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FTX investor Sequoia removed its glowing profile of Sam Bankman-Fried
- midislack 4y agoHe will get away clean.
- qprofyeh 4y agoIANAL. What's his defense?
- epgui 4y agoThere's no need to talk about any defence strategy if there are no specific accusations. And by specific I mean specific: what is the accusation? (Just to be clear, I am not on his side. I'm just pedantic.)
- 0xy 4y agoSecurities fraud. SBF almost certainly misrepresented the company during negotiations with investors in its most recent fundraising attempts. If his Twitter deception is anything to go by, he liked lied to investors about pilfering customer funds to bail out failed Alameda Research. Forget about lying, it's illegal to even withhold pertinent information when pitching to US investors. The Bahamas is no safe haven. They will extradite. After all, his investors are in the US and those transactions are covered by SEC rules. Given the scale of the fraud here, this is serious jail time. He could be saved by his political bribes, though, considering he's greased the palms of the current administration (#2 Democrat donator in the recent cycle) ;)
- user_named 4y agoHe's supposedly fled to Argentina. Probably just a stop on the way to his final destination
- baq 4y agoThe aircraft was registered in Argentina, so maybe it was just pulled back as sbf can’t pay for it. But yeah, I’d assume he’s on the run.
- biztos 4y agoI always wonder about escape plans when people are doing really dodgy things with large amounts of money. Do you come up with an escape plan when you start doing the thing you know is probably illegal and will definitely get you in serious trouble if it doesn't work? Or do you just convince yourself it's gonna work, because it worked for long enough to convince you that you're too smart to fail? I think I'd get me an extradition-proof mountaintop lair if I had even tens of millions and they were squeaky clean. Because you never know, right? (Or, maybe I watch too many movies.)
- threeseed 4y agoFrom all accounts this situation has moved far quicker than anyone expected. There's tweets that say that CZ wasn't trying to tank FTX with his "I'm selling FTT" announcement but rather just wanted to fire a shot across the bow. And we should believe him when he says that this isn't good for him or the industry - because it really isn't. And so in this case you have a few days to make a simple binary decision. Do you steal a few hundred million, bail to some country and hope you can live the next 50+ years without being extradited or risk staying in the US, being poor and spending the next 20+ years in jail. Many people would happily roll the dice and pick the former option.
- imron 4y agoOf course you’d pick the former. You can’t save the world from a jail cell, and just think about all the people you’ll be able to help sitting on a cool billion, by the beach in a country with a no extradition policy. It’s the altruistic choice.
- csomar 4y agoWe don’t know whether he was negligent or malicious. We don’t know also whether he was internationally competent (bahamas) or just imprudent. Getting away is easy if he walks of the usa. If you keep a low profile in south america, pretty much no one will recognize him.
- threeseed 4y agoWe don't know whether they misrepresented the situation or not. But what we do know is that they had no Board of Directors and the level of independent oversight was completely inadequate given the sums of money involved. If I was the SEC I would do nothing and simply remind investors like Sequoia of their responsibility to do basic due diligence. Because I really don't know how you can class them as professional investors given the level of incompetence.
- csomar 4y agoThere is serious money missing here (8-10bn) and serious connected investors that have been duped. I doubt his political donations will make a difference. Best case scenario he was working with the cia and was helping them finance some of these donations or other stuff. Then they’ll arrange his disappearance in another country or the afterlife.
- djbebs 4y agoFraud is one
- blitzar 4y agoHe is already setting up for the "it wasnt me" defence, along with the associated "I am a victim too". Eventually it will be pointed out that they were not actually real banks or brokerages, just crypto ones, and the "its not actually illegal" defence will kick in.
- throwaway742 4y agohttps://www.youtube.com/watch?v=2g5Hz17C4is https://www.youtube.com/watch?v=2g5Hz17C4is
- blitzar 4y ago"Gonna tell her that I'm sorry For the pain that I've caused"
- baq 4y agoIt’ll also help to have real estate in UAE.
- themihai 4y agoCrypto investors should not hold their funds in custodial wallets(i.e centralised exchanges). Sam did a great service to the crypto world. As far as I'm concerned they've got what they deserved. Hopefully Binance'll show them the empty bag as well and finnally the myth of centralised crypto is busted.
- itake 4y agoEveryone that didn’t hold their Terra or UST in an exchange couldn’t exit fast enough
- fmajid 4y agoIt doesn't matter whether you keep the IOU from a crook in your own wallet or at your bank, it's still intrinsically worthless. What I don't understand is what kind of sucker would still be willing to take them off your hands.
