20 ms·

FTX’s balance sheet was bad

479 points by latchkey 4y ago

xg15 4y ago
- invent a currency. - mint one token and sell it to your friend for $1. - make a tweet saying that supply of your currency will be capped at 1 billion tokens. - you now own $999.999.999 in assets! Analysts hate this one weird trick!
neonate 4y ago
https://archive.ph/4LlX8 https://archive.ph/4LlX8
jb12 4y ago
Matt Levine consistently puts out such good content. His newsletter is absolutely worth subscribing to.
- ProAm 4y ago
  Never subscribe to his newsletter, it's impossible to unsubscribe when you want to. Literally have to filter it in my mail to go to the trash as for the Bloomberg website won't let me unsubscribe.
  - HDThoreaun 4y ago
- PaulHoule 4y ago
  He wrote a whole issue of Bloomberg Businessweek boosting crypto recently that was not up to his usual standard and was worse than the usual Businessweek standards of layout and typography. It seemed something a year out of sync, aimed to get ‘greater fools’ to take a second look at crypto, completely divorced from the headlines a week ago and a week hence.
  - legitster 4y ago
    ??? The Bloomberg crypto issue was great! What were your specific problems with it? I read it cover to cover and didn't get a single sense of it "boosting" crypto. If anything, it was really in depth and skeptical.
    - PaulHoule 4y ago
      It's not news. Anybody who doesn't know how Bitcoin works in 2022 is never going to understand how Bitcoin works and they need clear messaging such as "No" or "Nothing more to see here, move on folks." My guess is that the real audience is blockchain enthusiasts who crave validation and will squee on it so much that they'll buy 50 reprints. Why doesn't Bloomberg take an issue and reprint the first few chapters of Extraordinary Popular Delusions and add a paragraph about each of the 20 times that people said "it's different this time" and it wasn't? That wouldn't be news but it would be timeless wisdom that would serve readers well.
      - legitster 4y ago
        Ummmm. I think for the typical readership of Bloomberg - guys in their 50s looking for cool places to park some extra cash - a five page explainer on how smart contracts work with some editorializing about how they will probably never work as promised is kind of the perfect inoculation against hype. If people are curious about crypto, and their only sources of information are polemic, that seems much, much worse for everyone.
  - danielodievich 4y ago
    I just finished reading this article and I absolutely loved it. The layout with meme pictures was an excellent use of that format, especially in context of all this crypto non-ponzi-sense. Another friend of mine who doesn't know Matt was very complimentary of it (in fact he gave me the paper article). My wife is reading it now and enjoying it too! There is no accounting for taste.
    - PaulHoule 4y ago
- legitster 4y ago
  Never paywalled!
  - lokar 4y ago
    The email subscription is free
- SnooSux 4y ago
  Link: https://www.bloomberg.com/account/newsletters/money-stuff https://www.bloomberg.com/account/newsletters/money-stuff
jpm_sd 4y ago
"Its balance sheet consisted mostly of stuff it made up! Stuff it made up! You can’t do that! That’s not how balance sheets work! That’s not how anything works!" I'm picturing Matt Levine being carted away by nice men in white coats after finishing this paragraph
- bena 4y ago
  Now, I'm not a money scientist or anything, but I really feel as if Sam Bankman-Fried could have picked up a book or two on accounting or how to manage a balance sheet before proclaiming himself a money genius.
  - bewaretheirs 4y ago
    Unfortunately nobody has distilled accounting into a series of six-paragraph blog posts. (see https://lithub.com/crypto-nerd-sam-bankman-fried-who-just-lost-16-billion-would-never-read-a-book/ https://lithub.com/crypto-nerd-sam-bankman-fried-who-just-lo...) “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.”
    - baxtr 4y ago
      I think that’s a bullshit quote. He actually said it but I think he understood how to stir the pot: but being eccentric and controversial.
    - whimsicalism 4y ago
      Guess he is saying his parents (both authors) fucked up in more than the obvious way.
    - Scoundreller 4y ago
      As someone that has probably read less than 10 fictional books in their life, I can see where he’s coming from. Like, I’m literate and basically read stuff all day. And I can get through a textbook as a part of a course, but force me to read a novel and by page 7 I’m falling asleep and losing track of the characters. I’m on the fence about borrowing/buying a book that was based on a podcast series because I fear 90% of what it covered was in the podcast.
dang 4y ago
Recent and related: FTX balance sheet, revealed - https://news.ycombinator.com/item?id=33577437 https://news.ycombinator.com/item?id=33577437 - Nov 2022 (286 comments) (too many other FTXen to make a generic list)
BrentOzar 4y ago
> The result of adding or subtracting those numbers with ordinary numbers is not a number; it is prison. Haven't laughed that hard in a while.
- dweekly 4y ago
  Matt Levine is a national treasure.
  - EMM_386 4y ago
    I only wish he had gone into the "compliance officer was also previously involved in massive online poker scams". Maybe the next one!
    - guynamedloren 4y ago
      Marc Cohodes has been sounding the alarm about FTX for a while. Here's a snippet (from last month, before the FTX crash) where he calls out the shady background of said compliance officer: https://youtu.be/VbDiWXFxqr8?t=2348 https://youtu.be/VbDiWXFxqr8?t=2348 The whole conversation is fascinating.
  - JTon 4y ago
    I happened to catch the Odd Lots podcast episode where Matt Levine and SBF of FTX were co-guests soon after it first came out [1]. Matt's reactions were priceless. Well worth the listen now, considering FTX blowup [1] https://www.youtube.com/watch?v=KZYqL79GDXU https://www.youtube.com/watch?v=KZYqL79GDXU
    - bombcar 4y ago
      Levine has said that he was a fan of SBF based on that podcast, btw. Someone posted about it earlier today. https://news.ycombinator.com/item?id=33594284 https://news.ycombinator.com/item?id=33594284 I think people would do well to remember that Levine's job is NOT to do your due diligence for you; he's an entertainer.
stephc_int13 4y ago
I wonder how the people at Sequoia feels now. I'd like to see the comments of people who lost money in this fiasco here. The HN crowd is generally hostile to crypto scams, but there are likely exceptions.
- whimsicalism 4y ago
  I'm a crypto moderate, if such a thing exists. Given the vitriol that I see here re:crypto (and the fact that pretty much every thread on crypto has to get dang chiming in to remind people to be civil & adhere to guidelines), there is little chance that actual "crypto evangelists" are going to be commenting here. Even a comment like this one will get aggressively downvoted in the current climate.
  - Semaphor 4y ago
    Mostly agreed, though there certainly are done evangelists, just few and rarely high quality
  - jfghi 4y ago
    Given that it’s a scam affecting many, vitriol is quite appropriate. However, I’ve mostly seen objective reality mislabeled as vitriol.
    - whimsicalism 4y ago
      I trust the moderators of this site to know vitriol when they see it. Honestly, all you need to see is dang's comment history [0] to see the proportionate amount of time they have to spend moderating crypto comments. [0]: https://news.ycombinator.com/posts?id=dang&next=33563869 https://news.ycombinator.com/posts?id=dang&next=33563869
  - wyldfire 4y ago
    I feel like I am slowly changing my mind about cryptocoins. It always seemed so powerful. Bitcoin's exchange rate may fluctuate but it has value and is nearly indestructible. You could complain that it's overvalued but it's not at all a ponzi scheme. Unfortunately, it seems like the only utility that has arrived is for the black market. A bajillion new coins have been created, some of which also have real value and purport to improve on bitcoin. But here we are in 2022 and while I can see some cryptocoin ATMs in supermarkets, I doubt they're used for much beyond paying ransoms. Even if we move the most important/useful coins off of proof-of-work †, I think governments around the world may move to outlaw cryptocoins. At which point whatever modest legitimate utility that existed will be eliminated and only the black market will remain. † this seems difficult or impossible for bitcoin until/unless it forks to something that looks completely unlike bitcoin.
chewz 4y ago
> I tried, in the previous section, to capture the horrors of FTX’s balance sheet as it spiraled into bankruptcy. But, as I said, there is something important missing in that account. What’s missing is the money. What’s missing is that FTX had at some point something like $16 billion of customer money, but most of its assets turned out to be tokens that it made up. It did not pay $16 billion for those tokens, or even $1 billion, probably. 7 Money came in, but then when customers came to FTX and pried open the doors of the safe, all they found were cobwebs and Serum. Where did the money go?
- queuebert 4y ago
  Levered losses?
  - HDThoreaun 4y ago
    It went into that @fiat account which was probably Alameda
  - mzs 4y ago
    I would assume most of it was stolen.
- nafix 4y ago
  I feel like all the news stories are ignoring some very blatant questions like this. Maybe they are just waiting for more details to come out?
nullc 4y ago
> $16 billion of dollar liabilities and assets consisting mostly of some magic beans that you invented yourself and acquired for zero dollars? WHAT? Never mind the valuation of the beans; where did the money go? Exactly. This is the first time I've seen the media asking the right questions. The answer probably is in part that most of it never existed to begin with-- those 'customer' liabilities probably include the probably fictional billions in arb gains SBF claimed to have and some amount of magic beans deposited by related entities. E.g. Deposit $1 billion magic beancoins you essentially made up (or a friend made up), then trade them for "Bitcoin perpetuals" (levered paper bitcoins) with FTX itself acting as the counterparty. Now the 'customer' is owed $1bn in bitcoin on FTX's books and ftx is long a billion in magic beans. Then get your friends in the media to write glowing stories about FTX's meteoric rise and some suckers come in, deposit real bitcoin, invest money from real pension funds, etc. and the 'customer' can then withdraw some of their paper bitcoins. ... at least until the exchange runs out of anything except magic beans and someone forgets to set the switch to 'more magic'. > FTX worked fine: People liked its technology, and it seems to have made money. Well, the people who deposited there liked the 8% APY they gave people simply for depositing funds. Prudent people saw that obvious ponzi scheme marker and stayed the hell away!
