11 ms·

Phone interview with Sam Bankman-Fried [audio]

74 points by abriosi 4y ago

ilrwbwrkhv 4y ago
Also Coffeezilla's take on the interview with more context: https://www.youtube.com/watch?v=0rL35_WV3lE https://www.youtube.com/watch?v=0rL35_WV3lE
- skippyboxedhero 4y ago
  That video was remarkable. Apparently the guy couldn't code but worked as a trader at JS for three years. In my own head, that almost reflected worse on JS than SBF. I think everyone assumed Alameda were doing something clever. In reality, they were just idiots stealing from and front-running their customers. Lol. These moments when you see the man behind the curtain, it is just ludicrous and shakes your faith in the "system" (I worked in finance, I remember meeting a fund manager, had made 9 digits selling his company...the guy was an idiot, he had got lucky with some distribution relationships and one stock pick, the company he was trying to hire me for has had absolutely terrible performance since I met him near on ten years ago now...life is really like this sometimes, people making billions doing work they have no business doing, everyone thinking they are genius despite that obviously not being the case).
  - deleted 4y ago
    [deleted]
  - dibt 4y ago
    > couldn't code but worked as a trader at JS for three years That doesn't seem odd. They need people good at math and/or creative problem solvers. The platform they execute on doesn't need to be rebuilt for each new strategy. > I think everyone assumed Alameda were doing something clever. Everyone knew the strategy they ran was to list a perpeptual futures contract for a Solana shitcoin on FTX, and short it into the ground. Their initial capital was an arb between Japan and US exchanges. That arb later disappeared. There are some rumors that the initial profits were wasted long ago, and they got new capital from investors hearing about the Japan/US arb.
    - skippyboxedhero 4y ago
      It does seem odd. Almost everyone who they hire (in these roles) can code. If you are just hiring traders, why not hire guys who can...you know...trade? Rather than some random person from MIT. The precise competitive advantage of JS is their tech. I will say this another way...back in the early 2000s, investment banks used to hire people to do index arbs, the strat was literally press sell/buy button on Excel that will execute basket cash trades against an index, call our broker up on the floor and sell/buy futures...that was it. The strong implication is that JS is hiring people to do that kind of thing...investment banks stopped hiring these guys by the mid-2000s. The idea of the "maverick trader" who is just very creative doesn't really exist...almost all of those people who do that at hedge funds spent decades at investment banks where they had access to flow...and most of those people never graduated to hedge funds in the 2000s and just became execution traders. Again, JS is hiring these people out of college...that is weird. That is exceptionally weird. No hedge fund does this. No investment bank does this. No-one does this. A few trading houses do this (not many, Optiver is the only one left afaik...there used to be more, most went bust) but it is counter to the image that JS presents. As someone who knows a little about trading, this struck me immediately as extremely odd. Looking at their job listings...yes, it is odd (they have a job listing for traders: it says you should know how to program in at least one language). Okay, the guy from Wintermute (who presumably knows something about trading) said he assumed they were doing something clever and was shocked when they failed. Also, they did a YouTube video which explained what some of the stuff they were doing was, that wasn't exactly surprising but I think people assumed (reasonably) they had more edge than they did (the reason they didn't was because they were cheating, nothing else). Right, I think the current view is: they probably went bust in June/July (or whenever the earlier crash was), and some of the numbers they told other people about how much they made may have been fictional (I have read that they were losing money before they went bust but other people have said, again the Wintermute CEO, that they assumed FTX were making money because of what they were seeing in markets...again though, they were doing things that were obviously illegal so they were clearly making money from other things after Japan).
      - dibt 4y ago
