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U.S. moves to seize $460M Robinhood stake linked to Sam Bankman-Fried

236 points by jb1991 4y ago

miguelazo 4y ago
Boggles the mind that they invested that much in RobinHood at all, but especially that late in the game. Maybe part of a broader scheme to access their capital as well?
- dr-detroit 4y ago
  [dead]
- adamnemecek 4y ago
  It's not really an investment as much as money laundering scheme which tend to be 'unprofitable on paper'.
  - lordfrito 4y ago
    Yeah I wonder if part of his strategy was just to dilute the crime so much by having it's tentacles dig into and wrap around every small corner of the legit financial/political system. At some point the surgery to separate the spreading cancer does more harm to the patient than just leaving it. It's just impossible to cleanly remove all of the tendrils. The strategy would start with getting intertwined with crypto, then move into crypto-tangential like Robinhood, eventually hoping to claw his way into Washington and Wall Street. The FTX / Farmington State Bank investment comes to mind. John Ray definitely has his work cut out for him trying to unravel this mess. I think he'll be able to cleanly claw back anything in TradFi (it's a great test of the TradFi system). Good luck trying to clawback any of the crypto. Not like it matters though, anything he can claw back there is worthless. "Hey, here's your XYZ coin back, you've been made whole." This is just so fun to watch.
    - waterhouse 4y ago
      > Yeah I wonder if part of his strategy was just to dilute the crime so much by having it's tentacles dig into and wrap around every small corner of the legit financial/political system. Deliberately becoming "too big to fail", eh? (Which was more accurately termed "too big to be permitted to fail". Which then raises the question of who is doing the permitting, and why we would trust their judgment; but that would give the game away.)
      - lordfrito 4y ago
        > who is doing the permitting The "who" is just greedy connected people, who are everywhere. Including government and finance. Thankfully we have laws and regulations, which at least serve as some checks and balances to prevent these people from causing too much damage. The genius of checks and balances government as that it doesn't rely on ensuring "bad" people never get into positions of power. You will never be able to stamp out 100% of bad actors. Instead it sets things up such that the damage bad actors can do is minimized and/or identified quickly. Less collateral damage, and a chance for justice afterwards. "No regulations" in crypto should be a warning flag to people. Meanwhile, I'm really really interested if any crimes were committed on the "regulated" side of things. Those people need to be put in jail. Will be fun to watch this unravel.
- SilasX 4y ago
  Not really, SBF was caught in a lot of hype himself -- he was trying to get included on the Twitter deal as well, and the FTX balance sheet showed $43 million of TWTR stock near the acquisition, though Musk claims the offer was rejected. https://www.yahoo.com/entertainment/elon-musk-calls-report-sbf-161721544.html https://www.yahoo.com/entertainment/elon-musk-calls-report-s...
  - texasbigdata 4y ago
    Read the text messages (different lawsuit) between musk and prominent (imho) Oxford philosopher William McAskill. Musk is asked repeatedly to meet and take money from this brillian guy called SBF. It’s weird bc I read wills book and really looked up to him, but clearly SBF can be very convincing. Elon seemed to not want to do it but the text messages suggest he did eventually take a call. So Elon must not have liked how that went since he was publicly encouraging others to roll over. My speculation of course.
    - jessaustin 4y ago
      If this episode isn't a giant warning sign for MacAskill and all of the rest of these characters, what would be? Maybe he's not as dumb as he always acts, but SBF seems more like a pawn of the altruism cabal than the other way around.
    - freejazz 4y ago
      All three of those people are dumb assholes. Not sure how that couldn't be clearer given all of their behavior. Part of life is being able to suss out people like these characters and never once did I think any of them had anything of value to contribute.
- wmf 4y ago
  It has been reported that Alameda made around $5B of VC investments. The scale of this thing is huge.
