4 ms·

Do you not understand the concept of a secured promise or bond? These things have been around long before crypto, before money was funny, and possibly before m

Do you not understand the concept of a secured promise or bond? These things have been around long before crypto, before money was funny, and possibly before money at all. The entire finance, banking, and trading and contract systems of the modern world are built around this. The reason FTX was a scam is not because they weren't sending gold bars to investors.

moralestapia 4y ago
This money is "funny" because: FTX said: "Don't worry we have collateral ... lol jk!" SBF's parents said: "Don't worry we have collateral ... lol jk!(?)" Your bit about "but fiat isn't real either" is true to some extent, and you could even go deeper and argue that nothing is real because we don't know if the universe is real or whatever. But honestly, in a practical context, there's a huge difference between: I have 100 million in the bank; source: bank statement. and I think I have 100 million in the bank; source: trust me.
- throwawaylinux 4y ago
  You're claiming the court accepted the collateral from the parents and these two other allegedly wealthy "individuals" without doing anything to verify it? If that is what happened then you are right about it being funny money, and hilarious that they duped the court like they did their investors.
  - moralestapia 4y ago
    >You're claiming the court accepted the collateral [...] without doing anything to verify it? Yes, I think that's exactly what happened.
    - trillic 4y ago
      The simplest explanation is usually true. A billionaire enabler of Sam's was willing to put up $250M in collateral because Sam spilling on him would cost him far more that $250M. I think the claim he was acting alone solely on his own behalf is absolute garbage. He rose too high, and too rapidly to have been solely of his own creation. Someone bigger than him was absolutely involved. I think we need to look further into FTX's Tokenized Stock Offerings, as that's what the SEC has been honing in upon, among other things. https://news.bitcoin.com/report-suggests-ftxs-tokenized-stocks-might-not-have-been-backed-11-synthetics-may-have-been-used-to-manipulate-real-stock-prices/ https://news.bitcoin.com/report-suggests-ftxs-tokenized-stoc... FTX was selling stock, claiming it to be backed 1:1, which was likely being used as collateral for further speculation, or as locates for short sales, despite never actually holding the shares they claimed to. Crypto is unregulated and is a whole thing, but claiming to have stocks you don't have is a way to really piss off the ultra-rich.
      - ethbr0 4y ago
        Why invoke conspiracy, when normal stupidity and corruption will suffice?
        trillic 4y ago
        I'm not the one invoking conspiracy here. SBF has been charged with the following crimes in a U.S. federal court. Conspiracy to commit wire fraud on customers Wire fraud on customers Conspiracy to commit wire fraud on lenders Wire fraud on lenders Conspiracy to commit commodities fraud Conspiracy to commit securities fraud Conspiracy to commit money laundering Conspiracy to defraud the United States and violate the campaign finance law. With the limited information we currently have, to assume that he is the biggest player in this and that him, Ellison, and Wang were the only ones involved is naive at best. The discovery process for these cases will be extremely interesting.
      - dragonwriter 4y ago
        > A billionaire enabler of Sam's was willing to put up $250M in collateral No one put up collateral beyond his parents home, and only SBF and his parents are on the hookfor the full $250M, the other two sureties are exposed for a smaller amount. This is all public record in the court documents.
      - SilasX 4y ago
        > The simplest explanation is usually true. A billionaire enabler of Sam's was willing to put up $250M in collateral because Sam spilling on him would cost him far more that $250M. But whether SBF is out on bail doesn't affect what comes out at trial. If you're saying that SBF is effectively extorting those other individuals, on threat of revealing their secrets, then their pretty dumb extortion victims, since nothing stops SBF from continuing to demand massive investments of their money such as this one.
    - jcpham2 4y ago
      I think equivalent collateral to 250 million was posted yes. Anyone catch the AMC -> APE reverse Let’s name the FTX tokenized stocks
      - SilasX 4y ago
        What APE —> AMC reverse? All I’m seeing is a plan to convert APE to AMC and a reverse split, but I don’t see how that would be relevant here.
hn_throwaway_99 4y ago
I think the issue, though, is that nobody put up anywhere near $250 million to secure the bond (at least from my read of it). This is one of the rare instances where general population outrage at this deal (read the NYTimes comments) is warranted. There are tons of poor folks who sit around wasting in jail, waiting for their trial, because they can't make bail. But this appears to be the case where the bail is "nominally" $250 million, but nobody had to guarantee that with reasonably equivalent collateral. I could be misunderstanding what collateral was put up, but the only thing that was mentioned was his parents house (which even in Palo Alto isn't $250 million).
- throwawaylinux 4y ago
  I never claimed that rich and poor were equal under the justice system, just that the court seems to consider the loan (edit: bond) to be secured. It sounded like there was more on the line than just the house, didn't it?
- joejerryronnie 4y ago
  You are correct. The parent’s home plus some assets of two other individuals probably totaling a max of $5 million but nowhere close to $250 million - which was a stupid amount to set in the first place. Either require a reasonable bond amount or deny bail.

