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SBF scheduled to testify tomorrow at US House hearing on FTX collapse
- andrejguran 4y agoIf someone has a direct contact to someone from the committee please forward them this video: https://www.youtube.com/watch?v=4o_jPzBZSIo https://www.youtube.com/watch?v=4o_jPzBZSIo
- JumpCrisscross 4y agoDid they write anything up?
- vgel 4y agotl;dw: It's hard to get SBF to admit to fraud involving Alameda because he can fall back on the excuse that he wasn't the CEO and didn't know what was happening (even though there's every chance he actually did). So the youtuber hit him with a more targeted question: if FTX guarantees deposits are not traded, why were deposits not able to be withdrawn -- where did they go? He gets SBF to admit that they were commingling regular deposits with funds from customers doing riskier things like margin trading, and during the run those riskier users withdrew funds that should have been deposits that were set aside in a separate pool. That exposed regular depositors to risk contrary to what was laid out in the TOS. SBF gets mad and lashes out.
- whimsicalism 4y agoSeems like he has been admitting this constantly, don't think this is a new scoop.
- etothepii 4y agoCoffeeZilla has done a really great job of following up with this line of questioning but on a technical point I am not sure that this gets him where he thinks it does. From what I have seen I do not think that FTX held itself out to formally be a "segregated accounts company" and the example CoffeeZilla uses of a bank is a bad example because that is exactly how banks operate. i.e. the problem with FTX was that they informally held themselves out to be a segregated accounts company but formally operated like a bank on a first-come-first-served basis.
- TechBro8615 4y agoHere [0] is the current membership of the committee (note it will change in 2023). I don't expect too many tough questions. [0] https://financialservices.house.gov/about/committee-membership.htm https://financialservices.house.gov/about/committee-membersh...
- JumpCrisscross 4y ago> don't expect too many tough questions Sounds like he finally got some good advice: he's testifying in the House but not the Senate.
- whimsicalism 4y ago> I don't expect too many tough questions. Wanna bet? He's super unpopular across the aisle and politicians are quick to turn on donors if they are dead in the water.
- zeven7 4y agoI'm not so sure he's dead in the water as a future donor. There is $8 billion missing. I think it's likely most of it is gone in the sense of irrecoverable by SBF, but with the amount he was moving around it wouldn't be hard to drop $100 million here, $40 million there. That's not to mention the $300 million he cashed out in the last FTX funding round and the $1 billion personal loan he took from FTX, neither of which I've seen addressed yet as to where that money is now.
- whimsicalism 4y agoHe's not going to be donating $100 million here or there to these politicians. They would not accept his donations, he is politically the kiss of death. He likely does not even have the $8 billion.
- zeven7 4y ago> They would not accept his donations, he is politically the kiss of death. I'm not going to address this part, which is the main point of your message. You might be right, I really don't know how political money moves, especially "dark money" and whatnot. I'll address the other parts to clarify because I think there were a couple minor points of confusion. > He's not going to be donating $100 million here or there to these politicians. The $100 million here, $40 million there I spoke of was him dropping money in accounts / crypto wallets controlled by himself. I'm saying I think he still has a lot of money, and from what I understand money can buy influence. You might be right that his money cannot buy influence on Capital Hill anymore. But I do think he still has a lot of money. > He likely does not even have the $8 billion. No, I definitely don't think he has $8 billion. Clearly a lot of that was lost. But I do think there's good reason to believe he has access to money in the order of $100 million - $1 billion while he's trying to claim he only has $100k left.
- invisible 4y agoNot to defend SBF or suggest he did anything correct, but isn't that _negligence_? Given that the factors of the negligence benefited their operations, it still may be charged as fraud and he may be guilty in court.
- encryptluks2 4y agoCouldn't anyone committing fraud just claim negligence? I'd imagine it is pretty common for people doing fraud to try to cover it with negligence, like not keeping records of money going "missing"
- nodesocket 4y agoSBF getting in character now and practicing his deception and manipulation skills in front of the mirror.
