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Having also followed this unfolding drama, I can say this is sadly a reasonably accurate take. I'll add my own opinion which is that he seems to—at least on so

Having also followed this unfolding drama, I can say this is sadly a reasonably accurate take. I'll add my own opinion which is that he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once. I say this because I otherwise can't come up with any reason why he would continue to give multiple interviews except that the man actually thinks that his ideas were brilliant and sound, but he just made some understandable mistakes and that if people could understand where he's coming from they'd see that he's a sympathetic victim here and not some idiot that was very obviously going to lose everyone's money from the get-go. Of course the reality is that he's some idiot that was very obviously going to lose everyone's money from the get-go. None of this is very complicated to anyone who's ever worked in finance (admittedly not me). And absolutely fundamental basic controls were never put into place. These controls were skipped because SBF was convinced he was doing something extremely novel and complicated and such old-school concepts would only hinder his ability to execute on his brilliant ideas. Except these ideas weren't all that brilliant, they just involved doing things the likes of which you wouldn't even imagine attempting in traditional finance because… gestures wildly at the ongoing FTX debacle.

zeven7 4y ago
> These controls were skipped because SBF was convinced he was doing something extremely novel and complicated and such old-school concepts would only hinder his ability to execute on his brilliant ideas. Don't let him sell the story that it was all very complex and he made a bunch of mistakes and he should have done better. They used Snapchat for company messaging so there wound't be records. This wasn't a mistake due to complexity. He knew he was risking customer funds with an extreme Alameda margin position. He just hoped the market would go up and he'd get away with it and come out with tens of billions in profit. His bet, that he illegally made with customer funds, did not pan out, and he ended up without the money to pay everyone back. His terms of service said he would not make such a bet, yet he did it anyway. He took extreme, fraudulent risk with other people's money. He knows that, but he's playing dumb and trying to sell the narrative that it was all a big mistake.
- stouset 4y ago
  I agree. It wasn't very complex, he made a bunch of basic mistakes that nobody with even a passing familiarity with finance should have made, and to say that he should have done better is an understatement of almost comical proportions. I just also think that these things were (at least initially) due to absurd levels of hubris and incompetence rather than outright malicious intent. The guy thought his shit didn't stink but anyone even vaguely paying attention could smell what was up from miles away. He still doesn't think he did anything wrong other than making some justifiable mistakes in his rush to build something great and surely anyone can see that if he just explains himself for the thousandth time.
  - zeven7 4y ago
    It is complex, but that doesn't mean it's not malicious. Let's use a simpler example. Sam runs a horse racing operation and allows you to place bets on horses. Before the race begins, Sam collects $1,000,000 from various people placing bets on the race. During the race, Sam runs across the street to the casino and puts the $1,000,000 he's holding on black at the roulette table. If he wins the bet, Sam plans to take the $2,000,000 back, pay off customers at his race track, and then walk away with an extra $1,000,000 in his pocket. Unfortunately, it comes up red, and Sam walks out of the casino with nothing. Realizing he won't have money to pay his customers back, he tries to find someone who can buy his race track and take on the debt, but nobody wants to inherit a $1,000,000 debt. This is malicious. Sam willfully defrauded customers. Yeah, it could have worked out, but it didn't, and nobody consented to risking their money on the roulette table. Now change $1,000,000 to $10 billion and replace "race track" and "casino" with complex finance mumbo jumbo.
    - stouset 4y ago
      Sure. This is a reasonable analogy. I simply think that he started from an a priori belief that a) he is brilliant, and therefore b) ideas he comes up with are similarly brilliant, thus c) this idea is brilliant. It wasn't. That said, I don't think it should matter whether or not he came into this plan with an intent to defraud or if he mistakenly thought this was a foolproof investment strategy. The man is guilty as all hell and ought to face consequences for the outcome regardless of intent. I just think it's amazing to watch him continually try and explain how brilliant and complicated this idea was and how a few small mistakes brought him down while it's actually pretty simple to understand at a high level what happened and this outcome was virtually guaranteed from the start.
TotoHorner 4y ago
> he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once Yeah, I strongly disagree here. He's just a pathological liar and he's currently on an interview spree where he's lying out of his mouth to try and avoid jail time. If you want evidence that he a liar, look at the DMs he sent to his friend (apparently he forgot she was a reporter?) that got published to Vox. He clearly explained his strategy of lying about his left-leaning political views to get brownie points with the media. He intentionally wanted to defraud people from the start. When he started FTX, they went through multiple jurisdictions (first Hong Kong, then Singapore and finally the Bahamas) to find the country that would give him the least regulatory oversight so he could run his ponzi. He intentionally had staff message him using Signal with disappearing messages to minimize the paper trail. Same thing with hiring the Ultimate Bet guy. He had a clear backdoor that allowed him to send customer funds over to Alameda and he put some some BS "FTX collateral" to serve as a veneer. He bought companies like BlockFi to get more customer funds so he could keep the ponzi going. Spent fucktons on advertising in arenas, F1, superbowl, etc. because your customer LTV calculation changes when you can just steal the user's deposits and use them to lever up your hedge fund. I'm guessing his plan was that he would use the FTX user deposits to take a huge long position on crypto, ride the bull wave and become the richest person in the world. He thought he'd be able to time it right and get out before the bear market with his profits but he timed it incorrectly and Alameda blew up. Now, he just wants to make it seem like it was an accident and due to poor management by him. No, it was 100% intentional and he knew exactly what he was doing.
- stouset 4y ago
  You could be right. But if this interview spree is a calculated move to avoid jail time, he's doing a truly awful job of it. But this wouldn't be the first time he did an awful job of something due to misjudging his own competence.
  - TotoHorner 4y ago
    > But if this interview spree is a calculated move to avoid jail time, he's doing a truly awful job of it. But this wouldn't be the first time he did an awful job of something due to misjudging his own competence. Yep, I think that's exactly it. In his mind, it's either - do not do any interviews. The outcome is a 90% probability of life in prision - do the interviews and try to shift public opinion to it being an accident. He knows he still has some influence over the media because of his past donations. Maybe 50% probability of life in prison if he can shift public opinion?
bogomipz 4y ago
>"I'll add my own opinion which is that he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber." Yes and I think that was an image he actively sought to cultivate. This is the whole "cult of the genius" trope that the VC's want us to believe in. This is where you hear people regurgitating things like "he's playing 3D chess", whatever that is means. Perhaps a telling bit of this chicanery is this incident: >"In this context, the most telling detail in the FTX saga doesn’t have to do with dubious tokens or suspicious accounting. Rather, it involves League of Legends, the massive multiplayer online game that is a favorite of FTX founder Sam Bankman-Fried. In September, the tech venture-capital firm Sequoia Capital published a profile of “SBF” on its website, explaining how the crypto prodigy convinced the firm to invest some $200 million during a Zoom meeting—while playing League of Legends the whole time."[1] Further from this same source: >"What’s significant isn’t just that the now 30-year-old entrepreneur didn’t think it necessary to give the deal his full attention. It’s that Sequoia published this detail in an article meant to advertise its FTX investment. (The article was taken down after the firm began to collapse in early November.) Far from seeing Mr. Bankman-Fried’s gaming as a worrisome example of distraction and disrespect, Sequoia was impressed by it and expected readers to have the same reaction."[1] [1] https://archive.vn/AiEEO#selection-243.48-247.34 https://archive.vn/AiEEO#selection-243.48-247.34
- ricktdotorg 4y ago
  > the crypto prodigy convinced the firm to invest some $200 million during a Zoom meeting—while playing League of Legends the whole time VC's deserve to be crushed for acts such as this. imagine giving $200 million to a 30 yr old who is playing games on critical investment calls!!! inconceivable -- from all angles.

