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The civil lawsuit against SBF's parents has email showing that they knew about the coming bankruptcy in 2021. So the father was asking how to transfer FTX asset

The civil lawsuit against SBF's parents has email showing that they knew about the coming bankruptcy in 2021. So the father was asking how to transfer FTX assets to "bankruptcy remote" location: assets that couldn't be clawed back once the bankruptcy would happen. But it was a scam from day one: FTX was losing half a million a day when FTX was created. Alameda never worked: the code SBF wrote to "arbitrage" wasn't even taking order book depth into account. So the code would see a bid/ask arbitrage and would make a big trade, but there wasn't enough liquidity at the bid/ask price found to make the arb work. So basically the code was losing money, for months. It's not even amateur hour: it's sheer idiocy and incompetence (or it was made on purpose to make the [unkown so far] party on the other side of these trades rich). Several people realized SBF was full of shit: the tweets and articles exposing this (entire family of) scammer(s) were all out there. But nobody listened. I don't understand how people could see a video of that guy talking and somehow think he was smart. I saw him during the craze, when there was on F1 race etc. and I sent an email to my brother asking him: "Have you heard of that dumb no-name?" How people fall for that? Shame on you Sequoia. Shame on you The NYT.

toomuchtodo 3y ago
Sequoia was looking out for Sequoia. This should come as no surprise. They don't care who is left holding the bag, crypto, public securities, or otherwise. They're trying to make their rake off their LP funding, while also being a "thought leader" and being able to make a strong case you should be putting your investment dollars with them if you want VC/startup asset class exposure. Incentives matter. Make investors jointly responsible for the fraud of their portfolio companies if you want to see meaningful change. Otherwise, there is no incentive to do due diligence, just to pump money into whatever the current lottery is, shielded from the blast radius by corporate limited liability. This applies just as much to public security institutional investors as it does to VCs or other PE investment arrangements. You're providing the powder, you can share in the blame when the cannon blows up. Returns must be earned through adult governance and oversight. If there are no adults in the room, that is what civil and criminal proceedings are for.
tempsy 3y ago
I'm not really "mad" at Sequoia. I think it's more funny VCs have developed a reputation for being experts in investing and technology but were still so easily duped by FTX through a simple combination of FOMO and credentialism (Jane Street/MIT/Ivy wunderboy creds).

toomuchtodo 3y ago

Sequoia was looking out for Sequoia. This should come as no surprise. They don't care who is left holding the bag, crypto, public securities, or otherwise. They're trying to make their rake off their LP funding, while also being a "thought leader" and being able to make a strong case you should be putting your investment dollars with them if you want VC/startup asset class exposure. Incentives matter. Make investors jointly responsible for the fraud of their portfolio companies if you want to see meaningful change. Otherwise, there is no incentive to do due diligence, just to pump money into whatever the current lottery is, shielded from the blast radius by corporate limited liability. This applies just as much to public security institutional investors as it does to VCs or other PE investment arrangements. You're providing the powder, you can share in the blame when the cannon blows up. Returns must be earned through adult governance and oversight. If there are no adults in the room, that is what civil and criminal proceedings are for.

tempsy 3y ago

I'm not really "mad" at Sequoia. I think it's more funny VCs have developed a reputation for being experts in investing and technology but were still so easily duped by FTX through a simple combination of FOMO and credentialism (Jane Street/MIT/Ivy wunderboy creds).