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SBF literally stole billions from a bank account. Not a very subtle crime.

by 323 4y ago

FormerBandmate 4y ago
He commingled bank accounts for two separate companies. It didn’t all go to him buying Lamborghinis
- _jal 4y ago
  > It didn’t all go to him buying Lamborghinis Beachfront properties, random companies, journalists... but no Lamborghinis. Got it.
  - tacker2000 4y ago
    Dont forget the political donations as well…
    - bandyaboot 4y ago
      The political donations that demonstrate high corruption within government and will prevent him from facing consequences…or something.
      - adra 4y ago
        Ah, remember those times that crypto was heralded as some sort of wedge against "2008-level government sponsored corruption? , That was a nice thought while it lasted. Don't get me wrong though, I'd say 2008 was blamed a lot on an industry that largely played fairly outside of some truly revolting players. Letting too many bent actors get away with their misgivings emboldens the next generation, and you could certainly argue a lot of this next generation of bent actors are playing fast and loose in crypto.
        bboygravity 4y ago
        > Ah, remember those times that crypto was heralded as some sort of wedge against "2008-level government sponsored corruption? , That was a nice thought while it lasted. How did any of that change exactly? That 2008 style Wallstreet corruption is bigger than ever, it's just a matter of time before the world sees that the upcoming/ongoing inflation is not actually "due to the war in Europe and Covid".
      - vkou 4y ago
        It's strange how as soon as criminal money starts going into campaign funds, we all get up in arms about how corrupt and awful pay-to-play politics is. The same political conflicts of interest exist, regardless of whether the funding comes from a carbon Super-PAC, or a crypto con man... But you wouldn't be able to tell that from any of the blatantly partisan rhetoric around it. It's all very "We're not mad that campaign funding works the way it does, we're mad that the other guys got more of it."
        briHass 4y ago
        Sure, but what do you do about it? I've never been able to formulate any rules that wouldn't have worse, unintended consequences. Running for a political office is essentially advertising yourself, and that takes gobs of money, existing fame, connections, or all of the above. Trying to limit 'who' can contribute is fraught with violations of free speech or picking and choosing the definition of what a 'company' vs an 'organization' is.
        landemva 4y ago
        I would go back to the Constitution that has a census to enumerate the people and expand the federal House of Reps, as intended. It would be so representative and so big they would meet on zoom or regionally. There would be way too many for the lobbyists to control them. 'The Number of Representatives shall not exceed one for every thirty Thousand, but each State shall have at Least one Representative…” — U.S. Constitution, Article I, section 2, clause 3' As it is now, they decided to stop.growing the House because ... big bribes to the controlled-by-lobbyists Reps.
  - devindotcom 4y ago
    Just a note, if it's The Block, he allegedly paid off the CEO, not the journalists who write there. It's a meaningful distinction. The CEO is a business officer, the EIC would be the one directing content.
    - _jal 4y ago
      I was actually thinking of ProPublica. That case is even murkier, but the intent seems clear.
      - dtjb 4y ago
        What was murky about ProPublica? I thought SBF started a fund dedicated to pandemic preparedness, and ProPublica received a $5M investigative journalism grant from that fund (unrelated to crypto or financial regulation). Did I miss something?
  - pigeons 4y ago
    yachts
- gitfan86 4y ago
  It doesn't matter. Taking deposits and investments from US citizens and then buying a 10 million dollar home for your parents with money from that company without your customers' permission is going to bring charges from regulators or a law enforcement agency. He can claim it was just a mistake and an accounting error if he wants, but the judge and jury will have final say if he goes to jail.
  - FormerBandmate 4y ago
    I agree. All I'm saying is that it's a lot harder to prove
- paulusthe 4y ago
  He didn't commingle accounts. He stole from customers to keep Alameda afloat. This is why the money never got converted into actual crypto, and why there are no assets: the money got used, by Alameda, in what must have been some truly cataclysmic trading. It also sounds like alameda's job was to market make the FTX coin, which they presumably did with that money in part. And likely kept doing until they blew up. He's a fraud. He knows he's a fraud, and his PR campaign is an attempt to prove he's not a fraud but instead just really really dumb and stuff. Because being dumb isn't illegal, but running a fraud is.
  - sizzle 4y ago
    So… Can they clawback the illegally “used” customer funds from whatever schemes were used to keep Alameda solvent? Where did the billions go?
    - vkou 4y ago
      My best guess is that a small part of the billions went towards mansions in the Bahamas, another small part went towards political bribes, and a rather large part went to various counterparties that traded against Alameda. It's pretty easy to lose any amount of money if you're paying $10 for $5 bills.