- stephc_int13 4y agoSBF should not be underestimated, he might be hard stuck in the silver league of LoL, but he is GM level or above at bullshit. Observing him dodging questions and managing to deflect the heat of relatively tenacious and seasoned journalists is a sight to behold. As irritating as it is impressive. Politics might have been a better fit for him.
- eachro 4y agobronze*
- __derek__ 4y agoHis parents are endowed professors at Stanford Law, so it's not surprising that he learned these skills.
- eddsh1994 4y ago*were, neither are teaching this coming year due to 'pre-planned retirement'
- radicaldreamer 4y agoIt's likely they could end up in legal trouble as well as they were on FTX's payroll and had property gifted to them, likely bought with customer funds. His mother ran a PAC which had large sums of money to spend on US politics... again with no accounting of where this money was coming from (likely customer funds).
- __derek__ 4y agoPresumably with emeritus status, in that case?
- nickthegreek 4y ago*remotely testify. https://www.reuters.com/legal/ftxs-sam-bankman-fried-says-he-will-testify-remotely-upcoming-congressional-2022-12-12/ https://www.reuters.com/legal/ftxs-sam-bankman-fried-says-he...
- quesera 4y agoAs the saying goes... If you forget to hire an accountant, make sure you listen to your lawyer.
- H8crilA 4y agoThey did not "forget to hire an accountant". They took customer funds and did whatever they wanted with it. Just look at that hilarious "balance sheet" that was leaked, it's not even on the same planet as a balance sheet of an exchange. It worked until the funds ran out. In a sense this is worse than a pyramid scheme because in a pyramid scheme at least a good portion of the "profits" is actually paid out. Here the funds went partially to fuck-knows-who, partially were lost in trading.
- swellguy 4y agoDoes anyone else find it extremely ironical that FTX happened in crypto? Wasn't FTX one of the things crypto was meant to solve?
- duskwuff 4y ago
- takeda 4y agoIt is and that's why now bitcoin folks now are distancing itself saying that crypto != cryptocurrency and the only real cryptocurrency is bitcoin and crypto are all "shitcoins".
- Kiro 4y agoWhat do you mean? > FTX is an abbreviation of "Futures Exchange".
- ESTheComposer 4y agoNo, not even remotely. FTX is a centralized exchange, and is the opposite of what crypto’s original philosophy is
- stouset 4y agoKind of like how git made tools for decentralized development widespread, so nobody uses centralized intermediaries to host their repositories any more. /s
- xg15 4y agoI mean, at least git is easily "re-decentralizable" if you have to: Just add another remote to your working copy and push your state. I also believe there are lots of companies who run their own internal git services to not be dependent on GitHub. I agree though, in theory, git would allow some fully p2p working mode, where each developer just adds the machines of the other developers as remotes and there is no "authoritative" remote at all. If that was ever seriously proposed as a real working mode, it definitely didn't catch on, due to it quickly becoming extremely confusing. In practice, having one universally agreed upon "authoritative" location of the project repo gives you an enormous amount of advantages, more than a p2p setup would give you. I think as long as you can freely choose where to host that authoritative version and can quickly change its location if need be, I'd still consider git to be decentralised in practice.
- kfrzcode 4y agoShouldn't be be in custody?
- ender341341 4y agoMy understanding is the Bahamas has confiscated his passport and is working with the DOJ to decide who prosecutes first as they aren't happy he ripped off rich people either.
- highfrequency 4y agoSource?
- ender341341 4y agoDon't have a direct source, I've only been following loosely, but he was just arrested by the Bahamas government https://twitter.com/tier10k/status/1602446984090107905 https://twitter.com/tier10k/status/1602446984090107905
- LarryMullins 4y agoWhat are the odds that Bahamas authorities were previously partners in his scheme, and now want to keep him in the Bahamas simply so they can loot the corpse of FTX before anybody else can?
- ender341341 4y agoThey just arrested him on behalf of the US and say they plan on processing his extradition quickly once it is formally requested. I don't think they like the spotlight. https://twitter.com/tier10k/status/1602446984090107905 https://twitter.com/tier10k/status/1602446984090107905
- LarryMullins 4y agoExcellent news.
