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A reddit post called out SBF as a fraud 2 years ago and no one on the Bitcoin subreddit believed them! https://www.reddit.com/r/Bitcoin/comments/p1oqqu/the_ceo

A reddit post called out SBF as a fraud 2 years ago and no one on the Bitcoin subreddit believed them! https://www.reddit.com/r/Bitcoin/comments/p1oqqu/the_ceo_of_ftx_sam_bankmanfried_copied_the/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&utm_content=1&utm_term=22 https://www.reddit.com/r/Bitcoin/comments/p1oqqu/the_ceo_of_...

sfmike 3y ago
great idea for a trader. scrape anything where people say something like "this is so f* dumb I don't have the time to explain it" as it could be a black swan and call puts against it.
paulgb 3y ago
Good find, but worth noting that this is accusing him of front-running when what he actually did was dumber and more criminal: using FTX customer deposits to cover losses on the Alameda side.
- acaloiar 3y ago
  I imagine SBF's charges are more serious than a front-running charge. The prosecution also may not have had sufficient evidence of front-running to get the charges to stick. But any exchange in such close company with a hedge fund should always be suspected of front-running. There's an inherent conflict of interest between those two entity types. And I would be surprised if Alameda wasn't front-running FTX customers, given both firm's obvious ethical shortcomings.
  - muldvarp 3y ago
    Is front-running something you could/would do manually? The prosecution had access to the source code and git history of FTX.
    - acaloiar 3y ago
      Front-running efficacy can be measured in milliseconds. It's a world where microwave towers sometimes replace fiber lines, to gain a few milliseconds of advantage. That is, when the front-runner isn't "in-house", which Alameda had ample opportunity to be. Alameda and FTX were separate legal entities, but Sam largely headed both. Alameda front-running servers, in theory, could have been running right along side FTX servers, with only inches of network-induced latency. You can of course front-run manually, depending on the degree of automation in the systems one is front-running, but front-runners will generally want to automate. And to scale the scheme for a realtime system of FTX's volume, Alameda would certainly want to automate it. I wasn't following the case closely enough, but did the prosecution have access to Alameda source code, or was it only FTX? As long as Alameda had access to FTX order records, any front-running code would likely have resided in Alameda repositories.
      - muldvarp 3y ago
        > I wasn't following the case closely enough, but did the prosecution have access to Alameda source code, or was it only FTX? This blog post [0] contains screenshots of git commits that were used as evidence in the trial. It only shows commits to FTX's source code, so I don't know if the prosecution also had access to Alameda's source code. Given how obviously incriminating those snippets are, I don't think SBF really tried to hide his crimes. I'm not sure then why they would architecture FTX such there are no signs of front-running in their code. Personally, my guess is that either A) the prosecution found evidence of front-running but thought that the case was air-tight enough already and they didn't want to confuse the jurors or B) Alameda didn't actually do any front-running. [0]: https://newsletter.mollywhite.net/p/the-fraud-was-in-the-code https://newsletter.mollywhite.net/p/the-fraud-was-in-the-cod...
      - pcl 3y ago
        I'm not in the industry. That said, it's my understanding that "front-running" as a term of art necessarily implies some sort of illegal behavior (at least in the US and European markets), but being clever with physics (microwave towers, bouncing signals off the ionosphere, etc.) is fair game, and if you can pull off some profitable arbitrage trades with that sort of setup, you're in the clear.
  - verteu 3y ago
    > any exchange in such close company with a hedge fund should always be suspected of front-running Indeed -- I knew several professional traders who used FTX. At the time, their consensus was: 1) "Probably Alameda has an unfair latency advantage, because they are the designated market-maker, and owned+operated by the same people who run the exchange." This could be called 'front-running' depending on how you define the term. 2) "However, SBF probably won't steal all our money because he is well-known, extraditable by USA, and would go to prison." Needless to say, assumption 2) was incorrect.
    - newswasboring 3y ago
      The premise of 2) is entirely correct, they just underestimated how irrational people can be.
      - toss1 3y ago
        Exactly. SBF was a sociopath who would (acdg to sworn testimony of his GF) actually go ahead and toss the coin if the outcome was one side results in the world getting twice as good and the other side causes the world to be destroyed, and he DGAF that he was also making the bet for everyone on the planet. They didn't count on the fact that this mentality would also mean that in real life, he would also do all kinds of risky crimes, and even go to trial instead of taking a plea deal, because there's a non-zero!! chance he could get away with it. Bad bets all around
        _bkyr 3y ago
