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SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

439 points by scrlk 4y ago

matheusmoreira 4y ago
That was fast...
ReptileMan 4y ago
And what about customers?
- kshacker 4y ago
  There must be some other org for that such CFPB. SEC focuses on investors, no?
ekpyrotic 4y ago
This might just be the 'first arrow' from the SEC with much more to be added down the track, but it's interesting to see that they have gone in heavily on defrauding equity investors in the FTX business -- rather than pulling the rug on customers. Either that's because it's easier for the SEC to prove, and get it to the point of demonstrating fraud? Or the US customers and the FTX US business were relatively untouched throughout this whole process, so there is less to go on for US customer fraud? Or, perhaps, this is just the first arrow to smoke out more data, informants, etc, with a strategic view to adding further allegations down the track?
- PaywallBuster 4y ago
  probably because FTX.com wasn't supposed to be servicing US customers So US customers who may have used FTX.com were circumventing whatever minimal measures they had preventing them to signup/use the platform
- quanticle 4y ago
  This might just be the 'first arrow' from the SEC with much more to be added down the track, but it's interesting to see that they have gone in heavily on defrauding equity investors in the FTX business -- rather than pulling the rug on customers. Isn't that the same approach that federal prosecutors took with Theranos as well? From what I understand, Elizabeth Holmes went to jail for defrauding her investors, not providing false test results to patients. I think the SEC's reasoning here is the same — investor fraud is easier to prove, so hit the fraudster with that charge first.
  - nnmg 4y ago
    I think you're spot on, it is easier to prove (or prosecutors have more experience prosecuting) financial crimes. To give them credit-- they at least tried to get Holmes for defrauding patients too, but she was acquitted of those charges [0]. Her partner, Sunny Balwani, was convicted on all counts, including defrauding patients [1]. [0]: https://en.wikipedia.org/wiki/Elizabeth_Holmes#U.S._v._Holmes,_et_al https://en.wikipedia.org/wiki/Elizabeth_Holmes#U.S._v._Holme.... [1]: https://en.wikipedia.org/wiki/Sunny_Balwani#United_States_v._Ramesh_%22Sunny%22_Balwani https://en.wikipedia.org/wiki/Sunny_Balwani#United_States_v....
  - evancox100 4y ago
    It wasn’t for lack of trying though, Holmes was charged with defrauding patients but acquitted on those counts. Only the investment fraud charges stuck.
  - jcranmer 4y ago
    It's also worth point out, if you're interested in seeing punitive justice, that you're going to steeper punishments for defrauding investors than patients. If Holmes were nailed on defrauding patients, that would add something like $100 worth of fraud for sentencing guidelines, which is nothing. But an investor who was defrauded of $100 million... that's $100 million of fraud. You have to specifically prove every instance fraud in a criminal case, so harm that is spread very widely but very shallowly (millions of people who lost $10) doesn't scale up for a fraud case, but harm that is narrow but deep (an investor who lost millions) can be easily done.
- tiahura 4y ago
  It’s because neither the SEC nor the CFTC have jurisdiction over crypto. The holding of the EPA v West Virg case (CO2 emissions) was that federal agencies can’t regulate new domains without actual legislation. The Securities Acts of 1933 and 1934 unsurprisingly says nothing about crypto.
pavlov 4y ago
It's sort of curious that this SEC action is to protect the venture capital investors like Sequoia who invested in FTX shares directly. If I were a retail investor who lost my savings in FTX, I might be feeling upset that the government is rushing to action in defense of billion-dollar funds whose own due diligence failed massively, while seemingly nothing is being done to help those who invested in crypto based on FTX's Super Bowl ads and celebrity endorsements... At the same time, I fully understand why it's like this. Because the VCs bought actual FTX shares, the SEC has a clear case of securities fraud. The law is pretty clear about what happens when you sell shares in your company and lie about it. In contrast, it's not really settled whether the little people who sent money to FTX in exchange for a crypto ledger entry were actually buying securities, commodities, custodial services, or something else — maybe nothing at all. (The crypto guys love this ambiguity, of course! They've been lobbying for regulation that keeps crypto in a no-man's-land where tokens that look and work like securities would still be something else.) This seems to be the reason why the SEC doesn't have a clear-cut case to protect FTX customers, but does have a case to protect rich VC crypto-bro partners.
- ethanbond 4y ago
