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> Bankman-Fried had directed subordinates to update the software in mid-2020 to enable Alameda to maintain a negative balance on its account, the SEC complaint

> Bankman-Fried had directed subordinates to update the software in mid-2020 to enable Alameda to maintain a negative balance on its account, the SEC complaint said. And thus do we have another piece of evidence for why morals and ethics matter, even for software developers. I doubt they'll end up with liability, but I do hope they at least recognize and think about how their actions enabled this whole mess.

JumpCrisscross 4y ago
> doubt they'll end up with liability They're each going to run up five, maybe six, figure legal bills.
- hn_throwaway_99 4y ago
  My guess is you haven't hired a lawyer recently. All of the top principals at FTX are looking at millions in legal fees.
- rootusrootus 4y ago
  Last time I got educated on this subject (required class for a CCW about 20 years ago) just getting arrested was predicted to net you a five figure legal bill. Get indicted, now we're six digits and climbing. These guys are going to spend a good bit more than that.
neilv 4y ago
> I doubt they'll end up with liability, When you should know it's criminal, "just following orders" isn't a great defense. > but I do hope they at least recognize and think about how their actions enabled this whole mess. They should get lawyers. And be prepared to sing like canaries.
- bb88 4y ago
  > When you should know it's criminal, "just following orders" isn't a great defense. That's even true in the military if you're given illegal orders. It's called the "duty to disobey". It's not enough that employees "should" know what's illegal and what's not in an exchange -- companies need to be held criminally negligent for employing people who don't know.
  - archontes 4y ago
    Tell that to whistleblowers.
- siegecraft 4y ago
  how would they know it's explicitly criminal though? i doubt most devs have enough understanding of their business domain, much less the regulatory frameworks to be able to confidently refuse to implement something because it's illegal.
  - meindnoch 4y ago
    ignorantia juris non excusat
    - tpankaj 4y ago
      My understanding is they would have to prove criminal intent.
      - 8note 4y ago
        If there's a duty of care, negligence. But that's why software "engineers" have quotes around "engineer"
    - quickthrower2 4y ago
      3 lawyers for each coder then?
  - batmenace 4y ago
    At the very least they should be aware enough of potential wrongdoing to raise questions, and do so in written form. When you write exceptions that specifically only benefit one party and no others, there is always a reason to at least be suspicious.
    - cookingmyserver 4y ago
      What I’m struggling with is that what was done is not illegal in its self. It’s not necessarily suspicious in itself (from the perspective of a single dev working on tasks), unless you assume fraud. Of course we know fraud occurred so we can look back on it and have our perception of the request tainted. If my boss came to me and said, “continue showing customer funds sent to our “sister” investment company in the staff dashboards” I wouldn’t find that suspicious. I would probably push back and say that might be confusing unless we separate out that amount and rename the total to something that denotes part of this value is with our sister company. But I would assume design incompetence and not fraud. But then again if I was just one of a handful of devs that worked with the company I would probably find it suspicious, as I would confidently know that nowhere else in the codebase do we support a close integration with our sister investment company and should therefore know we shouldn’t treat them any differently. Also the modification to exempt the investment company from risk rules does seem suspicious, unless again you believed there was an integration somewhere and believed investment risk mitigation rules were handled on the other platform or something.
- throwaway377456 4y ago
  Even if it was clearly criminal, what is one to do in such situation? Can you just quit the job and let it continue? Or are you actually need to be the one to call the cops to be legally safe at the expense of risking physical safety as those behind the crime may retaliate?
tiahura 4y ago
I doubt they'll end up with liability I doubt that. If they haven’t been sued already, they will tomorrow.
hn_throwaway_99 4y ago
> I doubt they'll end up with liability, but I do hope they at least recognize and think about how their actions enabled this whole mess. Singh is going to jail. He was an executive, not just a low-level employee, and was a pre-collapse billionaire. I have no doubt the evidence like this will show that he knew what he was doing was willingly fraudulent. Madoff's programmers each got 2 1/2 years.
ApolloFortyNine 4y ago
>And thus do we have another piece of evidence for why morals and ethics matter, It sounds like there's plenty of other evidence, but allowing a 'negative balance' hardly sounds like a smoking gun. A negative balance is often how credit is displayed. >Since Alameda didn't have the funds to meet these requests, Bankman-Fried directed Alameda to tap its "line of credit" with FTX to obtain billions of dollars in financing, the complaint said The article actually says as much. Now as Chief Engineer it's possible he was aware it was a scam, but it's also possible he was just told they have an arrangement with Alameda that allows them to maintain a credit line.
3327 4y ago