zeven7 4y ago

> These controls were skipped because SBF was convinced he was doing something extremely novel and complicated and such old-school concepts would only hinder his ability to execute on his brilliant ideas. Don't let him sell the story that it was all very complex and he made a bunch of mistakes and he should have done better. They used Snapchat for company messaging so there wound't be records. This wasn't a mistake due to complexity. He knew he was risking customer funds with an extreme Alameda margin position. He just hoped the market would go up and he'd get away with it and come out with tens of billions in profit. His bet, that he illegally made with customer funds, did not pan out, and he ended up without the money to pay everyone back. His terms of service said he would not make such a bet, yet he did it anyway. He took extreme, fraudulent risk with other people's money. He knows that, but he's playing dumb and trying to sell the narrative that it was all a big mistake.

stouset 4y ago
I agree. It wasn't very complex, he made a bunch of basic mistakes that nobody with even a passing familiarity with finance should have made, and to say that he should have done better is an understatement of almost comical proportions. I just also think that these things were (at least initially) due to absurd levels of hubris and incompetence rather than outright malicious intent. The guy thought his shit didn't stink but anyone even vaguely paying attention could smell what was up from miles away. He still doesn't think he did anything wrong other than making some justifiable mistakes in his rush to build something great and surely anyone can see that if he just explains himself for the thousandth time.
- zeven7 4y ago
  It is complex, but that doesn't mean it's not malicious. Let's use a simpler example. Sam runs a horse racing operation and allows you to place bets on horses. Before the race begins, Sam collects $1,000,000 from various people placing bets on the race. During the race, Sam runs across the street to the casino and puts the $1,000,000 he's holding on black at the roulette table. If he wins the bet, Sam plans to take the $2,000,000 back, pay off customers at his race track, and then walk away with an extra $1,000,000 in his pocket. Unfortunately, it comes up red, and Sam walks out of the casino with nothing. Realizing he won't have money to pay his customers back, he tries to find someone who can buy his race track and take on the debt, but nobody wants to inherit a $1,000,000 debt. This is malicious. Sam willfully defrauded customers. Yeah, it could have worked out, but it didn't, and nobody consented to risking their money on the roulette table. Now change $1,000,000 to $10 billion and replace "race track" and "casino" with complex finance mumbo jumbo.
  - stouset 4y ago
    Sure. This is a reasonable analogy. I simply think that he started from an a priori belief that a) he is brilliant, and therefore b) ideas he comes up with are similarly brilliant, thus c) this idea is brilliant. It wasn't. That said, I don't think it should matter whether or not he came into this plan with an intent to defraud or if he mistakenly thought this was a foolproof investment strategy. The man is guilty as all hell and ought to face consequences for the outcome regardless of intent. I just think it's amazing to watch him continually try and explain how brilliant and complicated this idea was and how a few small mistakes brought him down while it's actually pretty simple to understand at a high level what happened and this outcome was virtually guaranteed from the start.