        > SBF was a sociopath who would (acdg to sworn testimony of his GF) actually go ahead and toss the coin if the outcome was one side results in the world getting twice as good and the other side causes the world to be destroyed, and he DGAF that he was also making the bet for everyone on the planet. It could be true he's probably a sociopath, but having an edgy philosophical talk with your girlfriend is just that. It could say something about his character but it's nothing more than a fantasy. Much more damning is stealing all those billions to become rich and famous.
- bena 3y ago
  It's probably a result of not having complete information and giving benefit of the doubt. The guy realized SBF was doing weird shit that was probably, if not straight up illegal, at least highly unethical. And front-running was the thing that made the most sense to him at the time.
- itsoktocry 3y ago
  >what he actually did No, what he was charged with was using customer funds. I'm sure they did all kinds of shady things, including front-running customers.
  - trogdor 3y ago
    On what basis are you sure of that?
    - dotBen 3y ago
      proven character
      - xg15 3y ago
        also, remember, it was all for the greater good...
  - simplicio 3y ago
    I mean, if he was doing all kinds of smarter types of fraud, one would think they wouldn't have gone broke.
rosege 3y ago
Shame the Youtube vid of him frontrunning has been removed.
- josu 3y ago
  It's still here: https://web.archive.org/web/20221113092101/https://www.youtube.com/watch?v=KMZckrBPw38 https://web.archive.org/web/20221113092101/https://www.youtu... I don't really think it shows clear evidence of him front-running FTX users. He doesn't even seem to be trading on FTX.
tim333 3y ago
The poster accused SBF of front running his customers but comments underneath seem skeptical: >Clearly OP has no fucking clue what he’s talking about because the videos in question don’t prove he’s front running. >The Youtube video you linked to (I watched some from the point you linked), appears to be about trading an arb opportunity that existed because of a large sell wall on Binance. Where does it show he's using 'private FTX analytics' to 'front run his customers'?
mrkramer 3y ago
In crypto community everybody is calling everybody a fraud. Probably because in the early days of the Bitcoin and the altcoins, the industry was largely unregulated with a lot of scams going around. But nowadays, governments seem to be catching up.
josu 3y ago
This is actually one of the reasons why the FTX collapse came as a surprise for most crypto insiders. Everyone assumed that Alameda Research (the trading arm of FTX) was printing money, alas it was losing billions. Sam Trabuco, co-founder of Alameda, who has been surprisingly absent from any trial, was instrumental in creating this illusion of success for Alameda.
reidjs 3y ago
I’m sure there’s a Reddit thread for every cryptocurrency company and founder calling them a fraud.
- JustLurking2022 3y ago
  And statistically, they're virtually all correct.
  - reidjs 3y ago
    Just like how, statistically, a cancer test strip that always says "not cancer" is virtually always correct.
    - deleted 3y ago
      [deleted]
    - dymk 3y ago
      You're confusing false positives and false negatives
      - reidjs 3y ago
        Ok let me make a correction. It’s always a good blind bet that a singular new company and/or founder will fail their next venture, not just startups in the crypto space, but across every industry. If you know a little bit (insider info) about the space and founders you can probably make better bets, though .
        _wf2l 3y ago
        not with crypto though, because it's all a scam or a front, there is no actually successful crypto projects, unless you count successful as having scammed a bunch of money out of people's hands, in which case, yes theyre all pretty much successful
permo-w 3y ago
these subreddits are/were absolutely full to the brim with bots/adversarial actors. it's obvious after spending any time on them. the incentive to manipulate is just too high, and the ease with which to do it is too low
- Ographer 3y ago
  Exactly. Right now on the subreddit there is a post about how a guy plans to invest 2% of his net worth into bitcoin and most of the comments are mocking him for not investing 90-100%. There is no such thing as skepticism or critical analysis on these subreddits. Obviously these commenters are already holders and have incentive to convince more people to buy. Like you said, I'm sure there are plenty of bots active in pushing their narrative with no consequences or accountability. Whether crypto is useful or not, the market manipulation and ponzi-scheme recruiting tactics are too sleazy for me to invest seriously.
whatamidoingyo 3y ago
> OP you literally have no idea what you’re talking about. Put your tin foil hat away and stop trying to stir up controversy where there is none. Some of the replies to that... my god.
shadowgovt 3y ago
From this, we can glean two lessons: 1) There's not a lot of weight to put on such criticism because for any success there are also critics. Critics are wrong until and unless they're right. As others have noted, in this case, he wasn't convicted for the thing these critics were claiming he was doing. 2) ... But, it's Bitcoin. Any critic claiming anything Bitcoin related is probably tied to a scam is statistically likely to be correct. ;)
polynomial 3y ago
Best comment: "If this is true, this would be the worst rugpull ever!"
lawlessone 3y ago
TBF you can accusations of fraud against anyone in space like this. It's like Nostradamus predictions.
jquery 3y ago
The sheer confidence and contempt of some of those commentators is impressive...

