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FTX’s Sam Bankman-Fried cashed out $300M during funding spree

wsj.com

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Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#61

Post by mattbrewsbytes »

wmf wrote: post #13
slap_shot wrote: post #5

> the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals. The most fascinating part of this whole story to me is just how few checks and balances there were in this company. Even without a board, did major investors not get his quarterly financials? If the leaked balance sheet was any indication of their level financial engineering cap…

Given what we know now, those financials were probably completely wrong.

Yeah I’d venture a guess based on what we’re hearing that they just wrote up whatever they wanted it to look like.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#62

Post by notch656a »

colechristensen wrote: post #36
karmakurtisaani wrote: post #30

Earlier quoted context omitted.

I think the reason is that he was seen as a financial genius boy wonder who just understood crypto better than anyone from the "old guard". So he got away with wildly inappropriate things. More generally, we (as a society) seem to be worshiping those who make a fortune, and forget that they too are just as faulty as the rest of us. Initial innovative success gets projected to mythical proportions, and once the invest…

In other words, the investors were stupid and deserved what they got. Customers were owed better, but large scale investors who don't do due diligence and end up losing their shirts deserve every bit of it.

I think it's more likely that the more sophisticated investors knew there was a lot of handwaving going on and they thought they'd get through the exits with principal+profit before they became clogged. Sometimes people are known to just not ask if they think the details are odious and they want to maintain plausible deniability about knowledge of source of the profits.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#63

Post by sarahowen62 »

leet_thow wrote: post #9
twelve40 wrote: post #8

Earlier quoted context omitted.

if the investors are willing to buy your shares from you, then why not? I've done secondary sales as early as seed. Unless you hide it from the board somehow, or you are explicitly prohibited from doing this, it's just a business transaction.

Not an ethics question of why or why not, I'm just curious.

No post body was provided.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#64

Post by hackerlight »

Tenoke wrote: post #43
thepasswordis wrote: post #42

Just a general statement on people commenting on this saga: Sam wasn't doing effective altruism. He was lying about doing effective altruism. It's weird to me that people talk about this as an indictment of EA...but this rings similar to me as claiming that this is an indictment of DeFi or cryptocurrency generally. Sam/Caroline weren't doing DeFi, and neither were they really doing anything related to cryptocurrency.…

How was he not doing EA? He was lying AND donating to causes. I'm very pro-EA but that's a weird claim.

Because EA is about overall impact. (At least that's one strand of thought in EA, for those that lean more towards utilitarianism.) He hurt so many people and caused so much distrust that his overall impact is negative. It is therefore against the principles of EA. That's not the No True Scotsman fallacy.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#65

Post by throwaway4good »

slap_shot wrote: post #5

> the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals. The most fascinating part of this whole story to me is just how few checks and balances there were in this company. Even without a board, did major investors not get his quarterly financials? If the leaked balance sheet was any indication of their level financial engineering cap…

I think those investors got all the paperwork they wanted and it looked good.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#66

Post by sarahowen62 »

yieldcrv wrote: post #17
kieselguhr_kid wrote: post #16

Earlier quoted context omitted.

There are likely other charges that they could face. I don't think this rises to the level of embezzlement (although IANAL), but the missing customer deposits, lack of strict segregation between Alameda and FTX, and the use of company assets for personal loans and purchases will probably lead to indictments.

that I agree on, just commenting on this specific article

No post body was provided.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#67

Post by amanj41 »

colechristensen wrote: post #36
karmakurtisaani wrote: post #30

Earlier quoted context omitted.

I think the reason is that he was seen as a financial genius boy wonder who just understood crypto better than anyone from the "old guard". So he got away with wildly inappropriate things. More generally, we (as a society) seem to be worshiping those who make a fortune, and forget that they too are just as faulty as the rest of us. Initial innovative success gets projected to mythical proportions, and once the invest…

In other words, the investors were stupid and deserved what they got. Customers were owed better, but large scale investors who don't do due diligence and end up losing their shirts deserve every bit of it.

I have to agree with this. While I don't like to victim blame usually, the VCs are too much in a position of power to truly be victims here. They absolutely could have pushed for more transparency or a board and likely would have smelled smoke when there was none

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#68

Post by jasonwatkinspdx »

doesnotexist wrote: post #45

> The amount raised contained numerical references to marijuana and oral sex: $420.69 million raised from 69 investors. An article published by one of FTX’s investors, Sequoia, called that fundraising a “meme round,” referring to the embedded jokes. Is Sequoia going to need to rebrand itself after this? Sure does raise some questions about their judgement and professionalism. Hey Investors, we're raising a round of a…

That freakin novel of a fawning profile of SBF on their website sure hasn't aged well.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#69

Post by sarahowen62 »

oldgradstudent wrote: post #14
kieselguhr_kid wrote: post #6

I don't know if it will happen, but a potentially good outcome here would be some regulation on the business practices of sufficiently large private companies in order to ensure they meet some basic level of corporate governance. Maybe they don't need the same level of scrutiny publicly traded companies have, but establishing minimum standards of conduct would help avert crises like this that can spread across entire…

Fraud ands theft are already illegal.

No post body was provided.

Re: FTX’s Sam Bankman-Fried cashed out $300M during funding spree

#70

Post by ohashi »

wmf wrote: post #49
Tenoke wrote: post #43

Earlier quoted context omitted.

How was he not doing EA? He was lying AND donating to causes. I'm very pro-EA but that's a weird claim.

Prominent EAers like McAskill have said (before this scandal) that EA is only valid if the money is earned honestly. They say that they never intended EA to be "steal to give".

Sounds nice in theory, but when the outcome is people behaving like this and using it as a justification it rings hollow. The idea seems centered around making the most money possible as a core tenet. That alone is a pretty corrupting thing to build your whole ideology on judging from how we've seen humanity behave for thousands of years.
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