13 ms·

Caroline Ellison, CEO of Alameda Research, pleads guilty to seven offences

217 points by Animatronio 4y ago

MarcelOlsz 4y ago
[flagged]
- ttoinou 4y ago
  Why did you trust them in the first place ?
  - danrocks 4y ago
    How could he not trust them in the first place? C-level executives are on the record, before Congress, with the biggest and brightest politicians around, saying everything should be regulated, including themselves. They're actively projecting that they acknowledge the general sleaze surrounding the crypto industry and they are not a part of it. Hindsight is 20/20, but can you look at Binance, crypto.com, and other 'trusted' crypto exchanges now and say "how can you trust them"? SBF was hanging out with people who lent him their credibility and actively asking to be regulated - it doesn't get much better than that for the average person.
    - braingenious 4y ago
      > How could he not trust them in the first place? Because they were running a crypto exchange, a sort of business that very frequently ends rapidly and in a way that is not good for regular users.
    - deleted 4y ago
      [deleted]
    - serf 4y ago
      >Hindsight is 20/20, but can you look at Binance, crypto.com, and other 'trusted' crypto exchanges now and say "how can you trust them"? after this history of crypto exchanges thus-far? absolutely.
      - danrocks 4y ago
        Well, when this particular exchange is operating legally in the US and its CEO is respected enough to have a sit at the table with Maxine Waters, the hardest-ass congressperson when it comes to the financial sector, it's much harder than some guy yelling about his exchange on TikTok or Instagram?
        MarcelOlsz 4y ago
        She is the opposite of "hardest-ass" as she is sitting down with these robbers and they're all greasing each others palms. This shit doesn't magically happen.
        braingenious 4y ago
        Considering the fact that we now know that Maxine Waters got bamboozled by a 20something crypto bro, has your opinion of her being a competent regulator of the finance industry changed at all? It’s fascinating when people think of politicians like sports teams and not public employees with a mandate of competence.
        danrocks 4y ago
        I think you misunderstood what my point was. Maxine Waters now looks foolish of course but at the time the OP was investing with FTX one would be perfectly excused for believing SBF’s stories, given the lent credibility.
  - jazzyjackson 4y ago
    I don't see an implication that this person is personally fucked by FTX/Alameda, just mad that fraudsters are rolling in dough (til they get caught anyway, as they say, high risk high reward)
    - MarcelOlsz 4y ago
      Yes. Exactly. Every day I wake up and I have to hear about some next cunt I've never heard of before. "Richest before 30!". Some other trillionaire. Some other little kid son of ivy's who ran away with another billion. It's always some fucking scam. Every fucking day. What is the point anymore? I'm a regular cunt who wants to do regular cunt things but I have to wake up to news that Google is planning a 30B "tech park" local to me. Just kill me please.
      - neilv 4y ago
        That one word doesn't translate well across countries. And in the US will come across as misogyny, which will affect how people interpret everything else you said.
        baeaz 4y ago
        That's not a problem as long as people exist outside the US.
        neilv 4y ago
        "Two peoples, divided by a common language."
      - owlglass 4y ago
        While watching these people use their privilege to steal so much money is frustrating, I don't see how some Ivey League twenty-something's wrongdoing prevents you from doing regular things.
        malandrew 4y ago
  - MarcelOlsz 4y ago
    I never trusted any of these cunts. I didn't give them my money because I'm not a fucking idiot. How dare you try to assume I wrote my post out of personal anger. How dare you victim blame me in the face of a robber barons. You are an awful person.
    - Nicksil 4y ago
      >I never trusted any of these cunts. I didn't give them my money because I'm not a fucking idiot. How dare you try to assume I wrote my post out of personal anger. How dare you victim blame me in the face of a robber barons. You are an awful person. You're trying way too hard.
klipt 4y ago
I wonder if something similar will eventually happen to the Tether people? To my understanding they're printing money (USDT) which they claim is backed 1:1 by USD but really isn't. These USDTs can then be spent to pump up various other crypto assets. Seems a very shady business.
- danrocks 4y ago
  Didn't Tether get ordered the other day to disclaim all of its reserves? What happened to that? I find it incredible they keep surviving attempts to reveal exactly how the sausage is made in their reserves. https://www.yahoo.com/video/stablecoin-issuer-tether-ordered-produce-041706661.html https://www.yahoo.com/video/stablecoin-issuer-tether-ordered...
  - maria2 4y ago
    It seems like they were ordered to give the plaintiffs the documents, but they weren’t ordered to publicly release them. NYAG also looked into them last year. They were fined but it doesn’t seem like anything else came of it. > The New York Attorney General’s probe into Tether’s reserves concluded in February 2021 with an $18.5 million settlement. I don’t hold any tether, and I wouldn’t recommend it to others. But the common opinion that Tether is insolvent might be wrong. Tether, as a stable business, is a money printing machine. I’m not sure it’d be worth risking the business and jail time to pump shitcoins.
