5 ms·
This text resonates with me a bit: > like, "oh FTX doesn't have a bank account, I guess people can wire to Alameda's to get money on FTX" > ..3 years later.. >
by superfrank 4y ago
This text resonates with me a bit:
> like, "oh FTX doesn't have a bank account, I guess people can wire to Alameda's to get money on FTX"
> ..3 years later..
> 'oh fuck it looks like people wired $8b to Alameda and oh god we basically forgot about the stub account that corresponded to that and so it was never delivered to FTX'
I'm not trying to defend his actions him and I think he should be prosecuted to the fullest extent of the law, but honestly, I kind of get what he's saying. I've worked at enough start ups where everything is always chaos and speed and scrappiness are valued above all else, that I feel like I've seen this multiple times. It's like, someone makes a dumb choice and everyone goes, "we'll that's not great, but it's working and it's not that bad, so I don't want to make it my problem" and eventually that dumb decision is just how things are. Eventually, new people join the company and don't realize things aren't this way intentionally and eventually one of them adds another dumb decision on top of that and the same cycle plays out again.
After a few years, you end up with multiple of your processes or parts of your infrastructure based on these chains of bad choices and the one of them collapses. When you're close to the problem, each of the decisions on their own don't look too bad, but when you step back and summarize it in one sentence, it's clear how fucked up things are.
It's funny because he smugly spends the start of this article arguing about how pointless regulators are, but I feel like if there was actually regulation in the space, there's a good chance they would have slowed things down enough to catch these bad decision chains.
- ceejayoz 4y agoIf they could afford to hire an on-staff performance coach, they probably could and should have hired an on-staff accountant to manage literally billions of dollars rather than having the CEO put things in a spreadsheet.
- superfrank 4y agoAgreed. He absolutely could have caught this if he had cared to, but my guess is he was too caught up in the "move fast and break things" mindset to really give a shit and that's why I fully support him going to jail for this. I don't think he intentionally lost peoples' money, but I think he was intentionally reckless and for that reason he should be prosecuted.
- deleted 4y ago[deleted]
- genmud 4y agoIIRC during some of the interviews with Madoff, he didn’t “intentionally” lose peoples money either. Fraud like this is often many little “well, I just need to $x and everything will be OK”.
- sgammon 4y ago> I don't think he intentionally lost peoples' money How do you suppose they took a directional bet, with customer funds, and lost, unintentionally?
- PebblesRox 4y ago> 'oh fuck it looks like people wired $8b to Alameda and oh god we basically forgot about the stub account that corresponded to that and so it was never delivered to FTX' SBF's claim is that FTX customers sent money to Alameda and nobody remembered to categorize it as FTX client money. This is about as believable as my 11yo saying he didn't realize he had to pay for the $50 worth of Pokemon cards he took from Wawa. (This was after he originally claimed the cards were a gift from a friend at camp -- a friend whom he could neither name nor describe to us.)
- chris_wot 4y agoIt’s a financial exchange. These guys think they are so smart, they don’t even need an accountant. I’m still trying to understand why investors would entrust their money with them. Why did the press fawn all over him? He talked a big game, but so have literally hundreds of others!
- suresk 4y agoI have worked in plenty of fast-moving and chaotic environments, and while I can see some stuff slipping through the cracks, it is hard to see something so core to your business getting this bad without realizing it. Like, if you are releasing financial documents and a large entry is "HIDDEN POORLY INTERNALLY LABELED ACCOUNT.", it is hard to explain that without getting into outright malice or negligence so extreme that it is difficult to differentiate from malice. Even rudimentary reviews of their finances would have highlighted stuff like this, and they clearly had money to pay people to help them do it.
- expazl 4y agoYes, I get what you're saying. At our old startup we didn't setup a bank account either, why bother, we just had investors deposit the money into our CEOs trading account, seemed easier that way.
- superfrank 4y agoYou're laughing, but I was an early employee at a start up run by 20-somethings that's now grown into a company worth over a billion dollars and there were plenty of WTF moments like that until they started hiring adults. No one was doing things like that intentionally, but as the company started to grow, so did peoples' egos and they people begin to confuse being reckless with being innovative.
- torginus 4y agoFunny how these honest mistakes always tend to happen in a way that benefits the ones making them.