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FTX – The fraud was in the code

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Re: FTX – The fraud was in the code

#91

Post by ac29 »

shapefrog wrote: post #88
Analemma_ wrote: post #83

Earlier quoted context omitted.

You’re missing the broader context here. The prosecution is alleging massive fraud, while SBF’s defense is that he wasn’t committing fraud, he was just incompetent. So a lot of the trial hinges on presenting evidence one way or the other for the fraud-or-incompetence question. Things like the counter, which was clearly deliberate and specifically engineered to lie to customers, establish a pattern of deception and ma…

They guy had a personal net worth of ~$100bn; lost all that and $8bn of other peoples money. The prosecution have cracked open the books, turned every single employee, and this is their smoking gun? I will at least say, "goes to character", is absoultely an excellent and as I see it the only logical answer. If however, they have to play that game and that is all they have then they are going to struggle to make a leg…

> The prosecution have cracked open the books, turned every single employee, and this is their smoking gun?

We are not even one week into a six week trial. This particular fraud is only one small part of their overall case.

Re: FTX – The fraud was in the code

#92

Post by nyokodo »

fakedang wrote: post #81
nyokodo wrote: post #36

Earlier quoted context omitted.

> You are basically suggesting that a fraud victim should be punished more than the money they lost Their actions brought in more victims, and therefore investors ought to be wary of listening to them in future. They ought to be also punished by a hit to their reputation i.e. by being held partially responsible.

They didn't "bring" in more victims, more victims joined in because they were lazy, just like most of the VC industry.

> more victims joined in because they were lazy...

They were lazy because they relied on the reputation of who was pushing for FTX, now their reputations won't be so rock solid. That's some justice.

Re: FTX – The fraud was in the code

#93

Post by bmitc »

tomatocracy wrote: post #54
bmitc wrote: post #40

Earlier quoted context omitted.

It's a bit strong to call Sequoia "fraud victims". They were at a minimum incompetent and at a maximum intentionally misleading to other investors. You shouldn't write an article like this ( https://archive.ph/GQkCp ) unless you have done your research. Did they do literally any due diligence prior to leading a massive investment round? Just because they stand to lose millions doesn't excuse their responsibility and…

Isn't it a bigger indictment of the "follower" investors who did no due diligence of their own because Sequoia was investing? Why would anyone trust their money with these investors instead of investing with Sequoia if that's all they do?

In my opinion, it's all of the above.

Re: FTX – The fraud was in the code

#94

Post by smt88 »

injeolmi_love wrote: post #53
smt88 wrote: post #37

Earlier quoted context omitted.

Financial audits of public firms are not done through code. They're done by CPAs who copy files and generally run everything through generic Microsoft applications that aren't going to commit fraud for a bank.

At least at the firms I’ve worked with, new records were digitized and old files were undergoing digitization. Maybe it’s different in your country? There’s always some process a firm must use to make digital records available to an auditor - it’s at this point in the step code must be trusted even if it’s supposed to be as simple as “make everything available “.

> it’s at this point in the step code must be trusted even if it’s supposed to be as simple as “make everything available “

The "step code" here is a group of humans adding documents to some type of storage available to the auditor.

There is no question of fraud in that code because it's generic. Microsoft, Box, Dropbox, etc. aren't building in custom code to commit fraud.

When publicly-audited firms commit fraud, it's not an issue of untrustworthy code. It's because humans are going to some trouble to commit fraud. There are even "checksums" (balances) that tell you if something is accidentally missing, so it's rare that financial fraud can be conflated with an innocent mistake.

Re: FTX – The fraud was in the code

#95

Post by shrimpx »

zinekeller wrote: post #32
shrimpx wrote: post #27

Was the exchange actually running on Python? Or was Python used for less intensive stuff?

Python usage != incompetent financial institution. 1) even before the speedups done now on CPython, PyPy has always existed (and NumPy was HW-accelerated) and more importantly 2) It has a native arbitrary-precision decimal type. Even other languages seriously used in financial institutions like OCaml ( https://discuss.ocaml.org/t/ocaml-needs-an-arbitrary-precisi... ) doesn't even provide it natively.

Thanks I appreciate the info. I love python and I use it for nearly everything. But it often gets dogged for perf, so I wonder about the reasoning in using it for high frequency trading despite the bad rap.

Re: FTX – The fraud was in the code

#96

Post by Melting_Harps »

nullc wrote: post #44
xwolfi wrote: post #14

Earlier quoted context omitted.

Perjury* Sam is highly charismatic, especially when all you want to hear is that you send 2000$ and will receive 100k$ if only you listen to him and use his product. He's part of the mumbo jumbo guru crowd. I'm a programmer in finance: I understand nothing when SBF talks, it's like complete random BS, totally different from the traders I work with who would use complex concepts but with always a visible thread: utili…

> I'm a programmer in finance: I understand nothing when SBF talks, it's like complete random BS, totally different from the traders I work with who would use complex concepts but with always a visible thread: utility -> transformation adding value -> profit, with SBF it's all so fuzzy and unclear, it's like he pretends to talk like we're idiots to hide the fact he's the idiot who forgot that you need to sacrifice po…

> It appears that there is a sizable audience who will hear that and conclude he's a subject matter super genius and that you're a total idiot.

