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There has obviously been some bad stuff going on over at FTX, but is the counter on a website really the "most" proof that they could find? https://www.ycombin

There has obviously been some bad stuff going on over at FTX, but is the counter on a website really the "most" proof that they could find? https://www.ycombinator.com/ https://www.ycombinator.com/ Is every number on that page real time accurate? Is the combined value $600bn - if it is 599bn or even 601bn then ding ding ding we have ourselves fraud. https://en.wikipedia.org/wiki/National_Debt_Clock https://en.wikipedia.org/wiki/National_Debt_Clock - Can I get any and all people behind this (and Similar Projectes) jailed for fraud?

prettychill 3y ago
If you actually look at the article the very first code sample shows how certain customers (Alameda) are directly exempt from auto liquidation & can carry negative balances at FTX.
- shapefrog 3y ago
  > certain customers (Alameda) are directly exempt from auto liquidation Certain customers (including Alameda) - I understang other customers had similar arrangements, and why wouldnt they? Every account was trading on margin and high leverage - the reason you auto liquidate is so they dont run off owing you money. Is it fraud for a company to extend credit to another company? Any company that issues a invoice and allows say 14 days to settle is extending credit to the other party.
  - prettychill 3y ago
    It is most certainly fraud to lie about protections in place to protect customer assets. That includes backstop insurance and auto-liquidation practices.
deleted 3y ago
[deleted]
Analemma_ 3y ago
You’re missing the broader context here. The prosecution is alleging massive fraud, while SBF’s defense is that he wasn’t committing fraud, he was just incompetent. So a lot of the trial hinges on presenting evidence one way or the other for the fraud-or-incompetence question. Things like the counter, which was clearly deliberate and specifically engineered to lie to customers, establish a pattern of deception and make it very hard to allege incompetence. The counter is unimportant in and of itself, it’s how it undermines SBF’s defense.
- shapefrog 3y ago
  They guy had a personal net worth of ~$100bn; lost all that and $8bn of other peoples money. The prosecution have cracked open the books, turned every single employee, and this is their smoking gun? I will at least say, "goes to character", is absoultely an excellent and as I see it the only logical answer. If however, they have to play that game and that is all they have then they are going to struggle to make a legitimate case. Maximum entertainment value from the sidelines will be not guilty with all the other FTX employees having plead out!
  - ac29 3y ago
    > The prosecution have cracked open the books, turned every single employee, and this is their smoking gun? We are not even one week into a six week trial. This particular fraud is only one small part of their overall case.
bmitc 3y ago
The backing of that number was testified to, under oath, to Congress, which by itself is a felony. I haven't been following the trial though, and I'm unsure of how much testimony was given. What's reported on this blog does seem like it is a little small given Gary Wang's large role.
- shapefrog 3y ago
  > The backing of that number was testified to, under oath, to Congress, which by itself is a felony. He did not testify that the number on the website was real. He testified to the existence of the insurance fund and the single biggest daily drawdown from the fund. "which by itself is a felony" - wouldnt you mention that as the prosecution??? Or are they aiming for a mistrial on the grounds of incompetence? > Prosecutors haven’t mentioned it, but Sam Bankman-Fried would go on to testify under oath in front of the U.S. Congress in May 2022 that “the insurance fund has paid out a net total of $9.5 million” in the preceding three years, and that “the single biggest daily drawdown from the FTX.com insurance fund was $4.7 million.” Actual testimony. https://www.congress.gov/event/117th-congress/house-event/114729/text https://www.congress.gov/event/117th-congress/house-event/11... > Finally, prosecutors questioned Wang about the FTX “insurance fund”, which was ostensibly supposed to protect both FTX and its customers from trades that went badly even more quickly than the exchange’s risk engine could account for. > One such example was in 2021, when a trader was able to exploit a bug in FTX’s margin system that allowed them to take out a massive position in the MobileCoin cryptocurrency. They were eventually liquidated, and FTX suffered a loss of “several hundred million dollars,” according to Wang. The losses to the exchange from a failure of the code should be borne by the exchange not from any "insurance fund" whos purpose is the make good slippage losses for customers. There are grounds to ask why they passed the loss off to Alameda (in which case FTX co was defrauding Alemada co for an FTX mistake). I see the narative that the prosecution is trying to push, but unless SBFs laywers are idiots they should be pointing out that they are trying to connect two distinctly different dots.

