7 ms·

> If anything, it's excessive if you consider the nature of the crime relative to the nature of murder or kidnapping. I suspect the resulting number of shorten

> If anything, it's excessive if you consider the nature of the crime relative to the nature of murder or kidnapping. I suspect the resulting number of shortened lives amongst all the people who lost $8 billion worth of their money due to the fraud is more than the number caused by a single murder.

vlovich123 3y ago
I thought the “lost” money was simply due to poor accounting and actually found. > Kaplan said he had found that FTX customers lost $8 billion, FTX's equity investors lost $1.7 billion, and that lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion. https://www.reuters.com/technology/sam-bankman-fried-be-sentenced-multi-billion-dollar-ftx-fraud-2024-03-28/ https://www.reuters.com/technology/sam-bankman-fried-be-sent... Clearly the real crime is bilking investors out of their money. It’s also questionable whether they even ended up losing money given the rising price of crypto in the past year. It’s also interesting how this happened: > when it filed for bankruptcy after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. https://www.reuters.com/technology/bankrupt-crypto-exchange-ftx-has-recovered-73-bln-assets-attorney-2023-04-12/ https://www.reuters.com/technology/bankrupt-crypto-exchange-... So basically the traders did a bank run and Sam ended up going to jail. It’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things even though that ended up being very costly for the government.
- FireBeyond 3y ago
  > It’s also questionable whether they even ended up losing money given the rising price of crypto in the past year. Shkreli dealt with the "making people whole/replacing money you took": it's not okay to steal or defraud people just because you later make them whole or they don't even realize that you did. But even moreso, to your point: Please don't conflate the rising crypto price with SBF's intent. He didn't care about that. The fact that crypto rose and may have lessened the losses is entirely orthogonal to his intent, just a "fortunate" coincidence. It could equally have cratered. The people who are being recompensed are only being recompensed in part because of something entirely outside of SBF's control and intention.
  - vkou 3y ago
    It's worse than that. The only reason people can be made whole is because SBF was arrested for fraud, and all the funds got frozen. Given his track record, had he kept steering the firm for another year or two, he would have almost pissed away all the gains/potential gains from the crypto rally, and his customers would have found themselves in an even bigger hole. Also, Bernie Madoff could have just taken a ten year timeout, bought and rode the S&P 500, and had made his customers whole, too, so I guess he also did nothing wrong...
- JumpCrisscross 3y ago
  > the “lost” money was simply due to poor accounting and actually found What? No. The “lost” money was bet on red at the roulette wheel. While the firm was in bankruptcy, the wheel stopped spinning and came up red. That was enough to make customers whole to their original deposits. But it didn’t make up for capital gains, opportunity cost or the emotional damage caused by having your funds locked away for years. > interesting that by contrast SVB leaders didn’t face any repercussions Totally different situations. The analogy would be PayPal freezing everyone’s accounts for 3+ years while they put all the money into Peter Thiel’s hedge fund.
  - beambot 3y ago
    I would like to recuperate the cash value of my pre-crash SVB stock, even if it's 3 years later - please & thank you. Their complete lack of risk oversight for HTM assets definitely borders on negligence...
    - rootusrootus 3y ago
      SVB stock is a different thing than an SVB deposit.
      - beambot 3y ago
        Aren't all FTX depositors being made whole (in USD)?
- klelatti 3y ago
  You can’t call it a bank run if it’s not a bank! Banks are highly regulated as they are vulnerable to this sort of issue and that’s why there is compensation. A run should not have been problematic for FTX without the fraud.
- ddtaylor 3y ago
  > Clearly the real crime is bilking investors out of their money. It’s also questionable whether they even ended up losing money given the rising price of crypto in the past year. It’s also interesting how this happened: That's not how that works. Whatever purchasing power they were supposed to have that they were deprived of because of his actions results in damages - obviously equal at least to the crypto gains they would have.
- FabHK 3y ago
  > it’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things LOL, yeah, no. SFB also did really well established old fashioned tradCrime. It wasn't even DeCrime.
- usefulcat 3y ago
  > even though that ended up being very costly for the government. Did it? The FDIC is funded by banks, not the government.
  - vlovich123 3y ago