        > If you are just hiring traders I didn't say he was hired for his trading ability. I only suggested coding isn't a perquisite. > random person from MIT I didn't suggest that was the qualifier for them being hired. They do hire from universities like MIT, though, and I'm sure there are many alumni that stay connected to faculty for the purpose of finding candidates. Only 23 of 123 open jobs for students/new grads on their site are for software engineers. https://www.janestreet.com/join-jane-street/open-roles/?type=experienced-candidates&location=all-locations&department=all-departments https://www.janestreet.com/join-jane-street/open-roles/?type... They say on the site: "We look for smart people with curious minds from any background."
  - smcl 4y ago
    Coffeezilla remarked that he's deflecting - rather than saying "there was no backdoor" he seized on a slightly clumsily worded question and replied with "I didn't implement a backdoor" then padded it out with the fluff about how he isn't a coder. The guy is flailing around saying whatever he can to try to rescue himself (and not succeeding). He also said they got $4bn minutes after declaring bankruptcy ... but that the bankruptcy lawyers are too embarrassed to use it so they're burning the company to the ground? Absolute nonsense, everything he says in these little interviews should be taken with an enormous helping of salt.
    - skippyboxedhero 4y ago
      Which isn't the same thing as saying he can't code. Everyone knows he is deflecting, the truth of what occurred is already largely public.
  - dehrmann 4y ago
    We're watching something similar possibly play out with Twitter. Musk bought it at its peak price and scared away a lot of big advertisers. In the near-term, it's not clear if he cut headcount enough to offset the loss in revenue. In the mid-term, we'll see if he can maintain its relevance. The long-term bet is he can find something to bring Twitter to 1-2B users that Twitter overlooked for 10+ years. For someone who many see as a business genius, he's made a very questionable bet, and it's a reminder a lot of these people are more lucky than good. Or maybe I'll be using the TwitterPay in five years to buy a Feather tablet so I can watch Vines.
sgammon 4y ago
The idea that a "bank run" caused this is just silly. FTX is not a bank.
- fabian2k 4y ago
  As far as I've followed this there seem to be many billions simply missing. That is different from money that they can't get to quickly enough to pay out their customers, it's money that is not there. A large part of their "balance sheet" were their own tokens, which is not real money.
- Melting_Harps 4y ago
  > The idea that a "bank run" caused this is just silly. FTX is not a bank. Are you familiar with the adage: The easiest way to rob a bank is to own one? Here is the thing, FTX may not ave been a registered bank, but it definitely functioned as a fractional reserve bank: and in the end that is what matters most! SBF is so screwed, and a part of me makes me think he wanted to implode all along: despite being born on 3rd base he is still an immense failure, furthermore his perverted notions of effective altruism were revealed to be just another misguided cult like any other used by your run of the mill conman to maximize is ROI from the woke-mob gatekeepers in SV. SBF is bankrupt in every sense of te word, financially as well as morally. What I can’t tell if it's affluenza or suicidal ideation/depression making him do these interviews.
  - MrMan 4y ago
    FTX was not a bank it was a hole for money to go into.
  - pram 4y ago
    Tbh I think he’s talking to this specific person because he thinks she’s hot. I’m totally serious about this lol He’s not trying to convince the world he’s not a bad guy, just her.
    - Melting_Harps 4y ago
      > Tbh I think he’s talking to this specific person because he thinks she’s hot. I’m totally serious about this lol I didn't bother listening to it, and honestly if it is the reason it goes to show just how inept he really is considering how incriminating this all is and will be used against him; honestly, if this goes long as Theranos trial I will be extremely upset. He and his gf at Alameda should be thrown in prison as fast as Charlie Schrem was, but because he is an insider they will make a show of it and expensive lawyers will get them short sentences in a light security jail at worst. Hell, they should already be sitting in a cell next to Razzlekhan and her BF while being interrogated to hand over the funds while they sort all this out, that's the State's MO when it comes to these matters-- for them to sign a plea deal under duress and indefinite detainment like they have done to so many others. The fact that he is doing this podcast from the Bahamas shows the hypocrisy of the legal system entirely. Edit: I didn't know who she was so I looked at her playlist and this came up [0], she personally got scammed for 200k on Celsius with the yield farming rugpull. I think it's just another youtuber making content trying to get more traffic/ratings: it's totally transactional for her and it seems since he has the social graces of a lamp post doesn't realize he has no chance. 0: https://www.youtube.com/watch?v=F3AWve7QYIQ https://www.youtube.com/watch?v=F3AWve7QYIQ