  - londons_explore 4y ago
    How much of that $5B was actual cash, and how much was various loans/swaps/promises/tokens/paper money?
    - wmf 4y ago
      The worse case is that it was all customer cash. The funniest case is that it was IOUs and the startups will run out of money when their capital calls fail.
  - WJW 4y ago
    5 billion is definitely a large number in absolute terms and I would love to be that rich, but if one of the largest crypto VCs made ~5b in investments TOTAL then the real economy has nothing to worry about. The forex markets did over $6 trillion per day in 2022, and that is just the currency exchanges. There are single ships in the world that cost more than 6 billion.
- scottLobster 4y ago
  If FTX and the pathetic Elon-simping txts from the Twitter lawsuit discovery have revealed anything, it's that once you reach a certain level of wealth you're so immune from consequences that losing money has zero effect on you personally, and since most of these guys are extremely ego-centric to begin with, that removes the only constraint they seriously cared about. There are exceptions to this, but that seems to be the trend. Billionaires in general aren't playing 4D chess, why would they? 4D chess is hard, requires sacrifice and valuing something bigger than oneself and one's bank account. Much easier to jump on popular hype trains. If it works you look like a genius and have a million stans to stroke you off, and money number go up so you can flex on other billionaires. If it fails nothing really happens to you personally. SBF wasn't actually at that level, but he had enough paper wealth that he clearly thought he was. We're watching the wealthy equivalent of that COVID-denier who, with their last breath before being intubated, calls the doctors and nurses who diagnosed them liars.
  - spookthesunset 4y ago
    > We're watching the wealthy equivalent of that COVID-denier who, with their last breath before being intubated, calls the doctors and nurses who diagnosed them liars. Which is a work of fiction. Such a thing probably happened no more than a few times. The only reason it gets parroted back is because it serves as a nice bit of propaganda to gin up fear and get people to fall in line.
    - babypuncher 4y ago
      Herman Cain's Twitter account was still tweeting COVID denialism after he died of COVID.
      - macspoofing 4y ago
        [flagged]
        raverbashing 4y ago
        > making it seem like his death was justified. Death by Denialism? Darwin sends his regards "The good thing about science is that it doesn't give a f about what you think"
chollida1 4y ago
One interesting thing about these shares that hasn't been confirmed as far as I can tell is that they were rumored to have been used as collateral for loans FTX took out. If this is true, then someone else(Genesis) has a $500M hole in their balance sheet due to this. Which will lead to knock on issues, just like how Luna -> 3AC -> Celsius and Voyager -> FTX In additional knock on effects, the US sized about $100M of crypto assets from FTX that Silvergate bank was holding. This put more stress on Silvergate bank that was already in alot of trouble over their loans and shrinking crypto assets. Based on the Government asking Silvergate for the HOOD shares and $8B in customer withdrawals they've gotten, they're down almost 50% today alone. We'll probably see someone acquire them for nothing or we'll have a bank failure pretty soon. Almost certainly people like Elizabeth Warren will use this to show that crypto is having a spill on effect to the real world economy and therefore should be under their regulatory control
- rhacker 4y ago
  Without regulation, it's just a huge casino. Then again, it's not really possible to regulate.
  - JumpCrisscross 4y ago
    > it's not really possible to regulate Hell of a lot easier than cash.
    - etothepii 4y ago
      This is both true and not true. Cash is notionally untraceable but try moving $10m in cash illegally for less than 10% fee, and good luck buying anything if that cash represents a sizeable portion of your legitimate net worth.
      - LarryMullins 4y ago
        > Cash is notionally untraceable but try moving $10m in cash illegally for less than 10% fee, That's easy if you can tolerate risk; just put it in the back of a u-haul and obey the speed limit. Of course if the "cash" is actually a number in a bank account, not actual cash, then it's not so easy.
throwawayapples 4y ago