  Whoa, are you trying to tell me all the big fish hyping up the Regulators Are Evil Economy get near-total legal protection of a regulated market, but all the little people who got taken in by it are going to get screwed? An incredible and unforeseeable development! Surely there will be more charges over time but the end result isn’t going to change much. The wealthy people who’ve been boosting all of this will take the smallest losses of all.
  - Frost1x 4y ago
    I always find it interesting how in our implementation of capitalism here in the US, wealth is able to insulate and protect itself from many of the very measures capitalism is supposed to peel away and counter (in the interest of society at large). It's almost like it there are fundamental inherent flaws that need to be fixed to continue on and we can't keep treating things like business is usual if we want to enable continued growth vs stagnation due to power concentration like we've seen in non-capitalist systems in the past. You're going to see the big players like Sequoia get some retribution here and to a magnitude that's significant enough to be usable and recoverable, meanwhile you're going to see all sorts of others life savings evaporate, resulting in a far less recoverable scenario, with little to nothing recovered--at least that's how this tends to play out, historically. Everyone will of course lose, but you'll see disproportionate losses and disproportionate recoverability. Disproportionate wealth as a proxy to power does this.
matwood 4y ago
I'll just quote part of what I said a month ago :) > And given what's leaked from their balance sheet, I don't see how people avoid jail time. https://news.ycombinator.com/item?id=33608691 https://news.ycombinator.com/item?id=33608691 I'll also add that SBF going on tour was the stupidest thing he could have done. Every time he spoke, he was giving the government more evidence. Hubris has often been the downfall of the rich and powerful throughout history. What's changed is now we get to see it in real time with people like Musk and SBF.
- bluGill 4y ago
  If he wasn't the type to go on tour and shout, then he wouldn't have attracted enough investors in the first place to be rich. It takes a specific personality to market things so others will buy, and that personality doesn't like to shut up and so won't. Some things sell themselves, but most great ideas sit around unknown by people who need them just because they don't know about it. I'd love to buy a better mousetrap to take care of my mouse problem, but if one exists I don't know about it. If you shout that your mouse trap is better I'll probably try it.
  - blitzar 4y ago
    It worked to get him to a net worth of 100bn why wouldnt it work again.
    - zeven7 4y ago
      Right, everything in his life up to this point has taught him that if he keeps talking he'll be able to convince anybody of anything. He convinced his series B investors to hand over $420 million in "investment" funds to FTX while he pocketed $300 million of that personally.
  - macrolime 4y ago
    I think I know just the thing for you. It's a sophisticated autonomous mousetrap that doesn't even need bait, as it has the ability to locate and catch the mouse all by itself. With its unique combination of strength and agility, this mousetrap is able to outsmart any mouse. When you least expect it, the mousetrap will pounce and capture its target. It's called a cat.
0xbadc0de5 4y ago
"won't somebody /pleeease/ think of all those poor VC's" Facetiousness aside, whatever results in seeing those responsible held accountable is a step in the right direction. I suspect that this was the easier case to prepare and that the customers will eventually see their day in court as well.
lajosbacs 4y ago
I hope that swiftness of these charges will slightly diminish all these voices that keep repeating everywhere that 'the man' is on it with him, that the media defend him etc.
- cycrutchfield 4y ago
  Unlikely. That sound you hear is the goalposts being moved yet again
  - bena 4y ago
    Yeah, now the charges are "too soon" or something. I noticed the behavior living in oil country concerning gas prices. When gas prices go up, that's bad because it makes everything costs more. When gas prices go down, that's bad because it makes the oil and gas industry fire everyone and then no one has jobs. Apparently there's a Platonic ideal price for gas, just no one can tell me what that is. Also with various shootings. Right after, it's too soon to talk about current gun laws. Too long after, it's pointless to talk about because there hasn't been an incident in so long. We missed the window yet again. But no one will tell us when that window opens. Same thing here, apparently there's a perfect amount of time for charges. The Goldilocks zone, the golden hour, when the planets align and you can charge criminals for crimes and you'll magically have enough evidence and not too much time has passed. But try to pin down anyone on a concrete time frame and you'll get almost as much deflection as SBF tried to give the world.
    - cycrutchfield 4y ago
      Now you're starting to understand. This is the way of the cynic. Everything is awful all of the time and it's all somebody's fault. If I blame everybody for everything, then I don't ever need to use my brain and think critically.
