4 ms·

I think the reason is that he was seen as a financial genius boy wonder who just understood crypto better than anyone from the "old guard". So he got away with

I think the reason is that he was seen as a financial genius boy wonder who just understood crypto better than anyone from the "old guard". So he got away with wildly inappropriate things. More generally, we (as a society) seem to be worshiping those who make a fortune, and forget that they too are just as faulty as the rest of us. Initial innovative success gets projected to mythical proportions, and once the investment streams are open there is no limit to the wealth they accumulate. Looking at you Elon and Zuck.

colechristensen 4y ago
In other words, the investors were stupid and deserved what they got. Customers were owed better, but large scale investors who don't do due diligence and end up losing their shirts deserve every bit of it.
- notch656a 4y ago
  I think it's more likely that the more sophisticated investors knew there was a lot of handwaving going on and they thought they'd get through the exits with principal+profit before they became clogged. Sometimes people are known to just not ask if they think the details are odious and they want to maintain plausible deniability about knowledge of source of the profits.
- amanj41 4y ago
  I have to agree with this. While I don't like to victim blame usually, the VCs are too much in a position of power to truly be victims here. They absolutely could have pushed for more transparency or a board and likely would have smelled smoke when there was none
  - preommr 4y ago
    > VCs are too much in a position of power to truly be victims here Sam playing league of legends during his pitch meeting with squioa capital gets memed a lot but it truly is absolutely staggering that so little common sense was applied here.
  - JamesianP 4y ago
    VC's also have a high risk tolerance. Not every investment is even expected to pay off. So yes from their perspective, they took a risky bet and lost. But they'd still have a case as victims if FTX signed contracts and then violated them. Or broke laws which cost them money.
- dsr_ 4y ago
  Are you familiar with the term "accredited investor"? It's a formal term that the SEC uses to differentiate Joe Upper-Middle who has put 200K in a retirement program, from Josefina Nouveau, who has either: earned income exceeding $200,000, or $300,000 when combined with a spouse, during each of the previous two full calendar years, and a reasonable expectation of the same for the current year or a net worth greater than $1 million (either by yourself or combined with a spouse), excluding your primary residence. and is therefore expected, rightly or wrongly, to be able to judge the riskiness of a potential investment and absorb the loss without being crippled.
loceng 4y ago
Elon and Zuck aren't comparable - other than earning billions from scalable enterprise.
- gilleain 4y ago
  Ha, I'm genuinely unsure which one you think is better/worse than the other. It's like working out which return value from a comparison operator is the right one - +1 or -1?
- cwkoss 4y ago
  I think capital gains are not really 'earning' something, in the standard English use of the word.
  - JumpCrisscross 4y ago
    > capital gains are not really 'earning' something I think it's fair to say earned when it comes to the literal founder.
- deleted 4y ago
  [deleted]
JamesianP 4y ago
There is a saying that you invest in the leadership not the company. So the whole personality hype probably was indeed big for getting investment as well as keeping investors from insisting on putting their own "guys' in charge (maybe they didn't even have any experienced crypto people yet). Overall though, this isn't really surprising. I think generally no one really knows what's going on in a private company like this if the CEO is the founder and has all the power. It's exceeding possible and common for them to mix personal and company finances. Probably the norm.
srj 4y ago
Reading about SBF it seems like he was just doing arbitrage trading crypto between Asia and the US. When new players arrived that money fountain dried up and he turned to riskier ventures which blundered. None of that seems particularly brilliant, yet he was perceived as such. Plus he was a billionaire giving his money away. I think people just want heroes and ignore the red flags.
PeterStuer 4y ago
I find it hard to believe that tier 1 VC's would not have specialized top notch crypto talent on hand.

colechristensen 4y ago

In other words, the investors were stupid and deserved what they got. Customers were owed better, but large scale investors who don't do due diligence and end up losing their shirts deserve every bit of it.

notch656a 4y ago
I think it's more likely that the more sophisticated investors knew there was a lot of handwaving going on and they thought they'd get through the exits with principal+profit before they became clogged. Sometimes people are known to just not ask if they think the details are odious and they want to maintain plausible deniability about knowledge of source of the profits.
amanj41 4y ago
I have to agree with this. While I don't like to victim blame usually, the VCs are too much in a position of power to truly be victims here. They absolutely could have pushed for more transparency or a board and likely would have smelled smoke when there was none
- preommr 4y ago
  > VCs are too much in a position of power to truly be victims here Sam playing league of legends during his pitch meeting with squioa capital gets memed a lot but it truly is absolutely staggering that so little common sense was applied here.
- JamesianP 4y ago
  VC's also have a high risk tolerance. Not every investment is even expected to pay off. So yes from their perspective, they took a risky bet and lost. But they'd still have a case as victims if FTX signed contracts and then violated them. Or broke laws which cost them money.
dsr_ 4y ago
Are you familiar with the term "accredited investor"? It's a formal term that the SEC uses to differentiate Joe Upper-Middle who has put 200K in a retirement program, from Josefina Nouveau, who has either: earned income exceeding $200,000, or $300,000 when combined with a spouse, during each of the previous two full calendar years, and a reasonable expectation of the same for the current year or a net worth greater than $1 million (either by yourself or combined with a spouse), excluding your primary residence. and is therefore expected, rightly or wrongly, to be able to judge the riskiness of a potential investment and absorb the loss without being crippled.

loceng 4y ago

Elon and Zuck aren't comparable - other than earning billions from scalable enterprise.

gilleain 4y ago
Ha, I'm genuinely unsure which one you think is better/worse than the other. It's like working out which return value from a comparison operator is the right one - +1 or -1?
cwkoss 4y ago
I think capital gains are not really 'earning' something, in the standard English use of the word.
- JumpCrisscross 4y ago
  > capital gains are not really 'earning' something I think it's fair to say earned when it comes to the literal founder.
deleted 4y ago
[deleted]

JamesianP 4y ago

There is a saying that you invest in the leadership not the company. So the whole personality hype probably was indeed big for getting investment as well as keeping investors from insisting on putting their own "guys' in charge (maybe they didn't even have any experienced crypto people yet). Overall though, this isn't really surprising. I think generally no one really knows what's going on in a private company like this if the CEO is the founder and has all the power. It's exceeding possible and common for them to mix personal and company finances. Probably the norm.

srj 4y ago

Reading about SBF it seems like he was just doing arbitrage trading crypto between Asia and the US. When new players arrived that money fountain dried up and he turned to riskier ventures which blundered. None of that seems particularly brilliant, yet he was perceived as such. Plus he was a billionaire giving his money away. I think people just want heroes and ignore the red flags.

PeterStuer 4y ago

I find it hard to believe that tier 1 VC's would not have specialized top notch crypto talent on hand.