TotoHorner 4y ago

> he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber. It's so complicated, in fact, that even he struggles to keep it all in his head at once Yeah, I strongly disagree here. He's just a pathological liar and he's currently on an interview spree where he's lying out of his mouth to try and avoid jail time. If you want evidence that he a liar, look at the DMs he sent to his friend (apparently he forgot she was a reporter?) that got published to Vox. He clearly explained his strategy of lying about his left-leaning political views to get brownie points with the media. He intentionally wanted to defraud people from the start. When he started FTX, they went through multiple jurisdictions (first Hong Kong, then Singapore and finally the Bahamas) to find the country that would give him the least regulatory oversight so he could run his ponzi. He intentionally had staff message him using Signal with disappearing messages to minimize the paper trail. Same thing with hiring the Ultimate Bet guy. He had a clear backdoor that allowed him to send customer funds over to Alameda and he put some some BS "FTX collateral" to serve as a veneer. He bought companies like BlockFi to get more customer funds so he could keep the ponzi going. Spent fucktons on advertising in arenas, F1, superbowl, etc. because your customer LTV calculation changes when you can just steal the user's deposits and use them to lever up your hedge fund. I'm guessing his plan was that he would use the FTX user deposits to take a huge long position on crypto, ride the bull wave and become the richest person in the world. He thought he'd be able to time it right and get out before the bear market with his profits but he timed it incorrectly and Alameda blew up. Now, he just wants to make it seem like it was an accident and due to poor management by him. No, it was 100% intentional and he knew exactly what he was doing.

stouset 4y ago
You could be right. But if this interview spree is a calculated move to avoid jail time, he's doing a truly awful job of it. But this wouldn't be the first time he did an awful job of something due to misjudging his own competence.
- TotoHorner 4y ago
  > But if this interview spree is a calculated move to avoid jail time, he's doing a truly awful job of it. But this wouldn't be the first time he did an awful job of something due to misjudging his own competence. Yep, I think that's exactly it. In his mind, it's either - do not do any interviews. The outcome is a 90% probability of life in prision - do the interviews and try to shift public opinion to it being an accident. He knows he still has some influence over the media because of his past donations. Maybe 50% probability of life in prison if he can shift public opinion?

bogomipz 4y ago

>"I'll add my own opinion which is that he seems to—at least on some level—legitimately believe that all of this is extremely complicated and impossible to understand unless you're someone of his intellectual caliber." Yes and I think that was an image he actively sought to cultivate. This is the whole "cult of the genius" trope that the VC's want us to believe in. This is where you hear people regurgitating things like "he's playing 3D chess", whatever that is means. Perhaps a telling bit of this chicanery is this incident: >"In this context, the most telling detail in the FTX saga doesn’t have to do with dubious tokens or suspicious accounting. Rather, it involves League of Legends, the massive multiplayer online game that is a favorite of FTX founder Sam Bankman-Fried. In September, the tech venture-capital firm Sequoia Capital published a profile of “SBF” on its website, explaining how the crypto prodigy convinced the firm to invest some $200 million during a Zoom meeting—while playing League of Legends the whole time."[1] Further from this same source: >"What’s significant isn’t just that the now 30-year-old entrepreneur didn’t think it necessary to give the deal his full attention. It’s that Sequoia published this detail in an article meant to advertise its FTX investment. (The article was taken down after the firm began to collapse in early November.) Far from seeing Mr. Bankman-Fried’s gaming as a worrisome example of distraction and disrespect, Sequoia was impressed by it and expected readers to have the same reaction."[1] [1] https://archive.vn/AiEEO#selection-243.48-247.34 https://archive.vn/AiEEO#selection-243.48-247.34

ricktdotorg 4y ago
> the crypto prodigy convinced the firm to invest some $200 million during a Zoom meeting—while playing League of Legends the whole time VC's deserve to be crushed for acts such as this. imagine giving $200 million to a 30 yr old who is playing games on critical investment calls!!! inconceivable -- from all angles.