janmo 4y ago
SBF is literally adding one year more year to his sentence in every interview he gives. He should just shut up. (Not legal advice)
- swader999 4y ago
  Naw, he paid a lot of politicians, he fine.
  - maxbond 4y ago
    It's not clear to me that donating to politicians necessarily buys you clemency (in the absence of explicit quid pro quo), but accepting the premise, I think at a certain point, when your crimes and donations are widely publicized, there's a phase transition where it's more likely to work against you. The politicians can't bare the perception of having been bought, and whatever influence they're able to muster is directed against you. But it's not clear to me that donating to campaigns in a handful of election cycles buys you very much influence within the DoJ. Influencing politicians in order to impact the nomination of judges or other appointees, or to pass certain laws - those are clear mechanisms, but they take many election cycles to implement. It seems to me like SBF's influence campaign was successfully building good will for the crypto legislation he supported, but that FTX/Alameda blew up before that could come to fruition. I expect his donations to be largely neutral to his potential prosecution but am open to reporting surfacing facts to the contrary.
    - SilasX 4y ago
      Right, I would think that bribing politicians only gets you favors if both a) the favors have sufficient political cover, and b) there is the prospect of further bribes. Neither of those seem true here. For a), SBF has become a dirty name and politicians don't have cover to do anything blatantly favorable to him. For b), any money he might have touched is under intense scrutiny, especially if it makes its way to a politician. Ironically, his best hope might be if he had untraceably moved money into cryptocurrency, especially stablecoins.
    - cykros 4y ago
lolc 4y ago
Too smart by half, this guy just doesn't shut up. Sure plays into the narrative that he's a naive kid. But painful to listen to all the scheming in the pauses of speech.
- dehrmann 4y ago
  IANAL, but you can bet a lawyer would have told him to STFU so he doesn't incriminate himself further.
  - iudqnolq 4y ago
    Both his parents are (good!) law professors, ironically
  - timmytokyo 4y ago
    He's clearly playing the "I made a stupid mistake" angle to avoid being accused of deliberate fraud. He's trying to minimize the length of his jail sentence.
RC_ITR 4y ago
A very important nuance for everyone following this. SBF keeps saying there was a liquidity crisis at FTX, which is 100% not true. A liquidity crisis implies that he took deposits, flipped them into good, but illiquid investments, and ran into trouble because people asked for more cash than FTX had on hand. FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (many of which are now worthless, all of which were speculative nonsense) and is now revealed to have done that. He's using the concepts of "bank runs" and "liquidity crises" because that's sort of an "aww shucks, got caught in an unfortunate circumstance" situation when what he actually did was one of the stupidest and most malicious things anyone in "finance" has ever done.
- wyldfire 4y ago
  Is it at all possible that SBF is "merely" inept (yet still culpable)? Or is there any way to know whether SBF knew what he was doing was making FTX insolvent?
  - RC_ITR 4y ago
    No. His resume shows he's smart enough to understand how market-making and trading works, he just bought into his own mythos and thought he could out-trade the world. If he was actually as skilled as he thought, his strategy could have made him unimaginably wealthy, but he wasn't. I'd compare it to a magician throwing swords at an assistant on stage. You better be sure that you know what you're doing before you do it.
    - wyldfire 4y ago
      So that bonkers "magic box" interview he gave - was he deliberately planning a naivety defense while executing theft of the deposits?
      - MrMan 4y ago
        no he was bragging - a lot of the "trading" alameda did was participating and orchestrating "boxes" like what he so smugly described in the interview, which was horrifying to listen to.
memish 4y ago
There's another part of the interview where SBF says he donated about the same to Democrats and Republicans, contrary to the public record. https://youtu.be/6DezodR9hNI?t=775 https://youtu.be/6DezodR9hNI?t=775 His explanation and reasoning is that Democrat donations would be treated favorably by the media so those were done publicly, while "reporters would freak the fuck out" about Republican donations. So he made those in the dark.
