5 ms·

SBF to enter plea in FTX fraud case

27 points by infrawhispers 4y ago

boeingUH60 4y ago
In five years, this guy founded a hedge fund that made millions of dollars, a crypto exchange that handles billions of dollars in trades, and became a mega-billionaire...and it came crashing down because he was secretly stealing user funds. I don't want to sympathize with SBF, but I'm wondering if this is a problem of someone that amassed excessive money and power so fast that it screwed with his neurons to the point of him thinking he will get away with an obvious con..
- 71a54xd 4y ago
  There is an ongoing theory that his planned defense strat is to claim that his inhibition / empathy brain function was impaired as a result of being prescribed Adderall and EMSAM simultaneously. https://www.aafp.org/pubs/afp/issues/2008/0215/p505.html https://www.aafp.org/pubs/afp/issues/2008/0215/p505.html
- TacticalCoder 4y ago
  > In five years, this guy founded a hedge fund that made millions of dollars, a crypto exchange that handles billions of dollars in trades, and became a mega-billionaire...and it came crashing down because he was secretly stealing user funds. That is not what happened. Alameda was a scam tied to the tether fraud from the very start. The entire thing was a con. Alameda was pump and dumping shitcoins before FTX was even created. > In five years, this guy founded a hedge fund that made millions of dollars remains to be seen. May not even be true. Some say his "kimchi trade" story is bullshit. The leaflet where he "sold" Alameda to investors is more than extremely fishy: it looked like a scam planned from the beginning. > a crypto exchange that handles billions of dollars in trades remains to be shown too. A lot was certainly fake volume. For all we know most trades that happened where actually dumping shitcoins they pumped on their users. It's not known where all the supposed users are nor how much was really trader there. It is very likely the volume was in part fake, to sucker investors in. > and became a mega-billionaire he never was that. That was a lie too. If at any time he had billions, that was stolen money and valuation based on lies and tokens he created out of his (now sorry) arse. > and it came crashing down because he was secretly stealing user funds. It came crashing down when it shouldn't have because the dude was bribing officials (it's now proven) to try to regulatory capture a big part of the crypto exchange market by having a legislation passed that would have killed Binance. And CZ from Binance exposed the ponzi SBF was running since day one. The indictment clearly specify that there was a conspiracy to defraud both investors and customers. I don't buy for a second that he was running a legit scheme, that he was legally worth billions (it was all fake valuation) and that someone a few trades went wrong. That's not at all what happened.
  - maxbond 4y ago
    I don't think they're suggesting it was "a few trades gone wrong" but asking if the amount of money SBF was handling corrupted him, which is compatible with your read of the situation. I think it's an interesting question; it goes to the heart of the "earn to give" strategy sometimes espoused by Effective Altruism advocates, and the pitch of "good guy billionaires" like Musk, Gates, or Branson. It's entirely possible SBF was always a piece of work, but that the money enabled him to be his worst self.
71a54xd 4y ago
If the sentence is under 30yrs I will fly to a major city to attend a large scale protest. Poor people go to prison for decades for stealing chips from gas stations... crime is wrong, but what SBF did to millions deserves a sizable sentence.
- blacksmith_tb 4y ago
  I sense a certain echo of Anatole France's famous observation here, "The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread." But more specifically I would think that going "to prison for decades for stealing chips" is the perverse outcome of mandatory minimum sentences and three-strikes laws, which tough-on-crime politicians enacted to make their constituents feel like someone was "doing something" (making judges who take the actual facts of a given case mostly powerless). But SBF will of course be able to hire the best lawyers stolen billions can buy, and thus is likely to get off as lightly as a very rich person can. Just a guess, maybe he'll get decades, but I am not holding my breath.
  - NullPrefix 4y ago
    The fact that he managed to use a $4M house for a $250M bail is telling about what's going to happen in this case
    - g42gregory 4y ago
      And the fact that he does not even own that $4M house. And the people who live in that house does not even own it completely either, but instead lease (or some other financial arrangement) the house, only as long as they are employed at the owner of that house.
      - maxbond 4y ago
        I heard people speculating his parents may not own the house, but I have a hard time believing that would be agreeable to the court (unless perhaps Standford is one of the signatories that remains anonymous, and why would they be?). Has this been confirmed? The only "news" source I found discussing this was also speculating, and was a right-wing political blog. Not a source I'm comfortable relying on (even if it had been a left-wing or centrist political blog). But I didn't look very hard; open to being corrected if someone has a good source on this.
1vuio0pswjnm7 4y ago
"Kaplan was assigned to the case on Tuesday, after the original judge recused herself because her husband's law firm had advised FTX before its collapse." Davis Polk may have represented FTX but it also advised BlockFi in BlockFi's transactions with FTX. Judge Abrams in her 23 December docket entry wrote that her husband's firm represented FTX in 2021 "as well as represented parties adverse to FTX".