    > When dues and the proceeds of bank liquidations are insufficient, it can borrow from the federal government, or issue debt through the Federal Financing Bank on terms that the bank decides It’s not fully funded by the banks & borrows from the government when it’s short. I don’t know how to account the government borrowing from itself, but I wouldn’t think it’s necessarily “free”. Yes it does get paid back, but you’re borrowing on very preferential terms that aren’t available to the public so there is as cost to the broader economy.
    - rootusrootus 3y ago
      > It’s not fully funded by the banks & borrows from the government when it’s short. While it's true that the FDIC is "backed by the full faith and credit of the US Government" it is funded by the banks and by interest from treasuries [0]. Has there ever been a case when the FDIC actually ran out of funds and had to be bailed out? [0] https://www.fdic.gov/resources/deposit-insurance/understanding-deposit-insurance/index.html# https://www.fdic.gov/resources/deposit-insurance/understandi...
      - vlovich123 3y ago
        > During two banking crises—the savings and loan crisis and the Global Financial Crisis—the FDIC has expended its entire insurance fund. On these occasions it has met insurance obligations directly from operating cash, or by borrowing through the Federal Financing Bank. Another option, which it has never used, is a direct line of credit with the Treasury on which it can borrow up to $100 billion. So yes, it ran out of funds & had to borrow. It has not yet experienced a shock bad enough to leverage the Treasury line of credit but that’s a fig leaf IMO. The 2008 crisis saw the government bailing out banks through TARP to shore up failing banks to the tune of 700B. Without that, FDIC would have failed. So from that perspective, yet it was bailed out in 2008 & the funding from members wouldn’t have been anywhere near sufficient. That’s why I don’t understand the political football around TARP - “the full faith and credit of the US government” would have been meaningless if FDIC failed as that would have sent a giant shockwave of trust loss through the broader population as everyday people would have lost huge savings.
- JumpinJack_Cash 3y ago
  > > So basically the traders did a bank run and Sam ended up going to jail. It’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things even though that ended up being very costly for the government. Because Silicon Valley Bank leaders were nobodies whereas SBF became perceived as a trophy, pretty much immediately. This is something to be mindful on. When doing self promotion some people start seeing you as an inspiration , many others as a fraud or a human trophy to be captured and paraded around. Especially in startup communities where groupthink takes over and everybody wants to be the new cult figure of the Silicon Valley or the crypto valley or whatever. People outside that bubble (especially LE, prosecutors and judges) see right through that BS and are specifically looking with a magnifying glass everything that goes on hoping to get themselves a nice trophy on their desk, they want the heads of cult founders. Some would say rightfully so.
  - matthewdgreen 3y ago
    We throw people in jail for committing fraud. We don't throw them in jail for making bad investment decisions within the bounds of the law. While I am loathe to defend SVB's management here, your line of argument leads to a world where either (1) everyone commits outright fraud with impunity, or (2) everyone goes to jail. Neither world is any good.
    - JumpinJack_Cash 3y ago
      My line of argument is one where the role of a prosecutor or judge or LE of any kind is a very serious one These people should be spending their free time reading papers and books on how Romans enforced their laws over remote German provinces of the Empire. Instead they open all sorts of media and like hunters in the forest they pick a trophy that suits their liking and then they just use all their means to collect that trophy. Or even worse they are not even creative in their trophy hunting quest, they all pile on Trump because by the way he looks and acts he looks like a fraud and advertises his nature thanks to his huge megaphone . So every prosecutor in the Nation piles on him because they want to be the one uncovering this big revelation to the American public...pathetic. Their goal should be ratio of Money recovered from criminals to money spent for investigations/proceedings. No one operates this way because they are essentially predators, much like SBF and Trump are, just a different kind, but they receive a salary paid for by taxpayeyrs.
- SilasX 3y ago
  You're not replying to the question of how much money/assets -- thought to be lost -- was later found, you're just copy-pasting random details about the case.
- rootusrootus 3y ago