- user_named 4y agoAll crypto is centralized and always will be.
- mmcwilliams 4y agoIt's unfortunate that this is a lesson that is re-taught pretty regularly. I vividly remember this coming up when the Mt. Gox hack happened in 2014. Since many people are using crypto to speculate and day trade, exchanges will be the most convenient place for most people to keep their coins unless something changes this in a major way.
- nigrioid 4y ago
- lordnacho 4y agoI worked for an investment company that lost a lot of money once. The first thing we did was go visit the lawyer, who provided great relief for my boss. Basically as long as you haven't broken the law or the contracts, you're ok. It's no different from "I bought some stuff that lost money". That's the defense. I don't know anything about that rather large caveat in this case, but for that old boss it was clear since everything was exchange listed and there were never any movements of money other than to the clearing houses.
- khuey 4y agoThey almost certainly broke the contracts at a bare minimum.
- UncleEntity 4y agoThey weren’t running an investment house but an exchange. Investments come with inherent and stated risks and if you lose money, well, you knew the risks.
- dragonwriter 4y ago> I worked for an investment company that lost a lot of money once Losing money is not SBF’s problem. Stealing customer assets to cover for it, and then losing those, too, is. And tweeting through it, providing confessions to that that will greatly complicate any defense.
- ElfinTrousers 4y agoNo, he stole from the rich. They'll track him down and make an example of him.
- belter 4y agoYou are so correct. Bernie Madoff was exemplary convicted and in record time. And incredibly almost all funds were recovered by pressuring his business associates, even when the fault of some of these associates was not clear cut.
- sam345 4y agounfortunately funds recovery probably not going to happen here.
- pmorici 4y agoOn one hand yes BUT on the other he donated something like $40 million to Democratic Party candidates last cycle. 2nd largest donation. https://fortune.com/2022/11/10/sam-bankman-fried-ftx-joe-biden-democratic-party-second-biggest-donor/amp/ https://fortune.com/2022/11/10/sam-bankman-fried-ftx-joe-bid...
- ElfinTrousers 4y agoYeah, I have a feeling they're not returning his phone calls too quickly these days.
- none_to_remain 4y agoBut if we assume he can't perform similarly in the future - what reason do the Democrats have to help him now?
- tjpnz 4y agoBased on his background he's going to get away with a light slap on the wrist.
- bookofjoe 4y ago"Theranos founder Elizabeth Holmes should spend 15 years in prison and pay $800 million in restitution to investors defrauded in the blood testing start-up, U.S. prosecutors recommended late on Friday. "The Department of Justice recommendation, made in a court filing, came as Holmes prepares to be sentenced next week." https://www.reuters.com/world/us/us-seeks-15-years-elizabeth-holmes-over-theranos-fraud-2022-11-12/ https://www.reuters.com/world/us/us-seeks-15-years-elizabeth...
- KoftaBob 4y agoThe internet is forever: https://archive.ph/GQkCp https://archive.ph/GQkCp
- ignoramous 4y agoAlso, the og page was 8.5M in size: https://ghostarchive.org/archive/J1VEL https://ghostarchive.org/archive/J1VEL
- tenpies 4y agoBut Internet Archive is not, so make sure you archive it elsewhere.
- benmmurphy 4y agoFTX are now claiming they were hacked https://mobile.twitter.com/WatcherGuru/status/1591301679202590720 https://mobile.twitter.com/WatcherGuru/status/15913016792025...
- threeseed 4y agoAnd I can't confirm the truth of this: https://twitter.com/AltcoinPsycho/status/1591312517049257984 https://twitter.com/AltcoinPsycho/status/1591312517049257984 But apparently both FTX and FTX US were both hacked meaning the probability of this being an insider job just increased an order of magnitude or two.
- polote 4y agoVc are always the first to take ownership of the success of one of their company but also the first to blame the founder when it goes wrong
- notimetorelax 4y agoI don’t think this comment applies here. They portrayed the founder in a very positive light initially.
- haakonhr 4y agoDoesn't it exactly apply? They published profiles on their site and associated themselves closely with SBF until this week, when everything unraveled.
- belter 4y agoWhat does that say about VC's due diligence?
