5 ms·

> I imagine my question would be "hey, where'd all the deposits go?" But we know where they went. To Alameda Research. Then Alameda Research sent them somewher

> I imagine my question would be "hey, where'd all the deposits go?" But we know where they went. To Alameda Research. Then Alameda Research sent them somewhere else. The money isn't coming back, and Alameda Research's collateral of FTT tokens is worthless. So that's that, its done. Its actually quite a simple story here. FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that other group lost the money.

hn_throwaway_99 4y ago
> FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that other group lost the money One minor clarification: "lent" should be "stole". If I can't pay my mortgage, I'm not allowed to go break in to my neighbor's house to steal some cash that I'll "borrow" in the hopes of paying back later. FTX's Ts&Cs we're very clear - customer deposits were not FTX's to lend. This is a simple, straightforward case of fraud and theft. No additional "crypto-specific regulations" are needed to reach that conclusion.
- aliston 4y ago
  Not to mention, he literally tweeted a week ago that "We don't invest client assets (even in Treasuries)." FTX is not bank. It's not supposed to be susceptible to a bank run. This entire line of tweets makes no sense. SBF is a lying fraud that deserves prison.
- superfrank 4y ago
  > One minor clarification: "lent" should be "stole" Not a lawyer, but I think the correct term is "embezzled". > The crime of embezzlement is defined as the fraudulent appropriation of property of another by someone who has been entrusted with its possession. Unlike theft where the property is taken unlawfully, in embezzlement the property comes lawfully into the possession of the embezzler who then fraudulently or unlawfully appropriates it. The key aspect of embezzlement is the fiduciary relationship that exists between the embezzler and the victim of the embezzlement as embezzlement requires that the property be appropriated by a person who was entrusted with its possession. A senior executive who uses company funds to pay for his personal yacht is guilty of embezzlement even if he intended to return the funds or had the means to do so. Source: https://www.bayarea-attorney.com/CM/Articles/Theft-Offenses-Larceny-.asp https://www.bayarea-attorney.com/CM/Articles/Theft-Offenses-...
  - hn_throwaway_99 4y ago
    Agreed that this is embezzlement, but in all the definitions I've seen (including plain old Webster's), embezzlement is a form of theft, e.g. https://ryanbeasleylaw.com/2019/07/theft-embezzlement-and-fraud-whats-the-difference/ https://ryanbeasleylaw.com/2019/07/theft-embezzlement-and-fr...
    - superfrank 4y ago
      True. That's fair
- naveen99 4y ago
  How do you think margin works ?
  - hn_throwaway_99 4y ago
    Margin doesn't include theft of other people's assets.
Cupertino95014 4y ago
As I said yesterday, there's a guy (Irving Picard, AFAICR) who's clawed back most of the money that Bernie Madoff stole from his clients. In that case, Bernie took one person's deposits and gave the money to the previous sucker, so Irving unwound all that. In this case, apparently some people's money was fraudulently given to charities, so do they have to give it back? And what if they can't? There's a job almost no one would want to undertake.
TacticalCoder 4y ago
> So that's that, its done. Not at all. If Alameda really lost billions or tens in billions in trades, who was on the other side to collect the money? To random people who sold BTC at $64K and then all the way down? Or were the losing trades a way to syphon billions somewhere else? Seen the amount involved, the policital donations, the articles in the media portraying the guy as an altruistic genius and seen that tether/USDT/Bitfinex/Deltec are also in the Bahamas, it looks like, maybe, fucking maybe, it's time for actual journalism, actual research, actual congress hearings (at least one is coming in december btw), etc. about what's going on. Do you really believe it's just a few trades gone wrong? > Its actually quite a simple story here. FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that other group lost the money. For a start you're forgetting the part where FTX was also pumping and then dumping tokens on their customers. Some tokens they created themselves. They're also somehow tied to hundreds of million of USDs getting frozen by authorities, where FTX then quickly raised money. That's fraud, too. It's much more than "simple". There's serious shit going on.
- misiti3780 4y ago
  Your hypothesis is a small cabal of insiders at FTX/Alameda purposely blew up the hedge fund and exchange to siphon off billions (hiding it in the losses) to enrich themselves while simultaneously making themselves some of the most hated people in the world, and also rolling the dice on going to prison for decades. Seems very thin to me....