  - Bluestrike2 4y ago
    Well, the fact that he's been waging a PR campaign lately is, in itself, pretty damning proof that he's also really really dumb, in addition to being a fraud. That his lawyers haven't duct taped his ass to a chair, smashed his phone and computers, burned any paper he could use to write a letter to a random reporter, and cut the power lines to his house is honestly surprising at this point. They must have explained why he needs to stop talking and stay quiet multiple times at this point; nobody talks their way out of being charged by the feds. And yet, here we are. Everything he's done since FTX first crashed has pretty much been straight out of the most fantastical dream any federal prosecutor has woken up from in the middle of the night, certain that no defendant on the planet would actually be that dumb.
  - ckastner 4y ago
- trimbo 4y ago
  He took $1bn in a personal loan and execs in total took $4bn in loans. [1] - https://www.forbes.com/sites/mattdurot/2022/11/17/sam-bankman-fried-and-three-ftx-executives-received-41-billion-of-loans-from-alameda-research-where-did-the-money-come-from-and-where-did-it-go/?sh=6e61956779c7 https://www.forbes.com/sites/mattdurot/2022/11/17/sam-bankma...
- dgivney 4y ago
  > It didn’t all go to him buying Lamborghinis He cashed out $300M at Series B and took a $1B loan from FTX. So yeah, ~10% went to Lambos and the rest of the $10B to his gambling habit.
- ckwalsh 4y ago
  You don't need to be spending money on yourself for a fraud conviction. I was on the jury of a federal fraud case, where the defendants took millions of dollars in customer funds and used it to make bad business decisions and/or placate earlier customers. It was very clear to us that even though they lived a very simple life (old car, $1,500/month rented house), they wanted to build the biggest company in their industry, and fraudulently used their customer's funds to do it.
llanowarelves 4y ago
- jeffdn 4y ago
  He supported Zelensky’s political campaign, that doesn’t make them friends. Zelensky also stripped him of his Ukrainian citizenship.
  - llanowarelves 4y ago
    - jeffdn 4y ago
      Considering Zelensky has only been president for three years, you’ve just made very clear what your agenda is.
      - llanowarelves 4y ago
        ogogmad 4y ago
        The only commonality between those 3 people is that they're Jewish. There are good and bad people from every race and gender. "Russian" in the case you're talking about is not an ethnicity, so it's a false equivalence. I recommend you pull yourself away from the Anti-Semitic Point Of No Return. That way leads to social ostracism, and for no good reason at all. [edit] As I said elsewhere, I stand corrected. I thought you were dog-whistling.
        jimmygrapes 4y ago
        I'm shadow banned so no harm in this comment, but: I really hope you reflect on this idea of "dog whistle" considering you heard it
dheera 4y ago
- adasdasdas 4y ago
  FTX is a brokerage not a bank. Furthermore, banks have strict regulations on the kinds of loans they are allowed to give. Also, bank accounts are secured by FDIC.
  - dheera 4y ago
    OK sure so the FDIC can just insure FTX then. Other brokerages lend out their spare cash without your consent, too. It's not really any different other than that law has (rather arbitrarily) decided to protect one and not the other.
    - skullone 4y ago
      Insure what, exactly? Insure peoples imaginary crypto coins? Insure deposits into a brokerage account? Did FTX sweep brokerage accounts into a valid, insurable class? You're missing a ton here, buddy
    - adasdasdas 4y ago
      The fdic is not a law, its a self sufficient insurance company that banks pay premiums to.
    - pushrax 4y ago
      Proper brokerages will pay you to lend your securities, transparently disclose their programs, and require consent. For example: - https://www.interactivebrokers.com/en/pricing/stock-yield-enhancement-program.php https://www.interactivebrokers.com/en/pricing/stock-yield-en... - https://www.fidelity.com/trading/fully-paid-lending https://www.fidelity.com/trading/fully-paid-lending Some brokerages lend out spare cash (and pay a transparent interest rate, and are subject to strict reserve requirements) but the majority of assets controlled by a typical brokerage are securities. FTX assets were all subject to their leverage strategies, with no specific reserve.
russdill 4y ago
The requirements to prove white collar crime are very different. You have to prove the person did the criminal action knowingly. It's not like proving a case for literal bank robbery where you just need to play the tape. Because of this prosecutions of white collar crime tend to take longer. In this case though I suspect that things like discussing your criminal activity in a chat channel called wirefraud tended you accelerate things.
tim333 4y ago
I was a victim, FTX the company definitely stole assets from my brokerage (not bank) account which their terms and conditions said they would not. The trickier bit is showing personal responsibility of SBF rather than someone else in the company. That's why no one got locked up for the 2008 crash - the companies obviously did bad stuff but it was hard to pin on an individual. I imagine in this case they have some personal evidence SBF was in on it.

