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FTX’s SBF had a secret 'back door' to transfer billions off the books

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Re: FTX’s SBF had a secret 'back door' to transfer billions off the books

#41

Post by fakedang »

anonym29 wrote: post #30
oldgradstudent wrote: post #15

Earlier quoted context omitted.

> the original —actual— value proposition of crypto was: Buying heroin. That's totally unfair. It was buying all kinds of drugs, and weapons, and child porn, and stolen credit cards, and hiring assassins. The assassins invariably turned out to be working for the FBI, of course.

The value proposition was uncensorability, irreversibility, non-inflationary nature, and permissionless nature. It's a tool that can be used for good or evil, just like the personal automobile, which was also abused in early years for malicious ends - just as telephony, the internet, and a number of other technologies were. Criminals are early adopters of new & emerging technologies, that doesn't make those technolog…

> Also, why lump drug transactions in with weapons / CSAM / cc fraud / assassinations? Most drug buyers are not hurting anyone.

The marketplace for all of the above (except assassination) was the same - Silk Road. I remember seeing different sections for weapons, credit cards, fake ids and drugs, but I don't remember seeing a section for CSAM unless it was masquerading as something else.

Re: FTX’s SBF had a secret 'back door' to transfer billions off the books

#42

Post by bmitc »

midislack wrote: post #2

They'll all get away clean. Check out Sam's parents, and other attached people...

I'm not sure. The worst thing you can do is steal from rich people and be a fraudster but not be actually wealthy and powerful.

See Elizabeth Holmes, Trevor Milton, Billy McFarland, and others.

Re: FTX’s SBF had a secret 'back door' to transfer billions off the books

#43

Post by rukshn »

I know there are inherent issues like high energy consumption in the technology. But I believe that blockchain and the decentralization has some value to it. For example where I'm coming from, I can't accept payments via PayPal, it's nothing to do with PayPal but our government is not pushing to meet the requirements to get PayPal to our country.

Also we can't hold USD due to government regulations, if we get the transfers via a bank, so every USD is converted to local currency which is getting devalued faster than USD.

Therefore for people like us the easiest way to get money is via the blockchain.

I think the problem is not with the technology but with people who used it to get rich quick by running these Ponzi schemes and used the technology to create things that doesn't improve the way we transfer wealth but instead used to invent NFTs which is again a get rich quick scheme.

I hope this does not mean the end of blockchain and crypto as a technology, but just as the bursting of the dot-com bubble, we will see some good companies and ideas emerging out of this crisis.

Re: FTX’s SBF had a secret 'back door' to transfer billions off the books

#44

Post by xisthesqrtof9 »

a9h74j wrote: post #14
michaericalribo wrote: post #4

There’s also the matter of the hacked funds last night, and the juicy theory that SBF used his back door to steal even more cash. You can’t make it up!

I want to call this the 'freeze plug' -- as with molten salt nuclear, extract liquidity in case of emergency.

Huh, I wonder where he is now. No way he died in India.

Re: FTX’s SBF had a secret 'back door' to transfer billions off the books

#45

Post by acdha »

umeshunni wrote: post #13
aabhay wrote: post #7

Earlier quoted context omitted.

I actually think this blowback is going to hit Sam's parents, who are part of the liberal intelligentsia. Sam himself is unquestionably going to jail or exile.

Sam is the 2nd largest campaign contributor this election season. He’ll probably get away with this.

That seems unlikely - this is too blatant and, as we saw with Madoff, mismanaging your clients money tends to be taken more seriously than some other white-collar crimes.

Re: FTX’s SBF had a secret 'back door' to transfer billions off the books

#46

Post by the_gastropod »

anonym29 wrote: post #30
oldgradstudent wrote: post #15

Earlier quoted context omitted.

> the original —actual— value proposition of crypto was: Buying heroin. That's totally unfair. It was buying all kinds of drugs, and weapons, and child porn, and stolen credit cards, and hiring assassins. The assassins invariably turned out to be working for the FBI, of course.

The value proposition was uncensorability, irreversibility, non-inflationary nature, and permissionless nature. It's a tool that can be used for good or evil, just like the personal automobile, which was also abused in early years for malicious ends - just as telephony, the internet, and a number of other technologies were. Criminals are early adopters of new & emerging technologies, that doesn't make those technolog…

> The value proposition was uncensorability, irreversibility, non-inflationary nature, and permissionless nature.