JumpCrisscross 4y ago

> doubt they'll end up with liability They're each going to run up five, maybe six, figure legal bills.

hn_throwaway_99 4y ago
My guess is you haven't hired a lawyer recently. All of the top principals at FTX are looking at millions in legal fees.
rootusrootus 4y ago
Last time I got educated on this subject (required class for a CCW about 20 years ago) just getting arrested was predicted to net you a five figure legal bill. Get indicted, now we're six digits and climbing. These guys are going to spend a good bit more than that.

neilv 4y ago

> I doubt they'll end up with liability, When you should know it's criminal, "just following orders" isn't a great defense. > but I do hope they at least recognize and think about how their actions enabled this whole mess. They should get lawyers. And be prepared to sing like canaries.

bb88 4y ago
> When you should know it's criminal, "just following orders" isn't a great defense. That's even true in the military if you're given illegal orders. It's called the "duty to disobey". It's not enough that employees "should" know what's illegal and what's not in an exchange -- companies need to be held criminally negligent for employing people who don't know.
- archontes 4y ago
  Tell that to whistleblowers.
siegecraft 4y ago
how would they know it's explicitly criminal though? i doubt most devs have enough understanding of their business domain, much less the regulatory frameworks to be able to confidently refuse to implement something because it's illegal.
- meindnoch 4y ago
  ignorantia juris non excusat
  - tpankaj 4y ago
    My understanding is they would have to prove criminal intent.
    - 8note 4y ago
      If there's a duty of care, negligence. But that's why software "engineers" have quotes around "engineer"
  - quickthrower2 4y ago
    3 lawyers for each coder then?
- batmenace 4y ago
  At the very least they should be aware enough of potential wrongdoing to raise questions, and do so in written form. When you write exceptions that specifically only benefit one party and no others, there is always a reason to at least be suspicious.
  - cookingmyserver 4y ago
    What I’m struggling with is that what was done is not illegal in its self. It’s not necessarily suspicious in itself (from the perspective of a single dev working on tasks), unless you assume fraud. Of course we know fraud occurred so we can look back on it and have our perception of the request tainted. If my boss came to me and said, “continue showing customer funds sent to our “sister” investment company in the staff dashboards” I wouldn’t find that suspicious. I would probably push back and say that might be confusing unless we separate out that amount and rename the total to something that denotes part of this value is with our sister company. But I would assume design incompetence and not fraud. But then again if I was just one of a handful of devs that worked with the company I would probably find it suspicious, as I would confidently know that nowhere else in the codebase do we support a close integration with our sister investment company and should therefore know we shouldn’t treat them any differently. Also the modification to exempt the investment company from risk rules does seem suspicious, unless again you believed there was an integration somewhere and believed investment risk mitigation rules were handled on the other platform or something.
throwaway377456 4y ago
Even if it was clearly criminal, what is one to do in such situation? Can you just quit the job and let it continue? Or are you actually need to be the one to call the cops to be legally safe at the expense of risking physical safety as those behind the crime may retaliate?

tiahura 4y ago

I doubt they'll end up with liability I doubt that. If they haven’t been sued already, they will tomorrow.

hn_throwaway_99 4y ago

> I doubt they'll end up with liability, but I do hope they at least recognize and think about how their actions enabled this whole mess. Singh is going to jail. He was an executive, not just a low-level employee, and was a pre-collapse billionaire. I have no doubt the evidence like this will show that he knew what he was doing was willingly fraudulent. Madoff's programmers each got 2 1/2 years.

ApolloFortyNine 4y ago

>And thus do we have another piece of evidence for why morals and ethics matter, It sounds like there's plenty of other evidence, but allowing a 'negative balance' hardly sounds like a smoking gun. A negative balance is often how credit is displayed. >Since Alameda didn't have the funds to meet these requests, Bankman-Fried directed Alameda to tap its "line of credit" with FTX to obtain billions of dollars in financing, the complaint said The article actually says as much. Now as Chief Engineer it's possible he was aware it was a scam, but it's also possible he was just told they have an arrangement with Alameda that allows them to maintain a credit line.

3327 4y ago