- ethanbond 4y ago
  It won’t, just like even in this thread you see the perennial “this is good, actually.” At rock bottom the crypto world is held up by unadulterated greed and it shows on both ends: I am willing to make too-good-to-be-true “investments” because greed; when that unfolds the obvious way it was going to then it’s someone else’s fault and they’re not moving fast enough — also greed. In short: “Why aren’t I rich yet, I’ll speculate” -> “why aren’t I whole yet, I’ll speculate again!”
bouk 4y ago
Ah yes of course, as Matt Levine would say: everything is securities fraud
janandonly 4y ago
- bioemerl 4y ago
  > Furthermore, the current "bad crypto news" is still suppressing the BTC price. What determines the natural price that is being suppressed here?
  - _5uxp 4y ago
    Price discovery?
    - bioemerl 4y ago
      What determines the price that the discovery discovers?
      - _5uxp 4y ago
        Universe and dark matter obv.
- quanticle 4y ago
  Everyone who bought and held on to their bitcoins in their wallet instead of storing the coins with a custodian (exchange or otherwise) is still in full possession of said coins. not your keys, not your coins as the saying goes. "Not your keys, not your coins" is probably the single largest blocker to crypto adoption, in my opinion. With every other financial asset, custodial accounts just work. Putting a hundred dollars into a bank account is, thanks to bank regulation and the FDIC, the same as putting a hundred dollar bill underneath my mattress. I've traded a bunch of stocks, and not once have I ever thought about acquiring an actual stock certificate, because thanks to regulations and the SIPC, having stock in a custodial account is the same as having a physical stock certificate in a safe at home. "Not your keys, not your coins" is viable only in some kind of libertarian fantasy. In the real world, regulated, insured custodial accounts are useful and available for pretty much every security available to individual investors... save crypto.
perihelions 4y ago
Note that the SEC's is merely a civil action. The federal criminal indictment hasn't been unsealed yet (but should be soon, today [0]). [0] https://apnews.com/article/technology-business-bahamas-united-states-government-1de16cdf7e6956b401e998c34ad1fd11 https://apnews.com/article/technology-business-bahamas-unite... ("We expect to move to unseal the indictment in the morning and will have more to say at that time")
- insaneirish 4y ago
  > Note that the SEC's is merely a civil action. The SEC can only bring civil action, for those wondering why it's a civil action.
- arcticbull 4y ago
  I believe the federal criminal indictment is public now. [1] - First count: Conspiracy to commit wire fraud to defraud customers. - Second count: Wire fraud on customers. - Third count: Conspiracy to commit wire fraud on lenders. - Fourth count: Wire fraud on lenders. (again, specifically lenders to Alameda) - Fifth count: Conspiracy to commit commodities fraud. - Sixth count: Conspiracy to commit securities fraud. I believe there's more, I quoted the above text from a thread by Frances Coppola [2]. [1] https://www.johnreedstark.com/wp-content/uploads/sites/180/2022/12/SBF-indictment.pdf https://www.johnreedstark.com/wp-content/uploads/sites/180/2... [2] https://twitter.com/Frances_Coppola/status/1602687333169602562?s=20&t=z0yjP49dlEsIxJ4fAyM7NQ https://twitter.com/Frances_Coppola/status/16026873331696025...
  - etimberg 4y ago
    https://www.bbc.com/news/live/world-us-canada-63953033 https://www.bbc.com/news/live/world-us-canada-63953033 shows counts 7 and 8 as - Conspiracy to Commit Money Laundering - Conspiracy to Defraud the United States and Violate Campaign Finance Laws
    - deleted 4y ago
      [deleted]
  - deleted 4y ago
c0m 4y ago
The SEC's complaint. It's a brutal read if you're Sam: https://www.sec.gov/litigation/complaints/2022/comp-pr2022-219.pdf https://www.sec.gov/litigation/complaints/2022/comp-pr2022-2...
- clintonwoo 4y ago
  I read the whole thing, it's a damning account and he's never going to work in finance again.
  - dereg 4y ago
    This is the biggest understatement of the century.
  - Bayko 4y ago
    I highly doubt Sam needs to worry about his career prospects sir. But if he is would love to see solve some LC hards
    - astrange 4y ago
      He'd be a popular poker player since he'd always be giving his money away.
  - deleted 4y ago
    [deleted]
- blitzar 4y ago
  > 31. From the inception of FTX, Bankman-Fried diverted FTX customer funds to Alameda, and he continued to do so until FTX’s collapse in November 2022 I assume they have the evidence, and while what SBF was saying (we never touched customer funds etc.) was never particularly credible - it blows up the narative that he has maintained to date. Indeed much of the case is built on his public statements (and testimony) being false.
  - lovehashbrowns 4y ago
jpgvm 4y ago
a16z and Sequoia deserve their losses. They both went all-in on this crypto bullshit in their latest funds and convinced otherwise healthy companies to pivot into it also. Their returns for these latest funds will be decimated and I couldn't be happier.