    - richbell 4y ago
      > I don’t hold any tether, and I wouldn’t recommend it to others. But the common opinion that Tether is insolvent might be wrong. Tether, as a stable business, is a money printing machine. I’m not sure it’d be worth risking the business and jail time to pump shitcoins I encourage you to watch Coffeezilla's video about Tether. There's lots of shady stuff going on behind the scenes, like them borrowing $383M from Bitfinex and showing that to an auditor to prove they were solvent (~20:00). https://youtu.be/-whuXHSL1Pg https://youtu.be/-whuXHSL1Pg
andersonmvd 4y ago
The 7 offences are not detailed individually in the news, or I couldn't find it.
- danrocks 4y ago
  They are here: https://www.documentcloud.org/documents/23495436-crypto-cooperator-ftx-alamedas-caroline-ellisons-plea-agreement-inner-city-press-on-the-case https://www.documentcloud.org/documents/23495436-crypto-coop...
- mikeyouse 4y ago
  https://www.documentcloud.org/documents/23495436-crypto-cooperator-ftx-alamedas-caroline-ellisons-plea-agreement-inner-city-press-on-the-case https://www.documentcloud.org/documents/23495436-crypto-coop...
- berkle4455 4y ago
  Two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering. Maximum sentence of 110 years.
  - listenallyall 4y ago
    This outcome came about so quickly because she turned state's evidence, in return for what is likely to be an extreme reduction from that maximum (not that it was really a possibility, as a first offender)
    - jjtheblunt 4y ago
      it's an enormous first offense, though does that matter?
      - Hamuko 4y ago
        Did Madoff have a criminal record before he got hit with 150 years?
neonate 4y ago
https://www.documentcloud.org/documents/23495436-crypto-cooperator-ftx-alamedas-caroline-ellisons-plea-agreement-inner-city-press-on-the-case https://www.documentcloud.org/documents/23495436-crypto-coop...
samwillis 4y ago
Extensive previous discussion: https://news.ycombinator.com/item?id=34088840 https://news.ycombinator.com/item?id=34088840
- neilv 4y ago
  Those comments have a flagged thread (started by me) in which some commenters cited evidence that the Effective Altruism angle was a conscious lie: https://news.ycombinator.com/item?id=34089377 https://news.ycombinator.com/item?id=34089377
sillysaurusx 4y ago
She’s the queen of wallstreetbets. I think she’ll hold the yolo record for a long time. I wish we knew what the fateful market play was that sunk her ship. She mentioned she’s not a fan of stop losses, so I wonder if she went to bed with an open market position and woke up to negative three billion. Also I wonder if the entity on the other side of that trade realized they were making someone insolvent. It’ll be interesting to see how long she’s sentenced for. EDIT: Actually, is it possible to see who profited from her trading activity? FTX is in the hands of authorities now, and all the trading took place on it. I wonder if they could claw back some of those lost billions.
- potatototoo99 4y ago
  There probably wasn't any single one trade.
- baobabKoodaa 4y ago
  > She mentioned she’s not a fan of stop losses At the volume they were trading, stop losses are no longer practical. The market is not infinitely deep.
  - Lapsa 4y ago
    I've never understood how stop losses are supposed to help. Traders read heaps of news, do God knows what technical analysis yet simple "moves bit too much in wrong direction" is supposed to be an acceptable exit strategy.
    - tasuki 4y ago
      Same! When it's $100 I want to buy, but if the price falls to $80 i want to sell. Presumably i bought because I thought it was worth more than $100, it would only make sense for me to sell at $80 for a reason other than the price: fundamentals change, some bad event happening. If the only thing that changed is the price, I want to buy more at $80!
      - 4y ago
jmyeet 4y ago
It's interesting to see this play out because much of it was predictable. Personally, I was amused at the people complaining that the SBF case was taking too long. If however you know something about how Federal prosecutions work, you'd know (and I made many comments about this) that the case was moving incredibly quickly. As soon as SBF was indicted, it confirmed that the Feds had 1 or more cooperating witnesses and many correctly theorized Caroline Ellison was one of them. The other is less well-known but this basically maps out the prosecution's case. Ellison will testify to SBF's knowledge of the scheme. The other will testify to SBF instructing him to build the backdoor. Case closed. This is an open and shut case. SBF getting out on bail was a surprise and it shows the double standard to how the US uses its civil asset forfeiture power. Specifically, that doesn't seem to be used against SBF, his parents and his associates in a way that it has with far less wealthy people. I want people to realize that. For the record, I consider civil asset forfeiture to be unconstitutional and a travesty of justice but it is the law of the land. I'm going to be really interested to see what kind of deal the Feds cut for two witnesses. Could it be as light as no jail time? I have doubts but it's not impossible. It'll probably be a much lighter sentence, probably less than 10 years, maybe less than 5.
- sbierwagen 4y ago
