6 ms·

Arrested by UN? Genuinely curious

Animats 4y ago
Richmond, CA police department. Alameda Research HQ is at 5327 Jacuzzi St Ste 1c, Richmond, CA 94804. Since they were apparently the recipient of the money, and he's apparently the principal beneficiary of all this, that's where to start. Mr. Bankman-Fried may not physically be there, but they have jurisdiction. Once there's an arrest warrant, getting away becomes much more difficult.
- dvt 4y ago
  You're conflating FTX.us (which is regulated) and operates in the USA, and FTX global (where all this chicanery happened) and is located in the Bahamas. With that said, the SEC is already also investigating any potential links between the two entities. I don't think they'd be stupid enough to cross those wires, but you never know.
  - TylerE 4y ago
    If years of following crypto has taught me anything, it's the answer to "They couldn't possibly be that stupid, could they?" is always yes.
  - Animats 4y ago
    No, see Molly White's blog and the WSJ parent article. What seems to have happened is that 1) FTX.intl loaned money to Alameda Research in the US in exchange for some token, 2) Alameda Research, which is a crypto trading firm, speculated with that money and lost, 3) the collateral from Alameda to FTX turned out to have little value, and so 4) FTX.intl goes down. Bear in mind that Mr. Bankman-Fried heads all three organizations. Whether FTX.us is also involved is not yet clear. But it will be. The SEC and CFTC are descending, with hard questions. Molly White: "This suggests to me that a) they are in a really bad spot, and b) they want as few people sniffing around in their books as possible." Right. That was probably the real goal of a merger with Binance. In bankruptcy, all the dirty laundry comes out. Being acquired by Binance offered hope of keeping any criminal activity hidden. That hope is now gone.
    - Emma_Goldman 4y ago
      Thanks - this is the most succinct summary of the financial nexus leading to FTX's spiral into insolvency that I've seen, and squares with my own understanding. What we don't know is how the chain of cause and effect played out over a timeline. How did Alameda lose $10bn? How long has FTX been insolvent? Surely they have been staring down the end of a barrel for a good while?
    - dvt 4y ago
      I fully understand the purported chain of events. But, again: the US does not have jurisdiction over FTX. So why would he "get arrested" in California for embezzlement? He didn't break any US laws. The FTX/Alameda deal was likely done via SAFT[1], which is both legal and popular. [1] https://www.investopedia.com/terms/s/simple-agreement-future-tokens-saft.asp https://www.investopedia.com/terms/s/simple-agreement-future...
      - cmeacham98 4y ago
        Does FTX international have any US investors? This would be a theft of their funds too, right?
        nemothekid 4y ago
        It does, but those investors were breaking FTX ToS by using the site (you had to use a VPN to access it). I'm not sure if the SEC has standing for American investors that pretended to not be American.
        cmeacham98 4y ago
        Sorry, I mean investors in the company itself, not crypto traders.
        dvt 4y ago
        Sequoia marked their $150M investment into FTX down to $0 in a letter to LPs[1]. [1] https://twitter.com/sequoia/status/1590522718650499073/photo/1 https://twitter.com/sequoia/status/1590522718650499073/photo...
reso 4y ago
SEC often asserts jurisdiction over anything where American domiciled investors have suffered a large loss. That bar will definitely be met here.
- colinmhayes 4y ago
  The entire point of FTX is that Americans were barred from using it. Now Americans certainly ignored that rule by using vpn’s, but I’m not sure that gives the sec jurisdiction. The Americans using the exchange were explicitly breaking the TOS
  - willcipriano 4y ago
    Is it legal to defraud people in other countries from the US? I can't imagine that it is.
    - colinmhayes 4y ago
      Well he's in the bahamas, not the US.
    - robocat 4y ago
      Most countries have their own security laws and enforcement departments, which are nominally there to protect the interests of their citizens. Examples: https://sfo.govt.nz/ https://sfo.govt.nz/ https://en.m.wikipedia.org/wiki/Financial_Conduct_Authority https://en.m.wikipedia.org/wiki/Financial_Conduct_Authority https://www.afp.gov.au/what-we-do/crime-types/fraud/fraud-and-anti-corruption https://www.afp.gov.au/what-we-do/crime-types/fraud/fraud-an... However the enforcement departments usually appear to me to be underfunded and quite weak, even against fraud within their own country, and it seems rare they indict overseas parties even when citizens are deeply impacted. The SEC is unusually strong (which might surprise you), and because the American market is so wealthy and the rules are relatively clear, the SEC has a huge influence over investment structure.
- criddell 4y ago
  SBF says US customers are not affected by this. > This was about FTX International. FTX US, the US based exchange that accepts Americans, was not financially impacted by this shitshow. > It's 100% liquid. Every user could fully withdraw (modulo gas fees etc). https://twitter.com/SBF_FTX/status/1590709195892195329 https://twitter.com/SBF_FTX/status/1590709195892195329