- misiti3780 4y ago
  a16z didnt invest in FTX did it ? ( i agree with your thesis nonetheless)
  - jpgvm 4y ago
    I don't think so no, but they were the other VC that all-in'd on crypto.
    - misiti3780 4y ago
      for sure, chris dixon blocks anyone on twitter than doesnt cheerlead web3
- srj 4y ago
  They will probably be the only ones who get some of their money back.
deleted 4y ago
[deleted]
LatteLazy 4y ago
The best time for regulators to act would have been >1y ago before everyones money was lost when they were too busy going after Kim Kardashian. The second best time is now.
UltraViolence 4y ago
I hope he rots in jail like that other fraudster Madhoff. I'm pretty sure he already saw this coming and moved his assets into his family circle. In addition he probably also set out to destroy incriminating evidence and contacting political proponents to call in favors.
- rootusrootus 4y ago
  > I'm pretty sure he already saw this coming and moved his assets into his family circle. That's a mean thing to do. Just ask Madoff's family how that works out.
cs702 4y ago
The most interest aspect in the FTX saga, for me, is that SBF was treated very gently by major news outlets (and maybe by government regulators too)... until regular individuals in social media started asking: Why is SBF being treated so kindly? Why would journalists (and regulators) assume that SBF meant well? A possible answer that no one ever mentions is that SBF possesses many qualities that are valued and admired in elite circles. Consider: * SBF attended MIT, an institution that is valued and admired in elite circles. * At MIT, SBF majored in Physics and Math, two difficult subjects that require hard work, academic rigor, and high intelligence -- all qualities that are valued and admired in elite circles. * Both of his parents are prominent professors at Stanford, so they are also valued and admired in elite circles. Presumably, over the years they tried to instill in SBF the values and behaviors that are most prized by other members of the elite -- including honesty. * By all accounts, SBF truly could understand and could explain the distributed consensus protocols and algorithms that enable crypto-assets -- abilities that are valued and admired in elite circles. * By many accounts (before FTX's implosion), it seemed that SBF actually believed in his own slogan, "effective altruism" -- the kind of inspiring idea that is valued in elite circles.
- lilsoso 4y ago
  There are more curious details surrounding his parents. And you've neglected to point out the SEC connections. Also, how many lawyers has Sam had now? Who are they? Who have they previously represented? There's more to the story.
- rhaway84773 4y ago
  SBF didn’t believe in his effective altruism slogan. He basically admitted in the texts to the reporter he thought would be private that the EA stuff was BS. Also, I’m not sure what you mean by “treated kindly”. If you’re talking about why he wasn’t arrested yet, it’s obvious because the SEC was building its case, and more so because he was voluntarily going on public forums and publicly admitting increasing levels of guilt. I never understood the people complaining about why he wasn’t arrested yet. If you’re a prosecutor making a case against someone, why would you stop them from going to the media and publicly boasting about new crimes?
pigtailgirl 4y ago
-- relevant: https://www.sec.gov/news/press-release/2018-41 https://www.sec.gov/news/press-release/2018-41 -- Theranos and Holmes have agreed to settle the fraud charges levied against them. Holmes agreed to pay a $500,000 penalty, be barred from serving as an officer or director of a public company for 10 years, return the remaining 18.9 million shares that she obtained during the fraud, and relinquish her voting control of Theranos by converting her super-majority Theranos Class B Common shares to Class A Common shares.
pseingatl 4y ago
Will the SEC claw back the political donations made with stolen funds?
mlissner 4y ago
The whole case is here: https://www.courtlistener.com/docket/66631003/securities-and-exchange-commission-v-bankman-fried/ https://www.courtlistener.com/docket/66631003/securities-and... And if you want to get free email updates as it develops, you can sign up here: https://www.courtlistener.com/alert/docket/new/?pacer_case_id=590930&court_id=nysd https://www.courtlistener.com/alert/docket/new/?pacer_case_i...
hintymad 4y ago
Can SBF still leetcode his way into FAANG after serving his terms?
- blitzar 4y ago
  ‘I Don’t Even Know How To Code,’ SBF Declares in Latest Interview
Sporktacular 4y ago
It's infuriating how incredulous he acts. It would be like giving a microphone to a nabbed thief who says 'I can understand why someone might construe breaking into a safe as a reason for concern. That's a reasonable criticism'. Oh, you think?
black_13 4y ago
vithlani 4y ago
rkagerer 4y ago
A key allegation: In or around May 2020, Bankman-Fried directed that Alameda be exempted from the “auto-liquidation” feature of FTX’s spot margin trading services.