SBF literally stole billions from a bank account. Not a very subtle crime.

by 323 4y ago

SBF literally stole billions from a bank account. Not a very subtle crime.

FormerBandmate 4y ago

He commingled bank accounts for two separate companies. It didn’t all go to him buying Lamborghinis

_jal 4y ago
> It didn’t all go to him buying Lamborghinis Beachfront properties, random companies, journalists... but no Lamborghinis. Got it.
- tacker2000 4y ago
  Dont forget the political donations as well…
  - bandyaboot 4y ago
    The political donations that demonstrate high corruption within government and will prevent him from facing consequences…or something.
    - adra 4y ago
      Ah, remember those times that crypto was heralded as some sort of wedge against "2008-level government sponsored corruption? , That was a nice thought while it lasted. Don't get me wrong though, I'd say 2008 was blamed a lot on an industry that largely played fairly outside of some truly revolting players. Letting too many bent actors get away with their misgivings emboldens the next generation, and you could certainly argue a lot of this next generation of bent actors are playing fast and loose in crypto.
      - bboygravity 4y ago
        > Ah, remember those times that crypto was heralded as some sort of wedge against "2008-level government sponsored corruption? , That was a nice thought while it lasted. How did any of that change exactly? That 2008 style Wallstreet corruption is bigger than ever, it's just a matter of time before the world sees that the upcoming/ongoing inflation is not actually "due to the war in Europe and Covid".
    - vkou 4y ago
      It's strange how as soon as criminal money starts going into campaign funds, we all get up in arms about how corrupt and awful pay-to-play politics is. The same political conflicts of interest exist, regardless of whether the funding comes from a carbon Super-PAC, or a crypto con man... But you wouldn't be able to tell that from any of the blatantly partisan rhetoric around it. It's all very "We're not mad that campaign funding works the way it does, we're mad that the other guys got more of it."
      - briHass 4y ago
        Sure, but what do you do about it? I've never been able to formulate any rules that wouldn't have worse, unintended consequences. Running for a political office is essentially advertising yourself, and that takes gobs of money, existing fame, connections, or all of the above. Trying to limit 'who' can contribute is fraught with violations of free speech or picking and choosing the definition of what a 'company' vs an 'organization' is.
        landemva 4y ago
        I would go back to the Constitution that has a census to enumerate the people and expand the federal House of Reps, as intended. It would be so representative and so big they would meet on zoom or regionally. There would be way too many for the lobbyists to control them. 'The Number of Representatives shall not exceed one for every thirty Thousand, but each State shall have at Least one Representative…” — U.S. Constitution, Article I, section 2, clause 3' As it is now, they decided to stop.growing the House because ... big bribes to the controlled-by-lobbyists Reps.
- devindotcom 4y ago
  Just a note, if it's The Block, he allegedly paid off the CEO, not the journalists who write there. It's a meaningful distinction. The CEO is a business officer, the EIC would be the one directing content.
  - _jal 4y ago
    I was actually thinking of ProPublica. That case is even murkier, but the intent seems clear.
    - dtjb 4y ago
      What was murky about ProPublica? I thought SBF started a fund dedicated to pandemic preparedness, and ProPublica received a $5M investigative journalism grant from that fund (unrelated to crypto or financial regulation). Did I miss something?
- pigeons 4y ago
  yachts
gitfan86 4y ago
It doesn't matter. Taking deposits and investments from US citizens and then buying a 10 million dollar home for your parents with money from that company without your customers' permission is going to bring charges from regulators or a law enforcement agency. He can claim it was just a mistake and an accounting error if he wants, but the judge and jury will have final say if he goes to jail.
- FormerBandmate 4y ago
  I agree. All I'm saying is that it's a lot harder to prove
paulusthe 4y ago
He didn't commingle accounts. He stole from customers to keep Alameda afloat. This is why the money never got converted into actual crypto, and why there are no assets: the money got used, by Alameda, in what must have been some truly cataclysmic trading. It also sounds like alameda's job was to market make the FTX coin, which they presumably did with that money in part. And likely kept doing until they blew up. He's a fraud. He knows he's a fraud, and his PR campaign is an attempt to prove he's not a fraud but instead just really really dumb and stuff. Because being dumb isn't illegal, but running a fraud is.
- sizzle 4y ago
  So… Can they clawback the illegally “used” customer funds from whatever schemes were used to keep Alameda solvent? Where did the billions go?
  - vkou 4y ago
    My best guess is that a small part of the billions went towards mansions in the Bahamas, another small part went towards political bribes, and a rather large part went to various counterparties that traded against Alameda. It's pretty easy to lose any amount of money if you're paying $10 for $5 bills.
- Bluestrike2 4y ago
  Well, the fact that he's been waging a PR campaign lately is, in itself, pretty damning proof that he's also really really dumb, in addition to being a fraud. That his lawyers haven't duct taped his ass to a chair, smashed his phone and computers, burned any paper he could use to write a letter to a random reporter, and cut the power lines to his house is honestly surprising at this point. They must have explained why he needs to stop talking and stay quiet multiple times at this point; nobody talks their way out of being charged by the feds. And yet, here we are. Everything he's done since FTX first crashed has pretty much been straight out of the most fantastical dream any federal prosecutor has woken up from in the middle of the night, certain that no defendant on the planet would actually be that dumb.
- ckastner 4y ago
trimbo 4y ago
He took $1bn in a personal loan and execs in total took $4bn in loans. [1] - https://www.forbes.com/sites/mattdurot/2022/11/17/sam-bankman-fried-and-three-ftx-executives-received-41-billion-of-loans-from-alameda-research-where-did-the-money-come-from-and-where-did-it-go/?sh=6e61956779c7 https://www.forbes.com/sites/mattdurot/2022/11/17/sam-bankma...
dgivney 4y ago
> It didn’t all go to him buying Lamborghinis He cashed out $300M at Series B and took a $1B loan from FTX. So yeah, ~10% went to Lambos and the rest of the $10B to his gambling habit.
ckwalsh 4y ago
You don't need to be spending money on yourself for a fraud conviction. I was on the jury of a federal fraud case, where the defendants took millions of dollars in customer funds and used it to make bad business decisions and/or placate earlier customers. It was very clear to us that even though they lived a very simple life (old car, $1,500/month rented house), they wanted to build the biggest company in their industry, and fraudulently used their customer's funds to do it.