- indigodaddy 4y agoWill this be streaming somewhere hopefully?
- boppo1 4y agoCspan
- raiyu 4y agoIf you are testifying remotely, I suppose you are still under oath and have serious consequences for perjury ?
- 2OEH8eoCRo0 4y agoYes
- colpabar 4y ago
- 2OEH8eoCRo0 4y agoMartha Stewart?
- s1artibartfast 4y agoDespite your unnecessarily pessimistic comment, this is one of the leading ways that White Collar criminals (rich people) do see consequences
- stusmall 4y agoWell, good news. He isn't rich anymore.
- stcredzero 4y agoMore accurately, this doesn't happen except in "egregious" cases. Otherwise, if the judicial system tried to prosecute people for all lies under oath, they wouldn't have time for anything else. Seriously. Ask someone who works as a judge or a lawyer.
- twelve40 4y agoyes, so he's been hard at work practicing coming up with all kinds of non-answers several interviews a day. but seriously, I'm not sure how much they expect from this. He does have a legitimate excuse of being cut off from all the corporate data, so he can just keep replying "I'd tell you but the bankruptcy ceo took all my data".
- deleted 4y ago[deleted]
- carrja99 4y agoOh this will be rich
- eastbound 4y agoMark Zuckerberg’s-interrogation-by-the-congress-rich, or Bill Gates saying “I don’t know whether I wrote this” in front of a printout of his email, at the 1998 DoJ interrogation, rich? Either way, neither were dismantled.
- greggarious 4y agoI met someone who claimed they lost money in FTX when I was taking four figures in winnings from boomers at the poker room yesterday. (Could have been just table talk -- you can't trust anything you here in that context, just like you should take psudoanonymous internet comments from some guy named "Greg" with a grain of salt.) I didn't have a ton of sympathy for him or her, since this is the flip side of engaging in a market where the major players shun regulation - gamble in an illegal (or illegality ridden) market and the host might pull an exit scam and you might be left counting your blessings you're alive afterwards to complain, but I sympathize with those who simply want to use BTC as a fee free value transfer mechanism to kill abusive entities like Paypal. Conversely, I don't think it's something that should be used for day to day purchases -- cash is king folks. Offline, hard to counterfeit, and if we need to start moving it around physically more because the internet and/or market crashes, we can go back to having larger denominations just like back in the 1920s[1]. - Greg. [1] https://en.wikipedia.org/wiki/Large_denominations_of_United_States_currency#Table_of_banknotes https://en.wikipedia.org/wiki/Large_denominations_of_United_...
- cactusplant7374 4y ago> I met someone who claimed they lost money in FTX > Could have been just table talk -- you can't trust anything you here in that context I was expecting something more noteworthy. Many people lost money. Does anyone know if FTX.us users are completely made whole?
- greggarious 4y ago>completely made whole Both the FDIC and NCUA only insure deposits up to ~250k USD IIRC. Why would you expect differently in a less regulated context?
- cactusplant7374 4y agoBecause SBF said FTX.us wasn’t impacted.
- ahahahahah 4y ago
- lvl102 4y ago
- H8crilA 4y agoThis guy is something else. He's one of the largest scammers in history, if not the largest, by the amount of appropriated funds. But he's also very "cute", I mean he cannot open his mouth without incriminating himself. This is going to be a good show. On a more serious note I do hope for some serious sentences on the back of it (counted in decades, maybe a few life sentences if possible), because it's too much of a financial fraud to even look plausible. Yet it is real. If you want some good writeups check out the old dependable "Money Stuff" by Matt Levine, every paragraph is better than the last.
- eastbound 4y ago> But he's also very "cute" You’re unvoluntarily making another good point here: He’s young and, yes, cute in the form of having smooth skin, and young. Such things affect the imaginary of people: Old guys are often seen as bad guys in movies. Jurys are heavily influenced by looks. 30 years old and good-looking is an upside in affairs. I wonder whether the average age of scammers is getting smaller, due to being able to penetrate large finance much quicker in life. Madoff had to be 50-60 to setup such a large scheme. SBF is 30. Will the next AI-wizz be 2 years above legal age?