439 points by scrlk 4y ago

matheusmoreira 4y ago

That was fast...

ReptileMan 4y ago

And what about customers?

kshacker 4y ago
There must be some other org for that such CFPB. SEC focuses on investors, no?

ekpyrotic 4y ago

This might just be the 'first arrow' from the SEC with much more to be added down the track, but it's interesting to see that they have gone in heavily on defrauding equity investors in the FTX business -- rather than pulling the rug on customers. Either that's because it's easier for the SEC to prove, and get it to the point of demonstrating fraud? Or the US customers and the FTX US business were relatively untouched throughout this whole process, so there is less to go on for US customer fraud? Or, perhaps, this is just the first arrow to smoke out more data, informants, etc, with a strategic view to adding further allegations down the track?

PaywallBuster 4y ago
probably because FTX.com wasn't supposed to be servicing US customers So US customers who may have used FTX.com were circumventing whatever minimal measures they had preventing them to signup/use the platform
quanticle 4y ago
This might just be the 'first arrow' from the SEC with much more to be added down the track, but it's interesting to see that they have gone in heavily on defrauding equity investors in the FTX business -- rather than pulling the rug on customers. Isn't that the same approach that federal prosecutors took with Theranos as well? From what I understand, Elizabeth Holmes went to jail for defrauding her investors, not providing false test results to patients. I think the SEC's reasoning here is the same — investor fraud is easier to prove, so hit the fraudster with that charge first.
- nnmg 4y ago
  I think you're spot on, it is easier to prove (or prosecutors have more experience prosecuting) financial crimes. To give them credit-- they at least tried to get Holmes for defrauding patients too, but she was acquitted of those charges [0]. Her partner, Sunny Balwani, was convicted on all counts, including defrauding patients [1]. [0]: https://en.wikipedia.org/wiki/Elizabeth_Holmes#U.S._v._Holmes,_et_al https://en.wikipedia.org/wiki/Elizabeth_Holmes#U.S._v._Holme.... [1]: https://en.wikipedia.org/wiki/Sunny_Balwani#United_States_v._Ramesh_%22Sunny%22_Balwani https://en.wikipedia.org/wiki/Sunny_Balwani#United_States_v....
- evancox100 4y ago
  It wasn’t for lack of trying though, Holmes was charged with defrauding patients but acquitted on those counts. Only the investment fraud charges stuck.
- jcranmer 4y ago
  It's also worth point out, if you're interested in seeing punitive justice, that you're going to steeper punishments for defrauding investors than patients. If Holmes were nailed on defrauding patients, that would add something like $100 worth of fraud for sentencing guidelines, which is nothing. But an investor who was defrauded of $100 million... that's $100 million of fraud. You have to specifically prove every instance fraud in a criminal case, so harm that is spread very widely but very shallowly (millions of people who lost $10) doesn't scale up for a fraud case, but harm that is narrow but deep (an investor who lost millions) can be easily done.
tiahura 4y ago
It’s because neither the SEC nor the CFTC have jurisdiction over crypto. The holding of the EPA v West Virg case (CO2 emissions) was that federal agencies can’t regulate new domains without actual legislation. The Securities Acts of 1933 and 1934 unsurprisingly says nothing about crypto.

pavlov 4y ago

It's sort of curious that this SEC action is to protect the venture capital investors like Sequoia who invested in FTX shares directly. If I were a retail investor who lost my savings in FTX, I might be feeling upset that the government is rushing to action in defense of billion-dollar funds whose own due diligence failed massively, while seemingly nothing is being done to help those who invested in crypto based on FTX's Super Bowl ads and celebrity endorsements... At the same time, I fully understand why it's like this. Because the VCs bought actual FTX shares, the SEC has a clear case of securities fraud. The law is pretty clear about what happens when you sell shares in your company and lie about it. In contrast, it's not really settled whether the little people who sent money to FTX in exchange for a crypto ledger entry were actually buying securities, commodities, custodial services, or something else — maybe nothing at all. (The crypto guys love this ambiguity, of course! They've been lobbying for regulation that keeps crypto in a no-man's-land where tokens that look and work like securities would still be something else.) This seems to be the reason why the SEC doesn't have a clear-cut case to protect FTX customers, but does have a case to protect rich VC crypto-bro partners.