27 points by infrawhispers 4y ago

In five years, this guy founded a hedge fund that made millions of dollars, a crypto exchange that handles billions of dollars in trades, and became a mega-billionaire...and it came crashing down because he was secretly stealing user funds. I don't want to sympathize with SBF, but I'm wondering if this is a problem of someone that amassed excessive money and power so fast that it screwed with his neurons to the point of him thinking he will get away with an obvious con..

71a54xd 4y ago
There is an ongoing theory that his planned defense strat is to claim that his inhibition / empathy brain function was impaired as a result of being prescribed Adderall and EMSAM simultaneously. https://www.aafp.org/pubs/afp/issues/2008/0215/p505.html https://www.aafp.org/pubs/afp/issues/2008/0215/p505.html
TacticalCoder 4y ago
> In five years, this guy founded a hedge fund that made millions of dollars, a crypto exchange that handles billions of dollars in trades, and became a mega-billionaire...and it came crashing down because he was secretly stealing user funds. That is not what happened. Alameda was a scam tied to the tether fraud from the very start. The entire thing was a con. Alameda was pump and dumping shitcoins before FTX was even created. > In five years, this guy founded a hedge fund that made millions of dollars remains to be seen. May not even be true. Some say his "kimchi trade" story is bullshit. The leaflet where he "sold" Alameda to investors is more than extremely fishy: it looked like a scam planned from the beginning. > a crypto exchange that handles billions of dollars in trades remains to be shown too. A lot was certainly fake volume. For all we know most trades that happened where actually dumping shitcoins they pumped on their users. It's not known where all the supposed users are nor how much was really trader there. It is very likely the volume was in part fake, to sucker investors in. > and became a mega-billionaire he never was that. That was a lie too. If at any time he had billions, that was stolen money and valuation based on lies and tokens he created out of his (now sorry) arse. > and it came crashing down because he was secretly stealing user funds. It came crashing down when it shouldn't have because the dude was bribing officials (it's now proven) to try to regulatory capture a big part of the crypto exchange market by having a legislation passed that would have killed Binance. And CZ from Binance exposed the ponzi SBF was running since day one. The indictment clearly specify that there was a conspiracy to defraud both investors and customers. I don't buy for a second that he was running a legit scheme, that he was legally worth billions (it was all fake valuation) and that someone a few trades went wrong. That's not at all what happened.
- maxbond 4y ago
  I don't think they're suggesting it was "a few trades gone wrong" but asking if the amount of money SBF was handling corrupted him, which is compatible with your read of the situation. I think it's an interesting question; it goes to the heart of the "earn to give" strategy sometimes espoused by Effective Altruism advocates, and the pitch of "good guy billionaires" like Musk, Gates, or Branson. It's entirely possible SBF was always a piece of work, but that the money enabled him to be his worst self.

71a54xd 4y ago

If the sentence is under 30yrs I will fly to a major city to attend a large scale protest. Poor people go to prison for decades for stealing chips from gas stations... crime is wrong, but what SBF did to millions deserves a sizable sentence.

blacksmith_tb 4y ago
I sense a certain echo of Anatole France's famous observation here, "The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread." But more specifically I would think that going "to prison for decades for stealing chips" is the perverse outcome of mandatory minimum sentences and three-strikes laws, which tough-on-crime politicians enacted to make their constituents feel like someone was "doing something" (making judges who take the actual facts of a given case mostly powerless). But SBF will of course be able to hire the best lawyers stolen billions can buy, and thus is likely to get off as lightly as a very rich person can. Just a guess, maybe he'll get decades, but I am not holding my breath.
- NullPrefix 4y ago
  The fact that he managed to use a $4M house for a $250M bail is telling about what's going to happen in this case
  - g42gregory 4y ago
    And the fact that he does not even own that $4M house. And the people who live in that house does not even own it completely either, but instead lease (or some other financial arrangement) the house, only as long as they are employed at the owner of that house.
    - maxbond 4y ago
      I heard people speculating his parents may not own the house, but I have a hard time believing that would be agreeable to the court (unless perhaps Standford is one of the signatories that remains anonymous, and why would they be?). Has this been confirmed? The only "news" source I found discussing this was also speculating, and was a right-wing political blog. Not a source I'm comfortable relying on (even if it had been a left-wing or centrist political blog). But I didn't look very hard; open to being corrected if someone has a good source on this.

1vuio0pswjnm7 4y ago

"Kaplan was assigned to the case on Tuesday, after the original judge recused herself because her husband's law firm had advised FTX before its collapse." Davis Polk may have represented FTX but it also advised BlockFi in BlockFi's transactions with FTX. Judge Abrams in her 23 December docket entry wrote that her husband's firm represented FTX in 2021 "as well as represented parties adverse to FTX".