- esoterica 4y ago
  I think you’re confused about what a liability is. If the liabilities were fake FTX would not be insolvent. Their problem is that their liabilities are real but their assets are fake.
  - nullc 4y ago
    You might want to consider adopting a less condescending communication style in accordance with HN policy-- it would make it easier for both of us to learn something. I think I adequately described a credible sequence of operations, but your dismissive reply has made it impossible for me to tell which parts weren't communicated effectively. The central unanswered question is "where did the real money go?": Those ftx related magic beans were constructed for ~free. The balance sheet makes it look like billions of Bitcoin are owed, so where did they go? The idea that FTX didn't pay for the magic beans is just an assumption, but it's not necessary. They could have paid a related entity for them using the paper bitcoin traded on the site. I'm suggesting that related entities such as Alameda research and SBF personally deposited magic means and traded them for Bitcoin "perpetuals", with FTX awarding them paper Bitcoins. This creates a bitcoin liability on FTX's balance sheets even though no billions of dollars ever existed. Some amount of actual valuable assets were deposited, then withdrawn by people who traded magic beans for FTX bitcoin liability (and/or were awarded bitcoin through FTX's 8%/yr yield program on customer deposits) -- leaving FTX with a balance sheet full of huge Bitcoin liabilities. In that scenario one could go back through the transaction records and unwind some of these magic bean trades and make FTX less insolvent, but they'd still be insolvent because of the real assets that were withdrawn by parties that only brought magic beans into the picture, as well as FTX's spending, donations, bills for their designer amphetamines and cleanup services for their orgies, and other "business expenses" typical of their industry.
gruez 4y ago
>There is also an obscure $7mn holding called “TRUMPLOSE” https://ftx.com/trump-tokens https://ftx.com/trump-tokens
- jefftk 4y ago
  "Joe Biden won the 2020 United States Presidential election: TRUMPLOSE is redeemable for $1.00! All TRUMPLOSE balances on FTX will be auto-redeemed for $1.00 at 11/15/2020, 9:00:00 AM." How can TRUMPLOSE assets still be on their balance sheet? (Aside from "we have no idea what we're doing...")
  - atdrummond 4y ago
    It is 2024 futures, not 2020.
    - jefftk 4y ago
      I don't see anything in https://ftx.com/trump-tokens https://ftx.com/trump-tokens about 2024? It's all 2020.
      - NoboruWataya 4y ago
        There is a separate TRUMP2024 token: https://ftx.com/trade/TRUMP2024 https://ftx.com/trade/TRUMP2024 TRUMPLOSE is the 2020 one, so your point stands that there is no explanation for that account still having a huge amount of money. That said, we now know that internal labelling of accounts was not FTX's forte, so...
        atdrummond 4y ago
        This being the 2024 one was confirmed by the other side of the trade (@GiganticRebirth on TWT).
hn_throwaway_99 4y ago
Recommendation: If you've been following or interested in the FTX scandal at all, read this whole brilliant post beginning to end. Not only is the writing in Matt Levine's hilarious style (I second all the other comments related to this!) it is also incredibly informative as to the mechanics of all the WTFs that actually went down. For example, I've been following this fairly closely but I didn't really have a good understanding of how Serum/SRM played a role, and Levine outlines this clearly. Really great piece, thanks for posting.
- silexia 4y ago
  I would say Levine's proposed scenarios for how the money was stolen are generous... he comes up with all sorts of scenarios that make SBF and friends not sound like what they actually are - fraudsters.
  - hn_throwaway_99 4y ago
    Really?? That's not the impression I got at all. Statements like "The result of adding or subtracting those numbers with ordinary numbers is not a number; it is prison" doesn't exactly sound like he's being generous to SBF.
gadders 4y ago
>> a negative $8bn entry described as “hidden, poorly internally labled ‘fiat@’ account”. Anyone else old enough to remember Nick Leeson and Error Account 88888? https://www.independent.co.uk/news/business/how-account-88888-sank-britain-s-oldest-bank-1319275.html https://www.independent.co.uk/news/business/how-account-8888...
- mongol 4y ago
  I am old enough but I don't remember, being ignorant of it.
legitster 4y ago
I often joke that crypto has been run by gold bugs who were forced to "smoke the whole pack" on fiat currencies. So a lot of crypto is a nihilistic homage to federal reserve systems. In that way, "DeFi" feels the same about the finance industry. It was no secret that SBF hated traditional finance. And so I assume he refused to learn anything from it. But what he ended up creating was almost a hilarious parody of the financial system. That's at least how I can square the circle about how someone who could criticize Lehman Brothers for letting themselves get overleveraged on shady asset classes could literally have negative 8 billion dollars in "Hidden, poorly internally labeled ‘fiat@’ account" and then publicly go to Twitter to say they have a "liquidity problem".
- chc4 4y ago
  SBF (and like half the people at Alameda) worked at Jane Street or other big name financial firms. They weren't ignorant of traditional finance.
  - factsarelolz 4y ago
    Both SBF and the other person were glorified interns and got position based upon their parents network.
    - whimsicalism 4y ago
      Doubt it, unless you have evidence otherwise. Jane St (unlike customer-facing finance firms, like Goldman Sachs) does not really engage in this style of nepotism hiring that I know of. More likely is that the child of prominent academics might actually be more intelligent than average themselves and certainly provided more opportunity to flourish.
      - factsarelolz 4y ago
        Could you detail SBF's experience that would have opened doors to him at Jane St without nepotism? I ask because I can't find any evidence to show how he was able to get into that position. Thanks for the guidance and I look forward to your reply.
celestialcheese 4y ago
> Still it is striking that the balance sheet that FTX circulated to potential rescuers consisted mostly of stuff it made up. Its balance sheet consisted mostly of stuff it made up! Stuff it made up! You can’t do that! That’s not how balance sheets work! That’s not how anything works! This is absolute gold. Also... > FTX/Alameda were funneling customer money into effective altruism. Bankman-Fried seems to have generously funded a lot of effective altruism charities, artificial-intelligence and pandemic research, Democratic political candidates, etc. This is just catnip to the "right-wing" media machine, Even worse is that it's not even really that far-fetched of a theory. Billions spent influencing elections and policy over the last 3 years, and a $10B hole of customer funds just missing. This is just reinforcing the worst conspiracy theories out there, and I'm sad to see it.. *edit, formatting
- vkou 4y ago
  Why is a coal billionaire spending money on campaign contributions normal, but a finance billionare doing the same catnip for the worst right-wing conspiracy theories? [1] For someone who just arrived on Earth from another planet, modern campaign financing rules are indistinguishable from bribes, regardless of who the money goes to. [1] I mean, aside from the obvious answer (Which is that their guys aren't the beneficiaries.)
  - ok_dad 4y ago
    I absolutely hate myself for replying, but in this situation you gave, SBF may have used customer's money, but an oil/coal baron uses their own money. Even if you consider billionaires to be a disgusting stain on society, like myself, there's still a difference between stealing money to spend on stuff (political donations or Lambo's) and spending money/stocks you legally made in a horrible, earth-killing industry. I absolutely detest greed in all it's forms, but I also don't think people should lower their morals and ethics to match the lowest of the low, as if they're Robin Hood (the character, not the company).
    - vkou 4y ago
      That just makes SBF a thief, but that's not really relevant to the core problem of pay-to-play campaign contributions.
moralestapia 4y ago
OT but also part of that newsletter (by the end), That take on ESG as an excuse to mask out antitrust violations, wow, never thought of it like that. Agree with everyone else here, Matt Levine is top notch.
TrickyRick 4y ago
I guess Web 3.0 got its Madoff 2.0
- unmole 4y ago
  ~90% of the funds invested into Madoff Investment Securities LLC were recovered and disbursed. This is much much worse.
webscout 4y ago
jmyeet 4y ago
Forgive the repetition (I've mentioned this on other threads about FTX and their balance sheets) but this doesn't seem to be widely reported or known for some reason: 1. FTX had no CFO [1]; and 2. Their accounting firm is on the Metaverse [2]. (1) is particularly shocking because its normally the CFO's experience and reputation that gives investors and customers confidence in published numbers (yes, there's that awkward trust element against that seems to be an anathema to Crypto Andys). Even if it's not a regulatory requirement, I"m honestly shocked that the investors (Sequoia, etc) didn't insist on an adult in the room so they could trust the financials. Horrible for the customers. No sympathy for the investors. A giant fail by the financial press for not highlighting this issue earlier as it's a definite red flag. [1]: https://www.ledgerinsights.com/ftx-warning-signs-no-cfo/ https://www.ledgerinsights.com/ftx-warning-signs-no-cfo/ [2]: https://www.coindesk.com/business/2022/11/11/meet-the-metaverse-night-clubloving-audit-firm-that-presided-over-ftxs-financials/ https://www.coindesk.com/business/2022/11/11/meet-the-metave...
- nemo44x 4y ago
  It's even funnier and crazier than "Silicon Valley". I mean, c'mon - the auditor was the first Metaverse financial auditing company?! It's just so amazing and hilarious.
spaceman_2020 4y ago
What boggles my mind is how they lost it all. They should have been sitting on 1000x gains. Their Solana stake alone would have been worth billions.
- dordoka 4y ago
  Yeah, exactly. I reckon they didn't lose it. That money was sent somewhere else and they "covered" it up with their own issued/invented tokens at ridiculous real cost. It would seem plausible to think that they used Alameda as a proxy for the real destination of all that money.