ethanbond 4y ago
Whoa, are you trying to tell me all the big fish hyping up the Regulators Are Evil Economy get near-total legal protection of a regulated market, but all the little people who got taken in by it are going to get screwed? An incredible and unforeseeable development! Surely there will be more charges over time but the end result isn’t going to change much. The wealthy people who’ve been boosting all of this will take the smallest losses of all.
- Frost1x 4y ago
  I always find it interesting how in our implementation of capitalism here in the US, wealth is able to insulate and protect itself from many of the very measures capitalism is supposed to peel away and counter (in the interest of society at large). It's almost like it there are fundamental inherent flaws that need to be fixed to continue on and we can't keep treating things like business is usual if we want to enable continued growth vs stagnation due to power concentration like we've seen in non-capitalist systems in the past. You're going to see the big players like Sequoia get some retribution here and to a magnitude that's significant enough to be usable and recoverable, meanwhile you're going to see all sorts of others life savings evaporate, resulting in a far less recoverable scenario, with little to nothing recovered--at least that's how this tends to play out, historically. Everyone will of course lose, but you'll see disproportionate losses and disproportionate recoverability. Disproportionate wealth as a proxy to power does this.

matwood 4y ago

I'll just quote part of what I said a month ago :) > And given what's leaked from their balance sheet, I don't see how people avoid jail time. https://news.ycombinator.com/item?id=33608691 https://news.ycombinator.com/item?id=33608691 I'll also add that SBF going on tour was the stupidest thing he could have done. Every time he spoke, he was giving the government more evidence. Hubris has often been the downfall of the rich and powerful throughout history. What's changed is now we get to see it in real time with people like Musk and SBF.

bluGill 4y ago
If he wasn't the type to go on tour and shout, then he wouldn't have attracted enough investors in the first place to be rich. It takes a specific personality to market things so others will buy, and that personality doesn't like to shut up and so won't. Some things sell themselves, but most great ideas sit around unknown by people who need them just because they don't know about it. I'd love to buy a better mousetrap to take care of my mouse problem, but if one exists I don't know about it. If you shout that your mouse trap is better I'll probably try it.
- blitzar 4y ago
  It worked to get him to a net worth of 100bn why wouldnt it work again.
  - zeven7 4y ago
    Right, everything in his life up to this point has taught him that if he keeps talking he'll be able to convince anybody of anything. He convinced his series B investors to hand over $420 million in "investment" funds to FTX while he pocketed $300 million of that personally.
- macrolime 4y ago
  I think I know just the thing for you. It's a sophisticated autonomous mousetrap that doesn't even need bait, as it has the ability to locate and catch the mouse all by itself. With its unique combination of strength and agility, this mousetrap is able to outsmart any mouse. When you least expect it, the mousetrap will pounce and capture its target. It's called a cat.

0xbadc0de5 4y ago

"won't somebody /pleeease/ think of all those poor VC's" Facetiousness aside, whatever results in seeing those responsible held accountable is a step in the right direction. I suspect that this was the easier case to prepare and that the customers will eventually see their day in court as well.

lajosbacs 4y ago

I hope that swiftness of these charges will slightly diminish all these voices that keep repeating everywhere that 'the man' is on it with him, that the media defend him etc.

cycrutchfield 4y ago
Unlikely. That sound you hear is the goalposts being moved yet again
- bena 4y ago
  Yeah, now the charges are "too soon" or something. I noticed the behavior living in oil country concerning gas prices. When gas prices go up, that's bad because it makes everything costs more. When gas prices go down, that's bad because it makes the oil and gas industry fire everyone and then no one has jobs. Apparently there's a Platonic ideal price for gas, just no one can tell me what that is. Also with various shootings. Right after, it's too soon to talk about current gun laws. Too long after, it's pointless to talk about because there hasn't been an incident in so long. We missed the window yet again. But no one will tell us when that window opens. Same thing here, apparently there's a perfect amount of time for charges. The Goldilocks zone, the golden hour, when the planets align and you can charge criminals for crimes and you'll magically have enough evidence and not too much time has passed. But try to pin down anyone on a concrete time frame and you'll get almost as much deflection as SBF tried to give the world.
  - cycrutchfield 4y ago
    Now you're starting to understand. This is the way of the cynic. Everything is awful all of the time and it's all somebody's fault. If I blame everybody for everything, then I don't ever need to use my brain and think critically.
ethanbond 4y ago
It won’t, just like even in this thread you see the perennial “this is good, actually.” At rock bottom the crypto world is held up by unadulterated greed and it shows on both ends: I am willing to make too-good-to-be-true “investments” because greed; when that unfolds the obvious way it was going to then it’s someone else’s fault and they’re not moving fast enough — also greed. In short: “Why aren’t I rich yet, I’ll speculate” -> “why aren’t I whole yet, I’ll speculate again!”