  > basically the traders did a bank run Given that FTX is not a bank, and does not do any sort of (high regulated for a reason) fractional reserve lending ... how exactly can there be a run? All of the assets should still have been there.
  - okeuro49 3y ago
    > fractional reserve lending This is out of date. There is no reserve requirement anymore.
- Aloisius 3y ago
  > It’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things even though that ended up being very costly for the government. Why is it interesting? SVB leaders didn't engage in fraud or money laundering.
ghnws 3y ago
Hopefully no-one bet their life on unregulated extremely risky investments.
- stonogo 3y ago
  There have been at least three suicides. When this much money is being spent convincing people to buy into a bad idea, it's gonna work on someone.
  - datavirtue 3y ago
    People are buying Bitcoin like crazy still "because it is going to go up!!!"
    - Zpalmtree 3y ago
      You know better though right
      - datavirtue 3y ago
        I made no claims.
- zulban 3y ago
  That's not the point being made. However if 10,000 people lose 2000$ due to mysterious market forces, you bet this will contribute to some losing their lives.
  - andruby 3y ago
    Do people lose their lives over loosing $2000? * In developed countries. I doubt people from 3rd world countries had $2000 on FTX.
- forgotmyinfo 3y ago
  [flagged]
- deleted 3y ago
A_D_E_P_T 3y ago
I believe that, as a matter of public policy, there ought to be an important distinction between violent and non-violent crimes. The rationale behind prison, as opposed to corporal punishment without incarceration, is to remove dangerous people from society, so that they don't further victimize the public. A violent murderer -- of really any type of murder, e.g. of a random stranger, of one's spouse, or a murderer-for-hire -- should be removed from society for society's benefit. The key point is that the needs of society must come first; punitive measures are a secondary concern. As theory goes, this is trivial. In SBF's case, his ability to further harm the public is absolutely minimal, provided his punishment includes severe restrictions on his ability to access computers and serve as the director or shareholder of any business. I'd sentence him to a few years in jail, as a punitive measure, and then a lifetime of community service and probation. Let him try and do some good, if he's sincere about those stories he tells re his motivations. You might argue that punitive measures serve a vital function as deterrence, but evidence doesn't seem to support that argument, and in any case it applies far more strongly to violent crime than to financial crimes. As, in the latter, crimes are often amorphous and poorly delineated, and selective enforcement is the rule rather than the exception.
- jgeada 3y ago
  We measure the worth of a life, for insurance and actuarial purposes, at about $10m (and frequently less). Stealing someone's savings is stealing their life, their time, and in some cases their ability to survive (as we have very few safety nets in the US) Please stop defending white collar crime as somehow more palatable, as somehow a better class of criminal. https://www.nytimes.com/2020/05/11/upshot/virus-price-human-life.html https://www.nytimes.com/2020/05/11/upshot/virus-price-human-...
  - __loam 3y ago
    Thank you for telling this moron exactly what I wanted to say. White collar crime is incredibly violent, it's just well hidden.
  - A_D_E_P_T 3y ago
    Spoken like a true homo economicus. To you the value of somebody else's life may be $10M. To society, it varies with time and place. Yet, to the person in question, the value could well be infinite -- it's probably infinite more often than not -- i.e. no amount of money will induce somebody to die. When you kill somebody, you rob that person of everything they have, everything they ever will have, and of the value they've placed on their own life. But we're speaking of society. Is SBF a physical danger to society? Clearly not. He's not going to rob and murder you if he catches you in the park after sundown. His reputation is destroyed, and from a harm mitigation perspective it should be enough to monitor his economic activity and make sure he isn't in a position to run any more frauds. If you seek punitive measures, that's all well and good, but it should be done in a way that's equitable and according to a theory of punishment that's applied uniformly. I don't believe that exists, and jailing a non-violent criminal for such a period of time, when extremely violent criminals serve less time and are then allowed to reintegrate into society (often with poor results,) seems both strange and wrong.
yellow_lead 3y ago
Yeah, there are almost certainly suicides from this.
- Intralexical 3y ago
  This stuff can ruin multiple generations. Poverty is (obviously) correlated with violence, abuse, depression, various forms of trauma, exposure to/victimization by crime, addiction— basically anything that increases despair. Just because you put on a suit and mask doesn't make it okay.

