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A software change allowed FTX to use client money

reuters.com

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Re: A software change allowed FTX to use client money

#381

Post by jacquesm »

nullc wrote: post #171
jacquesm wrote: post #154

Earlier quoted context omitted.

For a non-violent crime which saw the recovery of a large fraction of the loot that's not 'only'.

It is relative to the other participants.

That's true, but likely factors were: they were in an adversarial power relationship with some of the other participants (notably: Madoff himself who repeatedly assured them that he actually made the trades that they reported but I fail to see how they could have been so gullible) and may have been put under significant pressure and it likely is a first offense all of which would result in a lesser sentence. But it still is obviously a very serious transgression, and none of their claims that they didn't know what was really going on seem to have fooled the jury.

Even the most kind reading of the situation leaves little doubt that they knew exactly what was going on.

Re: A software change allowed FTX to use client money

#382

Post by galaxyLogic »

mitjam wrote: post #274
galaxyLogic wrote: post #191

Earlier quoted context omitted.

Right, "software engineer" is often used just as a synonym for "Programmer". That's just how the industry is, currently. There are no regulations as to who can develop what software as far as I know. Whereas there are for who can design a bridge, act as your lawyer, or prescribe you medicine.

Yes and when we as software engineers / programmers act as if we don‘t care we should not be surprised if software engineering / programming gets regulated, too.

Right

Re: A software change allowed FTX to use client money

#383

Post by galaxyLogic »

XajniN wrote: post #365
galaxyLogic wrote: post #185

Earlier quoted context omitted.

I would say no. They just need to know how to implement what they are asked to implement. Say you are an engineer working for a gun manufacturer. You need to know how to manufacture the gun. You don't need to know what it is used for or by whom or even how much it is sold for. If you are aware that a crime is going on you in principle are required to report it, but not doing so is not nearly at the same level of crim…

That is a very bad analogy. Guns are not illegal, what people do with them might be. What these developers made had no lawful use. A better analogy would be if some engineers in a gun factory were making chemical weapons.

There are laws against chemical weapons but I don't think there are laws against producing any kind of software. It's more what you do with the software. Whereas with chemical weapons they are criminalized as such because it is clear they can be used only for one purpose.

Re: A software change allowed FTX to use client money

#384

Post by galaxyLogic »

zopa wrote: post #214
galaxyLogic wrote: post #178

Earlier quoted context omitted.

But we don't hold the gun-industry accountable for mass-shootings. Maybe we should. But situation is a little bit similar here. The engineer created the gun. He didn't use the software to shoot people. Or maybe he did. The question is did he personally benefit from the change made more than his usual salary? Or think about people who build bridges. They just follow the orders they get from higher ups. Bridge collapse…

> The question is did he personally benefit from the change made more than his usual salary? That’s not the question — as in, it won’t be an element of any of the crimes he’s eventually charged with. The question is whether he was knowingly or recklessly involved in a scheme to defraud people. And just generally, legal reasoning does frequently use analogies but they need to be tighter than the ones you’re using. Thi…

I would think that in most crimes the motivation of the accused is a factor. Think about hate-crimes. They are not hate-crimes unless the person did them out of hate for the PURPOSE of hurting members of some minority.

Murder-in-first-degree means you didn't just recklessly cause the death of somebody, it means you did it intentionally, on purpose.

See Mens Rea, "Criminal Intent" https://www.law.cornell.edu/wex/mens_rea

Was this engineer knowingly and intentionally helping to commit the crime? We don't know because we haven't seen many details or testimonies in this case. He must be assumed innocent until proven guilty. And proving him guilty must include proving he had criminal intent, Mens Rea. The court of public opinion as in Hacker News is of course a different matter.

Re: A software change allowed FTX to use client money

#385

Post by XajniN »

galaxyLogic wrote: post #383
XajniN wrote: post #365

Earlier quoted context omitted.

That is a very bad analogy. Guns are not illegal, what people do with them might be. What these developers made had no lawful use. A better analogy would be if some engineers in a gun factory were making chemical weapons.

There are laws against chemical weapons but I don't think there are laws against producing any kind of software. It's more what you do with the software. Whereas with chemical weapons they are criminalized as such because it is clear they can be used only for one purpose.

What about the laws against helping or enabling criminal activities? There is no need to mention software specifically.

Re: A software change allowed FTX to use client money

#386

Post by Godel_unicode »

anonymoushn wrote: post #361
Godel_unicode wrote: post #359

Earlier quoted context omitted.

Those times are wildly inaccurate on modern hardware with modern python, fwiw.

These are our observed latencies for their risk checks after sending millions of orders per day for months at a time (which doesn't sound like much, and isn't much, but is the entire order rate that they gave us while we were doing 0.5% of the maker volume on their exchange).

So it’s not, as you previously stated, the time to compute a square root?

Re: A software change allowed FTX to use client money

#387

Post by anonymoushn »

Godel_unicode wrote: post #386
anonymoushn wrote: post #361

Earlier quoted context omitted.

These are our observed latencies for their risk checks after sending millions of orders per day for months at a time (which doesn't sound like much, and isn't much, but is the entire order rate that they gave us while we were doing 0.5% of the maker volume on their exchange).

So it’s not, as you previously stated, the time to compute a square root?

That seemed to be the most computationally demanding portion of their public documentation of the formulas involved

Re: A software change allowed FTX to use client money

#388

Post by geoduck14 »

zopa wrote: post #223
notyourwork wrote: post #134

Earlier quoted context omitted.

In english it means the terms are 40 years to repay the loan at a 2% rate. Not sure how that translates to never really due.

I’m assuming the poster meant refinance with the same terms. So the borrower can get another 40 years to pay back the remaining balance anytime they like.

You're right. I believe the technical term is "recast" where you take all of the outstanding balance and spread it over the course of "the next 40 years" with the same interest rate.

Another fact I omitted is that the interest rate is 2%, but the minimum payment is lower. So the borrower is accumulating owed balance because they are paying less than interesting accruing.

Re: A software change allowed FTX to use client money

#389

Post by geoduck14 »

vel0city wrote: post #150
geoduck14 wrote: post #125

Earlier quoted context omitted.

>If Jamie Dimon asked a developer at the bank "hey can you have Chase ATMs allow these 10 accounts that are in my name to withdraw unlimited funds?" everyone involved would be in jail. This isn't true I worked for a large bank. I managed data for their mortgages. We bought another bank and processed their mortgages with our systems. There were several thousand accounts that we called "friends of the " because they ha…

$10M ona 40 year term and a 2% rate is like $30k/mo in payments. I wouldn't say most people would think of $30k a month a super low payment. And now that the bank has new ownership they might be able to refinance again and continue to kick the can down the road, but they're less likely to get as favorable of terms I'd imagine.

Your math is right. I forgot to mention than the minimum payment might be less than the interest rate.

And the technical term for the type of refinance is "recast" (iirc) - so the "new bank" honors the terms because it is a part of the originating documents.

Re: A software change allowed FTX to use client money

#390

Post by wolverine876 »

joshlemer wrote: post #190
xg15 wrote: post #181

Earlier quoted context omitted.

"I was only following orders" is generally seen as a bad defense since the end of WW2.

This is why I don't get why the phrase/excuse/justification "I'm just doing my job" is so commonly used.

Yet owners and management get to say, 'it's business' or 'it's just business'.
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