  - drcode 4y ago
    The recent crypto downturn has been unrelenting and deep: It's totally plausible they just thought they were the kind of geniuses who could spot the bottom of the market and quickly bled through all the money but yeah, it's also possible the money just ended up at a third unknown entity
    - dordoka 4y ago
      I agree, i wouldn't be surprised either if they were just morons believing they were geniuses
    - jsemrau 4y ago
      Trading is easy if everything goes up. The moment in time you are stomaching 90%+ losses your operating capital quickly disappears.
    - naijaboiler 4y ago
      Thats likely what happened. They are their own margin lenders and also FTX market makers. They backstop rapidly falling tokens on their exchange. So a sudden but prolonged drop in crypto prices can wipe put huge amounts quickly
      - notch656a 4y ago
smsm42 4y ago
It is incredible that each time I read new article on FTX I think "well, that tops everything I've seen so far in supposedly legit financial companies" and each next day I learn something that totally leaves the previous one in the dust. Turns out they didn't just used customers' money for risky investment as I thought, they actually pretended that illiquid token they themselves invented is a good asset to cover liabilities for customers' money! And they actually sent balance sheet with this to the investors trying to entice them to invest in this. No wonder Binance run away at the first look of it.
- grey-area 4y ago
  Binance does the same, as do Bitfinex and Tether and pretty much the entire cryptocurrency ecosystem.
  - sbierwagen 4y ago
    Coindesk says they don't. There's a pretty solid 90% chance that every exchange with a stablecoin is going to blow up, but I'd only guess a 30% chance of Coindesk going under.
    - grey-area 4y ago
      Yes I agree from what I’ve seen they are the most stable, though it’s hard to know what is going on under the hood and the ceo is an unsavoury character who I wouldn’t trust with my money.
      - captn3m0 4y ago
        Coinbase has a Altman Z-score of 0.16. This implies bankruptcy possibility in the next two years.
  - smsm42 4y ago
    That's a broad claim that would look much better supported by some proof.
hef19898 4y ago
Wow, imagine having 8 billion of customer money, negative, at a badly labelled internal account. And now remember that Wirecard fell over made up assets of 2 billion. FTX is an even bigger mess than Wirecard.
- durnygbur 4y ago
  Wire-what? No one in Europe remembers them anymore. Germans chase more ferociously torrent users, than the one executive who vanished.
  - def_true_false 4y ago
    Zee Germans are currently too busy with fucking up the energy market to the tune of 200B to care about silly stuff like wirecard :)
TacticalCoder 4y ago
Now people are realizing that the scam was planned from the beginning. Serum started trading in 2020 and was in preparation before that. And SBF was part of it from the beginning. Compliance lawyer was previously involved in massive online poker scams. Guess who's that lawyer' ex-colleague lawyer, also involved in the scam, is working for? tether/iFinex/BitFinex. Go read @bitfinex'ed 's Twitter account. He's been exposing tether / iFinex / Bitfinex / Alameda / FTX and SBF as frauds since the very beginning.
- gruez 4y ago
  >Go read @bitfinex'ed 's Twitter account. He's been exposing tether / iFinex / Bitfinex / Alameda / FTX and SBF as frauds since the very beginning. Seems like the account trashes mainly Tether/Bitfinex, but also whatever other crypto company shows up in the news (eg. FTX, Binance, or coinbase). If you trash everything, of course you're going to turn out to be the guy who was right "since the very beginning". It doesn't mean that you're actually a good source or anything. For instance, I scrolled all the way to the bottom (to escape all the recent FTX tweets), and found a retweet[1] portraying FTX as some sort of predatory lender and how "SBF HAS ACTUALLY RISKED LITTLE OR NOTHING", which we now know is the opposite of what happened (matt levine says that the probably lost money bailing all those companies out). [1] https://twitter.com/otteroooo/status/1571522943305523206 https://twitter.com/otteroooo/status/1571522943305523206
  - grey-area 4y ago
    All the companies you list are frauds, save maybe coinbase.
    - gruez 4y ago
      Isn't that the problem? If you call everything a fraud, is it worth listening to you? Presumably in this case "fraud" refers to some specific instance of intentional deception, and not just some vague idea of "it's fraud because crypto is fraud, because crypto has no value" or whatever.
mongol 4y ago
So what will happen? Will we see criminal charges and prison times?
nostromo 4y ago
Does Sequoia do literally no due diligence on the companies they invest in? This wasn't seed capital, this was $213mm. And it wasn't just a bet that didn't turn out, it was fraudulent at its core.
- themanmaran 4y ago
  Echoing this question. I worked in smallcap investment banking for several years. My bank wouldn't speak to you if you didn't have 2-3 years of Audited financials (note: not 'Reviewed' or a 'Compilation'). Often we would request an additional audit if we didn't recognize the firm that did the prior auditing. All for a valuation range of $200MM - $500MM. Meanwhile a hastily compiled excel sheet seems to satisfy the largest VC's in the market? Billion dollar valuations based on totally unsubstantiated numbers? Audit's are expensive (like $30-$80k). But surely better than losing $200MM on hot air.
  - erostrate 4y ago
    It's worse than that. That spreadsheet was created after FTX became insolvent. When Sequoia invested, they probably didn't even have something as good as that terrible spreadsheet. Or more charitably, Sequoia presented with something more professional looking, but completely incorrect.
    - rippercushions 4y ago
      Famously, SBF was playing League of Legends while pitching to Sequoia, and they just about fell over themselves in aww at his quirky genius. Matt even quotes this bit in the article.
      - deleted 4y ago
        [deleted]
      - dralley 4y ago
        I really cannot believe just how on the nose HBO's "Silicon Valley" was.
tppiotrowski 4y ago
> And another big asset is $616 million worth of the MAPS token ($865 million “before last week”). MAPS is the token of Maps.me 2.0, a sort of Serum spinoff that was also launched by FTX; I remember when maps.me added crypto and many users fled to Organic Maps. I didn't know that FTX was behind it.
- sjkoelle 4y ago
  ga did they add crypto? maps.me was an amazing product in 2018 but seems to have gone south.
  - tppiotrowski 4y ago
    Check out Organic Maps. It's a fork of maps.me and basically the same app without the crypto/monetization
alexb_ 4y ago
This has got to be one of the most absurd situations I've ever seen. Absolutely fucking insane that this could have even lasted that long. Every single charitable interpretation of this situation, every single possible way that they could have somehow argued their way out of it being a clear scam, it's all just obviously stealing. I think it's absolutely absurd that "smart money" was pumped into this to the tune of billions upon billions of dollars. The popularity of this delusion, and the madness of the billion-dollar crowd is so much worse than anyone could have thought.
- lkrubner 4y ago
  Strongly agree. In normal times there are scammers and people trying to set up Ponzi schemes, but they don't typically fool sophisticated investors. These last 30 years have seen the markets grow increasingly deranged. In that sense, Bernie Madoff was the true visionary who set the tone for this era, much more so than Elon Musk or Adam Neumann.
- gary_0 4y ago
  I still have doubts that regulators will step in and take decisive action to prevent this kind of thing happening again. Is fraud basically legal now?
- joe_the_user 4y ago
  Absolutely fucking insane that this could have even lasted that long. When things are good, Ponzi schemes appear smarter, hipper and more profitable than ordinary businesses and so no one want to run anything else after a bit. That's why the Fed is there to "take away the punch bowl just when the party is getting interesting" - because, whatever their other virtues, markets won't stop this before disaster strikes.
  - grey-area 4y ago
    Shame the Fed didn’t do that. Instead the Fed has been pouring vodka constantly into the punch bowl since 2009. This bubble is primarily their fault and now after it burst they have decided to go the other way and raise rates into a recession.
tibbydudeza 4y ago
So Sam Bankman-Fried is the new Adam Neuman. Seems he decamped to the Bahamas - is there an extradition treaty with the US ???.
- jerrycruncher 4y ago
  SBF is more like the reverse Neumann. Neumann went into WeWork's endgame looking like a fool, and emerged from it a rich wizard.
  - tibbydudeza 4y ago
    SBF self-medicated (bio hacked) himself with Emsam a Parkinson's drug which boost dopamine that causes extreme risk taking as a side effect. Another unhinged druggie it seems - I hope he goes to jail for fraud.
skizm 4y ago
> FTX shot its customer money into some still-unexplained reaches of the astral plane and was like “well we do have $5 billion of this Serum token we made up, that’s something?” No it isn’t! The upcoming series of FTX articles will be better than the Elon saga I think.
hn_throwaway_99 4y ago
The thing that this piece really got me thinking about is how many other crypto companies are the same ponzi scheme because they are counting made-up things as assets on their balance sheet. In other words, suppose I create token SCAMMER, and I say its supply will be capped at 1 million tokens (or 10 million, or 100 million - that's the "nice" thing about crypto, I can kinda choose whatever number I want), and then I'm able to sell 10 of those tokens for $100 each. According to FTX math, I now have $99,999,000 of assets on my balance sheet, but of course if I actually tried to sell a lot of my "kept" tokens I would tank the SCAMMER price. Even better, and I think what is probably more common in the crypto industry: suppose I get my buddy to create a SUX2BEU token. I tell my buddy I'll by 10 SUX2BEU tokens for $100 each if he buys 10 of my SCAMMER tokens for $100 each. Now suddenly we can both say we have huge assets on our balance sheets! Until, of course, someone decides to pull aside the curtain covering the wizard. So many ponzi schemes on top of ponzi schemes...
- rossdavidh 4y ago