- sam345 4y agoI'll answer. It sucks. But they had a leg tingle during the SBFs presentation when he said that his vision was for FTX app to buy bananas. So they bought in. Now to be fair all facts are in so maybe it went bad after so maybe controls were more of a factor than due diligence.
- belter 4y agoAre these the same VC's that, would grill, up and down, eventual founders on: - The minute details of a startup 5 year out business plan, cash-flow previsions, the impact of currency fluctuations of their profitable horizon...but ... - Would allow him to get his girlfriend as the CEO?
- chucksmash 4y ago
- hbbio 4y agoFor strange reasons, the archive link to that very interesting story was flagged yesterday: https://news.ycombinator.com/item?id=33554271 https://news.ycombinator.com/item?id=33554271
- shp0ngle 4y agoI think all archive links are auto-flagged, I guess as spam prevention.
- xdavidliu 4y agoto clarify, auto-flagged when submitted as top-level posts, not when submitted as comments.
- matjet 4y agoCan someone please elaborate on the relationship between archive links and spam? Why is this particular auto-flagging done?
- nkurz 4y agoI don't think it's true that archive links are auto-flagged. I think [flagged] always indicates that it was flagged by a human: almost always a user, but occasionally a moderator. Does anyone have evidence that would contradict this? There are some things that are automatically [dead], though. Here's a post by Dan from earlier this year explaining some of the inner-workings: https://news.ycombinator.com/item?id=30273707 https://news.ycombinator.com/item?id=30273707
- codetrotter 4y ago> I think all archive links are auto-flagged https://news.ycombinator.com/from?site=archive.org https://news.ycombinator.com/from?site=archive.org Plenty archive links not flagged. I think the hypothesis that archive links are auto-flagged is likely incorrect
- deleted 4y ago[deleted]
- wslh 4y agoI don't get how the directors, councelors, and compliance people at the company didn't raise their hand. Jail isn't a nice place to go.
- pmorici 4y agoThey were all inexperienced is maybe the most plausible explanation. There was reported to be no board of directors and the CEO of the related proprietary trading firm Alameda was only a couple years out of school with one prior year of work experience as an entry level employee at Jane Street.
- bitcharmer 4y agoThis is Alameda's CEO. https://youtu.be/aW6SqLXw944 https://youtu.be/aW6SqLXw944 Un fucking believable.
- conradfr 4y agoMike Judge should do a Silicon Valley spinoff, they don't even need writers at this point.
- ForHackernews 4y agoShe's not any younger or more awkward than Vitalik Buterin and many people consider that guy to be some sort of boy-genius.
- foobiekr 4y agoThose people are just as dumb. Crypto attracts this weird sort of clueless hero-worshipper type, similar to the Musk thing.
- rchaud 4y ago"Maverick boy genius that shatters conventional wisdom" is a well-established media trope, with decades worth of films and TV shows priming people into thinking that is plausible. Women's stories as told in the media often come with a "unrecognized in her time" narrative that isn't quite as gripping. Combine that with the hero worship common among the "college is a scam / audit the Fed" demographic AND their Dunning-Krueger multiplier effect of social media-based marketing, and you've got yourself a very distorted picture of reality.
- soumyadeb 4y agoWhy did Sequoia write this in the first place? Haven't seen VCs do that too often!!
- jasonwatkinspdx 4y agoSBF was investing 100's of millions with them. This is them uhm... offering him glowing praise. But also there was material interest. Even though SBF was investing in Sequoia, he also raised from them, and part of the logic there would be it lends Sequoia's reputation to his venture. So they'd be quite happy if this fawning article triggered some media coverage of their crypto boy genius.
- thelastbender12 4y agoSam already had a boy genius profile, and more positive coverage of him would plausibly have translated to better returns on their investment in FTX.
- skywhopper 4y agoI would have been embarrassed to release it in the first case even if FTX were doing great. The investors were impressed that SBF was playing League of Legends during a fundraising meeting. They thought it was a good thing.
- quacked 4y agoI've never been much of a believer in (stale, traditional) "honor-bound" business, where people are offended by rude behavior and personal slights and everyone has to dress up and speak properly. But my God, I'm starting to hope that it makes a comeback. Imagine losing a huge chunk of your savings to a scruffy man-child who played video games in the meeting where he was awarded the cash it took to ruin you.
- NotYourLawyer 4y agoDitching the suit is fine. Playing video games during a meeting is a red flag, and not only because it’s shockingly rude.