What claim does the federal government have to these funds? And how is this seizure even being contemplated before a trial and conviction? Does the Fourth Amendment not apply to him just because nobody likes him?
- marcinzm 4y ago
  I mean you could just read the article: "The Justice Department said Wednesday that has moved to seize millions of shares of Robinhood, the popular stock-trading app, whose ownership is disputed by several parties, including Bankman-Fried himself, his bankrupt crypto exchange FTX and another bankrupt crypto company. Because the competing claims, FTX filed a motion earlier this month to the Delaware bankruptcy court to keep the assets frozen until the court “can resolve the issues in a manner that is fair to all creditors of the debtors.”"
  - JumpCrisscross 4y ago
    The TL; DR being the DoJ moving to seize is the start of due process.
  - dehrmann 4y ago
    That's still a little weird because usually personal assets are shielded from issues a company has (at least for LLCs).
    - marcinzm 4y ago
      As the quoted text notes, FTX claims these are it's assets and until that is resolved is asking the courts for them to be frozen.
    - quickthrowman 4y ago
      It’s a bit different when you borrow $500M from your (now bankrupt) company to purchase the ‘personal assets’.
- peter422 4y ago
mannykannot 4y ago
> Bankman-Fried claims ownership of the shares, seeking a source of payment for legal expenses, according to FTX. These shares must have completely slipped his mind when he said all he had left was $100k in his bank account. https://www.axios.com/2022/11/29/sam-bankman-fried-100000-ftx-cftc-regulation https://www.axios.com/2022/11/29/sam-bankman-fried-100000-ft...
- SkyMarshal 4y ago
  Technically, Robinhood isn't a bank account...
- VHRanger 4y ago
  He was telling the truth! The shares weren't in his bank account, they were in his brokerage account
  - mannykannot 4y ago
    SBF, from the same article: "Basically everything I had was just tied up in the company." Of course, he's been dissembling all the way down.
- britneybitch 4y ago
  Carefully chosen words. A brokerage is not a bank account. Also, a crypto wallet is not a bank account.
  - TechBro8615 4y ago
    "It's all fungible" - SBF
- deleted 4y ago
  [deleted]
- psychlops 4y ago
  Pretty sure "he didn't have the numbers in front of him" when he answered.
twelve40 4y ago
So the interesting thing is that he massively toned down his public/online presence, was that a part of the deal or what else has changed?
- notyourwork 4y ago
  When the years of jail time start racking up you usually stop talking as much.
  - twelve40 4y ago
    Um they were racking up a month ago just the same
    - spookthesunset 4y ago
      But a month ago the idea the feds would get him was just fantasy (in his mind). Shit probably got very real once somebody slapped some handcuffs on him.
  - 0cf8612b2e1e 4y ago
    Is there any interpretation where he is not going down for all of the crypto ills? That the fraud was so straightforward, I expect the book to be thrown at him to make an example. What more could he say at this point to make the situation any worse? His lawyers were surely telling him to stop shut up for the past two months and he didn’t listen then.
- tofuahdude 4y ago
  Living at your parent's house with an ankle bracelet, only out of jail on a $250 million bond is quite a different scenario than being in a Bahamian mansion.
  - notch656c 4y ago
    Dude is staring down the barrel of the rest of his youthful years in jail, meanwhile he lives close enough to a coastline where he could board a yacht and be well into international waters god knows where in an anonymous fishing boat with hundreds of millions in crypto before sunrise. The most baffling part of all of this is that he has never attempted to escape. Surely a Liberian or Somalian warlord or something will protect him in exchange for $1MM / annum and probably provide him a harem and a nice plot of desert.
jmyeet 4y ago