bouk 4y ago

Ah yes of course, as Matt Levine would say: everything is securities fraud

janandonly 4y ago

bioemerl 4y ago
> Furthermore, the current "bad crypto news" is still suppressing the BTC price. What determines the natural price that is being suppressed here?
- _5uxp 4y ago
  Price discovery?
  - bioemerl 4y ago
    What determines the price that the discovery discovers?
    - _5uxp 4y ago
      Universe and dark matter obv.
quanticle 4y ago
Everyone who bought and held on to their bitcoins in their wallet instead of storing the coins with a custodian (exchange or otherwise) is still in full possession of said coins. not your keys, not your coins as the saying goes. "Not your keys, not your coins" is probably the single largest blocker to crypto adoption, in my opinion. With every other financial asset, custodial accounts just work. Putting a hundred dollars into a bank account is, thanks to bank regulation and the FDIC, the same as putting a hundred dollar bill underneath my mattress. I've traded a bunch of stocks, and not once have I ever thought about acquiring an actual stock certificate, because thanks to regulations and the SIPC, having stock in a custodial account is the same as having a physical stock certificate in a safe at home. "Not your keys, not your coins" is viable only in some kind of libertarian fantasy. In the real world, regulated, insured custodial accounts are useful and available for pretty much every security available to individual investors... save crypto.

perihelions 4y ago

Note that the SEC's is merely a civil action. The federal criminal indictment hasn't been unsealed yet (but should be soon, today [0]). [0] https://apnews.com/article/technology-business-bahamas-united-states-government-1de16cdf7e6956b401e998c34ad1fd11 https://apnews.com/article/technology-business-bahamas-unite... ("We expect to move to unseal the indictment in the morning and will have more to say at that time")

insaneirish 4y ago
> Note that the SEC's is merely a civil action. The SEC can only bring civil action, for those wondering why it's a civil action.
arcticbull 4y ago
I believe the federal criminal indictment is public now. [1] - First count: Conspiracy to commit wire fraud to defraud customers. - Second count: Wire fraud on customers. - Third count: Conspiracy to commit wire fraud on lenders. - Fourth count: Wire fraud on lenders. (again, specifically lenders to Alameda) - Fifth count: Conspiracy to commit commodities fraud. - Sixth count: Conspiracy to commit securities fraud. I believe there's more, I quoted the above text from a thread by Frances Coppola [2]. [1] https://www.johnreedstark.com/wp-content/uploads/sites/180/2022/12/SBF-indictment.pdf https://www.johnreedstark.com/wp-content/uploads/sites/180/2... [2] https://twitter.com/Frances_Coppola/status/1602687333169602562?s=20&t=z0yjP49dlEsIxJ4fAyM7NQ https://twitter.com/Frances_Coppola/status/16026873331696025...
- etimberg 4y ago
  https://www.bbc.com/news/live/world-us-canada-63953033 https://www.bbc.com/news/live/world-us-canada-63953033 shows counts 7 and 8 as - Conspiracy to Commit Money Laundering - Conspiracy to Defraud the United States and Violate Campaign Finance Laws
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c0m 4y ago

The SEC's complaint. It's a brutal read if you're Sam: https://www.sec.gov/litigation/complaints/2022/comp-pr2022-219.pdf https://www.sec.gov/litigation/complaints/2022/comp-pr2022-2...

clintonwoo 4y ago
I read the whole thing, it's a damning account and he's never going to work in finance again.
- dereg 4y ago
  This is the biggest understatement of the century.
- Bayko 4y ago
  I highly doubt Sam needs to worry about his career prospects sir. But if he is would love to see solve some LC hards
  - astrange 4y ago
    He'd be a popular poker player since he'd always be giving his money away.
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blitzar 4y ago
> 31. From the inception of FTX, Bankman-Fried diverted FTX customer funds to Alameda, and he continued to do so until FTX’s collapse in November 2022 I assume they have the evidence, and while what SBF was saying (we never touched customer funds etc.) was never particularly credible - it blows up the narative that he has maintained to date. Indeed much of the case is built on his public statements (and testimony) being false.
- lovehashbrowns 4y ago

jpgvm 4y ago

a16z and Sequoia deserve their losses. They both went all-in on this crypto bullshit in their latest funds and convinced otherwise healthy companies to pivot into it also. Their returns for these latest funds will be decimated and I couldn't be happier.

misiti3780 4y ago
a16z didnt invest in FTX did it ? ( i agree with your thesis nonetheless)
- jpgvm 4y ago
  I don't think so no, but they were the other VC that all-in'd on crypto.
  - misiti3780 4y ago
    for sure, chris dixon blocks anyone on twitter than doesnt cheerlead web3
srj 4y ago
They will probably be the only ones who get some of their money back.