sfmike 3y ago

great idea for a trader. scrape anything where people say something like "this is so f* dumb I don't have the time to explain it" as it could be a black swan and call puts against it.

paulgb 3y ago

Good find, but worth noting that this is accusing him of front-running when what he actually did was dumber and more criminal: using FTX customer deposits to cover losses on the Alameda side.

acaloiar 3y ago
I imagine SBF's charges are more serious than a front-running charge. The prosecution also may not have had sufficient evidence of front-running to get the charges to stick. But any exchange in such close company with a hedge fund should always be suspected of front-running. There's an inherent conflict of interest between those two entity types. And I would be surprised if Alameda wasn't front-running FTX customers, given both firm's obvious ethical shortcomings.
- muldvarp 3y ago
  Is front-running something you could/would do manually? The prosecution had access to the source code and git history of FTX.
  - acaloiar 3y ago
    Front-running efficacy can be measured in milliseconds. It's a world where microwave towers sometimes replace fiber lines, to gain a few milliseconds of advantage. That is, when the front-runner isn't "in-house", which Alameda had ample opportunity to be. Alameda and FTX were separate legal entities, but Sam largely headed both. Alameda front-running servers, in theory, could have been running right along side FTX servers, with only inches of network-induced latency. You can of course front-run manually, depending on the degree of automation in the systems one is front-running, but front-runners will generally want to automate. And to scale the scheme for a realtime system of FTX's volume, Alameda would certainly want to automate it. I wasn't following the case closely enough, but did the prosecution have access to Alameda source code, or was it only FTX? As long as Alameda had access to FTX order records, any front-running code would likely have resided in Alameda repositories.
    - muldvarp 3y ago
      > I wasn't following the case closely enough, but did the prosecution have access to Alameda source code, or was it only FTX? This blog post [0] contains screenshots of git commits that were used as evidence in the trial. It only shows commits to FTX's source code, so I don't know if the prosecution also had access to Alameda's source code. Given how obviously incriminating those snippets are, I don't think SBF really tried to hide his crimes. I'm not sure then why they would architecture FTX such there are no signs of front-running in their code. Personally, my guess is that either A) the prosecution found evidence of front-running but thought that the case was air-tight enough already and they didn't want to confuse the jurors or B) Alameda didn't actually do any front-running. [0]: https://newsletter.mollywhite.net/p/the-fraud-was-in-the-code https://newsletter.mollywhite.net/p/the-fraud-was-in-the-cod...
    - pcl 3y ago
      I'm not in the industry. That said, it's my understanding that "front-running" as a term of art necessarily implies some sort of illegal behavior (at least in the US and European markets), but being clever with physics (microwave towers, bouncing signals off the ionosphere, etc.) is fair game, and if you can pull off some profitable arbitrage trades with that sort of setup, you're in the clear.
- verteu 3y ago
  > any exchange in such close company with a hedge fund should always be suspected of front-running Indeed -- I knew several professional traders who used FTX. At the time, their consensus was: 1) "Probably Alameda has an unfair latency advantage, because they are the designated market-maker, and owned+operated by the same people who run the exchange." This could be called 'front-running' depending on how you define the term. 2) "However, SBF probably won't steal all our money because he is well-known, extraditable by USA, and would go to prison." Needless to say, assumption 2) was incorrect.
  - newswasboring 3y ago
    The premise of 2) is entirely correct, they just underestimated how irrational people can be.
    - toss1 3y ago
      Exactly. SBF was a sociopath who would (acdg to sworn testimony of his GF) actually go ahead and toss the coin if the outcome was one side results in the world getting twice as good and the other side causes the world to be destroyed, and he DGAF that he was also making the bet for everyone on the planet. They didn't count on the fact that this mentality would also mean that in real life, he would also do all kinds of risky crimes, and even go to trial instead of taking a plea deal, because there's a non-zero!! chance he could get away with it. Bad bets all around
      - _bkyr 3y ago
        > SBF was a sociopath who would (acdg to sworn testimony of his GF) actually go ahead and toss the coin if the outcome was one side results in the world getting twice as good and the other side causes the world to be destroyed, and he DGAF that he was also making the bet for everyone on the planet. It could be true he's probably a sociopath, but having an edgy philosophical talk with your girlfriend is just that. It could say something about his character but it's nothing more than a fantasy. Much more damning is stealing all those billions to become rich and famous.
bena 3y ago
It's probably a result of not having complete information and giving benefit of the doubt. The guy realized SBF was doing weird shit that was probably, if not straight up illegal, at least highly unethical. And front-running was the thing that made the most sense to him at the time.
itsoktocry 3y ago
>what he actually did No, what he was charged with was using customer funds. I'm sure they did all kinds of shady things, including front-running customers.
- trogdor 3y ago
  On what basis are you sure of that?
  - dotBen 3y ago
    proven character
    - xg15 3y ago
      also, remember, it was all for the greater good...
- simplicio 3y ago
  I mean, if he was doing all kinds of smarter types of fraud, one would think they wouldn't have gone broke.