  Madoff clawbacks took years. Here’s a story from 2018, and litigation is still ongoing: https://www.wsj.com/articles/the-amazing-madoff-clawback-1543620951 https://www.wsj.com/articles/the-amazing-madoff-clawback-154... Importantly, clawbacks went way back in time. If you put $5 million in in 2000 and pulled $10 million out in 2002 then you had FBI agents at your door in 2010. There’s going to be a lot of Lamborghinis on the used market, and plenty of vacancies in Miami condo towers soon.
- TacticalCoder 4y ago
  > This is an open and shut case. Conveniently the entire part where SBF had an ex-CFTC commissioner lobby the SEC and CFTC to get pro-FTX bill passed in the US is not looked at: who cares about regulatory capture through corrupted officials right? (I mean: a few senator say this should be looked upon but so far it's not the case) And the whole "FTX's top lawyer happens to be an ex-colleague of Bitfinex's top lawyer: they both worked in an online poker scam that defrauded players" is not looked at either. Instead we go for: "SBF ordered Wang to put a backdoor in FTX so that Alameda's losses could be hidden" and case closed. Justice.
deleted 4y ago
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Barrin92 4y ago
>In the absence of a comprehensive regulatory framework over digital assets, the CFTC will use all of its existing power and authority to protect all market participants, while ensuring the integrity of commodity markets Honestly it's good to see that the responsible American institutions still seem to be reasonably quick and effective when it comes to prosecuting the relevant people here, but can we finally get that comprehensive regulatory framework in question? Legislators need to stop being asleep at the wheel. Be it the US or the EU or someone else finally needs to take the air out of this entire ecosystem that enables these fraudulent schemes in the first place.
- HWR_14 4y ago
  Let's not get a legal framework. I don't want to make crypto more respectable. There is a reason no one is talking about FTX getting bailed out or triggering a recession. Unlike in 2008, they are isolated from the rest of the economic system.
nemo44x 4y ago
What a Queen. Massively connected and after destroying the life of thousands of working class chumps she gets to walk free after getting her wrist slap.
- apengwin 4y ago
  Go cardinal!
- dehrmann 4y ago
  > destroying the life of thousands of working class chumps I have little sympathy for anyone who got burnt by playing in the crypto space.
- rocket_surgeron 4y ago
  It is difficult to feel sorry for the chumps. If someone came up to me and said they were selling magic beans that would grow a vine up to the moon where riches await, I would politely decline. It doesn't matter if the seller substitutes the word "crypto" for "beans". What's even better are the "pros". In their pitch deck, only shown to whales, they promised "High Returns With No Risk". https://pbs.twimg.com/media/FhUdRVMXgAATCGU?format=jpg&name=large https://pbs.twimg.com/media/FhUdRVMXgAATCGU?format=jpg&name=... Anyone who looks at a slide or printout with "high returns" and "no risk" on the same page and who doesn't immediately come to the conclusion that they're being scammed deserves every penny of loss they suffer. Here I sit with "enough" (more than billions of others on Earth, really) watching a clawing mass of rabid others, each possessing way more than "enough" already, frantically scrambling for their spot at the trough so they can go to the moon and get a yacht or some stupid shit like that-- laughing.
  - Zpalmtree 4y ago
    you could have been just holding usdc on FTX, and got fucked. Of course, not your keys, not your crypto always applies, but it's easier to feel sorry for folks like this.
    - reducesuffering 4y ago
1vuio0pswjnm7 4y ago
Strange (re: The Guardian, not HN). By today's 24-hour news cycle standard, this is arguably "old news". These documents have been available for at least 24h. I know because I submitted them to HN yesterday. Ellison's Plea Agreement https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r478tCuj1_OU/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r478tCuj... CTFC v SBF, Ellison and Wang Amended Complaint https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rRCRC2hQKnmg/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rRCRC2hQ... Wang's Plea Agreement https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rWKaiz60kSVk/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rWKaiz60... EDIT: Also, I submitted the SBF Appearance Bond and Bail Disposition since there have been a number of stories I have seen today struggling to understand SBF's $250M bond. As the documents show, the parents are paying the bond with the equity in their Palo Alto home next to Stanford valued as "$4M". Payment is not due until Jan 12, 2023. Meawhile SBF is released to home detention. There are also two other unnamed individuals who are listed as FRP besides SBF's parents. As one can see on the form, one is a family member and the other is not. Who is this other person helping to bail out SBF. SBF Appearance Bond https://ia804708.us.archive.org/26/items/gov.uscourts.nysd.590939/gov.uscourts.nysd.590939.14.0.pdf https://ia804708.us.archive.org/26/items/gov.uscourts.nysd.5... SBF Bail Disposition https://ia804708.us.archive.org/26/items/gov.uscourts.nysd.590939/gov.uscourts.nysd.590939.13.0.pdf https://ia804708.us.archive.org/26/items/gov.uscourts.nysd.5...
- ChuckMcM 4y ago
  Not particularly strange. There are whole web pages devoted to the "right time of day" to submit something to this site to catch the most early up votes.