moralestapia 4y ago

This money is "funny" because: FTX said: "Don't worry we have collateral ... lol jk!" SBF's parents said: "Don't worry we have collateral ... lol jk!(?)" Your bit about "but fiat isn't real either" is true to some extent, and you could even go deeper and argue that nothing is real because we don't know if the universe is real or whatever. But honestly, in a practical context, there's a huge difference between: I have 100 million in the bank; source: bank statement. and I think I have 100 million in the bank; source: trust me.

throwawaylinux 4y ago
You're claiming the court accepted the collateral from the parents and these two other allegedly wealthy "individuals" without doing anything to verify it? If that is what happened then you are right about it being funny money, and hilarious that they duped the court like they did their investors.
- moralestapia 4y ago
  >You're claiming the court accepted the collateral [...] without doing anything to verify it? Yes, I think that's exactly what happened.
  - trillic 4y ago
    The simplest explanation is usually true. A billionaire enabler of Sam's was willing to put up $250M in collateral because Sam spilling on him would cost him far more that $250M. I think the claim he was acting alone solely on his own behalf is absolute garbage. He rose too high, and too rapidly to have been solely of his own creation. Someone bigger than him was absolutely involved. I think we need to look further into FTX's Tokenized Stock Offerings, as that's what the SEC has been honing in upon, among other things. https://news.bitcoin.com/report-suggests-ftxs-tokenized-stocks-might-not-have-been-backed-11-synthetics-may-have-been-used-to-manipulate-real-stock-prices/ https://news.bitcoin.com/report-suggests-ftxs-tokenized-stoc... FTX was selling stock, claiming it to be backed 1:1, which was likely being used as collateral for further speculation, or as locates for short sales, despite never actually holding the shares they claimed to. Crypto is unregulated and is a whole thing, but claiming to have stocks you don't have is a way to really piss off the ultra-rich.
    - ethbr0 4y ago
      Why invoke conspiracy, when normal stupidity and corruption will suffice?
      - trillic 4y ago
        I'm not the one invoking conspiracy here. SBF has been charged with the following crimes in a U.S. federal court. Conspiracy to commit wire fraud on customers Wire fraud on customers Conspiracy to commit wire fraud on lenders Wire fraud on lenders Conspiracy to commit commodities fraud Conspiracy to commit securities fraud Conspiracy to commit money laundering Conspiracy to defraud the United States and violate the campaign finance law. With the limited information we currently have, to assume that he is the biggest player in this and that him, Ellison, and Wang were the only ones involved is naive at best. The discovery process for these cases will be extremely interesting.
    - dragonwriter 4y ago
      > A billionaire enabler of Sam's was willing to put up $250M in collateral No one put up collateral beyond his parents home, and only SBF and his parents are on the hookfor the full $250M, the other two sureties are exposed for a smaller amount. This is all public record in the court documents.
    - SilasX 4y ago
      > The simplest explanation is usually true. A billionaire enabler of Sam's was willing to put up $250M in collateral because Sam spilling on him would cost him far more that $250M. But whether SBF is out on bail doesn't affect what comes out at trial. If you're saying that SBF is effectively extorting those other individuals, on threat of revealing their secrets, then their pretty dumb extortion victims, since nothing stops SBF from continuing to demand massive investments of their money such as this one.
  - jcpham2 4y ago
    I think equivalent collateral to 250 million was posted yes. Anyone catch the AMC -> APE reverse Let’s name the FTX tokenized stocks
    - SilasX 4y ago
      What APE —> AMC reverse? All I’m seeing is a plan to convert APE to AMC and a reverse split, but I don’t see how that would be relevant here.

hn_throwaway_99 4y ago

I think the issue, though, is that nobody put up anywhere near $250 million to secure the bond (at least from my read of it). This is one of the rare instances where general population outrage at this deal (read the NYTimes comments) is warranted. There are tons of poor folks who sit around wasting in jail, waiting for their trial, because they can't make bail. But this appears to be the case where the bail is "nominally" $250 million, but nobody had to guarantee that with reasonably equivalent collateral. I could be misunderstanding what collateral was put up, but the only thing that was mentioned was his parents house (which even in Palo Alto isn't $250 million).

throwawaylinux 4y ago
I never claimed that rich and poor were equal under the justice system, just that the court seems to consider the loan (edit: bond) to be secured. It sounded like there was more on the line than just the house, didn't it?
joejerryronnie 4y ago
You are correct. The parent’s home plus some assets of two other individuals probably totaling a max of $5 million but nowhere close to $250 million - which was a stupid amount to set in the first place. Either require a reasonable bond amount or deny bail.