- mr90210 4y agoI am quite sure that Holmes was also “cute”.
- john-tells-all 4y agoThere's a theory that his "gee shucks I'm so cute and dumb" thing is an act. He's portraying a character. No one is dumb enough to talk so much to so many news outlets after losing so much money.
- H8crilA 4y agoCould be, absolutely. But I'm guessing there's more than enough evidence to convict him already. The real question is just how deep the rabbit hole goes, I bet this is what the prosecutors are working on. Meanwhile, "never interrupt your enemy while he's making a mistake".
- throwthere 4y agoHaving followed a lot of the SBF discussion since he keeps giving interviews, here's the FAQ-- 1) How did you lose $5ish billion of customer deposits? - They were deposited to Alameda, a totally independent hedge fund run by an unrelated party (my ex-girlfriend who lives with me). We credited Alameda without properly debiting Alameda on FTX. 2) Why didn't you track them? - There was a bug in the dashboard. I made a boneheaded mistake. Oopsies. 3) What happened in the days leading up to the collapse? - It was an attack from Binance, they're the bad guys. They cashed out and broke FTX. 4) Wait but they cashed out their assets, how would that effect people who had cash and other assets at FTX? - Well we didn't comingle margin and non-margin customer accounts/assets if that's what you mean. It's more that we had this terms of service that was really complicated. Yes there's a part of the terms of service that says we won't lend out your assets, but there's this other part somewhere that says we will that applies to everyone even though it says it only applies to margin accounts. It's because of complex accounting. This is all actually just really complex and I don't remember all of it.
- xg15 4y ago> This is all actually just really complex and I don't remember all of it. Saving that one for future use.
- pclmulqdq 4y agoIt'll be interesting to see if anything blows back on binance here. If politicians see CZ as having blown up the business of one of their big donors, they may be unhappy enough to do something really dumb.
- bnt 4y agoYea, like destroying 100s of thousands of small account owners on Binance. Because the guy looks “Chinese” (but he multiple times publicly stated he is not Chinese).
- pclmulqdq 4y agoTo be fair, CZ was born in China and may have some ties to the Chinese government. He really is Canadian, though.
- imhoguy 4y agoBinance waiting next in the queue? /s from reddit
- StreamBright 4y agoProbably. I think I am going to close all my "crypto" accounts because it is a scam as many of us thought it from the beginning. The only real value of blockchain is immutable history that is a pretty good thing in few cases.
- rubyist5eva 4y agoThe fact that this guy has not been arrested just goes to show how completely f*cked America is.
- AlexandrB 4y agoThe question of jurisdiction is interesting. Technically FTX was not operating in the US or for US citizens but, as I understand, there were many workarounds. FTX US did operate in the US, but I'm not sure how fucked they are relative to the main FTX exchange. It's also notable that FTX customers (at least the "in-crypto-for-the-ideology" ones) and investors wanted this. They wanted a financial system that was out of the reach of the US legal system - none of them had a problem dealing with an exchange that was based in the Bahamas for legal reasons until the whole thing fell apart. So it's interesting to hear so many calls for SBF's arrest by US authorities.
- defterGoose 4y ago| FTX US did operate in the US, but I'm not sure how fucked they are relative to the main FTX exchange. I'm going to go out on an amputated limb here and say...right well fucked.
- dandanua 4y agoNot completely, but the "American dream" looks very differently today.
- vitaflo 4y agoIt took the feds 3 years to indict Kenneth Lay for Enron. You’re going to be waiting a while. Feds get one shot at a case and they don’t tend to lose for a reason. By arresting him now he can force a speedy trial. Feds are going to gather every single ounce of evidence they can before they go after him.
- rubyist5eva 4y agoThat seems optimistic but I hope so.
- atlasunshrugged 4y agoQuestion for folks here who have been very involved in the space - if you had 1-2 yes or no questions for SBF, what would they be?
- outside1234 4y agoCan we just perp walk this guy already?