- jeffbee 4y ago
  The party breakdown doesn't seem very interesting to me. A huge chunk of the money went to one pro-crypto long-shot candidate who got trounced 2-to-1 in the primary election. That one block of money distorts any aggregate analysis.
- eachro 4y ago
  I'm not sure how accurate that is: https://www.opensecrets.org/elections-overview/biggest-donors?cycle=2022&view=fc&t0-search=bankman-fried https://www.opensecrets.org/elections-overview/biggest-donor...
  - deleted 4y ago
    [deleted]
pqdbr 4y ago
I didn't lose a penny in the FTX debacle but even so it's infuriating to hear this crook giving this interview with the Bahamas waves as background noise.
- smcl 4y ago
  I’m the same, I’ve been a suspicious of crypto and openly questioned it so I’ve no doubt a few of the people who said “stay poor” to me lost money on these recent crypto collapses. But I can’t gloat, mostly because it’s not in my nature but it’s also just frustrating seeing such an obvious needless, empty boom and bust
NovemberWhiskey 4y ago
From my perspective, the problem here is no-one (including SBF) appears to know what kind of an enterprise FTX was supposed to be. Everyone seems to agree that Alameda is a hedge fund, but looking at the facts, FTX also appears to have been operated as one as well; but without the qualification of investors or others kinds of things. There's no just a really good correlate in traditional finance for "I'm going to act as a broker-dealer but actually I'm allowed to just invest your funds however the hell I like". Which is probably a good thing. I'm not necessarily saying that everything in defi has to be regulated exactly like something in traditional finance, but there are some pretty deep unanswered questions on basic stuff like "did your customers know they were actually your investors?" and "what exactly was your business model?" and "what was your risk management approach?"
- SilverBirch 4y ago
  Woah woah woah. Don't buy into the bullshit. We know exactly what FTX was meant to be. FTX US was meant to be a US based crypto exchange regulated in the US, FTX International was meant to be a Bahamas based crypto exchange with less regulation. Alameda was meant to be a hedge fund. FTX made very clear promises about what it was - and that all customer deposits were safe, which we know is a lie because at the point SBF said that we knew the liabilities of Alameda and FTX was denominated in an imaginary currency.
bluelightning2k 4y ago
The crazy thing: he still has a very valuable brand. There's many many people like us quietly trying to bootstrap enough traction to maybe get into YC one day... But if SBF ever wants to start another company it will be another record setting a12z seed valuation. Irrelevant if he goes to jail ofc.
- strikelaserclaw 4y ago
  well all these crooks are in cahoots, he probably stole money off some people but made the "big fish" more money than they invested.
SilverBirch 4y ago
I think it's pretty clear now we've heard the line from Sam. He's going to claim messiness, 'liquidity' and 'mistakes were made'. A line he's only willing to hold in front of very friendly interviewers. I don't think we'll get anything more out of him unless (1) he falls into the trap of taking an interview with someone numerate, or (2) he slips up and reveals some details that are going to be important later. But it's very clear he's decided to take a line that is clearly untrue, but is unprovable for an outsider. It'll only be as the evidence from the bankruptcy unfolds that we'll get the real story. The thing I would push for today, would be an audit of all of his associates, including family, and yearly audits of his accounts by the IRS for the rest of his life. The risk that he has squirrelled away some crypto nest egg is too high, regulators should be vigilant to ensure not a penny of customer funds ever enrich SBF or his family.
dpiers 4y ago
It's like he's too privileged to realize he's a criminal.
ipython 4y ago
But the real question is unanswered: was he actively playing league of legends during the interview?
neonate 4y ago
He sounds anxious to me. In fact he sounds terrified. I never heard him speak before so this may be an illusion but it's so uncomfortable I had to turn it off.
hackrnusr 4y ago
https://www.themarshallproject.org/ https://www.themarshallproject.org/ Would prison time be too harsh a sentence for him?
tibbydudeza 4y ago
What an utter BS artist - hope they extradite him and put him in jail for a long time.
deleted 4y ago
[deleted]