  - DantesKite 4y ago
    Really? I didn’t know that. It makes sense that there would be patterns though.
    - H8crilA 4y ago
      I heard rumours that the current time of day is a very important input feature for various content recommendation engines (things like those deciding which videos to show on youtube's front page).
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deleted 4y ago
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magnusss 4y ago
SBF’s plea deal can’t be far behind. He is uniquely positioned to help FTX’s receivers recover the maximum amount of money, and will use that leverage to strike the best deal possible. The whole FTX crew will likely pay their debt to society and be free before they’re 40 with the potential to do something useful with their skills and knowledge (think Mitnick).
jongjong 4y ago
I agree, they should reduce her punishment from 250 years to just 150 years if she cooperates.
- whendoyoushrink 4y ago
  While that sounds tough, that's not a smart negotiation plan at all. The negotiation will be more beneficial with a scale, based on traded info, that more resembles: "Your life is over" "Your life is over until you are retirement age" "Your life is over until after you go through menopause" "Your life can restart before you're 30" Or, you know, just hang tough and get no dirt.
  - akira2501 4y ago
    That seems to only allow for prison being purely a punishment, and that some level of deprivation must be included in order for the sentence to be considered complete. Truly beneficial scale would simply be: "You can return to regular society with restrictions after you have been rehabilitated, and you can return to regular life after your victims have been compensated." The other thing that's bothersome about these showy sentencing standards is that it provides good cover to the regulators and legislators who should be auditing their past actions with respect to this enterprise and should be holding honest hearings on how the legislation failed to protect consumers.
  - jongjong 4y ago
    Haha yeah I was just making fun of the idea that such potentially long sentences can be negotiated down at all.
bogomipz 4y ago
Is it surprising that besides Ellison and Wang none of the other inner circle of FTX/Alameda has cut deals yet? There's at least 8 people that were likely aware of what was going on no? See: "Who's Who in the FTX Inner Circle" https://www.coindesk.com/layer2/2022/11/22/the-whos-who-of-the-ftx-inner-circle/ https://www.coindesk.com/layer2/2022/11/22/the-whos-who-of-t...
- jasonhansel 4y ago
  Some are probably negotiating them now. I'm guessing they arrested SBF so quickly because they got a number of witnesses to testify against him.
carabiner 4y ago
Where is the TAPE???
gnicholas 4y ago
Is it a coincidence that CE and SBF were both raised by professors at elite institutions (MIT/Stanford)? Or are these just two people who were academically successful and parlayed that success into what looks to be a massive fraud?
- vkou 4y ago
  People who went to elite schools hang out with other people who went to elite schools. This isn't particularly surprising.
  - gnicholas 4y ago
    I was referring to the hubris that is presumably required to even attempt a fraud on this scale. Were the uniquely able to get away with this because of their bona fides, or were they uniquely predisposed to attempt this, due to the circumstances of their upbringing?
    - hammock 4y ago
      I'm sure plenty of "non-elite" people have the hubris. Just not the access to capital
    - EMM_386 4y ago
      They did both get hired by Jane Street, which is not so easy to do to. So they did have the "smarts", it just depends on if this started out as, or became, a massive fraud.
      - KMag 4y ago
        Just a wild guess, but my guess is that they intended to run everything legitimately, but bought into their own hype, and then got trapped by their egos into not admitting defeat. Once honestly admitting defeat was off the table, I'm not sure there were any non-fraudulent options left. I'm not saying the fraud is excusable, but it's entirely understandable how they may have been trapped by their own egos.
chank 4y ago
Is this just a big deal because crypto or purely because of the amount of money defrauded? This whole thing is sort of bizarre to me. It just seems to me a lot of people are blaming crypto as part of this problem when it was basically a couple of people who let the popularity/success of what they created get to their head and began to cover up mistakes of mismanagement and poor decision making. Now they face the full brunt of the law for that as they well should.
- enkid 4y ago
  Crypto is like snake oil. The seller makes all kinds of claims about what it can do, and the layman has no idea whether it's true or not, they just want it because it has the promise of solving their problems.
  - resource0x 4y ago
    Solving what problems exactly? Even if that "problem" is money laundering, I'm not quite sure it solves it. Looks more like a honey pot to me.
  - chank 4y ago
    I mean rather than just piling on crypto, it doesn't really seem to be the cause of any of what has happened here. How is it any different than what happened with Theranos.
obstacle3596 4y ago
She is not going to see the inside of a jail cell more likely. Woman, educated, fragile looking, and well aware of the political game.
- sumedh 4y ago
  Didn't she steal from some rich people as well? They will make sure she is punished.