rosege 3y ago

Shame the Youtube vid of him frontrunning has been removed.

josu 3y ago
It's still here: https://web.archive.org/web/20221113092101/https://www.youtube.com/watch?v=KMZckrBPw38 https://web.archive.org/web/20221113092101/https://www.youtu... I don't really think it shows clear evidence of him front-running FTX users. He doesn't even seem to be trading on FTX.

tim333 3y ago

The poster accused SBF of front running his customers but comments underneath seem skeptical: >Clearly OP has no fucking clue what he’s talking about because the videos in question don’t prove he’s front running. >The Youtube video you linked to (I watched some from the point you linked), appears to be about trading an arb opportunity that existed because of a large sell wall on Binance. Where does it show he's using 'private FTX analytics' to 'front run his customers'?

mrkramer 3y ago

In crypto community everybody is calling everybody a fraud. Probably because in the early days of the Bitcoin and the altcoins, the industry was largely unregulated with a lot of scams going around. But nowadays, governments seem to be catching up.

josu 3y ago

This is actually one of the reasons why the FTX collapse came as a surprise for most crypto insiders. Everyone assumed that Alameda Research (the trading arm of FTX) was printing money, alas it was losing billions. Sam Trabuco, co-founder of Alameda, who has been surprisingly absent from any trial, was instrumental in creating this illusion of success for Alameda.

reidjs 3y ago

I’m sure there’s a Reddit thread for every cryptocurrency company and founder calling them a fraud.

JustLurking2022 3y ago
And statistically, they're virtually all correct.
- reidjs 3y ago
  Just like how, statistically, a cancer test strip that always says "not cancer" is virtually always correct.
  - deleted 3y ago
    [deleted]
  - dymk 3y ago
    You're confusing false positives and false negatives
    - reidjs 3y ago
      Ok let me make a correction. It’s always a good blind bet that a singular new company and/or founder will fail their next venture, not just startups in the crypto space, but across every industry. If you know a little bit (insider info) about the space and founders you can probably make better bets, though .
      - _wf2l 3y ago
        not with crypto though, because it's all a scam or a front, there is no actually successful crypto projects, unless you count successful as having scammed a bunch of money out of people's hands, in which case, yes theyre all pretty much successful

permo-w 3y ago

these subreddits are/were absolutely full to the brim with bots/adversarial actors. it's obvious after spending any time on them. the incentive to manipulate is just too high, and the ease with which to do it is too low

Ographer 3y ago
Exactly. Right now on the subreddit there is a post about how a guy plans to invest 2% of his net worth into bitcoin and most of the comments are mocking him for not investing 90-100%. There is no such thing as skepticism or critical analysis on these subreddits. Obviously these commenters are already holders and have incentive to convince more people to buy. Like you said, I'm sure there are plenty of bots active in pushing their narrative with no consequences or accountability. Whether crypto is useful or not, the market manipulation and ponzi-scheme recruiting tactics are too sleazy for me to invest seriously.

whatamidoingyo 3y ago

> OP you literally have no idea what you’re talking about. Put your tin foil hat away and stop trying to stir up controversy where there is none. Some of the replies to that... my god.

shadowgovt 3y ago

From this, we can glean two lessons: 1) There's not a lot of weight to put on such criticism because for any success there are also critics. Critics are wrong until and unless they're right. As others have noted, in this case, he wasn't convicted for the thing these critics were claiming he was doing. 2) ... But, it's Bitcoin. Any critic claiming anything Bitcoin related is probably tied to a scam is statistically likely to be correct. ;)

polynomial 3y ago

Best comment: "If this is true, this would be the worst rugpull ever!"

lawlessone 3y ago

TBF you can accusations of fraud against anyone in space like this. It's like Nostradamus predictions.

jquery 3y ago

The sheer confidence and contempt of some of those commentators is impressive...