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As for 3), we really need to avoid the narrative that these people are idiots or stupid. They are sharks - intentionally malevolent people who have defrauded mi

by typon 4y ago

As for 3), we really need to avoid the narrative that these people are idiots or stupid. They are sharks - intentionally malevolent people who have defrauded millions of people. SBF's current defense is that he was too naive and unaware of what was happening at FTX. Obviously its a lie - but we shouldn't help these people spread it.

ramraj07 4y ago
I’m implying they’re idiots as in they can’t always think 3 steps ahead. This says nothing about their benevolence or lack thereof.
wombatpm 4y ago
I though SBF’s defense was poor FTX was manipulated by those bastards running Alameda, and that he had no idea what going on there. Despite the fact that he owns Alameda.
vgatherps 4y ago
I think his defense is sort of: 1. We had a busted accounting system 2. Early on in FTX people had to route dollars via Alameda because banking is hard 3. We accidentally credited those dollars both to Ftx and Alameda 4. Each side thought they had billions to spend / lose (their VC and related spend was WILD), and suddenly, oops!!!!!! I suspect there's a grain of truth to this, in that steps 1-4 did actually happen to some degree and influenced expenditures/risk taking that the firm couldn't back. Given what's known (for some definition), the upper crew knew about the problem well before the bank run, and knowingly transferred funds from FTX to Alameda. This sort of 'best case' scenario still implies an absurd commingling of exchange and user funds. It doesn't strike me as plausible that nobody ever questioned the extra billions , and it definitely isn't believable that when Alameda got margin called, they just casually 'sent' some of the double counted billions without taking some time to think "hey, so about these billions". Also, this doesn't square with Sam constantly claiming that he misjudged whether FTT was good backing - if they didn't commingle/steal customer funds, he wouldn't have cared about FTT collateral!
- Panzer04 4y ago
  I don't believe that at all. I can believe an initial loss of some amount of money, but there's no way everyone completely ignored it for years. Like, how hard do you have to try to lose 8 Billion dollars and not know how? I'd bet on them hoping they could make the money back after losing it, and just digging successively deeper holes. They knew what they were doing, and excuses are all about avoiding decades of well-deserved prison for the amount of people they've fucked over.
  - vgatherps 4y ago
    I don’t think they ignored it for years? That would imply most of the FTX lifetime, they’re not even and were only big for maybe 1.5-2 years? If you look at them buying out the binance share + their VC spend, I think that was over over 4bn? Buying out binance alone was 2.5bn iirc, and they had well over a billion in investments between FTX and Alameda. That doesn’t feel like the behavior of someone who knows they’re in a huge hole, but then who knows. Not trying to apply moral judgment or make excuses, just speculating about what happened fwiw. At the end of the day they stole customer money (a few good friends got super wrecked, I have no loyalty to ftx or anything)
- ohgodplsno 4y ago
  SBF recently said that both the FTX & Alameda/FTX Trading accounts were the same. People who signed up for just storage were exposed to the same risks as the trading degenerates. When everything collapsed, the trading degenerates could withdraw using the very same money that regular FTX users had put money in. It's fraud, from the beginning.
  - AdamN 4y ago
    It's fraud for sure .. but it doesn't mean he intended to take the money or anything. He was just too naive to understand how dangerous mixing the funds would be during an inevitable period of pressure and (I'm guessing) felt like keeping the mondy separate is the kind of control that an overly bureaucratic bank would need, not a nimble startup like FTX :-/ Don't get me wrong, he should still go to prison.

by typon 4y ago

ramraj07 4y ago

I’m implying they’re idiots as in they can’t always think 3 steps ahead. This says nothing about their benevolence or lack thereof.

wombatpm 4y ago

I though SBF’s defense was poor FTX was manipulated by those bastards running Alameda, and that he had no idea what going on there. Despite the fact that he owns Alameda.

vgatherps 4y ago

I think his defense is sort of: 1. We had a busted accounting system 2. Early on in FTX people had to route dollars via Alameda because banking is hard 3. We accidentally credited those dollars both to Ftx and Alameda 4. Each side thought they had billions to spend / lose (their VC and related spend was WILD), and suddenly, oops!!!!!! I suspect there's a grain of truth to this, in that steps 1-4 did actually happen to some degree and influenced expenditures/risk taking that the firm couldn't back. Given what's known (for some definition), the upper crew knew about the problem well before the bank run, and knowingly transferred funds from FTX to Alameda. This sort of 'best case' scenario still implies an absurd commingling of exchange and user funds. It doesn't strike me as plausible that nobody ever questioned the extra billions , and it definitely isn't believable that when Alameda got margin called, they just casually 'sent' some of the double counted billions without taking some time to think "hey, so about these billions". Also, this doesn't square with Sam constantly claiming that he misjudged whether FTT was good backing - if they didn't commingle/steal customer funds, he wouldn't have cared about FTT collateral!

Panzer04 4y ago
I don't believe that at all. I can believe an initial loss of some amount of money, but there's no way everyone completely ignored it for years. Like, how hard do you have to try to lose 8 Billion dollars and not know how? I'd bet on them hoping they could make the money back after losing it, and just digging successively deeper holes. They knew what they were doing, and excuses are all about avoiding decades of well-deserved prison for the amount of people they've fucked over.
- vgatherps 4y ago
  I don’t think they ignored it for years? That would imply most of the FTX lifetime, they’re not even and were only big for maybe 1.5-2 years? If you look at them buying out the binance share + their VC spend, I think that was over over 4bn? Buying out binance alone was 2.5bn iirc, and they had well over a billion in investments between FTX and Alameda. That doesn’t feel like the behavior of someone who knows they’re in a huge hole, but then who knows. Not trying to apply moral judgment or make excuses, just speculating about what happened fwiw. At the end of the day they stole customer money (a few good friends got super wrecked, I have no loyalty to ftx or anything)
ohgodplsno 4y ago
SBF recently said that both the FTX & Alameda/FTX Trading accounts were the same. People who signed up for just storage were exposed to the same risks as the trading degenerates. When everything collapsed, the trading degenerates could withdraw using the very same money that regular FTX users had put money in. It's fraud, from the beginning.
- AdamN 4y ago
  It's fraud for sure .. but it doesn't mean he intended to take the money or anything. He was just too naive to understand how dangerous mixing the funds would be during an inevitable period of pressure and (I'm guessing) felt like keeping the mondy separate is the kind of control that an overly bureaucratic bank would need, not a nimble startup like FTX :-/ Don't get me wrong, he should still go to prison.