217 points by Animatronio 4y ago

MarcelOlsz 4y ago

[flagged]

ttoinou 4y ago
Why did you trust them in the first place ?
- danrocks 4y ago
  How could he not trust them in the first place? C-level executives are on the record, before Congress, with the biggest and brightest politicians around, saying everything should be regulated, including themselves. They're actively projecting that they acknowledge the general sleaze surrounding the crypto industry and they are not a part of it. Hindsight is 20/20, but can you look at Binance, crypto.com, and other 'trusted' crypto exchanges now and say "how can you trust them"? SBF was hanging out with people who lent him their credibility and actively asking to be regulated - it doesn't get much better than that for the average person.
  - braingenious 4y ago
    > How could he not trust them in the first place? Because they were running a crypto exchange, a sort of business that very frequently ends rapidly and in a way that is not good for regular users.
  - deleted 4y ago
    [deleted]
  - serf 4y ago
    >Hindsight is 20/20, but can you look at Binance, crypto.com, and other 'trusted' crypto exchanges now and say "how can you trust them"? after this history of crypto exchanges thus-far? absolutely.
    - danrocks 4y ago
      Well, when this particular exchange is operating legally in the US and its CEO is respected enough to have a sit at the table with Maxine Waters, the hardest-ass congressperson when it comes to the financial sector, it's much harder than some guy yelling about his exchange on TikTok or Instagram?
      - MarcelOlsz 4y ago
        She is the opposite of "hardest-ass" as she is sitting down with these robbers and they're all greasing each others palms. This shit doesn't magically happen.
      - braingenious 4y ago
        Considering the fact that we now know that Maxine Waters got bamboozled by a 20something crypto bro, has your opinion of her being a competent regulator of the finance industry changed at all? It’s fascinating when people think of politicians like sports teams and not public employees with a mandate of competence.
        danrocks 4y ago
        I think you misunderstood what my point was. Maxine Waters now looks foolish of course but at the time the OP was investing with FTX one would be perfectly excused for believing SBF’s stories, given the lent credibility.
- jazzyjackson 4y ago
  I don't see an implication that this person is personally fucked by FTX/Alameda, just mad that fraudsters are rolling in dough (til they get caught anyway, as they say, high risk high reward)
  - MarcelOlsz 4y ago
    Yes. Exactly. Every day I wake up and I have to hear about some next cunt I've never heard of before. "Richest before 30!". Some other trillionaire. Some other little kid son of ivy's who ran away with another billion. It's always some fucking scam. Every fucking day. What is the point anymore? I'm a regular cunt who wants to do regular cunt things but I have to wake up to news that Google is planning a 30B "tech park" local to me. Just kill me please.
    - neilv 4y ago
      That one word doesn't translate well across countries. And in the US will come across as misogyny, which will affect how people interpret everything else you said.
      - baeaz 4y ago
        That's not a problem as long as people exist outside the US.
        neilv 4y ago
        "Two peoples, divided by a common language."
    - owlglass 4y ago
      While watching these people use their privilege to steal so much money is frustrating, I don't see how some Ivey League twenty-something's wrongdoing prevents you from doing regular things.
      - malandrew 4y ago
- MarcelOlsz 4y ago
  I never trusted any of these cunts. I didn't give them my money because I'm not a fucking idiot. How dare you try to assume I wrote my post out of personal anger. How dare you victim blame me in the face of a robber barons. You are an awful person.
  - Nicksil 4y ago
    >I never trusted any of these cunts. I didn't give them my money because I'm not a fucking idiot. How dare you try to assume I wrote my post out of personal anger. How dare you victim blame me in the face of a robber barons. You are an awful person. You're trying way too hard.

klipt 4y ago

I wonder if something similar will eventually happen to the Tether people? To my understanding they're printing money (USDT) which they claim is backed 1:1 by USD but really isn't. These USDTs can then be spent to pump up various other crypto assets. Seems a very shady business.

danrocks 4y ago
Didn't Tether get ordered the other day to disclaim all of its reserves? What happened to that? I find it incredible they keep surviving attempts to reveal exactly how the sausage is made in their reserves. https://www.yahoo.com/video/stablecoin-issuer-tether-ordered-produce-041706661.html https://www.yahoo.com/video/stablecoin-issuer-tether-ordered...
- maria2 4y ago
  It seems like they were ordered to give the plaintiffs the documents, but they weren’t ordered to publicly release them. NYAG also looked into them last year. They were fined but it doesn’t seem like anything else came of it. > The New York Attorney General’s probe into Tether’s reserves concluded in February 2021 with an $18.5 million settlement. I don’t hold any tether, and I wouldn’t recommend it to others. But the common opinion that Tether is insolvent might be wrong. Tether, as a stable business, is a money printing machine. I’m not sure it’d be worth risking the business and jail time to pump shitcoins.
  - richbell 4y ago
    > I don’t hold any tether, and I wouldn’t recommend it to others. But the common opinion that Tether is insolvent might be wrong. Tether, as a stable business, is a money printing machine. I’m not sure it’d be worth risking the business and jail time to pump shitcoins I encourage you to watch Coffeezilla's video about Tether. There's lots of shady stuff going on behind the scenes, like them borrowing $383M from Bitfinex and showing that to an auditor to prove they were solvent (~20:00). https://youtu.be/-whuXHSL1Pg https://youtu.be/-whuXHSL1Pg