The Fourth Amendment quite literally has the words "unlawful search and seizure". I want people to remember that whenever they're pushing the propaganda that is the originalist or textualist interpretation of the Constitution by the Supreme Court. That propaganda is a lie. I understand the mental gymanstics used to justify this, in that the property is the defendant in a civil action (for a suspected criminal act by its owner, no less). The end result is what we see here: civil asset forfeiture and absolutely no protection against unlawful seizure. Now a lot of people won't care about this because it's SBF and it looks pretty likely that he's guilty. At least there's a criminal indictment in this case. If the government has this power (and, again, I think they should not) this use seems appropriate. But the government doesn't require a criminal indictment at all (let alone a conviction) to use this power. Consider the case of Amy Nelson [1]. At the behest of Amazon, the Department of Justice seized the bank accounts of her, her husband, a bunch of employees of a company and even their lawyers who worked for a law firm, ultimately charging nobody with anything and returning 85% of the money 2 years later once the Nelsons agreed not to sue the government. Also, SBF gave tens of millions in donations to both parties in the recent midterms. If the Robinhood shares are fair game, why aren't the donations? [1]: https://www.geekwire.com/2022/former-seattle-entrepreneur-and-husband-will-get-back-most-of-funds-seized-by-fbi-in-amazon-case/ https://www.geekwire.com/2022/former-seattle-entrepreneur-an...
- tedunangst 4y ago
  > If the Robinhood shares are fair game, why aren't the donations? Because SBF allegedly owns the shares. He doesn't own the donation. Unless you want the government to seize whatever goodwill the donation got him. That would be a fun sheriff's sale. "One lunch with selected congressman, to discuss voting in up to two bills."
  - graeme 4y ago
    Actually the donations may well be clawed back in the bankruptcy proceedings, depending how recent they are.
- graeme 4y ago
  The article is a little unclear but it appears the assets are being seized because there is a reasonable claim they’re part of the bankruptcy estate of FTX, which isn’t directly related to SBF’s trial.
thesausageking 4y ago
Sequoia was heavily invested in Robinhood and then backed FTX and promoted SBF as the next great founder, evening allowing him to invest in their fund as an LP with money he took out of FTX. That seems pretty suspicious.
- afrcnc 4y ago
  VC bros will fund almost anything. Not that suspicious. I've seen them fund cybersecurity firms on the edge of legality, even after they were questioned in the Indian Parliament on a major corruption case. Nothing is too shady for these people.
  - birdyrooster 4y ago
    I just want to see the egghead man lose everything in disgrace.
Octokiddie 4y ago
> Four separate entities have laid claim to the approximately 56 million shares, worth about $460 million. FTX’s new management, which is trying to claw back funds for investors and customers of the bankrupt platform, have sought to wrest control of the shares from an Antigua-based holding company 90% owned by Bankman-Fried. The article mentions: 1. SBF himself 2. FTX Who are the other two? This seems important because those other two entities may have recorded the shares as assets or even themselves pledged them as collateral.
- cypherpunks01 4y ago
  BlockFi is one of them. They believed they were holding the Robinhood shares as collateral pledged for a large loan to Alameda Research. But when they went to liquidate the shares after the loan defaulted, the broker did not allow them to do so, as FTX/Alameda had just filed for bankruptcy and I believe the estate argued against it. See https://www.reuters.com/legal/ftx-opposes-blockfis-claim-bankman-frieds-robinhood-shares-2022-12-22/ https://www.reuters.com/legal/ftx-opposes-blockfis-claim-ban... I am not sure who the 4th party is.
- paxys 4y ago
  3. The US government, as mentioned in the title 4. Probably one of their creditors or authorities in the Bahamas
naillo 4y ago
I wonder if they'll take the $500M or so money AnthropicAI also apparantely got from FTX
peter303 4y ago
70% of Madoff victims contributions recovered by 2022. In 14 rounds. https://abcnews.go.com/Business/funds-recovered-victims-bernie-madoff/story?id=94863713 https://abcnews.go.com/Business/funds-recovered-victims-bern... They only get contributions back with no earnings.
noyoudumbdolt 4y ago
Poor legal reporting by CNN, but it sounds like DOJ was worried that these shares might fall under a bankruptcy exception somehow and end up in SBF's hands, clear of the bankruptcy court's jurisdiction. If so, this move makes sure the victims, not SBF, get this money.
chucklenorris 4y ago
And ofcourse no word about clawing back the donations to democrats and republicans