  Paul Graham wrote an essay years ago in which he described the moment when he realized that most of the dot-com companies in the late 90's were selling their ads mostly to other dot-com companies, who were buying their ads in turn. It looked like growing revenue for everyone, but once it came time to show a profit, all of it came crashing down...
  - hef19898 4y ago
    The lesson drawn, and a good one as an investor, was the YC advice that start-ups should build stuff for other start-ups.
    - jgalt212 4y ago
      It worked like a charm for AWS.
      - justinator 4y ago
        In what world is AWS a startup?
c7b 4y ago
> It’s an Excel file full of the howling of ghosts and the shrieking of tortured souls. I wish I had Matt Levine's eloquence to put this madness into words. Great analysis and I just want to add a small thing: while a balance sheet looks like a simple listing of assets and liabilities, that's not how you go about constructing one. Your financial statements are the result of a sequence of double-entry bookeeping statements, and the balance sheet is one particular view on the data processed by this formalism. There is no way assets couldn't add up to liability plus equity, no matter the market fluctuations, valuation uncertainty,... (your numbers might be out of date/incorrect, but they would still be internally consistent). The resulting checksum mechanism is an interesting aspect why double-entry bookeeping was such a useful tool for merchants on busy, dirty, buzzing medieval markets. FTX, on the other hand, looks more like a mechanism for funnelling cash to who knows where - that's the big question that Matt correctly points out: where did all the money go? There's no way you can spend $16bn on meth and yachts and mansions in the Bahamas in the space of a few years.
- thinkharderdev 4y ago
  From the article my bet would be that they basically vaporized all the money bailing out bad trades at Alameda.
  - c7b 4y ago
    Maybe, but it might be worth following the money a bit further (especially on the later transactions). Was the money at Alameda really just lost on bad trades, or which accounts did it end up in eventually? I read somewhere else that the portfolio of Alameda contained over 400 companies that looked like little more than a Twitter profile with a handful of followers. It's not hard to imagine that the people behind those 'firms' were the same or related to those who are now saying 'whoopsies, they looked like such good trades back then, my bad'.
  - naijaboiler 4y ago
    I think it's less bad trades and more like a few frivolous purchases and a lot of losses from using alameda to market make on FTX, i.e. when crypto prices fell, they were using alameda to bail out margin loans they had made out
rossdavidh 4y ago
That youngsters in a new, unregulated and often scammy industry could do this, is not at all surprising. That lots of old people with billions of dollars gave them money to lose, is what needs explaining here.
- fullshark 4y ago
  Explanation: Greed, FOMO, and a lack of better opportunities. From that Sequoia profile I guess they were also just so enchanted by some global arbitrage trade SBF did, exploiting arbitrage being every banker's fantasy scenario.
thinkharderdev 4y ago
Holy crap this is so much worse than I could have imagined....
ricardou 4y ago
Time and time again it seems like the people involved in the crypto industry are speedrunning through dynamics that are now either clearly understood as a failing strategy, or outright illegal. Another such example here.
bhk 4y ago
FTX's problems were nothing that a government bailout couldn't solve.
- deleted 4y ago
  [deleted]
civilized 4y ago
I don't know much about Austrian economics, but the wiki article about its "malinvestment" concept [1] sounds like it's talking about us: > In Austrian business cycle theory, malinvestments are badly allocated business investments due to artificially low cost of credit and an unsustainable increase in money supply. Central banks are often blamed for causing malinvestments, such as the dot-com bubble and the United States housing bubble. Austrian economists such as the Swedish central bank's Nobel Memorial Prize in Economic Sciences laureate F. A. Hayek advocate the idea that malinvestment occurs due to the combination of fractional reserve banking and artificially low interest rates misleading relative price signals which eventually necessitate a corrective contraction – a boom followed by a bust. [1] https://en.wikipedia.org/wiki/Malinvestment https://en.wikipedia.org/wiki/Malinvestment
brookst 4y ago
Is it wrong that I want the crypto and NFT and GME and other insane bullshit to continue just so we are blessed with more of Matt Levine!s writing? Damn that guy is talented. So HN please go invent more multi-billion-dollar insanity that is too crazy to even be called a scam, because the world needs more of this great writing.
akelly 4y ago
> Where did all the money go? One theory is that the crypto quant funds figured out how to exploit the Alameda FTX market maker starting in 2020-2021 to take tons of money from Alameda. But FTX couldn't just turn off the Alameda market maker because most of the FTX trading volume, and therefore FTX revenue, was these crypto quant funds taking money from Alameda. So if they turned off the Alameda money spigot then their revenue would drop off a cliff and they wouldn't be able to raise more money from Sequoia or the UAE. And the value of FTT was tied to the trading volume and was a huge portion of their assets, so if volume fell they would be insolvent. Basically they turned customer deposits into revenue at pennies on the dollar.
- deleted 4y ago
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- lend000 4y ago
  This doesn't make much sense to me. I think the problem is that arbitrage just dried up (as it does in a maturing market), and SBF got high on his own farts and started making directional bets. This is clear from the amount of FTT tokens that were held by Alameda in comparison to the amount of assets a typical market maker would hold relative to a pair's liquidity.
  - jeffreyrogers 4y ago
    Yes I think this is more likely to be correct. And Alameda started making directional bets back in 2020 at least: https://twitter.com/AlamedaTrabucco/status/1385180941186789384 https://twitter.com/AlamedaTrabucco/status/13851809411867893...
- felixbraun 4y ago
  And then Luna happened, sealing their fate
- caiomassan 4y ago
  well, he is the 6th highest donor for the democratic party.
rowls66 4y ago
Most financial companies have large balance sheets, a small amount of equity that is highly leveraged, and asset values based on many assumptions. If the assumptions change, a business can go from everything is great to insolvent really fast. That is why such businesses are highly regulated. With crypto we see why this regulation is so important.
impulser_ 4y ago
One thing I learned from this FTX situation is that VC firms are horrible at their job. How does one of the world's largest VC firms, Sequoia, with 90b dollars in assets not do simple due diligence on their investments. Do VC firms not do background check on executives, or look at financial statements of the company they put their money in?
beefield 4y ago
> So if for instance some company creates a token, and says that there can be 10 billion of the token, and reserves them all for itself, and then sells 1 million of them to outside investors for $1 each, then the market cap of that token is $1 million ($1 times 1 million circulating tokens), while the fully diluted market cap is $10 billion ($1 times 10 billion total tokens), and the issuer’s 9,999,000,000 remaining tokens have a value, on this math, of $9.999 billion. I have had for a while this secret plan to become the richest person in the world by a wide margin. Because I seem to be too lazy to actually execute it, I think it is better to just publish it for the hope that someone else does it: So, the plan is to create a new cryptocurrency called Googolcoin (GGC). The supply of the coin would be - as the name implies, 10^100 GGC. I would pre-mine all but say 1000 of them for myself and leave the rest for miners. Then I would start making the market and put all of my GGC for sale, at a price of $1/GGC. Of course, I would also put offer to buy as many GGC as anyone wants to sell at say $0.7/GGC. Then I would go and bribe someone and buy one GGC from me. And there you have it. My net worth would be orders of magnitude greater than all other wealth in the earth combined! Take that, Elon. (If my reader at this point has not realized that the concept of market cap for cryptocurrencies is stupidest thing since... well previous stupidest thing, I would recommend selling your crypto ASAP.)
- deleted 4y ago
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- ribosometronome 4y ago
  https://www.youtube.com/watch?v=iHfJRON3b-w https://www.youtube.com/watch?v=iHfJRON3b-w Reminds me of Max Fosh briefly being the world's richest man.
KKKKkkkk1 4y ago
The vast majority of FTX Trading’s recorded assets are either illiquid venture capital investments [...] In all, the spreadsheet says FTX Trading’s assets were [...] $3.2bn of illiquid private equity investments. Sounds like the VCs may have managed to recoup their investments using customer funds before the thing blew up.
- xg15 4y ago
  Maybe I misunderstood, but if the investments were on the "assets" side, doesn't that mean that FTX was the VC investor here - and the "asset" is the potential of the investment to pay off?
  - deleted 4y ago
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samgranieri 4y ago
What the hell did I just read? Wow.
DebtDeflation 4y ago
How are SBF and CE not in custody at the moment? $10B of customer funds are flat out missing (assuming you start with $16B, $5B gets invested in illiquid VC and PE stuff, and $1B is used to buy shitcoins). Last I heard SBF was questioned in the Bahamas but it didn't sound like they were holding him and CE was "in Hong Kong trying to get to Dubai".
akhilpotla 4y ago
I think the idea of "fully diluted market cap" is essentially bs. It is answering the question what if the supply went up but the demand went up to the same degree as to keep the price stable, what would the market cap be then? That's not how it works
mfkp 4y ago
Matt Levine (article's author) did an interview with SBF about 6 months ago and there were plenty of red flags back then (mentioned in article in section about yield farming): https://youtu.be/C6nAxiym9oc https://youtu.be/C6nAxiym9oc
deleted 4y ago
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Ozzie_osman 4y ago
It is insane that large, reputable VCs supposedly did diligence on FTX and alarm bells didn't go off.
nunez 4y ago
i liked how max painted sbf and co as perverse robin hoods, except they (maybe, probably) stole a bit from the commons while stealing from the rich and giving back to the commons (via political influence)