- olouv 4y agoWhat I find especially amusing is that it is described as if Sam was somehow a genius for playing while talking in a meeting. It takes literally no intellectual effort to play a game once you’ve played it a lot, it’s like driving or eating. Only thing it shows is probably a high level of uncontrolled boredom/stress/anxiety that had to get out somehow. Hard to believe the “experts” at Sequoia and co fell for it.
- rchaud 4y agoBack in my day you just had to show up to a pitch meeting in a hoodie.
- stephc_int13 4y agoWhat is striking about the Sam Bankman-Fried case is that for a long time he was considered to be one of the few who really knew what he was doing and also an advocate for more regulation. It appears to have been a smoke screen, given the financial fragility of his multiple companies, he could not have been looking for more scrutiny and regulation, he was playing Poker with politicians and his competitors. Same with his stance about charity and altruism, all PR, likely nothing in good faith. All of this is not surprising or unusual in business, deception is part of the game, but the part I find disappointing is that almost everyone believed it until it crashed. Why? This is not the first time. Enron, Worldcom, Theranos, Madoff, Nikola, to name a few...
- bookofjoe 4y agoMicroStrategy?
- lordnacho 4y agoUnfortunately I think the biggest red flag is one that doesn't become widely publicized, and I don't know if it happened in this case: a well-respected senior hire comes into the firm and leaves quickly, after discovering the mess. Excuses are made if it does become public, but most people brush it off as not clicking with the culture. Someone I know joined a rather large investment firm and this happened. I only knew about the mess because I'm friends with him, but oh boy it was a mess. Guy moved on, doesn't mention it anymore, but will tell you if you know him. Similar story with a major international bank. Friend goes in, sees a load of bodies (board members doing shady things), leaves. Nothing to report.
- Scoundreller 4y agoOr a sudden change of course of the business and simultaneous departures. Obviously not everyone was on-board. When the RIAA went started suing mp3 downloaders, the CEO left for “family reasons”, but a few decades later it came out that they saw downloading music off the internet as their future business model. Napster was a representation of her vision of a virtual jukebox that could play any song ever made. (Can’t remember for the life of me which documentary she was filmed describing that) https://en.m.wikipedia.org/wiki/Hilary_Rosen https://en.m.wikipedia.org/wiki/Hilary_Rosen
- deleted 4y ago[deleted]
- ZeljkoS 4y agoThere are some golden statements in the original Sequoia article: https://web.archive.org/web/20221027181005/https://www.sequoiacap.com/article/sam-bankman-fried-spotlight/ https://web.archive.org/web/20221027181005/https://www.sequo... For example, Sam's opinion on books: “Oh, yeah?” says SBF. “I would never read a book.” I’m not sure what to say. I’ve read a book a week for my entire adult life and have written three of my own. “I’m very skeptical of books. I don’t want to say no book is ever worth reading, but I actually do believe something pretty close to that,” explains SBF. “I think, if you wrote a book, you fucked up, and it should have been a six-paragraph blog post.” So there you have it: Books are for losers. I guess that explains a lot.
- Emma_Goldman 4y agoWow... that is a shocking level of philistinism given his parentage. His own mum wrote a seemingly well-received book, and Will MacAskill, who he claims is his moral hero, has written three books.
- tartoran 4y agoHardcore gamers don’t have the time to read books. Besides, books have no points, no special effects, other players and so on. There you have it, the philistines time has come. Let’s hope it won’t last too long
- lordnacho 4y agoWow, I'm really surprised. Of all the people who could make anti-intellectual statements, I really thought SBF was one of the last. I get that many books these days are long winded (looking at you Nassim Taleb) ways to make a point, but someone absolutely needs to document all the thinking somewhere. Whether you read the whole book in detail is also optional. But to generalize this much about all books is astonishing. Plus he's a math/physics grad, aren't those books super dense with new lemmas on every page?
- ahelwer 4y agoBeing an effective altruist doesn't make someone an intellectual. They teach the boy-in-pond thought experiment the first week of any college elective ethics class. They hand out The Life You Could Save to all harvard undergrads in the first week. Locking yourself into a myopic utilitarianism that avoids all structural critiques seems roughly the opposite of an open intellectual perspective.
- kebman 4y agoNo wonder. The last tweets from SBF has been lies. In particular he's stated that Alameda Research would stop trading on FTX. This is glossing over the fact that Alameda Research is a major liquidity provider for FTX, meaning that if they stop trading there, there will be no party to take the other side of trades anymore. With a completely illiquid exchange, trading becomes all but impossible and you risk extreme slippage as a consequence of it.