74 points by abriosi 4y ago

Also Coffeezilla's take on the interview with more context: https://www.youtube.com/watch?v=0rL35_WV3lE https://www.youtube.com/watch?v=0rL35_WV3lE

skippyboxedhero 4y ago
That video was remarkable. Apparently the guy couldn't code but worked as a trader at JS for three years. In my own head, that almost reflected worse on JS than SBF. I think everyone assumed Alameda were doing something clever. In reality, they were just idiots stealing from and front-running their customers. Lol. These moments when you see the man behind the curtain, it is just ludicrous and shakes your faith in the "system" (I worked in finance, I remember meeting a fund manager, had made 9 digits selling his company...the guy was an idiot, he had got lucky with some distribution relationships and one stock pick, the company he was trying to hire me for has had absolutely terrible performance since I met him near on ten years ago now...life is really like this sometimes, people making billions doing work they have no business doing, everyone thinking they are genius despite that obviously not being the case).
- deleted 4y ago
  [deleted]
- dibt 4y ago
  > couldn't code but worked as a trader at JS for three years That doesn't seem odd. They need people good at math and/or creative problem solvers. The platform they execute on doesn't need to be rebuilt for each new strategy. > I think everyone assumed Alameda were doing something clever. Everyone knew the strategy they ran was to list a perpeptual futures contract for a Solana shitcoin on FTX, and short it into the ground. Their initial capital was an arb between Japan and US exchanges. That arb later disappeared. There are some rumors that the initial profits were wasted long ago, and they got new capital from investors hearing about the Japan/US arb.
  - skippyboxedhero 4y ago
    It does seem odd. Almost everyone who they hire (in these roles) can code. If you are just hiring traders, why not hire guys who can...you know...trade? Rather than some random person from MIT. The precise competitive advantage of JS is their tech. I will say this another way...back in the early 2000s, investment banks used to hire people to do index arbs, the strat was literally press sell/buy button on Excel that will execute basket cash trades against an index, call our broker up on the floor and sell/buy futures...that was it. The strong implication is that JS is hiring people to do that kind of thing...investment banks stopped hiring these guys by the mid-2000s. The idea of the "maverick trader" who is just very creative doesn't really exist...almost all of those people who do that at hedge funds spent decades at investment banks where they had access to flow...and most of those people never graduated to hedge funds in the 2000s and just became execution traders. Again, JS is hiring these people out of college...that is weird. That is exceptionally weird. No hedge fund does this. No investment bank does this. No-one does this. A few trading houses do this (not many, Optiver is the only one left afaik...there used to be more, most went bust) but it is counter to the image that JS presents. As someone who knows a little about trading, this struck me immediately as extremely odd. Looking at their job listings...yes, it is odd (they have a job listing for traders: it says you should know how to program in at least one language). Okay, the guy from Wintermute (who presumably knows something about trading) said he assumed they were doing something clever and was shocked when they failed. Also, they did a YouTube video which explained what some of the stuff they were doing was, that wasn't exactly surprising but I think people assumed (reasonably) they had more edge than they did (the reason they didn't was because they were cheating, nothing else). Right, I think the current view is: they probably went bust in June/July (or whenever the earlier crash was), and some of the numbers they told other people about how much they made may have been fictional (I have read that they were losing money before they went bust but other people have said, again the Wintermute CEO, that they assumed FTX were making money because of what they were seeing in markets...again though, they were doing things that were obviously illegal so they were clearly making money from other things after Japan).
    - dibt 4y ago
      > If you are just hiring traders I didn't say he was hired for his trading ability. I only suggested coding isn't a perquisite. > random person from MIT I didn't suggest that was the qualifier for them being hired. They do hire from universities like MIT, though, and I'm sure there are many alumni that stay connected to faculty for the purpose of finding candidates. Only 23 of 123 open jobs for students/new grads on their site are for software engineers. https://www.janestreet.com/join-jane-street/open-roles/?type=experienced-candidates&location=all-locations&department=all-departments https://www.janestreet.com/join-jane-street/open-roles/?type... They say on the site: "We look for smart people with curious minds from any background."
- smcl 4y ago
  Coffeezilla remarked that he's deflecting - rather than saying "there was no backdoor" he seized on a slightly clumsily worded question and replied with "I didn't implement a backdoor" then padded it out with the fluff about how he isn't a coder. The guy is flailing around saying whatever he can to try to rescue himself (and not succeeding). He also said they got $4bn minutes after declaring bankruptcy ... but that the bankruptcy lawyers are too embarrassed to use it so they're burning the company to the ground? Absolute nonsense, everything he says in these little interviews should be taken with an enormous helping of salt.
  - skippyboxedhero 4y ago
    Which isn't the same thing as saying he can't code. Everyone knows he is deflecting, the truth of what occurred is already largely public.
- dehrmann 4y ago
  We're watching something similar possibly play out with Twitter. Musk bought it at its peak price and scared away a lot of big advertisers. In the near-term, it's not clear if he cut headcount enough to offset the loss in revenue. In the mid-term, we'll see if he can maintain its relevance. The long-term bet is he can find something to bring Twitter to 1-2B users that Twitter overlooked for 10+ years. For someone who many see as a business genius, he's made a very questionable bet, and it's a reminder a lot of these people are more lucky than good. Or maybe I'll be using the TwitterPay in five years to buy a Feather tablet so I can watch Vines.