- Raidion 4y agoNo, because then he can invoke his right to a speedy trial (72 days) leaving prosecutors in a spot where they can't use a grand jury to find new charges, have a time limit to get their case locked down, and they don't have time to make deals with smaller fish to testify against the big fish. "The wheels of justice turn slowly, but grind exceedingly fine"
- jmyeet 4y agoThis is crazy. It seems like SBF is determined to go to jail. Put another way: it seems like he's so full of himself and deluded that he thinks these interviews, Tweets and (now) an appearance before Congress are good ideas. They are not. The one thing you should do when facing a likely criminal indictment is to shut the F up. Every statement you make can be used against you and remove your legal options. You may be admitting to things that the prosecution would otherwise have to prove. Yes, interviews aren't given under oath but then you have to argue what you said was a deliberate lie or you were mistaken. The prosecutor will have a field day with this: "what else did you lie about?", "were you lying then or lying now?", "how are we to believe anything you say when you've admitted that you lie?", etc. His parents are lawyers. They should know this. He should have legal counsel. They will definitely know this. So he either doesn't have legal counsel or is ignoring their advice. He will absolutely spend the rest of his life in prison or on the run.
- dqpb 4y agoTomorrow, somebody will become the first person in history to play League of Legends against a person who is simultaneously testifying at a US House hearing.
- 1vuio0pswjnm7 4y agoThe US Trustee has now filed its objection to the proposed motion to redact the names of FTX's creditors. https://ia601406.us.archive.org/2/items/gov.uscourts.deb.188450/gov.uscourts.deb.188450.196.0.pdf https://ia601406.us.archive.org/2/items/gov.uscourts.deb.188... Celsius recently asked to redact the names of its creditors in its bankruptcy filings and the court denied the request. What are the chances FTX's motion will be granted. The IRS has also filed a notice of appearance.
- clusterhacks 4y agoI think FTX claimed 1.2 million users awhile back. Is there any insight into a true count of FTX users and maybe the average value of holdings they entered into FTX with? I'm interested in understanding just how much actually flowed into FTX from users vs what (the probably fake?) value of their holdings were when FTX melted down.
- Animats 4y agoThe encouraging thing about the FTX collapse is that it didn't affect the rest of the economy. The Washington Post points out that the FTX crash didn't produce any visible change in any major US economic indicator outside crypto.[1] The whole crypto sector is that disconnected from the real world. So, let the prosecutors, courts, and accountants sort this out. Follow the court filings here.[2] Today's updates: the Internal Revenue Service is getting involved. And, amusingly, the U.S. Bankruptcy Trustee is using FTX's privacy policy against them. [1] https://www.washingtonpost.com/opinions/2022/12/11/crypto-contagion-financial-system-treasuries-economy/ https://www.washingtonpost.com/opinions/2022/12/11/crypto-co... [2] https://restructuring.ra.kroll.com/FTX/Home-DocketInfo https://restructuring.ra.kroll.com/FTX/Home-DocketInfo
- TechoChamber 4y agoWe still don't know that. > “We note that you own or have issued crypto assets and/or hold crypto assets on behalf of third parties,” one of the questions said. “Explain whether these crypto assets serve as collateral for any loan, margin, rehypothecation or other similar activities to which you or your affiliates are a party.” https://www.wsj.com/articles/sec-asks-public-companies-for-more-information-about-crypto-exposure-11670531943 https://www.wsj.com/articles/sec-asks-public-companies-for-m... I know lots of people in finance who are claiming the big banks used made up coins as collateral for stocks, and the house of cards just hasn't collapsed yet. And if you look through their 13F reports it kinda confirms it.
- dang 4y agoThis isn't a substantive story, so the thread is just a repetition of discussions that have already been had many times by now. Once he does testify, maybe that will be a substantive story, with something new to discuss. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=%22significant%20new%20information%22%20by%3Adang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so... https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=follow-up%20downweight&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que... https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=%22no%20harm%20in%20waiting%22%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so... Edit: it looks like https://news.ycombinator.com/item?id=33959557 https://news.ycombinator.com/item?id=33959557 has some new information? not sure how significant it is