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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

#391

Post by NoPicklez »

jiggawatts wrote: post #98
andrewstuart wrote: post #75

The real problem behind all these crypto companies is the people who make the money have no concept of what "integrity" is. They aren't coming from a baseline assumption that their job is to protect and interests and the money of their clients. Traditional banks, for the most part, have DNA built around protecting customer interests and customer money. Crypto companies have none of that attitude - behind every one of…

> The real problem behind all these crypto companies is the people who make the money have no concept of what "integrity" is. You don't need integrity while "the line goes up". Integrity is only for when it goes down. Until recently, the line has been consistently going up. SBF was banking on it going up forever. If it had gone up forever, he would not have been caught! While the line goes up, integrity just eats int…

Terrible point of view, you need integrity regardless of whether the line goes up or down. As often, the line goes up DUE TO unethical behavior and poor integrity. The incentive to act without integrity is what often what drives the line going up, when it should have to begin with.

Yes, I can imagine having error bars in 20 billion dollars in size, its what the financial audit space does every single year. It's what keeps companies like you've listed in line, because you audit against a materiality.

Re: A software change allowed FTX to use client money

#392

Post by headsoup »

tiahura wrote: post #343
headsoup wrote: post #293

Earlier quoted context omitted.

Isn't it fraud if you're telling you're customers you don't and can't do this?

No. A car salesman telling you they can't sell you the new Buick for $42,000, when they sold one to their neighbor yesterday for $41,000 is not fraud.

Yeah but if the salesman told you it's a brand new Buick never been driven that they've actually been lending out to friends and driving around?

Re: A software change allowed FTX to use client money

#393

Post by galaxyLogic »

XajniN wrote: post #385
galaxyLogic wrote: post #383

Earlier quoted context omitted.

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.

True, depends on the facts of the case.

Re: A software change allowed FTX to use client money

#394

Post by mlrtime »

Animats wrote: post #144
totalZero wrote: post #87

Earlier quoted context omitted.

I totally agree. Licenses/certifications do exist. SBF had the FINRA Series 7 and 55. https://brokercheck.finra.org/individual/summary/6204362 The loophole is that employees at hedge funds and investment advisers don't face the same licensing requirements as employees at banks and brokerages who deal directly with customers. There are people who trade billions of dollars of customer funds a week without any required…

He had a series 7? Did not know that. But, right, he was a trader with Jane Street, so he had to have a Series 55 and probably the Series 7, which is for brokers. (Everybody in finance takes the SIE, the "securities industry essentials" exam. That should be required for programmers in finance.) So he knew what he was supposed to be doing.

There are a few trading firms that require all SWE/Traders/Quants to get the Series 7.

I have a Series 7 and have never handled client money, but I wrote software and had had access to these systems.

Not all fintechs are evil.

Re: A software change allowed FTX to use client money

#395

Post by mlrtime »

strangeattractr wrote: post #104
wanderingmind wrote: post #101

Earlier quoted context omitted.

You mean like how Goldman sold junk bonds to customers while knowing it was junk?

Junk bonds are bonds with high credit risk, what’s wrong with selling them to customers who are after high yields?

Junk bonds are just High Yield bonds at a certain rating. GS doesn't set the Price/Yield or the rating.

Re: A software change allowed FTX to use client money

#396

Post by parksoha »

hn_throwaway_99 wrote: post #95
parksoha wrote: post #67

Earlier quoted context omitted.

Isn't it completely unscalable? I work for a big automaker, there's literally people whose only job is to be compliant and inform the necessary leads about it. There's hundreds of countries, each with very specific things. If I study everything, I can't code. When knowledge arrives at my team, is already condensed to the point of: "in X country, you must tell the prices of a call if you show a phone number for assist…

For some reason, I've seen a lot of people try to make arguments around FTX that completely miss the scale and malfeasance that occurred. This wasn't a case of "oh, you got some esoteric GAAP depreciation rule wrong". This was an engineering leader putting a ton of special cases in the code saying "For our most beloved partner, none of the rules apply, including letting them take unlimited amounts of customer funds.…

The thing is, the comment I'm answering, is not about FTX. I'm not talking about FTX. The user was making a very broad statement based on this case.

Re: A software change allowed FTX to use client money

#397

Post by joshlemer »

wolverine876 wrote: post #390
joshlemer wrote: post #190

Earlier quoted context omitted.

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'.

Not according to me, they're both wrong in the exact same way to me.

Re: A software change allowed FTX to use client money

#398

Post by Godel_unicode »

anonymoushn wrote: post #387
Godel_unicode wrote: post #386

Earlier quoted context omitted.

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

You’re stating confidently that python is orders of magnitude slower than it actually is because of some pseudo code, which you haven’t seen implemented, and you called into across a network link?

…do you see the problem?

Re: A software change allowed FTX to use client money

#399

Post by nullc »

jacquesm wrote: post #381
nullc wrote: post #171

Earlier quoted context omitted.

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 s…

Perhaps a small upside to computer programmers / techs often being viewed as low status compared to other highly paid professionals. :)

Re: A software change allowed FTX to use client money

#400

Post by t0suj4 »

ithinkso wrote: post #265
t0suj4 wrote: post #257

Earlier quoted context omitted.

Why should be someone responsible for how the product of their labor is being used?

That's why be don't deserve the title of engineer in software and we should stick with coder or programmer. 'Hi mate. We just bought this rebar from Alibaba, saved as a ton of money. Could you sign here real quick? We need to finish that bridge!'

I see the sign off as a transaction where the signee assumes responsibility for results being up to spec and all bets are off at this point.
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