236 points by jb1991 4y ago

Boggles the mind that they invested that much in RobinHood at all, but especially that late in the game. Maybe part of a broader scheme to access their capital as well?

dr-detroit 4y ago
[dead]
adamnemecek 4y ago
It's not really an investment as much as money laundering scheme which tend to be 'unprofitable on paper'.
- lordfrito 4y ago
  Yeah I wonder if part of his strategy was just to dilute the crime so much by having it's tentacles dig into and wrap around every small corner of the legit financial/political system. At some point the surgery to separate the spreading cancer does more harm to the patient than just leaving it. It's just impossible to cleanly remove all of the tendrils. The strategy would start with getting intertwined with crypto, then move into crypto-tangential like Robinhood, eventually hoping to claw his way into Washington and Wall Street. The FTX / Farmington State Bank investment comes to mind. John Ray definitely has his work cut out for him trying to unravel this mess. I think he'll be able to cleanly claw back anything in TradFi (it's a great test of the TradFi system). Good luck trying to clawback any of the crypto. Not like it matters though, anything he can claw back there is worthless. "Hey, here's your XYZ coin back, you've been made whole." This is just so fun to watch.
  - waterhouse 4y ago
    > Yeah I wonder if part of his strategy was just to dilute the crime so much by having it's tentacles dig into and wrap around every small corner of the legit financial/political system. Deliberately becoming "too big to fail", eh? (Which was more accurately termed "too big to be permitted to fail". Which then raises the question of who is doing the permitting, and why we would trust their judgment; but that would give the game away.)
    - lordfrito 4y ago
      > who is doing the permitting The "who" is just greedy connected people, who are everywhere. Including government and finance. Thankfully we have laws and regulations, which at least serve as some checks and balances to prevent these people from causing too much damage. The genius of checks and balances government as that it doesn't rely on ensuring "bad" people never get into positions of power. You will never be able to stamp out 100% of bad actors. Instead it sets things up such that the damage bad actors can do is minimized and/or identified quickly. Less collateral damage, and a chance for justice afterwards. "No regulations" in crypto should be a warning flag to people. Meanwhile, I'm really really interested if any crimes were committed on the "regulated" side of things. Those people need to be put in jail. Will be fun to watch this unravel.
SilasX 4y ago
Not really, SBF was caught in a lot of hype himself -- he was trying to get included on the Twitter deal as well, and the FTX balance sheet showed $43 million of TWTR stock near the acquisition, though Musk claims the offer was rejected. https://www.yahoo.com/entertainment/elon-musk-calls-report-sbf-161721544.html https://www.yahoo.com/entertainment/elon-musk-calls-report-s...
- texasbigdata 4y ago
  Read the text messages (different lawsuit) between musk and prominent (imho) Oxford philosopher William McAskill. Musk is asked repeatedly to meet and take money from this brillian guy called SBF. It’s weird bc I read wills book and really looked up to him, but clearly SBF can be very convincing. Elon seemed to not want to do it but the text messages suggest he did eventually take a call. So Elon must not have liked how that went since he was publicly encouraging others to roll over. My speculation of course.
  - jessaustin 4y ago
    If this episode isn't a giant warning sign for MacAskill and all of the rest of these characters, what would be? Maybe he's not as dumb as he always acts, but SBF seems more like a pawn of the altruism cabal than the other way around.
  - freejazz 4y ago
    All three of those people are dumb assholes. Not sure how that couldn't be clearer given all of their behavior. Part of life is being able to suss out people like these characters and never once did I think any of them had anything of value to contribute.
wmf 4y ago
It has been reported that Alameda made around $5B of VC investments. The scale of this thing is huge.
- londons_explore 4y ago
  How much of that $5B was actual cash, and how much was various loans/swaps/promises/tokens/paper money?
  - wmf 4y ago
    The worse case is that it was all customer cash. The funniest case is that it was IOUs and the startups will run out of money when their capital calls fail.
- WJW 4y ago
  5 billion is definitely a large number in absolute terms and I would love to be that rich, but if one of the largest crypto VCs made ~5b in investments TOTAL then the real economy has nothing to worry about. The forex markets did over $6 trillion per day in 2022, and that is just the currency exchanges. There are single ships in the world that cost more than 6 billion.
scottLobster 4y ago
If FTX and the pathetic Elon-simping txts from the Twitter lawsuit discovery have revealed anything, it's that once you reach a certain level of wealth you're so immune from consequences that losing money has zero effect on you personally, and since most of these guys are extremely ego-centric to begin with, that removes the only constraint they seriously cared about. There are exceptions to this, but that seems to be the trend. Billionaires in general aren't playing 4D chess, why would they? 4D chess is hard, requires sacrifice and valuing something bigger than oneself and one's bank account. Much easier to jump on popular hype trains. If it works you look like a genius and have a million stans to stroke you off, and money number go up so you can flex on other billionaires. If it fails nothing really happens to you personally. SBF wasn't actually at that level, but he had enough paper wealth that he clearly thought he was. We're watching the wealthy equivalent of that COVID-denier who, with their last breath before being intubated, calls the doctors and nurses who diagnosed them liars.
- spookthesunset 4y ago
  > We're watching the wealthy equivalent of that COVID-denier who, with their last breath before being intubated, calls the doctors and nurses who diagnosed them liars. Which is a work of fiction. Such a thing probably happened no more than a few times. The only reason it gets parroted back is because it serves as a nice bit of propaganda to gin up fear and get people to fall in line.
  - babypuncher 4y ago
    Herman Cain's Twitter account was still tweeting COVID denialism after he died of COVID.
    - macspoofing 4y ago
      [flagged]
      - raverbashing 4y ago
        > making it seem like his death was justified. Death by Denialism? Darwin sends his regards "The good thing about science is that it doesn't give a f about what you think"