vlovich123 3y ago

I thought the “lost” money was simply due to poor accounting and actually found. > Kaplan said he had found that FTX customers lost $8 billion, FTX's equity investors lost $1.7 billion, and that lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion. https://www.reuters.com/technology/sam-bankman-fried-be-sentenced-multi-billion-dollar-ftx-fraud-2024-03-28/ https://www.reuters.com/technology/sam-bankman-fried-be-sent... Clearly the real crime is bilking investors out of their money. It’s also questionable whether they even ended up losing money given the rising price of crypto in the past year. It’s also interesting how this happened: > when it filed for bankruptcy after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. https://www.reuters.com/technology/bankrupt-crypto-exchange-ftx-has-recovered-73-bln-assets-attorney-2023-04-12/ https://www.reuters.com/technology/bankrupt-crypto-exchange-... So basically the traders did a bank run and Sam ended up going to jail. It’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things even though that ended up being very costly for the government.

FireBeyond 3y ago
> It’s also questionable whether they even ended up losing money given the rising price of crypto in the past year. Shkreli dealt with the "making people whole/replacing money you took": it's not okay to steal or defraud people just because you later make them whole or they don't even realize that you did. But even moreso, to your point: Please don't conflate the rising crypto price with SBF's intent. He didn't care about that. The fact that crypto rose and may have lessened the losses is entirely orthogonal to his intent, just a "fortunate" coincidence. It could equally have cratered. The people who are being recompensed are only being recompensed in part because of something entirely outside of SBF's control and intention.
- vkou 3y ago
  It's worse than that. The only reason people can be made whole is because SBF was arrested for fraud, and all the funds got frozen. Given his track record, had he kept steering the firm for another year or two, he would have almost pissed away all the gains/potential gains from the crypto rally, and his customers would have found themselves in an even bigger hole. Also, Bernie Madoff could have just taken a ten year timeout, bought and rode the S&P 500, and had made his customers whole, too, so I guess he also did nothing wrong...
JumpCrisscross 3y ago
> the “lost” money was simply due to poor accounting and actually found What? No. The “lost” money was bet on red at the roulette wheel. While the firm was in bankruptcy, the wheel stopped spinning and came up red. That was enough to make customers whole to their original deposits. But it didn’t make up for capital gains, opportunity cost or the emotional damage caused by having your funds locked away for years. > interesting that by contrast SVB leaders didn’t face any repercussions Totally different situations. The analogy would be PayPal freezing everyone’s accounts for 3+ years while they put all the money into Peter Thiel’s hedge fund.
- beambot 3y ago
  I would like to recuperate the cash value of my pre-crash SVB stock, even if it's 3 years later - please & thank you. Their complete lack of risk oversight for HTM assets definitely borders on negligence...
  - rootusrootus 3y ago
    SVB stock is a different thing than an SVB deposit.
    - beambot 3y ago
      Aren't all FTX depositors being made whole (in USD)?
klelatti 3y ago
You can’t call it a bank run if it’s not a bank! Banks are highly regulated as they are vulnerable to this sort of issue and that’s why there is compensation. A run should not have been problematic for FTX without the fraud.
ddtaylor 3y ago
> Clearly the real crime is bilking investors out of their money. It’s also questionable whether they even ended up losing money given the rising price of crypto in the past year. It’s also interesting how this happened: That's not how that works. Whatever purchasing power they were supposed to have that they were deprived of because of his actions results in damages - obviously equal at least to the crypto gains they would have.
FabHK 3y ago
> it’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things LOL, yeah, no. SFB also did really well established old fashioned tradCrime. It wasn't even DeCrime.
usefulcat 3y ago
> even though that ended up being very costly for the government. Did it? The FDIC is funded by banks, not the government.
- vlovich123 3y ago
  > When dues and the proceeds of bank liquidations are insufficient, it can borrow from the federal government, or issue debt through the Federal Financing Bank on terms that the bank decides It’s not fully funded by the banks & borrows from the government when it’s short. I don’t know how to account the government borrowing from itself, but I wouldn’t think it’s necessarily “free”. Yes it does get paid back, but you’re borrowing on very preferential terms that aren’t available to the public so there is as cost to the broader economy.