andersonmvd 4y ago

The 7 offences are not detailed individually in the news, or I couldn't find it.

danrocks 4y ago
They are here: https://www.documentcloud.org/documents/23495436-crypto-cooperator-ftx-alamedas-caroline-ellisons-plea-agreement-inner-city-press-on-the-case https://www.documentcloud.org/documents/23495436-crypto-coop...
mikeyouse 4y ago
https://www.documentcloud.org/documents/23495436-crypto-cooperator-ftx-alamedas-caroline-ellisons-plea-agreement-inner-city-press-on-the-case https://www.documentcloud.org/documents/23495436-crypto-coop...
berkle4455 4y ago
Two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering. Maximum sentence of 110 years.
- listenallyall 4y ago
  This outcome came about so quickly because she turned state's evidence, in return for what is likely to be an extreme reduction from that maximum (not that it was really a possibility, as a first offender)
  - jjtheblunt 4y ago
    it's an enormous first offense, though does that matter?
    - Hamuko 4y ago
      Did Madoff have a criminal record before he got hit with 150 years?

neonate 4y ago

https://www.documentcloud.org/documents/23495436-crypto-cooperator-ftx-alamedas-caroline-ellisons-plea-agreement-inner-city-press-on-the-case https://www.documentcloud.org/documents/23495436-crypto-coop...

samwillis 4y ago

Extensive previous discussion: https://news.ycombinator.com/item?id=34088840 https://news.ycombinator.com/item?id=34088840

neilv 4y ago
Those comments have a flagged thread (started by me) in which some commenters cited evidence that the Effective Altruism angle was a conscious lie: https://news.ycombinator.com/item?id=34089377 https://news.ycombinator.com/item?id=34089377

sillysaurusx 4y ago

She’s the queen of wallstreetbets. I think she’ll hold the yolo record for a long time. I wish we knew what the fateful market play was that sunk her ship. She mentioned she’s not a fan of stop losses, so I wonder if she went to bed with an open market position and woke up to negative three billion. Also I wonder if the entity on the other side of that trade realized they were making someone insolvent. It’ll be interesting to see how long she’s sentenced for. EDIT: Actually, is it possible to see who profited from her trading activity? FTX is in the hands of authorities now, and all the trading took place on it. I wonder if they could claw back some of those lost billions.

potatototoo99 4y ago
There probably wasn't any single one trade.
baobabKoodaa 4y ago
> She mentioned she’s not a fan of stop losses At the volume they were trading, stop losses are no longer practical. The market is not infinitely deep.
- Lapsa 4y ago
  I've never understood how stop losses are supposed to help. Traders read heaps of news, do God knows what technical analysis yet simple "moves bit too much in wrong direction" is supposed to be an acceptable exit strategy.
  - tasuki 4y ago
    Same! When it's $100 I want to buy, but if the price falls to $80 i want to sell. Presumably i bought because I thought it was worth more than $100, it would only make sense for me to sell at $80 for a reason other than the price: fundamentals change, some bad event happening. If the only thing that changed is the price, I want to buy more at $80!
    - 4y ago

jmyeet 4y ago

It's interesting to see this play out because much of it was predictable. Personally, I was amused at the people complaining that the SBF case was taking too long. If however you know something about how Federal prosecutions work, you'd know (and I made many comments about this) that the case was moving incredibly quickly. As soon as SBF was indicted, it confirmed that the Feds had 1 or more cooperating witnesses and many correctly theorized Caroline Ellison was one of them. The other is less well-known but this basically maps out the prosecution's case. Ellison will testify to SBF's knowledge of the scheme. The other will testify to SBF instructing him to build the backdoor. Case closed. This is an open and shut case. SBF getting out on bail was a surprise and it shows the double standard to how the US uses its civil asset forfeiture power. Specifically, that doesn't seem to be used against SBF, his parents and his associates in a way that it has with far less wealthy people. I want people to realize that. For the record, I consider civil asset forfeiture to be unconstitutional and a travesty of justice but it is the law of the land. I'm going to be really interested to see what kind of deal the Feds cut for two witnesses. Could it be as light as no jail time? I have doubts but it's not impossible. It'll probably be a much lighter sentence, probably less than 10 years, maybe less than 5.

