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Phone interview with Sam Bankman-Fried [audio]

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

#41

Post by SilverBirch »

I think it's pretty clear now we've heard the line from Sam. He's going to claim messiness, 'liquidity' and 'mistakes were made'. A line he's only willing to hold in front of very friendly interviewers. I don't think we'll get anything more out of him unless (1) he falls into the trap of taking an interview with someone numerate, or (2) he slips up and reveals some details that are going to be important later. But it's very clear he's decided to take a line that is clearly untrue, but is unprovable for an outsider. It'll only be as the evidence from the bankruptcy unfolds that we'll get the real story.

The thing I would push for today, would be an audit of all of his associates, including family, and yearly audits of his accounts by the IRS for the rest of his life. The risk that he has squirrelled away some crypto nest egg is too high, regulators should be vigilant to ensure not a penny of customer funds ever enrich SBF or his family.

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

#43

Post by eachro »

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.

I'm not sure how accurate that is: https://www.opensecrets.org/elections-overview/biggest-donor...

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

#44

Post by RC_ITR »

TacticalCoder wrote: post #31
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…

> FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (many of which are now worthless, all of which were speculative nonsense) and is now revealed to have done that. Who was on the other side of these losing trades? People need to follow the money trail. Where did the money go? There are people who called the Alameda / FTX scam from day one, before FTX was eve…

I mean it's always easy to look for a conspiracy, but is it really so crazy to think that in a market that lost $2tn of "value" (I know crypto market caps are fake, but bear with me) that the most aggressive trader out there lost $8bn?

When I say investments, I don't mean VC investments, I mean Crypto trades.

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

#45

Post by trident5000 »

tpxl wrote: post #36
trident5000 wrote: post #17

Earlier quoted context omitted.

I have no idea how this plays out. One question is what was in the agreement for FTX users? Can FTX use deposits for investments and to fund his other businesses? In my view the path to prison for SBF is likely to come in the form of misleading investors rather than customers, but I dont know what the pitch deck told them at the time of funding. It might not even be against the law regarding what he did to customers…

> One question is what was in the agreement for FTX users? Can FTX use deposits for investments and to fund his other businesses? I doubt you can just put that in the ToS and EULA. > In my view the path to prison for SBF is likely to come in the form of misleading investors rather than customers This isn't like Theranos, there is clear and provable monetary harm that was done.

"monetary harm" isnt a broken law. Im wondering what the specific rules are that he broke that could land him in jail for mismanaging customer funds. Its an odd case because the space has little regulation.

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

#46

Post by divbzero »

TacticalCoder wrote: post #31
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…

> FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (many of which are now worthless, all of which were speculative nonsense) and is now revealed to have done that. Who was on the other side of these losing trades? People need to follow the money trail. Where did the money go? There are people who called the Alameda / FTX scam from day one, before FTX was eve…

> Who was on the other side of these losing trades? People need to follow the money trail. Where did the money go?

There doesn’t have to be another side to the losses. If Alameda / FTX was holding assets that depreciate in value, they would book losses along with everyone else holding the same assets.

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

#47

Post by smcl »

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.

This part of the story is where we are starting to see the MIT grad and former Jane Street trader claim to be actually quite stupid and naive. His excuse is that they took customers' account deposits to FTX via an account Alameda held, then credited the FTX accounts with balances without ringfencing those funds in that Alameda account (or I guess opening an FTX one and moving them there, not sure why they didn't do that in the first place...) so they got double-spent, so to speak. Which would be kinda funny for a crypto-firm, but I don't buy it.

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

#48

Post by RC_ITR »

dibt wrote: post #25
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…

> The tokens didn't suddenly drop in value.

May I point you to a chart showing the price of Solana (SBF's preferred token)? Down 80% in four months is a pretty sudden drop in value. To be clear, I think the fraud started then, but that was after the damage had been done.

>He has experience as a market maker and remaining delta-neutral

Yeah, but market makers in unexpectedly lopsided markets lose all the time. It's the risk that enables them to 'earn' a take rate.

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

#49

Post by maxbond »

swader999 wrote: post #9
janmo wrote: post #5

SBF is literally adding one year more year to his sentence in every interview he gives. He should just shut up. (Not legal advice)

Naw, he paid a lot of politicians, he fine.

It's not clear to me that donating to politicians necessarily buys you clemency (in the absence of explicit quid pro quo), but accepting the premise, I think at a certain point, when your crimes and donations are widely publicized, there's a phase transition where it's more likely to work against you. The politicians can't bare the perception of having been bought, and whatever influence they're able to muster is directed against you.

But it's not clear to me that donating to campaigns in a handful of election cycles buys you very much influence within the DoJ. Influencing politicians in order to impact the nomination of judges or other appointees, or to pass certain laws - those are clear mechanisms, but they take many election cycles to implement. It seems to me like SBF's influence campaign was successfully building good will for the crypto legislation he supported, but that FTX/Alameda blew up before that could come to fruition.

I expect his donations to be largely neutral to his potential prosecution but am open to reporting surfacing facts to the contrary.

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

#50

Post by eftychis »

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…

Well technically it is a liquidity crisis, as being insolvent is a liquidity crisis. (If you have no assets, you have no liquid, class 1 assets by definition.) It is similar to the extreme example of "bombing a building to the ground and then saying we lacked a roof."
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