479 points by latchkey 4y ago

xg15 4y ago

- invent a currency. - mint one token and sell it to your friend for $1. - make a tweet saying that supply of your currency will be capped at 1 billion tokens. - you now own $999.999.999 in assets! Analysts hate this one weird trick!

neonate 4y ago

https://archive.ph/4LlX8 https://archive.ph/4LlX8

jb12 4y ago

Matt Levine consistently puts out such good content. His newsletter is absolutely worth subscribing to.

ProAm 4y ago
Never subscribe to his newsletter, it's impossible to unsubscribe when you want to. Literally have to filter it in my mail to go to the trash as for the Bloomberg website won't let me unsubscribe.
- HDThoreaun 4y ago
PaulHoule 4y ago
He wrote a whole issue of Bloomberg Businessweek boosting crypto recently that was not up to his usual standard and was worse than the usual Businessweek standards of layout and typography. It seemed something a year out of sync, aimed to get ‘greater fools’ to take a second look at crypto, completely divorced from the headlines a week ago and a week hence.
- legitster 4y ago
  ??? The Bloomberg crypto issue was great! What were your specific problems with it? I read it cover to cover and didn't get a single sense of it "boosting" crypto. If anything, it was really in depth and skeptical.
  - PaulHoule 4y ago
    It's not news. Anybody who doesn't know how Bitcoin works in 2022 is never going to understand how Bitcoin works and they need clear messaging such as "No" or "Nothing more to see here, move on folks." My guess is that the real audience is blockchain enthusiasts who crave validation and will squee on it so much that they'll buy 50 reprints. Why doesn't Bloomberg take an issue and reprint the first few chapters of Extraordinary Popular Delusions and add a paragraph about each of the 20 times that people said "it's different this time" and it wasn't? That wouldn't be news but it would be timeless wisdom that would serve readers well.
    - legitster 4y ago
      Ummmm. I think for the typical readership of Bloomberg - guys in their 50s looking for cool places to park some extra cash - a five page explainer on how smart contracts work with some editorializing about how they will probably never work as promised is kind of the perfect inoculation against hype. If people are curious about crypto, and their only sources of information are polemic, that seems much, much worse for everyone.
- danielodievich 4y ago
  I just finished reading this article and I absolutely loved it. The layout with meme pictures was an excellent use of that format, especially in context of all this crypto non-ponzi-sense. Another friend of mine who doesn't know Matt was very complimentary of it (in fact he gave me the paper article). My wife is reading it now and enjoying it too! There is no accounting for taste.
  - PaulHoule 4y ago
legitster 4y ago
Never paywalled!
- lokar 4y ago
  The email subscription is free
SnooSux 4y ago
Link: https://www.bloomberg.com/account/newsletters/money-stuff https://www.bloomberg.com/account/newsletters/money-stuff

jpm_sd 4y ago

"Its balance sheet consisted mostly of stuff it made up! Stuff it made up! You can’t do that! That’s not how balance sheets work! That’s not how anything works!" I'm picturing Matt Levine being carted away by nice men in white coats after finishing this paragraph

bena 4y ago
Now, I'm not a money scientist or anything, but I really feel as if Sam Bankman-Fried could have picked up a book or two on accounting or how to manage a balance sheet before proclaiming himself a money genius.
- bewaretheirs 4y ago
  Unfortunately nobody has distilled accounting into a series of six-paragraph blog posts. (see https://lithub.com/crypto-nerd-sam-bankman-fried-who-just-lost-16-billion-would-never-read-a-book/ https://lithub.com/crypto-nerd-sam-bankman-fried-who-just-lo...) “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.”
  - baxtr 4y ago
    I think that’s a bullshit quote. He actually said it but I think he understood how to stir the pot: but being eccentric and controversial.
  - whimsicalism 4y ago
    Guess he is saying his parents (both authors) fucked up in more than the obvious way.
  - Scoundreller 4y ago
    As someone that has probably read less than 10 fictional books in their life, I can see where he’s coming from. Like, I’m literate and basically read stuff all day. And I can get through a textbook as a part of a course, but force me to read a novel and by page 7 I’m falling asleep and losing track of the characters. I’m on the fence about borrowing/buying a book that was based on a podcast series because I fear 90% of what it covered was in the podcast.

dang 4y ago

Recent and related: FTX balance sheet, revealed - https://news.ycombinator.com/item?id=33577437 https://news.ycombinator.com/item?id=33577437 - Nov 2022 (286 comments) (too many other FTXen to make a generic list)

BrentOzar 4y ago

> The result of adding or subtracting those numbers with ordinary numbers is not a number; it is prison. Haven't laughed that hard in a while.

dweekly 4y ago
Matt Levine is a national treasure.
- EMM_386 4y ago
  I only wish he had gone into the "compliance officer was also previously involved in massive online poker scams". Maybe the next one!
  - guynamedloren 4y ago
    Marc Cohodes has been sounding the alarm about FTX for a while. Here's a snippet (from last month, before the FTX crash) where he calls out the shady background of said compliance officer: https://youtu.be/VbDiWXFxqr8?t=2348 https://youtu.be/VbDiWXFxqr8?t=2348 The whole conversation is fascinating.
- JTon 4y ago
  I happened to catch the Odd Lots podcast episode where Matt Levine and SBF of FTX were co-guests soon after it first came out [1]. Matt's reactions were priceless. Well worth the listen now, considering FTX blowup [1] https://www.youtube.com/watch?v=KZYqL79GDXU https://www.youtube.com/watch?v=KZYqL79GDXU
  - bombcar 4y ago
    Levine has said that he was a fan of SBF based on that podcast, btw. Someone posted about it earlier today. https://news.ycombinator.com/item?id=33594284 https://news.ycombinator.com/item?id=33594284 I think people would do well to remember that Levine's job is NOT to do your due diligence for you; he's an entertainer.

stephc_int13 4y ago

I wonder how the people at Sequoia feels now. I'd like to see the comments of people who lost money in this fiasco here. The HN crowd is generally hostile to crypto scams, but there are likely exceptions.

whimsicalism 4y ago
I'm a crypto moderate, if such a thing exists. Given the vitriol that I see here re:crypto (and the fact that pretty much every thread on crypto has to get dang chiming in to remind people to be civil & adhere to guidelines), there is little chance that actual "crypto evangelists" are going to be commenting here. Even a comment like this one will get aggressively downvoted in the current climate.
- Semaphor 4y ago
  Mostly agreed, though there certainly are done evangelists, just few and rarely high quality
- jfghi 4y ago
  Given that it’s a scam affecting many, vitriol is quite appropriate. However, I’ve mostly seen objective reality mislabeled as vitriol.
  - whimsicalism 4y ago
    I trust the moderators of this site to know vitriol when they see it. Honestly, all you need to see is dang's comment history [0] to see the proportionate amount of time they have to spend moderating crypto comments. [0]: https://news.ycombinator.com/posts?id=dang&next=33563869 https://news.ycombinator.com/posts?id=dang&next=33563869
- wyldfire 4y ago
  I feel like I am slowly changing my mind about cryptocoins. It always seemed so powerful. Bitcoin's exchange rate may fluctuate but it has value and is nearly indestructible. You could complain that it's overvalued but it's not at all a ponzi scheme. Unfortunately, it seems like the only utility that has arrived is for the black market. A bajillion new coins have been created, some of which also have real value and purport to improve on bitcoin. But here we are in 2022 and while I can see some cryptocoin ATMs in supermarkets, I doubt they're used for much beyond paying ransoms. Even if we move the most important/useful coins off of proof-of-work †, I think governments around the world may move to outlaw cryptocoins. At which point whatever modest legitimate utility that existed will be eliminated and only the black market will remain. † this seems difficult or impossible for bitcoin until/unless it forks to something that looks completely unlike bitcoin.

chewz 4y ago

> I tried, in the previous section, to capture the horrors of FTX’s balance sheet as it spiraled into bankruptcy. But, as I said, there is something important missing in that account. What’s missing is the money. What’s missing is that FTX had at some point something like $16 billion of customer money, but most of its assets turned out to be tokens that it made up. It did not pay $16 billion for those tokens, or even $1 billion, probably. 7 Money came in, but then when customers came to FTX and pried open the doors of the safe, all they found were cobwebs and Serum. Where did the money go?

queuebert 4y ago
Levered losses?
- HDThoreaun 4y ago
  It went into that @fiat account which was probably Alameda
- mzs 4y ago
  I would assume most of it was stolen.
nafix 4y ago
I feel like all the news stories are ignoring some very blatant questions like this. Maybe they are just waiting for more details to come out?

nullc 4y ago

> $16 billion of dollar liabilities and assets consisting mostly of some magic beans that you invented yourself and acquired for zero dollars? WHAT? Never mind the valuation of the beans; where did the money go? Exactly. This is the first time I've seen the media asking the right questions. The answer probably is in part that most of it never existed to begin with-- those 'customer' liabilities probably include the probably fictional billions in arb gains SBF claimed to have and some amount of magic beans deposited by related entities. E.g. Deposit $1 billion magic beancoins you essentially made up (or a friend made up), then trade them for "Bitcoin perpetuals" (levered paper bitcoins) with FTX itself acting as the counterparty. Now the 'customer' is owed $1bn in bitcoin on FTX's books and ftx is long a billion in magic beans. Then get your friends in the media to write glowing stories about FTX's meteoric rise and some suckers come in, deposit real bitcoin, invest money from real pension funds, etc. and the 'customer' can then withdraw some of their paper bitcoins. ... at least until the exchange runs out of anything except magic beans and someone forgets to set the switch to 'more magic'. > FTX worked fine: People liked its technology, and it seems to have made money. Well, the people who deposited there liked the 8% APY they gave people simply for depositing funds. Prudent people saw that obvious ponzi scheme marker and stayed the hell away!