hn_throwaway_99 4y ago

> FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that other group lost the money One minor clarification: "lent" should be "stole". If I can't pay my mortgage, I'm not allowed to go break in to my neighbor's house to steal some cash that I'll "borrow" in the hopes of paying back later. FTX's Ts&Cs we're very clear - customer deposits were not FTX's to lend. This is a simple, straightforward case of fraud and theft. No additional "crypto-specific regulations" are needed to reach that conclusion.

aliston 4y ago
Not to mention, he literally tweeted a week ago that "We don't invest client assets (even in Treasuries)." FTX is not bank. It's not supposed to be susceptible to a bank run. This entire line of tweets makes no sense. SBF is a lying fraud that deserves prison.
superfrank 4y ago
> One minor clarification: "lent" should be "stole" Not a lawyer, but I think the correct term is "embezzled". > The crime of embezzlement is defined as the fraudulent appropriation of property of another by someone who has been entrusted with its possession. Unlike theft where the property is taken unlawfully, in embezzlement the property comes lawfully into the possession of the embezzler who then fraudulently or unlawfully appropriates it. The key aspect of embezzlement is the fiduciary relationship that exists between the embezzler and the victim of the embezzlement as embezzlement requires that the property be appropriated by a person who was entrusted with its possession. A senior executive who uses company funds to pay for his personal yacht is guilty of embezzlement even if he intended to return the funds or had the means to do so. Source: https://www.bayarea-attorney.com/CM/Articles/Theft-Offenses-Larceny-.asp https://www.bayarea-attorney.com/CM/Articles/Theft-Offenses-...
- hn_throwaway_99 4y ago
  Agreed that this is embezzlement, but in all the definitions I've seen (including plain old Webster's), embezzlement is a form of theft, e.g. https://ryanbeasleylaw.com/2019/07/theft-embezzlement-and-fraud-whats-the-difference/ https://ryanbeasleylaw.com/2019/07/theft-embezzlement-and-fr...
  - superfrank 4y ago
    True. That's fair
naveen99 4y ago
How do you think margin works ?
- hn_throwaway_99 4y ago
  Margin doesn't include theft of other people's assets.

Cupertino95014 4y ago

As I said yesterday, there's a guy (Irving Picard, AFAICR) who's clawed back most of the money that Bernie Madoff stole from his clients. In that case, Bernie took one person's deposits and gave the money to the previous sucker, so Irving unwound all that. In this case, apparently some people's money was fraudulently given to charities, so do they have to give it back? And what if they can't? There's a job almost no one would want to undertake.

TacticalCoder 4y ago

> So that's that, its done. Not at all. If Alameda really lost billions or tens in billions in trades, who was on the other side to collect the money? To random people who sold BTC at $64K and then all the way down? Or were the losing trades a way to syphon billions somewhere else? Seen the amount involved, the policital donations, the articles in the media portraying the guy as an altruistic genius and seen that tether/USDT/Bitfinex/Deltec are also in the Bahamas, it looks like, maybe, fucking maybe, it's time for actual journalism, actual research, actual congress hearings (at least one is coming in december btw), etc. about what's going on. Do you really believe it's just a few trades gone wrong? > Its actually quite a simple story here. FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that other group lost the money. For a start you're forgetting the part where FTX was also pumping and then dumping tokens on their customers. Some tokens they created themselves. They're also somehow tied to hundreds of million of USDs getting frozen by authorities, where FTX then quickly raised money. That's fraud, too. It's much more than "simple". There's serious shit going on.

misiti3780 4y ago
Your hypothesis is a small cabal of insiders at FTX/Alameda purposely blew up the hedge fund and exchange to siphon off billions (hiding it in the losses) to enrich themselves while simultaneously making themselves some of the most hated people in the world, and also rolling the dice on going to prison for decades. Seems very thin to me....