prettychill 3y ago

If you actually look at the article the very first code sample shows how certain customers (Alameda) are directly exempt from auto liquidation & can carry negative balances at FTX.

shapefrog 3y ago
> certain customers (Alameda) are directly exempt from auto liquidation Certain customers (including Alameda) - I understang other customers had similar arrangements, and why wouldnt they? Every account was trading on margin and high leverage - the reason you auto liquidate is so they dont run off owing you money. Is it fraud for a company to extend credit to another company? Any company that issues a invoice and allows say 14 days to settle is extending credit to the other party.
- prettychill 3y ago
  It is most certainly fraud to lie about protections in place to protect customer assets. That includes backstop insurance and auto-liquidation practices.

deleted 3y ago

[deleted]

Analemma_ 3y ago

You’re missing the broader context here. The prosecution is alleging massive fraud, while SBF’s defense is that he wasn’t committing fraud, he was just incompetent. So a lot of the trial hinges on presenting evidence one way or the other for the fraud-or-incompetence question. Things like the counter, which was clearly deliberate and specifically engineered to lie to customers, establish a pattern of deception and make it very hard to allege incompetence. The counter is unimportant in and of itself, it’s how it undermines SBF’s defense.

shapefrog 3y ago
They guy had a personal net worth of ~$100bn; lost all that and $8bn of other peoples money. The prosecution have cracked open the books, turned every single employee, and this is their smoking gun? I will at least say, "goes to character", is absoultely an excellent and as I see it the only logical answer. If however, they have to play that game and that is all they have then they are going to struggle to make a legitimate case. Maximum entertainment value from the sidelines will be not guilty with all the other FTX employees having plead out!
- ac29 3y ago
  > The prosecution have cracked open the books, turned every single employee, and this is their smoking gun? We are not even one week into a six week trial. This particular fraud is only one small part of their overall case.

bmitc 3y ago

The backing of that number was testified to, under oath, to Congress, which by itself is a felony. I haven't been following the trial though, and I'm unsure of how much testimony was given. What's reported on this blog does seem like it is a little small given Gary Wang's large role.

shapefrog 3y ago
> The backing of that number was testified to, under oath, to Congress, which by itself is a felony. He did not testify that the number on the website was real. He testified to the existence of the insurance fund and the single biggest daily drawdown from the fund. "which by itself is a felony" - wouldnt you mention that as the prosecution??? Or are they aiming for a mistrial on the grounds of incompetence? > Prosecutors haven’t mentioned it, but Sam Bankman-Fried would go on to testify under oath in front of the U.S. Congress in May 2022 that “the insurance fund has paid out a net total of $9.5 million” in the preceding three years, and that “the single biggest daily drawdown from the FTX.com insurance fund was $4.7 million.” Actual testimony. https://www.congress.gov/event/117th-congress/house-event/114729/text https://www.congress.gov/event/117th-congress/house-event/11... > Finally, prosecutors questioned Wang about the FTX “insurance fund”, which was ostensibly supposed to protect both FTX and its customers from trades that went badly even more quickly than the exchange’s risk engine could account for. > One such example was in 2021, when a trader was able to exploit a bug in FTX’s margin system that allowed them to take out a massive position in the MobileCoin cryptocurrency. They were eventually liquidated, and FTX suffered a loss of “several hundred million dollars,” according to Wang. The losses to the exchange from a failure of the code should be borne by the exchange not from any "insurance fund" whos purpose is the make good slippage losses for customers. There are grounds to ask why they passed the loss off to Alameda (in which case FTX co was defrauding Alemada co for an FTX mistake). I see the narative that the prosecution is trying to push, but unless SBFs laywers are idiots they should be pointing out that they are trying to connect two distinctly different dots.