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LatteLazy 4y ago

The best time for regulators to act would have been >1y ago before everyones money was lost when they were too busy going after Kim Kardashian. The second best time is now.

UltraViolence 4y ago

I hope he rots in jail like that other fraudster Madhoff. I'm pretty sure he already saw this coming and moved his assets into his family circle. In addition he probably also set out to destroy incriminating evidence and contacting political proponents to call in favors.

rootusrootus 4y ago
> I'm pretty sure he already saw this coming and moved his assets into his family circle. That's a mean thing to do. Just ask Madoff's family how that works out.

cs702 4y ago

The most interest aspect in the FTX saga, for me, is that SBF was treated very gently by major news outlets (and maybe by government regulators too)... until regular individuals in social media started asking: Why is SBF being treated so kindly? Why would journalists (and regulators) assume that SBF meant well? A possible answer that no one ever mentions is that SBF possesses many qualities that are valued and admired in elite circles. Consider: * SBF attended MIT, an institution that is valued and admired in elite circles. * At MIT, SBF majored in Physics and Math, two difficult subjects that require hard work, academic rigor, and high intelligence -- all qualities that are valued and admired in elite circles. * Both of his parents are prominent professors at Stanford, so they are also valued and admired in elite circles. Presumably, over the years they tried to instill in SBF the values and behaviors that are most prized by other members of the elite -- including honesty. * By all accounts, SBF truly could understand and could explain the distributed consensus protocols and algorithms that enable crypto-assets -- abilities that are valued and admired in elite circles. * By many accounts (before FTX's implosion), it seemed that SBF actually believed in his own slogan, "effective altruism" -- the kind of inspiring idea that is valued in elite circles.

lilsoso 4y ago
There are more curious details surrounding his parents. And you've neglected to point out the SEC connections. Also, how many lawyers has Sam had now? Who are they? Who have they previously represented? There's more to the story.
rhaway84773 4y ago
SBF didn’t believe in his effective altruism slogan. He basically admitted in the texts to the reporter he thought would be private that the EA stuff was BS. Also, I’m not sure what you mean by “treated kindly”. If you’re talking about why he wasn’t arrested yet, it’s obvious because the SEC was building its case, and more so because he was voluntarily going on public forums and publicly admitting increasing levels of guilt. I never understood the people complaining about why he wasn’t arrested yet. If you’re a prosecutor making a case against someone, why would you stop them from going to the media and publicly boasting about new crimes?

pigtailgirl 4y ago

-- relevant: https://www.sec.gov/news/press-release/2018-41 https://www.sec.gov/news/press-release/2018-41 -- Theranos and Holmes have agreed to settle the fraud charges levied against them. Holmes agreed to pay a $500,000 penalty, be barred from serving as an officer or director of a public company for 10 years, return the remaining 18.9 million shares that she obtained during the fraud, and relinquish her voting control of Theranos by converting her super-majority Theranos Class B Common shares to Class A Common shares.

pseingatl 4y ago

Will the SEC claw back the political donations made with stolen funds?

mlissner 4y ago

The whole case is here: https://www.courtlistener.com/docket/66631003/securities-and-exchange-commission-v-bankman-fried/ https://www.courtlistener.com/docket/66631003/securities-and... And if you want to get free email updates as it develops, you can sign up here: https://www.courtlistener.com/alert/docket/new/?pacer_case_id=590930&court_id=nysd https://www.courtlistener.com/alert/docket/new/?pacer_case_i...

hintymad 4y ago

Can SBF still leetcode his way into FAANG after serving his terms?

blitzar 4y ago
‘I Don’t Even Know How To Code,’ SBF Declares in Latest Interview

Sporktacular 4y ago

It's infuriating how incredulous he acts. It would be like giving a microphone to a nabbed thief who says 'I can understand why someone might construe breaking into a safe as a reason for concern. That's a reasonable criticism'. Oh, you think?

black_13 4y ago

vithlani 4y ago

rkagerer 4y ago

A key allegation: In or around May 2020, Bankman-Fried directed that Alameda be exempted from the “auto-liquidation” feature of FTX’s spot margin trading services.