The timing of this is interesting, on the eve of SBF testifying before Congress.
SBF Arrested by Bahamian Authorities
621–630 of 886 posts
Re: SBF Arrested by Bahamian Authorities
#622Earlier quoted context omitted.
I think you grossly underestimate the amount of regulation Caroline is subject to. At the very least she will be deemed unfit or proper, which means she will be barred from any financial activity for the years to come. On top of that, as a MOO & RO she will be professionally and personally liable to millions in fines, and most likely jail time. Negligence _is_ a crime, a lack of means _is_ a crime, a lack of knowledg…
My understanding is that she was the CEO of Alameda and received a loan from FTX based on garbage collateral. That’s not a crime? SBF knew the collateral was junk, so it’s not misrepresentation. Was she also an officer of FTX? A good chunk of those customer funds were from margin accounts that could be loaned out, so it may be hard to prove she knew SBF was dipping into the forbidden cookie jar, especially when there…
There are very strict rules for any regulated firm about the provenance of the funds, ultimate beneficiaries, client-assumed risk, KYC, etc.
These are not only for customer protection, but anti money laundering as well.
Small regulators often overlook the client risk part so as to attract foreign money (that's why most of these regulators will be OK with little to no restriction of derivatives). The anti money laundering part though is very important for these small regulators as they could be fined internationally and don't want the bad publicity.
You cannot just "accept money and trust its from a legitimate source".
Re: SBF Arrested by Bahamian Authorities
#623Earlier quoted context omitted.
I haven’t seen any evidence Alameda itself committed any crime, only that they were terrible traders and lost many billions on margin through FTX, who gave them special treatment for collateral. SBF then tried to bail them out with FTX customer funds since he owned both. I think Ellison will get off scot free since she only controlled Alameda, and not entirely. Her crimes are probably minor and worth forgiving for he…
Didn't she admit that only she, SBF and the cofounder were aware that the funds were taken from costumers to fund their illiquid investiments? Many news outlets reported this. She participated on the crime
Couldn’t she just claim she believed those funds were coming from the customer margin accounts where the terms allowed that usage? That matches her public statements.
Re: SBF Arrested by Bahamian Authorities
#624Earlier quoted context omitted.
A) Banks seem to be getting out of the business of hosting deposit boxes. I’d guess it’s not worth the hassle and liability. B) I don’t know about all of them, but the ones I’ve used have explicit rules against storing cash.
Would a so-called cbdc work? Get a bank account at the Fed that only gives you overnight rates (i.e. low but still higher than banks!), and only risk is sovereign risk. Akin to the narrow banks proposals of a few years ago
Given that the Fed refused to grant licenses to those narrow banks, with no real justification, those CBDCs seem unlikely to happen.
Re: SBF Arrested by Bahamian Authorities
#625It is a good first move to arrest SBF, but nothing will happen if the rest of the team has already left the Bahamas or gone untraceable.
Going untraceable is the stuff of novels. Pulling that off in the real world is almost certainly well beyond the abilities of any of these individuals.
Re: SBF Arrested by Bahamian Authorities
#626Re: SBF Arrested by Bahamian Authorities
#627Earlier quoted context omitted.
He is a much bigger "prize" for the prosecution. She had low profile and not all that well known to the electorate. Plus, prosecuting her may not even look all that good, for identity politics reasons. If she cooperated first, there is a good chance of immunity or very low sentence.
> Plus, prosecuting her may not even look all that good, for identity politics reasons. Strongly disagree with this. Look at how they threw the book at Elizabeth Holmes (vs, say, Adam Neumann, or any other male founder from the last decade plus). If anything women have been getting it harder.
What an awful take. Holmes' (male) co-founder got a longer sentence than she did, just for a start.
Re: SBF Arrested by Bahamian Authorities
#628Earlier quoted context omitted.
It uses the same tone that SBF uses when characterizing the situation as a complicate mixup instead of what it really is, deliberate fraud using customer funds to increase leverage. If you want to compare tone, you can look up any NYT article on FB https://www.nytimes.com/topic/company/facebook-inc . If you want something specific to compare, just take a look at the headline/subtitle which about as far as most people…
> It uses the same tone that SBF uses when characterizing the situation as a complicate mixup instead of what it really is, deliberate fraud using customer funds to increase leverage. That's because describing it as "deliberate fraud" would require evidence of intent that they don't have. I agree that it's likely the case, but I wouldn't expect a journalist to state it as fact at this point.
Here is a better title.
FTX firm headed by SBF collapses after failing to process user withdrawals. Mismanaged funds and risky trades are to blame. Victims and prominent figures within the crytposphere allege fraud.
Funny how when it comes to most stories, "Business is killing babies... says person (random person on twitter)" is good enough.
Re: SBF Arrested by Bahamian Authorities
#629Earlier quoted context omitted.
My understanding is that she was the CEO of Alameda and received a loan from FTX based on garbage collateral. That’s not a crime? SBF knew the collateral was junk, so it’s not misrepresentation. Was she also an officer of FTX? A good chunk of those customer funds were from margin accounts that could be loaned out, so it may be hard to prove she knew SBF was dipping into the forbidden cookie jar, especially when there…
There are very strict rules for any regulated firm about the provenance of the funds, ultimate beneficiaries, client-assumed risk, KYC, etc. These are not only for customer protection, but anti money laundering as well. Small regulators often overlook the client risk part so as to attract foreign money (that's why most of these regulators will be OK with little to no restriction of derivatives). The anti money launde…
Some of those funds were legitimate though? A $1B loan would have been fine, probably a fair bit more. How would she know where that line was?
Re: SBF Arrested by Bahamian Authorities
#630Earlier quoted context omitted.
The political donations that demonstrate high corruption within government and will prevent him from facing consequences…or something.
It's strange how as soon as criminal money starts going into campaign funds, we all get up in arms about how corrupt and awful pay-to-play politics is. The same political conflicts of interest exist, regardless of whether the funding comes from a carbon Super-PAC, or a crypto con man... But you wouldn't be able to tell that from any of the blatantly partisan rhetoric around it. It's all very "We're not mad that campa…
Sure, but what do you do about it? I've never been able to formulate any rules that wouldn't have worse, unintended consequences. Running for a political office is essentially advertising yourself, and that takes gobs of money, existing fame, connections, or all of the above.
Trying to limit 'who' can contribute is fraught with violations of free speech or picking and choosing the definition of what a 'company' vs an 'organization' is.