sbierwagen 4y ago
Madoff clawbacks took years. Here’s a story from 2018, and litigation is still ongoing: https://www.wsj.com/articles/the-amazing-madoff-clawback-1543620951 https://www.wsj.com/articles/the-amazing-madoff-clawback-154... Importantly, clawbacks went way back in time. If you put $5 million in in 2000 and pulled $10 million out in 2002 then you had FBI agents at your door in 2010. There’s going to be a lot of Lamborghinis on the used market, and plenty of vacancies in Miami condo towers soon.
TacticalCoder 4y ago
> This is an open and shut case. Conveniently the entire part where SBF had an ex-CFTC commissioner lobby the SEC and CFTC to get pro-FTX bill passed in the US is not looked at: who cares about regulatory capture through corrupted officials right? (I mean: a few senator say this should be looked upon but so far it's not the case) And the whole "FTX's top lawyer happens to be an ex-colleague of Bitfinex's top lawyer: they both worked in an online poker scam that defrauded players" is not looked at either. Instead we go for: "SBF ordered Wang to put a backdoor in FTX so that Alameda's losses could be hidden" and case closed. Justice.

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Barrin92 4y ago

>In the absence of a comprehensive regulatory framework over digital assets, the CFTC will use all of its existing power and authority to protect all market participants, while ensuring the integrity of commodity markets Honestly it's good to see that the responsible American institutions still seem to be reasonably quick and effective when it comes to prosecuting the relevant people here, but can we finally get that comprehensive regulatory framework in question? Legislators need to stop being asleep at the wheel. Be it the US or the EU or someone else finally needs to take the air out of this entire ecosystem that enables these fraudulent schemes in the first place.

HWR_14 4y ago
Let's not get a legal framework. I don't want to make crypto more respectable. There is a reason no one is talking about FTX getting bailed out or triggering a recession. Unlike in 2008, they are isolated from the rest of the economic system.

nemo44x 4y ago

What a Queen. Massively connected and after destroying the life of thousands of working class chumps she gets to walk free after getting her wrist slap.

apengwin 4y ago
Go cardinal!
dehrmann 4y ago
> destroying the life of thousands of working class chumps I have little sympathy for anyone who got burnt by playing in the crypto space.
rocket_surgeron 4y ago
It is difficult to feel sorry for the chumps. If someone came up to me and said they were selling magic beans that would grow a vine up to the moon where riches await, I would politely decline. It doesn't matter if the seller substitutes the word "crypto" for "beans". What's even better are the "pros". In their pitch deck, only shown to whales, they promised "High Returns With No Risk". https://pbs.twimg.com/media/FhUdRVMXgAATCGU?format=jpg&name=large https://pbs.twimg.com/media/FhUdRVMXgAATCGU?format=jpg&name=... Anyone who looks at a slide or printout with "high returns" and "no risk" on the same page and who doesn't immediately come to the conclusion that they're being scammed deserves every penny of loss they suffer. Here I sit with "enough" (more than billions of others on Earth, really) watching a clawing mass of rabid others, each possessing way more than "enough" already, frantically scrambling for their spot at the trough so they can go to the moon and get a yacht or some stupid shit like that-- laughing.
- Zpalmtree 4y ago
  you could have been just holding usdc on FTX, and got fucked. Of course, not your keys, not your crypto always applies, but it's easier to feel sorry for folks like this.
  - reducesuffering 4y ago

1vuio0pswjnm7 4y ago

Strange (re: The Guardian, not HN). By today's 24-hour news cycle standard, this is arguably "old news". These documents have been available for at least 24h. I know because I submitted them to HN yesterday. Ellison's Plea Agreement https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r478tCuj1_OU/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r478tCuj... CTFC v SBF, Ellison and Wang Amended Complaint https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rRCRC2hQKnmg/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rRCRC2hQ... Wang's Plea Agreement https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rWKaiz60kSVk/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rWKaiz60... EDIT: Also, I submitted the SBF Appearance Bond and Bail Disposition since there have been a number of stories I have seen today struggling to understand SBF's $250M bond. As the documents show, the parents are paying the bond with the equity in their Palo Alto home next to Stanford valued as "$4M". Payment is not due until Jan 12, 2023. Meawhile SBF is released to home detention. There are also two other unnamed individuals who are listed as FRP besides SBF's parents. As one can see on the form, one is a family member and the other is not. Who is this other person helping to bail out SBF. SBF Appearance Bond https://ia804708.us.archive.org/26/items/gov.uscourts.nysd.590939/gov.uscourts.nysd.590939.14.0.pdf https://ia804708.us.archive.org/26/items/gov.uscourts.nysd.5... SBF Bail Disposition https://ia804708.us.archive.org/26/items/gov.uscourts.nysd.590939/gov.uscourts.nysd.590939.13.0.pdf https://ia804708.us.archive.org/26/items/gov.uscourts.nysd.5...