- VHRanger 4y agoI think he meant theyd stop trading but keep market making Or he just lied yeah
- ycombobreaker 4y agoThe head of an exchange would know that "Market Making" is a subset of "Trading".
- TheLastChemist 4y agoThe head of an exchange would also know the difference between "my money" and "customer money", or so you would have hoped.
- tomger 4y agoFake it till you make it.
- hamasho 4y agoFor anyone who wants a deeper understanding of the atmosphere, it's good to know that in the series B round, they raised $420.69m from 69 investors. https://blockworks.co/news/sam-bankman-frieds-ftx-raises-precisely-420-69m/ https://blockworks.co/news/sam-bankman-frieds-ftx-raises-pre... I don't know what those numbers mean, but those investors probably thought it was the funniest thing on earth, and they created history.
- uptownfunk 4y agoCan anyone explain what is special about this number?
- fred256 4y agohttps://en.wikipedia.org/wiki/420_(cannabis_culture) https://en.wikipedia.org/wiki/420_(cannabis_culture) https://en.wikipedia.org/wiki/69_(sex_position) https://en.wikipedia.org/wiki/69_(sex_position)
- quantified 4y ago420 is likely a symbol for cannabis. 69 is a paired sexual position.
- rchaud 4y agoLeague of Legends player AND appreciates 2006-level Digg humor? Hire this man!
- deleted 4y ago[deleted]
- stephc_int13 4y agoNot a traditional billionaire indeed. https://twitter.com/The_Prologuist/status/1589678498549207042 https://twitter.com/The_Prologuist/status/158967849854920704...
- seydor 4y agoAnother Theranos. How many until SV investors lose credibility?
- deleted 4y ago[deleted]
- encryptluks2 4y agoInfinite, until they start seeing real repercussions like life sentences behind bars.
- rchaud 4y agoCome on now, Elizabeth Holmes could only dream of having $420m handed to her, no questions asked. She came up in more hardscrabble times where the children of the rich had to first con former government and military officials to join their board. That takes work!
- fourstar 4y agoMadoff would be more appropriate. Most normal people weren't affected by Theranos.
- lotsofpulp 4y agoI cannot imagine most normal people are affected by FTX.
- fourstar 4y agoLook up how deep the FTX rabbithole goes. It affects all of crypto and even influenced US politics.
- thr0wawayf00 4y agoThe bit about him playing League of Legends during a meeting with Sequoia reads like something straight out of Silicon Valley.
- rchaud 4y agoPerhaps Mike Judge should be running a VC firm, instead of simply writing the playbook for future conmen.
- quantified 4y agoI think his contributions to society are far greater in the role he's played. More than enough VCs out there. Not enough clear-eyed interpreters.
- thr0wawayf00 4y agoAnyone who watches Silicon Valley and uses it as a blueprint to start a successful VS firm deserves to keep that money, tbf. That show is a straight up mockery of the tech world.
- deleted 4y ago[deleted]
- bambax 4y ago> It’s just SBF, his family (his mother, father and brother are all in town) and close friends. A small team dedicated to fixing the world—via the magic of quantitative reasoning and the overwhelming force of goodwill. (...) It’s not worth the salt in one’s tears to be sad for the plight of the oligarchy—but there is a downside to billions. Reciprocity becomes difficult between the post-economic and the merely civilian. What do you give a man who has everything and wants for nothing? What do you expect to get? But within the inner circle at Apartment V—a community of family and friends united by a philosophy that’s almost Pythagorean in its rule—there’s no unit of account. Love is the currency. Love is infinite. And infinity is a problem. This reads like satire. It's amazing anyone would write this seriously. Money does really rot the mind; not just the money you have, or the money you don't have, but also simply being in the presence of money.
- rchaud 4y agoI think the same thing when I hear about rich techbros discuss "longtermism", like it's a real thing and not something dreamed up in a overheated tent at Burning Man.
- deleted 4y ago[deleted]
- quantified 4y agoThere are so many ridiculous sentences and passages in that article. It's not worth the cheese in our navels to tally them all, though they do not approach infinity in any way. I wonder why it took more than a day to remove from their site.
- w1nst0nsm1th 4y agoDoes it mean something ?
- deleted 4y ago[deleted]
- ChoGGi 4y agosultry wood nymph