunk of the money went to one pro-crypto long-shot candidate who got trounced 2-to-1 in the primary election. That one block of money distorts any aggregate analysis.

Re: Phone interview with Sam Bankman-Fried [audio]

#25

Post by dibt »

RC_ITR wrote: post #10

A very important nuance for everyone following this. SBF keeps saying there was a liquidity crisis at FTX, which is 100% not true. A liquidity crisis implies that he took deposits, flipped them into good, but illiquid investments, and ran into trouble because people asked for more cash than FTX had on hand. FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (m…

> took deposits, put them in completely inappropriate investments (many of which are now worthless, all of which were speculative nonsense)

I think it's naive to think this is the case. It's reasonable to assume he knows those tokens couldn't have been worth what he claims they're worth, before or after the FTX collapse. The tokens didn't suddenly drop in value. He has experience as a market maker and remaining delta-neutral. We must assume all of what he claims is deception and/or preparation for the court battle.

Remember that there was a pamphlet for Alameda investors that promised something like "15% return with no risk." FTX also had an "earn" product that was paid out from a marketing budget. These were deliberate actions. They knew what they were doing.

Re: Phone interview with Sam Bankman-Fried [audio]

#26

Post by shkkmo »

blamazon wrote: post #12
ryanSrich wrote: post #6

Earlier quoted context omitted.

At this point, I'm very surprised he hasn't been extradited to the US. I suppose these things take time, but he's been given the opportunity to rub salt in the wounds of thousands of people that lost billions. He shows absolutely zero remorse for his actions that have led to several suicides.

"Never interrupt your enemy when he is making a mistake" -- commonly attributed to Napoleon

That is incredibly bad advice to generalize. Not all mistakes one's "enemy" makes are to one's benefit. Your enemy might make a huge mistake by killing your family in front of a lot of witnesses, doesn't mean you should let him because you want to see him go to jail.

Re: Phone interview with Sam Bankman-Fried [audio]

#28

Post by SilverBirch »

wyldfire wrote: post #14
RC_ITR wrote: post #10

A very important nuance for everyone following this. SBF keeps saying there was a liquidity crisis at FTX, which is 100% not true. A liquidity crisis implies that he took deposits, flipped them into good, but illiquid investments, and ran into trouble because people asked for more cash than FTX had on hand. FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (m…

Is it at all possible that SBF is "merely" inept (yet still culpable)? Or is there any way to know whether SBF knew what he was doing was making FTX insolvent?

The problem with claiming he was just inept is that he was actively doing things to hide the insolvency - pumping the value of assets in which he controlled the market, doing deals with other insolvent entities to hide any defaults, and conditioning deals on collateral being held on FTX. It was very clear many months back that Alameda was underwater, and that whoever was their lender was going to face a massive default. SBF was both the issuer, borrower and lender of the FTT tokens - and none of that money was meant to be associated with customer assets. There are some simple questions of "Why did SBF do a load of deals in the spring which were clearly money losing?" and the answer is "The only possible reason to do those deals is to hide the massive losses he'd incurred".

Re: Phone interview with Sam Bankman-Fried [audio]

#29

Post by NovemberWhiskey »

From my perspective, the problem here is no-one (including SBF) appears to know what kind of an enterprise FTX was supposed to be.

Everyone seems to agree that Alameda is a hedge fund, but looking at the facts, FTX also appears to have been operated as one as well; but without the qualification of investors or others kinds of things. There's no just a really good correlate in traditional finance for "I'm going to act as a broker-dealer but actually I'm allowed to just invest your funds however the hell I like". Which is probably a good thing.

I'm not necessarily saying that everything in defi has to be regulated exactly like something in traditional finance, but there are some pretty deep unanswered questions on basic stuff like "did your customers know they were actually your investors?" and "what exactly was your business model?" and "what was your risk management approach?"

Re: Phone interview with Sam Bankman-Fried [audio]

#30

Post by dibt »

skippyboxedhero wrote: post #18
ilrwbwrkhv wrote: post #2

Also Coffeezilla's take on the interview with more context: https://www.youtube.com/watch?v=0rL35_WV3lE

That video was remarkable. Apparently the guy couldn't code but worked as a trader at JS for three years. In my own head, that almost reflected worse on JS than SBF. I think everyone assumed Alameda were doing something clever. In reality, they were just idiots stealing from and front-running their customers. Lol. These moments when you see the man behind the curtain, it is just ludicrous and shakes your faith in the…

> couldn't code but worked as a trader at JS for three years

That doesn't seem odd. They need people good at math and/or creative problem solvers. The platform they execute on doesn't need to be rebuilt for each new strategy.

> I think everyone assumed Alameda were doing something clever.

Everyone knew the strategy they ran was to list a perpeptual futures contract for a Solana shitcoin on FTX, and short it into the ground. Their initial capital was an arb between Japan and US exchanges. That arb later disappeared. There are some rumors that the initial profits were wasted long ago, and they got new capital from investors hearing about the Japan/US arb.

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