esoterica 4y ago
I think you’re confused about what a liability is. If the liabilities were fake FTX would not be insolvent. Their problem is that their liabilities are real but their assets are fake.
- nullc 4y ago
  You might want to consider adopting a less condescending communication style in accordance with HN policy-- it would make it easier for both of us to learn something. I think I adequately described a credible sequence of operations, but your dismissive reply has made it impossible for me to tell which parts weren't communicated effectively. The central unanswered question is "where did the real money go?": Those ftx related magic beans were constructed for ~free. The balance sheet makes it look like billions of Bitcoin are owed, so where did they go? The idea that FTX didn't pay for the magic beans is just an assumption, but it's not necessary. They could have paid a related entity for them using the paper bitcoin traded on the site. I'm suggesting that related entities such as Alameda research and SBF personally deposited magic means and traded them for Bitcoin "perpetuals", with FTX awarding them paper Bitcoins. This creates a bitcoin liability on FTX's balance sheets even though no billions of dollars ever existed. Some amount of actual valuable assets were deposited, then withdrawn by people who traded magic beans for FTX bitcoin liability (and/or were awarded bitcoin through FTX's 8%/yr yield program on customer deposits) -- leaving FTX with a balance sheet full of huge Bitcoin liabilities. In that scenario one could go back through the transaction records and unwind some of these magic bean trades and make FTX less insolvent, but they'd still be insolvent because of the real assets that were withdrawn by parties that only brought magic beans into the picture, as well as FTX's spending, donations, bills for their designer amphetamines and cleanup services for their orgies, and other "business expenses" typical of their industry.

gruez 4y ago

>There is also an obscure $7mn holding called “TRUMPLOSE” https://ftx.com/trump-tokens https://ftx.com/trump-tokens

jefftk 4y ago
"Joe Biden won the 2020 United States Presidential election: TRUMPLOSE is redeemable for $1.00! All TRUMPLOSE balances on FTX will be auto-redeemed for $1.00 at 11/15/2020, 9:00:00 AM." How can TRUMPLOSE assets still be on their balance sheet? (Aside from "we have no idea what we're doing...")
- atdrummond 4y ago
  It is 2024 futures, not 2020.
  - jefftk 4y ago
    I don't see anything in https://ftx.com/trump-tokens https://ftx.com/trump-tokens about 2024? It's all 2020.
    - NoboruWataya 4y ago
      There is a separate TRUMP2024 token: https://ftx.com/trade/TRUMP2024 https://ftx.com/trade/TRUMP2024 TRUMPLOSE is the 2020 one, so your point stands that there is no explanation for that account still having a huge amount of money. That said, we now know that internal labelling of accounts was not FTX's forte, so...
      - atdrummond 4y ago
        This being the 2024 one was confirmed by the other side of the trade (@GiganticRebirth on TWT).

hn_throwaway_99 4y ago

Recommendation: If you've been following or interested in the FTX scandal at all, read this whole brilliant post beginning to end. Not only is the writing in Matt Levine's hilarious style (I second all the other comments related to this!) it is also incredibly informative as to the mechanics of all the WTFs that actually went down. For example, I've been following this fairly closely but I didn't really have a good understanding of how Serum/SRM played a role, and Levine outlines this clearly. Really great piece, thanks for posting.

silexia 4y ago
I would say Levine's proposed scenarios for how the money was stolen are generous... he comes up with all sorts of scenarios that make SBF and friends not sound like what they actually are - fraudsters.
- hn_throwaway_99 4y ago
  Really?? That's not the impression I got at all. Statements like "The result of adding or subtracting those numbers with ordinary numbers is not a number; it is prison" doesn't exactly sound like he's being generous to SBF.

gadders 4y ago

>> a negative $8bn entry described as “hidden, poorly internally labled ‘fiat@’ account”. Anyone else old enough to remember Nick Leeson and Error Account 88888? https://www.independent.co.uk/news/business/how-account-88888-sank-britain-s-oldest-bank-1319275.html https://www.independent.co.uk/news/business/how-account-8888...

mongol 4y ago
I am old enough but I don't remember, being ignorant of it.

legitster 4y ago

I often joke that crypto has been run by gold bugs who were forced to "smoke the whole pack" on fiat currencies. So a lot of crypto is a nihilistic homage to federal reserve systems. In that way, "DeFi" feels the same about the finance industry. It was no secret that SBF hated traditional finance. And so I assume he refused to learn anything from it. But what he ended up creating was almost a hilarious parody of the financial system. That's at least how I can square the circle about how someone who could criticize Lehman Brothers for letting themselves get overleveraged on shady asset classes could literally have negative 8 billion dollars in "Hidden, poorly internally labeled ‘fiat@’ account" and then publicly go to Twitter to say they have a "liquidity problem".

chc4 4y ago
SBF (and like half the people at Alameda) worked at Jane Street or other big name financial firms. They weren't ignorant of traditional finance.
- factsarelolz 4y ago
  Both SBF and the other person were glorified interns and got position based upon their parents network.
  - whimsicalism 4y ago
    Doubt it, unless you have evidence otherwise. Jane St (unlike customer-facing finance firms, like Goldman Sachs) does not really engage in this style of nepotism hiring that I know of. More likely is that the child of prominent academics might actually be more intelligent than average themselves and certainly provided more opportunity to flourish.
    - factsarelolz 4y ago
      Could you detail SBF's experience that would have opened doors to him at Jane St without nepotism? I ask because I can't find any evidence to show how he was able to get into that position. Thanks for the guidance and I look forward to your reply.

celestialcheese 4y ago

> Still it is striking that the balance sheet that FTX circulated to potential rescuers consisted mostly of stuff it made up. Its balance sheet consisted mostly of stuff it made up! Stuff it made up! You can’t do that! That’s not how balance sheets work! That’s not how anything works! This is absolute gold. Also... > FTX/Alameda were funneling customer money into effective altruism. Bankman-Fried seems to have generously funded a lot of effective altruism charities, artificial-intelligence and pandemic research, Democratic political candidates, etc. This is just catnip to the "right-wing" media machine, Even worse is that it's not even really that far-fetched of a theory. Billions spent influencing elections and policy over the last 3 years, and a $10B hole of customer funds just missing. This is just reinforcing the worst conspiracy theories out there, and I'm sad to see it.. *edit, formatting

vkou 4y ago
Why is a coal billionaire spending money on campaign contributions normal, but a finance billionare doing the same catnip for the worst right-wing conspiracy theories? [1] For someone who just arrived on Earth from another planet, modern campaign financing rules are indistinguishable from bribes, regardless of who the money goes to. [1] I mean, aside from the obvious answer (Which is that their guys aren't the beneficiaries.)
- ok_dad 4y ago
  I absolutely hate myself for replying, but in this situation you gave, SBF may have used customer's money, but an oil/coal baron uses their own money. Even if you consider billionaires to be a disgusting stain on society, like myself, there's still a difference between stealing money to spend on stuff (political donations or Lambo's) and spending money/stocks you legally made in a horrible, earth-killing industry. I absolutely detest greed in all it's forms, but I also don't think people should lower their morals and ethics to match the lowest of the low, as if they're Robin Hood (the character, not the company).
  - vkou 4y ago
    That just makes SBF a thief, but that's not really relevant to the core problem of pay-to-play campaign contributions.

moralestapia 4y ago

OT but also part of that newsletter (by the end), That take on ESG as an excuse to mask out antitrust violations, wow, never thought of it like that. Agree with everyone else here, Matt Levine is top notch.

TrickyRick 4y ago

I guess Web 3.0 got its Madoff 2.0

unmole 4y ago
~90% of the funds invested into Madoff Investment Securities LLC were recovered and disbursed. This is much much worse.

webscout 4y ago

jmyeet 4y ago

Forgive the repetition (I've mentioned this on other threads about FTX and their balance sheets) but this doesn't seem to be widely reported or known for some reason: 1. FTX had no CFO [1]; and 2. Their accounting firm is on the Metaverse [2]. (1) is particularly shocking because its normally the CFO's experience and reputation that gives investors and customers confidence in published numbers (yes, there's that awkward trust element against that seems to be an anathema to Crypto Andys). Even if it's not a regulatory requirement, I"m honestly shocked that the investors (Sequoia, etc) didn't insist on an adult in the room so they could trust the financials. Horrible for the customers. No sympathy for the investors. A giant fail by the financial press for not highlighting this issue earlier as it's a definite red flag. [1]: https://www.ledgerinsights.com/ftx-warning-signs-no-cfo/ https://www.ledgerinsights.com/ftx-warning-signs-no-cfo/ [2]: https://www.coindesk.com/business/2022/11/11/meet-the-metaverse-night-clubloving-audit-firm-that-presided-over-ftxs-financials/ https://www.coindesk.com/business/2022/11/11/meet-the-metave...

nemo44x 4y ago
It's even funnier and crazier than "Silicon Valley". I mean, c'mon - the auditor was the first Metaverse financial auditing company?! It's just so amazing and hilarious.