This boils down to two things, really: 1. To skirt the law (aka regulatory arbitrage) and 2. Act as a techno-libertarian “sound money” experiment.

Ghost guns can be used for good. But it’d be pretty silly to suggest that criminals use them because they’re early adopters. Criminals use them because they’re criminals. Sometimes the laws they’re breaking are unjust—but these are just tools for breaking the law.

And just because you can use crypto to buy things legally, there’s virtually no reason to do so, like taking a ghost gun to your local firing range.

Re: FTX’s SBF had a secret 'back door' to transfer billions off the books

#47

Post by anonym29 »

fakedang wrote: post #41
anonym29 wrote: post #30

Earlier quoted context omitted.

The value proposition was uncensorability, irreversibility, non-inflationary nature, and permissionless nature. It's a tool that can be used for good or evil, just like the personal automobile, which was also abused in early years for malicious ends - just as telephony, the internet, and a number of other technologies were. Criminals are early adopters of new & emerging technologies, that doesn't make those technolog…

> Also, why lump drug transactions in with weapons / CSAM / cc fraud / assassinations? Most drug buyers are not hurting anyone. The marketplace for all of the above (except assassination) was the same - Silk Road. I remember seeing different sections for weapons, credit cards, fake ids and drugs, but I don't remember seeing a section for CSAM unless it was masquerading as something else.

That's a fair point. But what was on that platform was there because it was illegal, not necessarily immoral (drugs for responsible, personal consumption). I am simply contesting the use of drug transactions (especially small ones for personal use) as an example of an undesirable use case of a new technology.

Re: FTX’s SBF had a secret 'back door' to transfer billions off the books

#48

Post by hailwren »

snowwrestler wrote: post #29
andirk wrote: post #17

This is a story of a corrupt CEO. The main crypto part of it is that FTT was seen as actual money on its balance sheets. This individual stealing people's money sheds light on how regulations exist for a reason, especially when handling billions of USD. Doesn't really speak positively or poorly on cryptocurrency as a technology though.

THE big argument in favor of cryptocurrency as a concept was that it freed people to store and transact value without interference or oversight by governments and institutions. A big argument against cryptocurrency was that those governments and institutions had developed financial oversight for a reason.

There’s a weird false equivalence here. Whenever critics hear government oversight and interference, they immediately point to the governments that manage their currency relatively well and say “look, these governments do therefore no one needs to worry”.

History and contemporary geopolitics are both littered with examples of governments that absolutely ruin their population’s lives with currency problems. What if it were possible to have consumer protection regulation and also remove some of the nasty side effects of government and institutional preference in monetary policy?

Re: FTX’s SBF had a secret 'back door' to transfer billions off the books

#49

Post by WalterBright »

braingenious wrote: post #5

This has been some of the funniest few days in recent memory. Even my crypto true-believer HODL maximalist friends are questioning the entire ecosystem and its value. I think it’s funny that so many people have been hypnotized by get-rich-quick schemes and promises of a utopian monetary system while forgetting what the original —actual— value proposition of crypto was: Buying heroin. As a corollary to “not your keys…

Amusingly, what drove the development of internet video was - wait for it - porn.

The other driver of internet adoption in general was online stock brokerages and banks.

And in the 1970s, people thought the only use for a personal computer was storing recipes.

Re: FTX’s SBF had a secret 'back door' to transfer billions off the books

#50

Post by woah »

braingenious wrote: post #5

This has been some of the funniest few days in recent memory. Even my crypto true-believer HODL maximalist friends are questioning the entire ecosystem and its value. I think it’s funny that so many people have been hypnotized by get-rich-quick schemes and promises of a utopian monetary system while forgetting what the original —actual— value proposition of crypto was: Buying heroin. As a corollary to “not your keys…

Why would this make someone question crypto? FTX was not a blockchain. It was a website run by one guy which (incorrectly) told you that he was holding some crypto for you. FTX could have been an exchange for anything, and it would have been the same outcome, had the CEO gambled with customer deposits like SBF did
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