FTX used corporate funds to purchase employee homes, new filing shows • Hacker News Board

Re: FTX used corporate funds to purchase employee homes, new filing shows

#231

Post by nullc » Thu, Nov 17, 2022, 8:45 PM UTC

foobarian wrote: post #16

This whole mess makes me wonder, what if they did everything right, with proper accounting and compliance practices etc.? Would we have ended up with a successful crypto business that would advance the whole field forward? Perhaps Coinbase is an example of that, though maybe not as well known due to less drama?

They wouldn't have had any business if they weren't fraudulent. Most of the actual customer interest came because they were paying people 8%/yr on deposits, because their exchange was paying high rates for total dogshit scamcoins (presumably because their market maker Alameda was buying that dogshit), and because they were offering derivatives products like perpetuals that are live grenades.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#232

Post by jandrese » Thu, Nov 17, 2022, 8:45 PM UTC

jerf wrote: post #54

moneycantbuy wrote: post #28

how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?

That's one theory. Of course, given the depth of financial depravity on display here and the incredible thinness of the financial defense, one must also entertain the theory that they did do the due diligence, they were aware of how dangerous this was, and they invested anyhow for other reasons. And that those reasons are probably not good. There have been many cases where companies go to great lengths to do accounti…

What blows my mind is that SBF is going to investors asking for money in his billion dollar "no you can't look at the books" crypto hedge fund while looking like he's playing hookie from his math class and playing video games during the pitch meeting and the supposedly very serious Wall Street types went "Wow! This guy is amazing! All the money he wants and more!".

Re: FTX used corporate funds to purchase employee homes, new filing shows

#233

Post by subsaharancoder » Thu, Nov 17, 2022, 8:46 PM UTC

huevosabio wrote: post #64

moneycantbuy wrote: post #28

how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?

I have the same question. My best guess is that these VCs need to deploy so much capital that they don't really do due diligence, instead they go by "founder vibes" and "vision", a watered down version of "invest in the team, not the product". Sequoia, SoftBank, a16z all seem to be guilty of this. Anecdotally, Chamath Palihapitiya, in the recent All-in Podcast [0], said that they met with SBF and as a condition to in…

Chamath Palihapitiya has an uncanny ability of appearing when others are left holding the turd bags and then waxing some insight of how they foresaw something. All he cares about is being in the news cycle and making money, he did the same thing with the GameStop short squeeze..

Re: FTX used corporate funds to purchase employee homes, new filing shows

#234

Post by bwi4 » Thu, Nov 17, 2022, 8:46 PM UTC

xdavidliu wrote: post #199

encoderer wrote: post #191

Earlier quoted context omitted.

same creative use of mark to market accounting but compared to FTX, Enron was fraud on difficult mode. They had to (attempt to) actually build things like power plants in India. FTX just yeeted tokens to bag holders based on fancy darkmode graphic design and a screwball haircut.

> FTX just yeeted ticker symbols to bag holders based on fancy darkmode graphic design and a screwball haircut. I understand the words in this sentence individually, but not the sentence in its entirety. Can anyone translate?

As a bag holder, I often find myself attracted to dark mode websites, where I make my purchase decision based on how I feel about the CEO's haircut.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#235

Post by dahdum » Thu, Nov 17, 2022, 8:46 PM UTC

gabcoh wrote: post #135

jonathankoren wrote: post #119

Earlier quoted context omitted.

The EA shtick really feels like Big Tony walking Bart through the logic that selling stolen cigarettes to strangers by the truck load is the same as stealing bread to feed your starving family.

I don't know why it would feel like that. The EA community came out immediately and very forcefully in opposition to SBF and this perversion of EA philosophy since the FTX blow up [1] and they have been vocally opposed to shady practices in the service of EA since long before the last week. [1]: https://forum.effectivealtruism.org/posts/XHrHsrQGyr4NnqCA7/...

I encourage anyone reading that post to read some of the others on the forum as well.

> Alameda and later FTX are founded explicitly as Effective Altruist organizations, although they rely on commercial investment and seed funding. Early employees are mostly or all EAs. The hiring process filters aggressively for goodness of fit a lot of which is to what extent someone is an EA. They pitch FTX and Alameda as places to go work if you are looking to do good.

> SBF is influenced by his longtime friend Will MacAskill* and others by the principles of Effective Altruism.

* Will MacAskill is the co-founder of EA, close friend of SBF for 9 years, and the one that was trying to get Musk to accept an investment from SBF for Twitter.

https://forum.effectivealtruism.org/posts/f9rFsbsd4rGLQfpQg/...