spaceman_2020 4y ago

What boggles my mind is how they lost it all. They should have been sitting on 1000x gains. Their Solana stake alone would have been worth billions.

dordoka 4y ago
Yeah, exactly. I reckon they didn't lose it. That money was sent somewhere else and they "covered" it up with their own issued/invented tokens at ridiculous real cost. It would seem plausible to think that they used Alameda as a proxy for the real destination of all that money.
- drcode 4y ago
  The recent crypto downturn has been unrelenting and deep: It's totally plausible they just thought they were the kind of geniuses who could spot the bottom of the market and quickly bled through all the money but yeah, it's also possible the money just ended up at a third unknown entity
  - dordoka 4y ago
    I agree, i wouldn't be surprised either if they were just morons believing they were geniuses
  - jsemrau 4y ago
    Trading is easy if everything goes up. The moment in time you are stomaching 90%+ losses your operating capital quickly disappears.
  - naijaboiler 4y ago
    Thats likely what happened. They are their own margin lenders and also FTX market makers. They backstop rapidly falling tokens on their exchange. So a sudden but prolonged drop in crypto prices can wipe put huge amounts quickly
    - notch656a 4y ago

smsm42 4y ago

It is incredible that each time I read new article on FTX I think "well, that tops everything I've seen so far in supposedly legit financial companies" and each next day I learn something that totally leaves the previous one in the dust. Turns out they didn't just used customers' money for risky investment as I thought, they actually pretended that illiquid token they themselves invented is a good asset to cover liabilities for customers' money! And they actually sent balance sheet with this to the investors trying to entice them to invest in this. No wonder Binance run away at the first look of it.

grey-area 4y ago
Binance does the same, as do Bitfinex and Tether and pretty much the entire cryptocurrency ecosystem.
- sbierwagen 4y ago
  Coindesk says they don't. There's a pretty solid 90% chance that every exchange with a stablecoin is going to blow up, but I'd only guess a 30% chance of Coindesk going under.
  - grey-area 4y ago
    Yes I agree from what I’ve seen they are the most stable, though it’s hard to know what is going on under the hood and the ceo is an unsavoury character who I wouldn’t trust with my money.
    - captn3m0 4y ago
      Coinbase has a Altman Z-score of 0.16. This implies bankruptcy possibility in the next two years.
- smsm42 4y ago
  That's a broad claim that would look much better supported by some proof.

hef19898 4y ago

Wow, imagine having 8 billion of customer money, negative, at a badly labelled internal account. And now remember that Wirecard fell over made up assets of 2 billion. FTX is an even bigger mess than Wirecard.

durnygbur 4y ago
Wire-what? No one in Europe remembers them anymore. Germans chase more ferociously torrent users, than the one executive who vanished.
- def_true_false 4y ago
  Zee Germans are currently too busy with fucking up the energy market to the tune of 200B to care about silly stuff like wirecard :)

TacticalCoder 4y ago

Now people are realizing that the scam was planned from the beginning. Serum started trading in 2020 and was in preparation before that. And SBF was part of it from the beginning. Compliance lawyer was previously involved in massive online poker scams. Guess who's that lawyer' ex-colleague lawyer, also involved in the scam, is working for? tether/iFinex/BitFinex. Go read @bitfinex'ed 's Twitter account. He's been exposing tether / iFinex / Bitfinex / Alameda / FTX and SBF as frauds since the very beginning.

gruez 4y ago
>Go read @bitfinex'ed 's Twitter account. He's been exposing tether / iFinex / Bitfinex / Alameda / FTX and SBF as frauds since the very beginning. Seems like the account trashes mainly Tether/Bitfinex, but also whatever other crypto company shows up in the news (eg. FTX, Binance, or coinbase). If you trash everything, of course you're going to turn out to be the guy who was right "since the very beginning". It doesn't mean that you're actually a good source or anything. For instance, I scrolled all the way to the bottom (to escape all the recent FTX tweets), and found a retweet[1] portraying FTX as some sort of predatory lender and how "SBF HAS ACTUALLY RISKED LITTLE OR NOTHING", which we now know is the opposite of what happened (matt levine says that the probably lost money bailing all those companies out). [1] https://twitter.com/otteroooo/status/1571522943305523206 https://twitter.com/otteroooo/status/1571522943305523206
- grey-area 4y ago
  All the companies you list are frauds, save maybe coinbase.
  - gruez 4y ago
    Isn't that the problem? If you call everything a fraud, is it worth listening to you? Presumably in this case "fraud" refers to some specific instance of intentional deception, and not just some vague idea of "it's fraud because crypto is fraud, because crypto has no value" or whatever.

mongol 4y ago

So what will happen? Will we see criminal charges and prison times?

nostromo 4y ago

Does Sequoia do literally no due diligence on the companies they invest in? This wasn't seed capital, this was $213mm. And it wasn't just a bet that didn't turn out, it was fraudulent at its core.

themanmaran 4y ago
Echoing this question. I worked in smallcap investment banking for several years. My bank wouldn't speak to you if you didn't have 2-3 years of Audited financials (note: not 'Reviewed' or a 'Compilation'). Often we would request an additional audit if we didn't recognize the firm that did the prior auditing. All for a valuation range of $200MM - $500MM. Meanwhile a hastily compiled excel sheet seems to satisfy the largest VC's in the market? Billion dollar valuations based on totally unsubstantiated numbers? Audit's are expensive (like $30-$80k). But surely better than losing $200MM on hot air.
- erostrate 4y ago
  It's worse than that. That spreadsheet was created after FTX became insolvent. When Sequoia invested, they probably didn't even have something as good as that terrible spreadsheet. Or more charitably, Sequoia presented with something more professional looking, but completely incorrect.
  - rippercushions 4y ago
    Famously, SBF was playing League of Legends while pitching to Sequoia, and they just about fell over themselves in aww at his quirky genius. Matt even quotes this bit in the article.
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    - dralley 4y ago
      I really cannot believe just how on the nose HBO's "Silicon Valley" was.

tppiotrowski 4y ago

> And another big asset is $616 million worth of the MAPS token ($865 million “before last week”). MAPS is the token of Maps.me 2.0, a sort of Serum spinoff that was also launched by FTX; I remember when maps.me added crypto and many users fled to Organic Maps. I didn't know that FTX was behind it.

sjkoelle 4y ago
ga did they add crypto? maps.me was an amazing product in 2018 but seems to have gone south.
- tppiotrowski 4y ago
  Check out Organic Maps. It's a fork of maps.me and basically the same app without the crypto/monetization

alexb_ 4y ago

This has got to be one of the most absurd situations I've ever seen. Absolutely fucking insane that this could have even lasted that long. Every single charitable interpretation of this situation, every single possible way that they could have somehow argued their way out of it being a clear scam, it's all just obviously stealing. I think it's absolutely absurd that "smart money" was pumped into this to the tune of billions upon billions of dollars. The popularity of this delusion, and the madness of the billion-dollar crowd is so much worse than anyone could have thought.

lkrubner 4y ago
Strongly agree. In normal times there are scammers and people trying to set up Ponzi schemes, but they don't typically fool sophisticated investors. These last 30 years have seen the markets grow increasingly deranged. In that sense, Bernie Madoff was the true visionary who set the tone for this era, much more so than Elon Musk or Adam Neumann.
gary_0 4y ago
I still have doubts that regulators will step in and take decisive action to prevent this kind of thing happening again. Is fraud basically legal now?
joe_the_user 4y ago
Absolutely fucking insane that this could have even lasted that long. When things are good, Ponzi schemes appear smarter, hipper and more profitable than ordinary businesses and so no one want to run anything else after a bit. That's why the Fed is there to "take away the punch bowl just when the party is getting interesting" - because, whatever their other virtues, markets won't stop this before disaster strikes.
- grey-area 4y ago
  Shame the Fed didn’t do that. Instead the Fed has been pouring vodka constantly into the punch bowl since 2009. This bubble is primarily their fault and now after it burst they have decided to go the other way and raise rates into a recession.

tibbydudeza 4y ago

So Sam Bankman-Fried is the new Adam Neuman. Seems he decamped to the Bahamas - is there an extradition treaty with the US ???.

jerrycruncher 4y ago
SBF is more like the reverse Neumann. Neumann went into WeWork's endgame looking like a fool, and emerged from it a rich wizard.
- tibbydudeza 4y ago
  SBF self-medicated (bio hacked) himself with Emsam a Parkinson's drug which boost dopamine that causes extreme risk taking as a side effect. Another unhinged druggie it seems - I hope he goes to jail for fraud.

skizm 4y ago

> FTX shot its customer money into some still-unexplained reaches of the astral plane and was like “well we do have $5 billion of this Serum token we made up, that’s something?” No it isn’t! The upcoming series of FTX articles will be better than the Elon saga I think.

hn_throwaway_99 4y ago

The thing that this piece really got me thinking about is how many other crypto companies are the same ponzi scheme because they are counting made-up things as assets on their balance sheet. In other words, suppose I create token SCAMMER, and I say its supply will be capped at 1 million tokens (or 10 million, or 100 million - that's the "nice" thing about crypto, I can kinda choose whatever number I want), and then I'm able to sell 10 of those tokens for $100 each. According to FTX math, I now have $99,999,000 of assets on my balance sheet, but of course if I actually tried to sell a lot of my "kept" tokens I would tank the SCAMMER price. Even better, and I think what is probably more common in the crypto industry: suppose I get my buddy to create a SUX2BEU token. I tell my buddy I'll by 10 SUX2BEU tokens for $100 each if he buys 10 of my SCAMMER tokens for $100 each. Now suddenly we can both say we have huge assets on our balance sheets! Until, of course, someone decides to pull aside the curtain covering the wizard. So many ponzi schemes on top of ponzi schemes...