Many of them the titans of SV no less, Sequoia being chief among them; honestly, I called this imbecile being in jail in mid-late '21 when he announced he was going to start influencing US politics. He was an idiot then and he has proven himself and even greater one with time. Likely mentally ill, as well.

I do want to underscore that this scammer would have NEVER gotten the chance he had were it not for the connections his family has at Stanford, and thus VC, and the litany of connections that followed. This article is a must read [0], as were the testimonies given by gyus like Scarmocci (I'm not going to correct his name), because it all boils down to the fact that he was the child of privilisge and connected to all the power-brokers in SV.

SBF, FTX and Alameda is and will always remain a a Silicon Valley VC backed cluster***, and it must be noted that this has nothing to do with us and everything to do with THEM.

> Silicon Valley could be said to be in the business of reality distortion. Fundraising for startups can be as much about narrative as about economic fundamentals. Most venture capital portfolios are filled with companies that will fail because their model is wrong, their product won’t land, their vision of the future won’t pan out. The high dropout rate means that everyone is in search of the one thing that will reach escape velocity. Everyone is looking for an epochal success—a Steve Jobs, a Jeff Bezos. That creates a degree of hunger—even desperation—that can be exploited by someone who arrives with a great story at the right moment.

0: https://www.wired.com/story/why-silicon-valley-falls-for-fra...

Re: FTX – The fraud was in the code

#97

Post by dilyevsky »

hfuyf65 wrote: post #77
dilyevsky wrote: post #19

Earlier quoted context omitted.

What if he paid you to listen? You know, hypothetically speaking

https://m.youtube.com/watch?v=2ozjiX1E7ZA&pp=ygUTc2JmIGludGV... Picked an interview ar random. He is not charismatic, but he can talk like so many banking VPs talk ( almost no substance ). This may have helped him make people part with money.

Isn’t VP typically an entry level employee at a bank? If so, I would agree. He clearly doesn’t know when to stfu, he’s gonna get 30 to life

Re: FTX – The fraud was in the code

#98

Post by gerikson »

Macha wrote: post #64
rich_sasha wrote: post #56

Earlier quoted context omitted.

OCaml is used by Jane Street but no one else in this space (certainly no major player). Jane Street are a successful and respectable company but no giant, by any standard. If anything, I'd say their fame for using OCaml is greater than their fame as a trading firm. The benchmark would need to be Java or C++, which are the mainstay of the industry.

I actually sort of suspect that the most common reason for people to have heard of Jane Street is their advertising for internships on maths related YouTube channels. (Not the most common reason for their customers or partners, just the greatest number of people)

SBF worked at Jane Street, for what it's worth.

Re: FTX – The fraud was in the code

#99

Post by bmitc »

hn_throwaway_99 wrote: post #26
bmitc wrote: post #5

Pretty insane that Sam Bankman-Fried decided to plead not-guilty. And it's interesting that their defense is an implication that a witness is committing perjury for a lighter sentence without any evidence backing it up. And just what in the world were any of these people thinking? Sam Bankman-Fried isn't remotely charismatic, so I just don't understand why people would follow his demands and actively participate in s…

> Pretty insane that Sam Bankman-Fried decided to plead not-guilty. Would easily bet that was his decision. He's obviously made insanely stupid choices already, like leaking Caroline Ellison's journal and getting his bail revoked. I'm sure he was counseled against it, but his lawyers were probably like "well, he wants to swing the bat, and we get paid more if it goes to trial anyway."

It becomes more and more clear that he's just a sociopathic idiot, sort of like Miles Bron from The Glass Onion. I wonder how off his rocker he is from drug use.

Re: FTX – The fraud was in the code

#100

Post by ThinkBeat »

red-iron-pine wrote: post #79
ThinkBeat wrote: post #67

A tip: If you intend to commit fraud or other illicit activity dont host / store your code on Microsoft GitHub. Hmm in fact dont use git at all. Law enforcement only need to find a single developer pc/laptop/whatever and they will have the entire history, comments, who did it, and code. Having it all in a centralized system that is configured to be easily nuked is safer, than trying to nuke every laptop/pc/whatever t…

> I wonder if you could do the development all on ram drives on the development machine, that way if you shut down all the code is gone. Just make damn sure to stow/check in your code before doing so. or if you have any downtime you lose all of your shit

It is best practice to check in, or stow code regularly even on regular machines, in case the HD fails, the computer explodes, or whatever else.

May have to be a bit more dilligent but not a big change.

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