  - rootusrootus 3y ago
    > It’s not fully funded by the banks & borrows from the government when it’s short. While it's true that the FDIC is "backed by the full faith and credit of the US Government" it is funded by the banks and by interest from treasuries [0]. Has there ever been a case when the FDIC actually ran out of funds and had to be bailed out? [0] https://www.fdic.gov/resources/deposit-insurance/understanding-deposit-insurance/index.html# https://www.fdic.gov/resources/deposit-insurance/understandi...
    - vlovich123 3y ago
      > During two banking crises—the savings and loan crisis and the Global Financial Crisis—the FDIC has expended its entire insurance fund. On these occasions it has met insurance obligations directly from operating cash, or by borrowing through the Federal Financing Bank. Another option, which it has never used, is a direct line of credit with the Treasury on which it can borrow up to $100 billion. So yes, it ran out of funds & had to borrow. It has not yet experienced a shock bad enough to leverage the Treasury line of credit but that’s a fig leaf IMO. The 2008 crisis saw the government bailing out banks through TARP to shore up failing banks to the tune of 700B. Without that, FDIC would have failed. So from that perspective, yet it was bailed out in 2008 & the funding from members wouldn’t have been anywhere near sufficient. That’s why I don’t understand the political football around TARP - “the full faith and credit of the US government” would have been meaningless if FDIC failed as that would have sent a giant shockwave of trust loss through the broader population as everyday people would have lost huge savings.
JumpinJack_Cash 3y ago
> > So basically the traders did a bank run and Sam ended up going to jail. It’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things even though that ended up being very costly for the government. Because Silicon Valley Bank leaders were nobodies whereas SBF became perceived as a trophy, pretty much immediately. This is something to be mindful on. When doing self promotion some people start seeing you as an inspiration , many others as a fraud or a human trophy to be captured and paraded around. Especially in startup communities where groupthink takes over and everybody wants to be the new cult figure of the Silicon Valley or the crypto valley or whatever. People outside that bubble (especially LE, prosecutors and judges) see right through that BS and are specifically looking with a magnifying glass everything that goes on hoping to get themselves a nice trophy on their desk, they want the heads of cult founders. Some would say rightfully so.
- matthewdgreen 3y ago
  We throw people in jail for committing fraud. We don't throw them in jail for making bad investment decisions within the bounds of the law. While I am loathe to defend SVB's management here, your line of argument leads to a world where either (1) everyone commits outright fraud with impunity, or (2) everyone goes to jail. Neither world is any good.
  - JumpinJack_Cash 3y ago
    My line of argument is one where the role of a prosecutor or judge or LE of any kind is a very serious one These people should be spending their free time reading papers and books on how Romans enforced their laws over remote German provinces of the Empire. Instead they open all sorts of media and like hunters in the forest they pick a trophy that suits their liking and then they just use all their means to collect that trophy. Or even worse they are not even creative in their trophy hunting quest, they all pile on Trump because by the way he looks and acts he looks like a fraud and advertises his nature thanks to his huge megaphone . So every prosecutor in the Nation piles on him because they want to be the one uncovering this big revelation to the American public...pathetic. Their goal should be ratio of Money recovered from criminals to money spent for investigations/proceedings. No one operates this way because they are essentially predators, much like SBF and Trump are, just a different kind, but they receive a salary paid for by taxpayeyrs.
SilasX 3y ago
You're not replying to the question of how much money/assets -- thought to be lost -- was later found, you're just copy-pasting random details about the case.
rootusrootus 3y ago
> basically the traders did a bank run Given that FTX is not a bank, and does not do any sort of (high regulated for a reason) fractional reserve lending ... how exactly can there be a run? All of the assets should still have been there.
- okeuro49 3y ago
  > fractional reserve lending This is out of date. There is no reserve requirement anymore.
Aloisius 3y ago
> It’s interesting that by contrast SVB leaders didn’t face any repercussions because they were part of the established ways of doing things even though that ended up being very costly for the government. Why is it interesting? SVB leaders didn't engage in fraud or money laundering.