chollida1 4y ago

One interesting thing about these shares that hasn't been confirmed as far as I can tell is that they were rumored to have been used as collateral for loans FTX took out. If this is true, then someone else(Genesis) has a $500M hole in their balance sheet due to this. Which will lead to knock on issues, just like how Luna -> 3AC -> Celsius and Voyager -> FTX In additional knock on effects, the US sized about $100M of crypto assets from FTX that Silvergate bank was holding. This put more stress on Silvergate bank that was already in alot of trouble over their loans and shrinking crypto assets. Based on the Government asking Silvergate for the HOOD shares and $8B in customer withdrawals they've gotten, they're down almost 50% today alone. We'll probably see someone acquire them for nothing or we'll have a bank failure pretty soon. Almost certainly people like Elizabeth Warren will use this to show that crypto is having a spill on effect to the real world economy and therefore should be under their regulatory control

rhacker 4y ago
Without regulation, it's just a huge casino. Then again, it's not really possible to regulate.
- JumpCrisscross 4y ago
  > it's not really possible to regulate Hell of a lot easier than cash.
  - etothepii 4y ago
    This is both true and not true. Cash is notionally untraceable but try moving $10m in cash illegally for less than 10% fee, and good luck buying anything if that cash represents a sizeable portion of your legitimate net worth.
    - LarryMullins 4y ago
      > Cash is notionally untraceable but try moving $10m in cash illegally for less than 10% fee, That's easy if you can tolerate risk; just put it in the back of a u-haul and obey the speed limit. Of course if the "cash" is actually a number in a bank account, not actual cash, then it's not so easy.

throwawayapples 4y ago

What claim does the federal government have to these funds? And how is this seizure even being contemplated before a trial and conviction? Does the Fourth Amendment not apply to him just because nobody likes him?