llanowarelves 4y ago

jeffdn 4y ago
He supported Zelensky’s political campaign, that doesn’t make them friends. Zelensky also stripped him of his Ukrainian citizenship.
- llanowarelves 4y ago
  - jeffdn 4y ago
    Considering Zelensky has only been president for three years, you’ve just made very clear what your agenda is.
    - llanowarelves 4y ago
      - ogogmad 4y ago
        The only commonality between those 3 people is that they're Jewish. There are good and bad people from every race and gender. "Russian" in the case you're talking about is not an ethnicity, so it's a false equivalence. I recommend you pull yourself away from the Anti-Semitic Point Of No Return. That way leads to social ostracism, and for no good reason at all. [edit] As I said elsewhere, I stand corrected. I thought you were dog-whistling.
        jimmygrapes 4y ago
        I'm shadow banned so no harm in this comment, but: I really hope you reflect on this idea of "dog whistle" considering you heard it

dheera 4y ago

adasdasdas 4y ago
FTX is a brokerage not a bank. Furthermore, banks have strict regulations on the kinds of loans they are allowed to give. Also, bank accounts are secured by FDIC.
- dheera 4y ago
  OK sure so the FDIC can just insure FTX then. Other brokerages lend out their spare cash without your consent, too. It's not really any different other than that law has (rather arbitrarily) decided to protect one and not the other.
  - skullone 4y ago
    Insure what, exactly? Insure peoples imaginary crypto coins? Insure deposits into a brokerage account? Did FTX sweep brokerage accounts into a valid, insurable class? You're missing a ton here, buddy
  - adasdasdas 4y ago
    The fdic is not a law, its a self sufficient insurance company that banks pay premiums to.
  - pushrax 4y ago
    Proper brokerages will pay you to lend your securities, transparently disclose their programs, and require consent. For example: - https://www.interactivebrokers.com/en/pricing/stock-yield-enhancement-program.php https://www.interactivebrokers.com/en/pricing/stock-yield-en... - https://www.fidelity.com/trading/fully-paid-lending https://www.fidelity.com/trading/fully-paid-lending Some brokerages lend out spare cash (and pay a transparent interest rate, and are subject to strict reserve requirements) but the majority of assets controlled by a typical brokerage are securities. FTX assets were all subject to their leverage strategies, with no specific reserve.

russdill 4y ago

The requirements to prove white collar crime are very different. You have to prove the person did the criminal action knowingly. It's not like proving a case for literal bank robbery where you just need to play the tape. Because of this prosecutions of white collar crime tend to take longer. In this case though I suspect that things like discussing your criminal activity in a chat channel called wirefraud tended you accelerate things.

tim333 4y ago

I was a victim, FTX the company definitely stole assets from my brokerage (not bank) account which their terms and conditions said they would not. The trickier bit is showing personal responsibility of SBF rather than someone else in the company. That's why no one got locked up for the 2008 crash - the companies obviously did bad stuff but it was hard to pin on an individual. I imagine in this case they have some personal evidence SBF was in on it.