Richmond, CA police department. Alameda Research HQ is at 5327 Jacuzzi St Ste 1c, Richmond, CA 94804. Since they were apparently the recipient of the money, and he's apparently the principal beneficiary of all this, that's where to start. Mr. Bankman-Fried may not physically be there, but they have jurisdiction. Once there's an arrest warrant, getting away becomes much more difficult.

dvt 4y ago
You're conflating FTX.us (which is regulated) and operates in the USA, and FTX global (where all this chicanery happened) and is located in the Bahamas. With that said, the SEC is already also investigating any potential links between the two entities. I don't think they'd be stupid enough to cross those wires, but you never know.
- TylerE 4y ago
  If years of following crypto has taught me anything, it's the answer to "They couldn't possibly be that stupid, could they?" is always yes.
- Animats 4y ago
  No, see Molly White's blog and the WSJ parent article. What seems to have happened is that 1) FTX.intl loaned money to Alameda Research in the US in exchange for some token, 2) Alameda Research, which is a crypto trading firm, speculated with that money and lost, 3) the collateral from Alameda to FTX turned out to have little value, and so 4) FTX.intl goes down. Bear in mind that Mr. Bankman-Fried heads all three organizations. Whether FTX.us is also involved is not yet clear. But it will be. The SEC and CFTC are descending, with hard questions. Molly White: "This suggests to me that a) they are in a really bad spot, and b) they want as few people sniffing around in their books as possible." Right. That was probably the real goal of a merger with Binance. In bankruptcy, all the dirty laundry comes out. Being acquired by Binance offered hope of keeping any criminal activity hidden. That hope is now gone.
  - Emma_Goldman 4y ago
    Thanks - this is the most succinct summary of the financial nexus leading to FTX's spiral into insolvency that I've seen, and squares with my own understanding. What we don't know is how the chain of cause and effect played out over a timeline. How did Alameda lose $10bn? How long has FTX been insolvent? Surely they have been staring down the end of a barrel for a good while?
  - dvt 4y ago
    I fully understand the purported chain of events. But, again: the US does not have jurisdiction over FTX. So why would he "get arrested" in California for embezzlement? He didn't break any US laws. The FTX/Alameda deal was likely done via SAFT[1], which is both legal and popular. [1] https://www.investopedia.com/terms/s/simple-agreement-future-tokens-saft.asp https://www.investopedia.com/terms/s/simple-agreement-future...
    - cmeacham98 4y ago
      Does FTX international have any US investors? This would be a theft of their funds too, right?
      - nemothekid 4y ago
        It does, but those investors were breaking FTX ToS by using the site (you had to use a VPN to access it). I'm not sure if the SEC has standing for American investors that pretended to not be American.
        cmeacham98 4y ago
        Sorry, I mean investors in the company itself, not crypto traders.
        dvt 4y ago
        Sequoia marked their $150M investment into FTX down to $0 in a letter to LPs[1]. [1] https://twitter.com/sequoia/status/1590522718650499073/photo/1 https://twitter.com/sequoia/status/1590522718650499073/photo...

reso 4y ago

SEC often asserts jurisdiction over anything where American domiciled investors have suffered a large loss. That bar will definitely be met here.

colinmhayes 4y ago
The entire point of FTX is that Americans were barred from using it. Now Americans certainly ignored that rule by using vpn’s, but I’m not sure that gives the sec jurisdiction. The Americans using the exchange were explicitly breaking the TOS
- willcipriano 4y ago
  Is it legal to defraud people in other countries from the US? I can't imagine that it is.
  - colinmhayes 4y ago
    Well he's in the bahamas, not the US.
  - robocat 4y ago
    Most countries have their own security laws and enforcement departments, which are nominally there to protect the interests of their citizens. Examples: https://sfo.govt.nz/ https://sfo.govt.nz/ https://en.m.wikipedia.org/wiki/Financial_Conduct_Authority https://en.m.wikipedia.org/wiki/Financial_Conduct_Authority https://www.afp.gov.au/what-we-do/crime-types/fraud/fraud-and-anti-corruption https://www.afp.gov.au/what-we-do/crime-types/fraud/fraud-an... However the enforcement departments usually appear to me to be underfunded and quite weak, even against fraud within their own country, and it seems rare they indict overseas parties even when citizens are deeply impacted. The SEC is unusually strong (which might surprise you), and because the American market is so wealthy and the rules are relatively clear, the SEC has a huge influence over investment structure.
criddell 4y ago
SBF says US customers are not affected by this. > This was about FTX International. FTX US, the US based exchange that accepts Americans, was not financially impacted by this shitshow. > It's 100% liquid. Every user could fully withdraw (modulo gas fees etc). https://twitter.com/SBF_FTX/status/1590709195892195329 https://twitter.com/SBF_FTX/status/1590709195892195329