sgammon 4y ago

The idea that a "bank run" caused this is just silly. FTX is not a bank.

fabian2k 4y ago
As far as I've followed this there seem to be many billions simply missing. That is different from money that they can't get to quickly enough to pay out their customers, it's money that is not there. A large part of their "balance sheet" were their own tokens, which is not real money.
Melting_Harps 4y ago
> The idea that a "bank run" caused this is just silly. FTX is not a bank. Are you familiar with the adage: The easiest way to rob a bank is to own one? Here is the thing, FTX may not ave been a registered bank, but it definitely functioned as a fractional reserve bank: and in the end that is what matters most! SBF is so screwed, and a part of me makes me think he wanted to implode all along: despite being born on 3rd base he is still an immense failure, furthermore his perverted notions of effective altruism were revealed to be just another misguided cult like any other used by your run of the mill conman to maximize is ROI from the woke-mob gatekeepers in SV. SBF is bankrupt in every sense of te word, financially as well as morally. What I can’t tell if it's affluenza or suicidal ideation/depression making him do these interviews.
- MrMan 4y ago
  FTX was not a bank it was a hole for money to go into.
- pram 4y ago
  Tbh I think he’s talking to this specific person because he thinks she’s hot. I’m totally serious about this lol He’s not trying to convince the world he’s not a bad guy, just her.
  - Melting_Harps 4y ago
    > Tbh I think he’s talking to this specific person because he thinks she’s hot. I’m totally serious about this lol I didn't bother listening to it, and honestly if it is the reason it goes to show just how inept he really is considering how incriminating this all is and will be used against him; honestly, if this goes long as Theranos trial I will be extremely upset. He and his gf at Alameda should be thrown in prison as fast as Charlie Schrem was, but because he is an insider they will make a show of it and expensive lawyers will get them short sentences in a light security jail at worst. Hell, they should already be sitting in a cell next to Razzlekhan and her BF while being interrogated to hand over the funds while they sort all this out, that's the State's MO when it comes to these matters-- for them to sign a plea deal under duress and indefinite detainment like they have done to so many others. The fact that he is doing this podcast from the Bahamas shows the hypocrisy of the legal system entirely. Edit: I didn't know who she was so I looked at her playlist and this came up [0], she personally got scammed for 200k on Celsius with the yield farming rugpull. I think it's just another youtuber making content trying to get more traffic/ratings: it's totally transactional for her and it seems since he has the social graces of a lamp post doesn't realize he has no chance. 0: https://www.youtube.com/watch?v=F3AWve7QYIQ https://www.youtube.com/watch?v=F3AWve7QYIQ