marcinzm 4y ago
I mean you could just read the article: "The Justice Department said Wednesday that has moved to seize millions of shares of Robinhood, the popular stock-trading app, whose ownership is disputed by several parties, including Bankman-Fried himself, his bankrupt crypto exchange FTX and another bankrupt crypto company. Because the competing claims, FTX filed a motion earlier this month to the Delaware bankruptcy court to keep the assets frozen until the court “can resolve the issues in a manner that is fair to all creditors of the debtors.”"
- JumpCrisscross 4y ago
  The TL; DR being the DoJ moving to seize is the start of due process.
- dehrmann 4y ago
  That's still a little weird because usually personal assets are shielded from issues a company has (at least for LLCs).
  - marcinzm 4y ago
    As the quoted text notes, FTX claims these are it's assets and until that is resolved is asking the courts for them to be frozen.
  - quickthrowman 4y ago
    It’s a bit different when you borrow $500M from your (now bankrupt) company to purchase the ‘personal assets’.
peter422 4y ago

mannykannot 4y ago

> Bankman-Fried claims ownership of the shares, seeking a source of payment for legal expenses, according to FTX. These shares must have completely slipped his mind when he said all he had left was $100k in his bank account. https://www.axios.com/2022/11/29/sam-bankman-fried-100000-ftx-cftc-regulation https://www.axios.com/2022/11/29/sam-bankman-fried-100000-ft...

SkyMarshal 4y ago
Technically, Robinhood isn't a bank account...
VHRanger 4y ago
He was telling the truth! The shares weren't in his bank account, they were in his brokerage account
- mannykannot 4y ago
  SBF, from the same article: "Basically everything I had was just tied up in the company." Of course, he's been dissembling all the way down.
britneybitch 4y ago
Carefully chosen words. A brokerage is not a bank account. Also, a crypto wallet is not a bank account.
- TechBro8615 4y ago
  "It's all fungible" - SBF
deleted 4y ago
[deleted]
psychlops 4y ago
Pretty sure "he didn't have the numbers in front of him" when he answered.

twelve40 4y ago

So the interesting thing is that he massively toned down his public/online presence, was that a part of the deal or what else has changed?

notyourwork 4y ago
When the years of jail time start racking up you usually stop talking as much.
- twelve40 4y ago
  Um they were racking up a month ago just the same
  - spookthesunset 4y ago
    But a month ago the idea the feds would get him was just fantasy (in his mind). Shit probably got very real once somebody slapped some handcuffs on him.
- 0cf8612b2e1e 4y ago
  Is there any interpretation where he is not going down for all of the crypto ills? That the fraud was so straightforward, I expect the book to be thrown at him to make an example. What more could he say at this point to make the situation any worse? His lawyers were surely telling him to stop shut up for the past two months and he didn’t listen then.
tofuahdude 4y ago
Living at your parent's house with an ankle bracelet, only out of jail on a $250 million bond is quite a different scenario than being in a Bahamian mansion.
- notch656c 4y ago
  Dude is staring down the barrel of the rest of his youthful years in jail, meanwhile he lives close enough to a coastline where he could board a yacht and be well into international waters god knows where in an anonymous fishing boat with hundreds of millions in crypto before sunrise. The most baffling part of all of this is that he has never attempted to escape. Surely a Liberian or Somalian warlord or something will protect him in exchange for $1MM / annum and probably provide him a harem and a nice plot of desert.