rossdavidh 4y ago
Paul Graham wrote an essay years ago in which he described the moment when he realized that most of the dot-com companies in the late 90's were selling their ads mostly to other dot-com companies, who were buying their ads in turn. It looked like growing revenue for everyone, but once it came time to show a profit, all of it came crashing down...
- hef19898 4y ago
  The lesson drawn, and a good one as an investor, was the YC advice that start-ups should build stuff for other start-ups.
  - jgalt212 4y ago
    It worked like a charm for AWS.
    - justinator 4y ago
      In what world is AWS a startup?

c7b 4y ago

> It’s an Excel file full of the howling of ghosts and the shrieking of tortured souls. I wish I had Matt Levine's eloquence to put this madness into words. Great analysis and I just want to add a small thing: while a balance sheet looks like a simple listing of assets and liabilities, that's not how you go about constructing one. Your financial statements are the result of a sequence of double-entry bookeeping statements, and the balance sheet is one particular view on the data processed by this formalism. There is no way assets couldn't add up to liability plus equity, no matter the market fluctuations, valuation uncertainty,... (your numbers might be out of date/incorrect, but they would still be internally consistent). The resulting checksum mechanism is an interesting aspect why double-entry bookeeping was such a useful tool for merchants on busy, dirty, buzzing medieval markets. FTX, on the other hand, looks more like a mechanism for funnelling cash to who knows where - that's the big question that Matt correctly points out: where did all the money go? There's no way you can spend $16bn on meth and yachts and mansions in the Bahamas in the space of a few years.

thinkharderdev 4y ago
From the article my bet would be that they basically vaporized all the money bailing out bad trades at Alameda.
- c7b 4y ago
  Maybe, but it might be worth following the money a bit further (especially on the later transactions). Was the money at Alameda really just lost on bad trades, or which accounts did it end up in eventually? I read somewhere else that the portfolio of Alameda contained over 400 companies that looked like little more than a Twitter profile with a handful of followers. It's not hard to imagine that the people behind those 'firms' were the same or related to those who are now saying 'whoopsies, they looked like such good trades back then, my bad'.
- naijaboiler 4y ago
  I think it's less bad trades and more like a few frivolous purchases and a lot of losses from using alameda to market make on FTX, i.e. when crypto prices fell, they were using alameda to bail out margin loans they had made out

rossdavidh 4y ago

That youngsters in a new, unregulated and often scammy industry could do this, is not at all surprising. That lots of old people with billions of dollars gave them money to lose, is what needs explaining here.

fullshark 4y ago
Explanation: Greed, FOMO, and a lack of better opportunities. From that Sequoia profile I guess they were also just so enchanted by some global arbitrage trade SBF did, exploiting arbitrage being every banker's fantasy scenario.

thinkharderdev 4y ago

Holy crap this is so much worse than I could have imagined....

ricardou 4y ago

Time and time again it seems like the people involved in the crypto industry are speedrunning through dynamics that are now either clearly understood as a failing strategy, or outright illegal. Another such example here.

bhk 4y ago

FTX's problems were nothing that a government bailout couldn't solve.

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civilized 4y ago

I don't know much about Austrian economics, but the wiki article about its "malinvestment" concept [1] sounds like it's talking about us: > In Austrian business cycle theory, malinvestments are badly allocated business investments due to artificially low cost of credit and an unsustainable increase in money supply. Central banks are often blamed for causing malinvestments, such as the dot-com bubble and the United States housing bubble. Austrian economists such as the Swedish central bank's Nobel Memorial Prize in Economic Sciences laureate F. A. Hayek advocate the idea that malinvestment occurs due to the combination of fractional reserve banking and artificially low interest rates misleading relative price signals which eventually necessitate a corrective contraction – a boom followed by a bust. [1] https://en.wikipedia.org/wiki/Malinvestment https://en.wikipedia.org/wiki/Malinvestment

brookst 4y ago

Is it wrong that I want the crypto and NFT and GME and other insane bullshit to continue just so we are blessed with more of Matt Levine!s writing? Damn that guy is talented. So HN please go invent more multi-billion-dollar insanity that is too crazy to even be called a scam, because the world needs more of this great writing.

akelly 4y ago

> Where did all the money go? One theory is that the crypto quant funds figured out how to exploit the Alameda FTX market maker starting in 2020-2021 to take tons of money from Alameda. But FTX couldn't just turn off the Alameda market maker because most of the FTX trading volume, and therefore FTX revenue, was these crypto quant funds taking money from Alameda. So if they turned off the Alameda money spigot then their revenue would drop off a cliff and they wouldn't be able to raise more money from Sequoia or the UAE. And the value of FTT was tied to the trading volume and was a huge portion of their assets, so if volume fell they would be insolvent. Basically they turned customer deposits into revenue at pennies on the dollar.

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lend000 4y ago
This doesn't make much sense to me. I think the problem is that arbitrage just dried up (as it does in a maturing market), and SBF got high on his own farts and started making directional bets. This is clear from the amount of FTT tokens that were held by Alameda in comparison to the amount of assets a typical market maker would hold relative to a pair's liquidity.
- jeffreyrogers 4y ago
  Yes I think this is more likely to be correct. And Alameda started making directional bets back in 2020 at least: https://twitter.com/AlamedaTrabucco/status/1385180941186789384 https://twitter.com/AlamedaTrabucco/status/13851809411867893...
felixbraun 4y ago
And then Luna happened, sealing their fate
caiomassan 4y ago
well, he is the 6th highest donor for the democratic party.

rowls66 4y ago

Most financial companies have large balance sheets, a small amount of equity that is highly leveraged, and asset values based on many assumptions. If the assumptions change, a business can go from everything is great to insolvent really fast. That is why such businesses are highly regulated. With crypto we see why this regulation is so important.

impulser_ 4y ago

One thing I learned from this FTX situation is that VC firms are horrible at their job. How does one of the world's largest VC firms, Sequoia, with 90b dollars in assets not do simple due diligence on their investments. Do VC firms not do background check on executives, or look at financial statements of the company they put their money in?

beefield 4y ago

> So if for instance some company creates a token, and says that there can be 10 billion of the token, and reserves them all for itself, and then sells 1 million of them to outside investors for $1 each, then the market cap of that token is $1 million ($1 times 1 million circulating tokens), while the fully diluted market cap is $10 billion ($1 times 10 billion total tokens), and the issuer’s 9,999,000,000 remaining tokens have a value, on this math, of $9.999 billion. I have had for a while this secret plan to become the richest person in the world by a wide margin. Because I seem to be too lazy to actually execute it, I think it is better to just publish it for the hope that someone else does it: So, the plan is to create a new cryptocurrency called Googolcoin (GGC). The supply of the coin would be - as the name implies, 10^100 GGC. I would pre-mine all but say 1000 of them for myself and leave the rest for miners. Then I would start making the market and put all of my GGC for sale, at a price of $1/GGC. Of course, I would also put offer to buy as many GGC as anyone wants to sell at say $0.7/GGC. Then I would go and bribe someone and buy one GGC from me. And there you have it. My net worth would be orders of magnitude greater than all other wealth in the earth combined! Take that, Elon. (If my reader at this point has not realized that the concept of market cap for cryptocurrencies is stupidest thing since... well previous stupidest thing, I would recommend selling your crypto ASAP.)

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ribosometronome 4y ago
https://www.youtube.com/watch?v=iHfJRON3b-w https://www.youtube.com/watch?v=iHfJRON3b-w Reminds me of Max Fosh briefly being the world's richest man.

KKKKkkkk1 4y ago

The vast majority of FTX Trading’s recorded assets are either illiquid venture capital investments [...] In all, the spreadsheet says FTX Trading’s assets were [...] $3.2bn of illiquid private equity investments. Sounds like the VCs may have managed to recoup their investments using customer funds before the thing blew up.

xg15 4y ago
Maybe I misunderstood, but if the investments were on the "assets" side, doesn't that mean that FTX was the VC investor here - and the "asset" is the potential of the investment to pay off?
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samgranieri 4y ago

What the hell did I just read? Wow.

DebtDeflation 4y ago

How are SBF and CE not in custody at the moment? $10B of customer funds are flat out missing (assuming you start with $16B, $5B gets invested in illiquid VC and PE stuff, and $1B is used to buy shitcoins). Last I heard SBF was questioned in the Bahamas but it didn't sound like they were holding him and CE was "in Hong Kong trying to get to Dubai".

akhilpotla 4y ago

I think the idea of "fully diluted market cap" is essentially bs. It is answering the question what if the supply went up but the demand went up to the same degree as to keep the price stable, what would the market cap be then? That's not how it works

mfkp 4y ago

Matt Levine (article's author) did an interview with SBF about 6 months ago and there were plenty of red flags back then (mentioned in article in section about yield farming): https://youtu.be/C6nAxiym9oc https://youtu.be/C6nAxiym9oc

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Ozzie_osman 4y ago

It is insane that large, reputable VCs supposedly did diligence on FTX and alarm bells didn't go off.

nunez 4y ago

i liked how max painted sbf and co as perverse robin hoods, except they (maybe, probably) stole a bit from the commons while stealing from the rich and giving back to the commons (via political influence)