Re: FTX used corporate funds to purchase employee homes, new filing shows

#236

Post by jandrese » Thu, Nov 17, 2022, 8:47 PM UTC

Animats wrote: post #32

This is the kind of theft that puts people in prison fast. It will take years to untangle the whole financial mess, but buying a house with company funds right before a bankruptcy is easy to explain to a jury.

And these people are young. Bernie Madoff at least had the smarts to be old before he was caught so life in jail is basically a whatever for him.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#237

Post by seagullrific » Thu, Nov 17, 2022, 8:47 PM UTC

jerf wrote: post #54

moneycantbuy wrote: post #28

how did ftx successfully raise so much vc money recently? do these top vc firms do no due diligence?

That's one theory. Of course, given the depth of financial depravity on display here and the incredible thinness of the financial defense, one must also entertain the theory that they did do the due diligence, they were aware of how dangerous this was, and they invested anyhow for other reasons. And that those reasons are probably not good. There have been many cases where companies go to great lengths to do accounti…

> FTX’s list of investors spans powerful and well-known investment firms: NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo.

- https://archive.ph/1tjP5

This is an extraordinary number of high-profile companies which either failed to do due diligence, or were knowingly, deliberately doing shady dealings.

Not great to have to choose between incompetence and shadiness at any of those, but those are the two options, and each should be investigated for throwing their [customers'] money into an obvious scam.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#238

Post by Goronmon » Thu, Nov 17, 2022, 8:48 PM UTC

xdavidliu wrote: post #101

_fat_santa wrote: post #20

Earlier quoted context omitted.

My impression is Coinbase is the thing that FTX was claiming to be, a well run exchange. Looking back, them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. It's very easy to see the celebrity endorsements, puff pieces and the companies name plastered over a stadium as endorsements of how solid the business is, after all, a bunch of kids…

ironically, I first heard about FTX and SBF in a hackernews thread about Coinbase layoffs. https://news.ycombinator.com/item?id=31738029 Some gems: "Yeah. FTX people clearly know a lot more about market making and how exchanges work. Makes coinbase look like amateurs. ... I agree and am in general a big fan of FTX and the guys that work there. The CEO, Sam Bankman-Fried one of these HFT guys from Jane Street and his…

At least one person seemed to know what they were talking about. Unfortunately the comment was flagged, which is interesting.

https://news.ycombinator.com/item?id=31738560

> Very different approach to Bryan Armstrong, who’s more of a Bitcoin “believer”

The fact that you think this goes to show just how little you know about this ecosystem. And Bankman is the worst type of con-artist, he is going to use his billion(s) to influence US politics rather than build viable technological solutions. Armstrong has been the source of ire since the Segwit wars where he scammed and peddled Bcash on unsuspecting noobs using the 'legitimacy' of being the only YC backed and US sanctioned exchange. It's been a series of horrible UX after bad business strategy.

Armstrong is what I expected when SV entered this space and played the typical VC game as seen with the buy-out of 21 Inc. I kind of respect him for hustling the SV crowds with such an absurd IPO valuation, but he is immensely foolish if he did not cash out then and there and anticipate buying back under this bear market to recapitalize and sell more of his worthless shares as they cratered in price.

Again, HN is pathetically out of its depth when it comes to this Industry that it's hard to take most of you seriously on anything else.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#239

Post by nullc » Thu, Nov 17, 2022, 8:51 PM UTC

gabcoh wrote: post #135

jonathankoren wrote: post #119

Earlier quoted context omitted.

The EA shtick really feels like Big Tony walking Bart through the logic that selling stolen cigarettes to strangers by the truck load is the same as stealing bread to feed your starving family.

I don't know why it would feel like that. The EA community came out immediately and very forcefully in opposition to SBF and this perversion of EA philosophy since the FTX blow up [1] and they have been vocally opposed to shady practices in the service of EA since long before the last week. [1]: https://forum.effectivealtruism.org/posts/XHrHsrQGyr4NnqCA7/...

> have been vocally opposed to shady practices in the service of EA

That isn't the impression I got from reading their forums-- rather, you can find some messages vocally opposed to "shady practices" but only because people keep promoting and arguing against the position.

You won't find such vocal opposition to shady practices elsewhere because elsewhere it isn't needed. In the world of charity for sociopaths, "scamming for good" is inside the overton window and has to be combated to prevent it from taking over.

Re: FTX used corporate funds to purchase employee homes, new filing shows

#240

Post by UncleOxidant » Thu, Nov 17, 2022, 8:52 PM UTC

boh wrote: post #114

In a separate article Ray also said: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” And this is the same man who oversaw the liquidation of Enron. "Ray said he had found at FTX international, FTX US and Bankman-Fried’s Alameda Research trading company “compromised systems integrity”, “faulty regulatory o…

And this is only after a few days that's he's had to examine the FTX books. There's likely a lot more bodies buried that will take a bit longer to find.