janmo 4y ago

SBF is literally adding one year more year to his sentence in every interview he gives. He should just shut up. (Not legal advice)

swader999 4y ago
Naw, he paid a lot of politicians, he fine.
- maxbond 4y ago
  It's not clear to me that donating to politicians necessarily buys you clemency (in the absence of explicit quid pro quo), but accepting the premise, I think at a certain point, when your crimes and donations are widely publicized, there's a phase transition where it's more likely to work against you. The politicians can't bare the perception of having been bought, and whatever influence they're able to muster is directed against you. But it's not clear to me that donating to campaigns in a handful of election cycles buys you very much influence within the DoJ. Influencing politicians in order to impact the nomination of judges or other appointees, or to pass certain laws - those are clear mechanisms, but they take many election cycles to implement. It seems to me like SBF's influence campaign was successfully building good will for the crypto legislation he supported, but that FTX/Alameda blew up before that could come to fruition. I expect his donations to be largely neutral to his potential prosecution but am open to reporting surfacing facts to the contrary.
  - SilasX 4y ago
    Right, I would think that bribing politicians only gets you favors if both a) the favors have sufficient political cover, and b) there is the prospect of further bribes. Neither of those seem true here. For a), SBF has become a dirty name and politicians don't have cover to do anything blatantly favorable to him. For b), any money he might have touched is under intense scrutiny, especially if it makes its way to a politician. Ironically, his best hope might be if he had untraceably moved money into cryptocurrency, especially stablecoins.
  - cykros 4y ago

lolc 4y ago

Too smart by half, this guy just doesn't shut up. Sure plays into the narrative that he's a naive kid. But painful to listen to all the scheming in the pauses of speech.

dehrmann 4y ago
IANAL, but you can bet a lawyer would have told him to STFU so he doesn't incriminate himself further.
- iudqnolq 4y ago
  Both his parents are (good!) law professors, ironically
- timmytokyo 4y ago
  He's clearly playing the "I made a stupid mistake" angle to avoid being accused of deliberate fraud. He's trying to minimize the length of his jail sentence.

RC_ITR 4y ago

A very important nuance for everyone following this. SBF keeps saying there was a liquidity crisis at FTX, which is 100% not true. A liquidity crisis implies that he took deposits, flipped them into good, but illiquid investments, and ran into trouble because people asked for more cash than FTX had on hand. FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (many of which are now worthless, all of which were speculative nonsense) and is now revealed to have done that. He's using the concepts of "bank runs" and "liquidity crises" because that's sort of an "aww shucks, got caught in an unfortunate circumstance" situation when what he actually did was one of the stupidest and most malicious things anyone in "finance" has ever done.

wyldfire 4y ago
Is it at all possible that SBF is "merely" inept (yet still culpable)? Or is there any way to know whether SBF knew what he was doing was making FTX insolvent?
- RC_ITR 4y ago
  No. His resume shows he's smart enough to understand how market-making and trading works, he just bought into his own mythos and thought he could out-trade the world. If he was actually as skilled as he thought, his strategy could have made him unimaginably wealthy, but he wasn't. I'd compare it to a magician throwing swords at an assistant on stage. You better be sure that you know what you're doing before you do it.
  - wyldfire 4y ago
    So that bonkers "magic box" interview he gave - was he deliberately planning a naivety defense while executing theft of the deposits?
    - MrMan 4y ago
      no he was bragging - a lot of the "trading" alameda did was participating and orchestrating "boxes" like what he so smugly described in the interview, which was horrifying to listen to.

memish 4y ago

There's another part of the interview where SBF says he donated about the same to Democrats and Republicans, contrary to the public record. https://youtu.be/6DezodR9hNI?t=775 https://youtu.be/6DezodR9hNI?t=775 His explanation and reasoning is that Democrat donations would be treated favorably by the media so those were done publicly, while "reporters would freak the fuck out" about Republican donations. So he made those in the dark.