jmyeet 4y ago

The Fourth Amendment quite literally has the words "unlawful search and seizure". I want people to remember that whenever they're pushing the propaganda that is the originalist or textualist interpretation of the Constitution by the Supreme Court. That propaganda is a lie. I understand the mental gymanstics used to justify this, in that the property is the defendant in a civil action (for a suspected criminal act by its owner, no less). The end result is what we see here: civil asset forfeiture and absolutely no protection against unlawful seizure. Now a lot of people won't care about this because it's SBF and it looks pretty likely that he's guilty. At least there's a criminal indictment in this case. If the government has this power (and, again, I think they should not) this use seems appropriate. But the government doesn't require a criminal indictment at all (let alone a conviction) to use this power. Consider the case of Amy Nelson [1]. At the behest of Amazon, the Department of Justice seized the bank accounts of her, her husband, a bunch of employees of a company and even their lawyers who worked for a law firm, ultimately charging nobody with anything and returning 85% of the money 2 years later once the Nelsons agreed not to sue the government. Also, SBF gave tens of millions in donations to both parties in the recent midterms. If the Robinhood shares are fair game, why aren't the donations? [1]: https://www.geekwire.com/2022/former-seattle-entrepreneur-and-husband-will-get-back-most-of-funds-seized-by-fbi-in-amazon-case/ https://www.geekwire.com/2022/former-seattle-entrepreneur-an...

tedunangst 4y ago
> If the Robinhood shares are fair game, why aren't the donations? Because SBF allegedly owns the shares. He doesn't own the donation. Unless you want the government to seize whatever goodwill the donation got him. That would be a fun sheriff's sale. "One lunch with selected congressman, to discuss voting in up to two bills."
- graeme 4y ago
  Actually the donations may well be clawed back in the bankruptcy proceedings, depending how recent they are.
graeme 4y ago
The article is a little unclear but it appears the assets are being seized because there is a reasonable claim they’re part of the bankruptcy estate of FTX, which isn’t directly related to SBF’s trial.

thesausageking 4y ago

Sequoia was heavily invested in Robinhood and then backed FTX and promoted SBF as the next great founder, evening allowing him to invest in their fund as an LP with money he took out of FTX. That seems pretty suspicious.

afrcnc 4y ago
VC bros will fund almost anything. Not that suspicious. I've seen them fund cybersecurity firms on the edge of legality, even after they were questioned in the Indian Parliament on a major corruption case. Nothing is too shady for these people.
- birdyrooster 4y ago
  I just want to see the egghead man lose everything in disgrace.

Octokiddie 4y ago

> Four separate entities have laid claim to the approximately 56 million shares, worth about $460 million. FTX’s new management, which is trying to claw back funds for investors and customers of the bankrupt platform, have sought to wrest control of the shares from an Antigua-based holding company 90% owned by Bankman-Fried. The article mentions: 1. SBF himself 2. FTX Who are the other two? This seems important because those other two entities may have recorded the shares as assets or even themselves pledged them as collateral.

cypherpunks01 4y ago
BlockFi is one of them. They believed they were holding the Robinhood shares as collateral pledged for a large loan to Alameda Research. But when they went to liquidate the shares after the loan defaulted, the broker did not allow them to do so, as FTX/Alameda had just filed for bankruptcy and I believe the estate argued against it. See https://www.reuters.com/legal/ftx-opposes-blockfis-claim-bankman-frieds-robinhood-shares-2022-12-22/ https://www.reuters.com/legal/ftx-opposes-blockfis-claim-ban... I am not sure who the 4th party is.
paxys 4y ago
3. The US government, as mentioned in the title 4. Probably one of their creditors or authorities in the Bahamas

naillo 4y ago

I wonder if they'll take the $500M or so money AnthropicAI also apparantely got from FTX

peter303 4y ago

70% of Madoff victims contributions recovered by 2022. In 14 rounds. https://abcnews.go.com/Business/funds-recovered-victims-bernie-madoff/story?id=94863713 https://abcnews.go.com/Business/funds-recovered-victims-bern... They only get contributions back with no earnings.

noyoudumbdolt 4y ago

Poor legal reporting by CNN, but it sounds like DOJ was worried that these shares might fall under a bankruptcy exception somehow and end up in SBF's hands, clear of the bankruptcy court's jurisdiction. If so, this move makes sure the victims, not SBF, get this money.

chucklenorris 4y ago

And ofcourse no word about clawing back the donations to democrats and republicans