ChuckMcM 4y ago
Not particularly strange. There are whole web pages devoted to the "right time of day" to submit something to this site to catch the most early up votes.
- DantesKite 4y ago
  Really? I didn’t know that. It makes sense that there would be patterns though.
  - H8crilA 4y ago
    I heard rumours that the current time of day is a very important input feature for various content recommendation engines (things like those deciding which videos to show on youtube's front page).

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magnusss 4y ago

SBF’s plea deal can’t be far behind. He is uniquely positioned to help FTX’s receivers recover the maximum amount of money, and will use that leverage to strike the best deal possible. The whole FTX crew will likely pay their debt to society and be free before they’re 40 with the potential to do something useful with their skills and knowledge (think Mitnick).

jongjong 4y ago

I agree, they should reduce her punishment from 250 years to just 150 years if she cooperates.

whendoyoushrink 4y ago
While that sounds tough, that's not a smart negotiation plan at all. The negotiation will be more beneficial with a scale, based on traded info, that more resembles: "Your life is over" "Your life is over until you are retirement age" "Your life is over until after you go through menopause" "Your life can restart before you're 30" Or, you know, just hang tough and get no dirt.
- akira2501 4y ago
  That seems to only allow for prison being purely a punishment, and that some level of deprivation must be included in order for the sentence to be considered complete. Truly beneficial scale would simply be: "You can return to regular society with restrictions after you have been rehabilitated, and you can return to regular life after your victims have been compensated." The other thing that's bothersome about these showy sentencing standards is that it provides good cover to the regulators and legislators who should be auditing their past actions with respect to this enterprise and should be holding honest hearings on how the legislation failed to protect consumers.
- jongjong 4y ago
  Haha yeah I was just making fun of the idea that such potentially long sentences can be negotiated down at all.

bogomipz 4y ago

Is it surprising that besides Ellison and Wang none of the other inner circle of FTX/Alameda has cut deals yet? There's at least 8 people that were likely aware of what was going on no? See: "Who's Who in the FTX Inner Circle" https://www.coindesk.com/layer2/2022/11/22/the-whos-who-of-the-ftx-inner-circle/ https://www.coindesk.com/layer2/2022/11/22/the-whos-who-of-t...

jasonhansel 4y ago
Some are probably negotiating them now. I'm guessing they arrested SBF so quickly because they got a number of witnesses to testify against him.

carabiner 4y ago

Where is the TAPE???

gnicholas 4y ago

Is it a coincidence that CE and SBF were both raised by professors at elite institutions (MIT/Stanford)? Or are these just two people who were academically successful and parlayed that success into what looks to be a massive fraud?

vkou 4y ago
People who went to elite schools hang out with other people who went to elite schools. This isn't particularly surprising.
- gnicholas 4y ago
  I was referring to the hubris that is presumably required to even attempt a fraud on this scale. Were the uniquely able to get away with this because of their bona fides, or were they uniquely predisposed to attempt this, due to the circumstances of their upbringing?
  - hammock 4y ago
    I'm sure plenty of "non-elite" people have the hubris. Just not the access to capital
  - EMM_386 4y ago
    They did both get hired by Jane Street, which is not so easy to do to. So they did have the "smarts", it just depends on if this started out as, or became, a massive fraud.
    - KMag 4y ago
      Just a wild guess, but my guess is that they intended to run everything legitimately, but bought into their own hype, and then got trapped by their egos into not admitting defeat. Once honestly admitting defeat was off the table, I'm not sure there were any non-fraudulent options left. I'm not saying the fraud is excusable, but it's entirely understandable how they may have been trapped by their own egos.

chank 4y ago

Is this just a big deal because crypto or purely because of the amount of money defrauded? This whole thing is sort of bizarre to me. It just seems to me a lot of people are blaming crypto as part of this problem when it was basically a couple of people who let the popularity/success of what they created get to their head and began to cover up mistakes of mismanagement and poor decision making. Now they face the full brunt of the law for that as they well should.

enkid 4y ago
Crypto is like snake oil. The seller makes all kinds of claims about what it can do, and the layman has no idea whether it's true or not, they just want it because it has the promise of solving their problems.
- resource0x 4y ago
  Solving what problems exactly? Even if that "problem" is money laundering, I'm not quite sure it solves it. Looks more like a honey pot to me.
- chank 4y ago
  I mean rather than just piling on crypto, it doesn't really seem to be the cause of any of what has happened here. How is it any different than what happened with Theranos.

obstacle3596 4y ago

She is not going to see the inside of a jail cell more likely. Woman, educated, fragile looking, and well aware of the political game.

sumedh 4y ago
Didn't she steal from some rich people as well? They will make sure she is punished.