jeffbee 4y ago
The party breakdown doesn't seem very interesting to me. A huge chunk of the money went to one pro-crypto long-shot candidate who got trounced 2-to-1 in the primary election. That one block of money distorts any aggregate analysis.
eachro 4y ago
I'm not sure how accurate that is: https://www.opensecrets.org/elections-overview/biggest-donors?cycle=2022&view=fc&t0-search=bankman-fried https://www.opensecrets.org/elections-overview/biggest-donor...
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pqdbr 4y ago

I didn't lose a penny in the FTX debacle but even so it's infuriating to hear this crook giving this interview with the Bahamas waves as background noise.

smcl 4y ago
I’m the same, I’ve been a suspicious of crypto and openly questioned it so I’ve no doubt a few of the people who said “stay poor” to me lost money on these recent crypto collapses. But I can’t gloat, mostly because it’s not in my nature but it’s also just frustrating seeing such an obvious needless, empty boom and bust

NovemberWhiskey 4y ago

From my perspective, the problem here is no-one (including SBF) appears to know what kind of an enterprise FTX was supposed to be. Everyone seems to agree that Alameda is a hedge fund, but looking at the facts, FTX also appears to have been operated as one as well; but without the qualification of investors or others kinds of things. There's no just a really good correlate in traditional finance for "I'm going to act as a broker-dealer but actually I'm allowed to just invest your funds however the hell I like". Which is probably a good thing. I'm not necessarily saying that everything in defi has to be regulated exactly like something in traditional finance, but there are some pretty deep unanswered questions on basic stuff like "did your customers know they were actually your investors?" and "what exactly was your business model?" and "what was your risk management approach?"

SilverBirch 4y ago
Woah woah woah. Don't buy into the bullshit. We know exactly what FTX was meant to be. FTX US was meant to be a US based crypto exchange regulated in the US, FTX International was meant to be a Bahamas based crypto exchange with less regulation. Alameda was meant to be a hedge fund. FTX made very clear promises about what it was - and that all customer deposits were safe, which we know is a lie because at the point SBF said that we knew the liabilities of Alameda and FTX was denominated in an imaginary currency.

bluelightning2k 4y ago

The crazy thing: he still has a very valuable brand. There's many many people like us quietly trying to bootstrap enough traction to maybe get into YC one day... But if SBF ever wants to start another company it will be another record setting a12z seed valuation. Irrelevant if he goes to jail ofc.

strikelaserclaw 4y ago
well all these crooks are in cahoots, he probably stole money off some people but made the "big fish" more money than they invested.

SilverBirch 4y ago

I think it's pretty clear now we've heard the line from Sam. He's going to claim messiness, 'liquidity' and 'mistakes were made'. A line he's only willing to hold in front of very friendly interviewers. I don't think we'll get anything more out of him unless (1) he falls into the trap of taking an interview with someone numerate, or (2) he slips up and reveals some details that are going to be important later. But it's very clear he's decided to take a line that is clearly untrue, but is unprovable for an outsider. It'll only be as the evidence from the bankruptcy unfolds that we'll get the real story. The thing I would push for today, would be an audit of all of his associates, including family, and yearly audits of his accounts by the IRS for the rest of his life. The risk that he has squirrelled away some crypto nest egg is too high, regulators should be vigilant to ensure not a penny of customer funds ever enrich SBF or his family.

dpiers 4y ago

It's like he's too privileged to realize he's a criminal.

ipython 4y ago

But the real question is unanswered: was he actively playing league of legends during the interview?

neonate 4y ago

He sounds anxious to me. In fact he sounds terrified. I never heard him speak before so this may be an illusion but it's so uncomfortable I had to turn it off.

hackrnusr 4y ago

https://www.themarshallproject.org/ https://www.themarshallproject.org/ Would prison time be too harsh a sentence for him?

tibbydudeza 4y ago

What an utter BS artist - hope they extradite him and put him in jail for a long time.

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