ghnws 3y ago

Hopefully no-one bet their life on unregulated extremely risky investments.

stonogo 3y ago
There have been at least three suicides. When this much money is being spent convincing people to buy into a bad idea, it's gonna work on someone.
- datavirtue 3y ago
  People are buying Bitcoin like crazy still "because it is going to go up!!!"
  - Zpalmtree 3y ago
    You know better though right
    - datavirtue 3y ago
      I made no claims.
zulban 3y ago
That's not the point being made. However if 10,000 people lose 2000$ due to mysterious market forces, you bet this will contribute to some losing their lives.
- andruby 3y ago
  Do people lose their lives over loosing $2000? * In developed countries. I doubt people from 3rd world countries had $2000 on FTX.
forgotmyinfo 3y ago
[flagged]
deleted 3y ago

A_D_E_P_T 3y ago

I believe that, as a matter of public policy, there ought to be an important distinction between violent and non-violent crimes. The rationale behind prison, as opposed to corporal punishment without incarceration, is to remove dangerous people from society, so that they don't further victimize the public. A violent murderer -- of really any type of murder, e.g. of a random stranger, of one's spouse, or a murderer-for-hire -- should be removed from society for society's benefit. The key point is that the needs of society must come first; punitive measures are a secondary concern. As theory goes, this is trivial. In SBF's case, his ability to further harm the public is absolutely minimal, provided his punishment includes severe restrictions on his ability to access computers and serve as the director or shareholder of any business. I'd sentence him to a few years in jail, as a punitive measure, and then a lifetime of community service and probation. Let him try and do some good, if he's sincere about those stories he tells re his motivations. You might argue that punitive measures serve a vital function as deterrence, but evidence doesn't seem to support that argument, and in any case it applies far more strongly to violent crime than to financial crimes. As, in the latter, crimes are often amorphous and poorly delineated, and selective enforcement is the rule rather than the exception.

jgeada 3y ago
We measure the worth of a life, for insurance and actuarial purposes, at about $10m (and frequently less). Stealing someone's savings is stealing their life, their time, and in some cases their ability to survive (as we have very few safety nets in the US) Please stop defending white collar crime as somehow more palatable, as somehow a better class of criminal. https://www.nytimes.com/2020/05/11/upshot/virus-price-human-life.html https://www.nytimes.com/2020/05/11/upshot/virus-price-human-...
- __loam 3y ago
  Thank you for telling this moron exactly what I wanted to say. White collar crime is incredibly violent, it's just well hidden.
- A_D_E_P_T 3y ago
  Spoken like a true homo economicus. To you the value of somebody else's life may be $10M. To society, it varies with time and place. Yet, to the person in question, the value could well be infinite -- it's probably infinite more often than not -- i.e. no amount of money will induce somebody to die. When you kill somebody, you rob that person of everything they have, everything they ever will have, and of the value they've placed on their own life. But we're speaking of society. Is SBF a physical danger to society? Clearly not. He's not going to rob and murder you if he catches you in the park after sundown. His reputation is destroyed, and from a harm mitigation perspective it should be enough to monitor his economic activity and make sure he isn't in a position to run any more frauds. If you seek punitive measures, that's all well and good, but it should be done in a way that's equitable and according to a theory of punishment that's applied uniformly. I don't believe that exists, and jailing a non-violent criminal for such a period of time, when extremely violent criminals serve less time and are then allowed to reintegrate into society (often with poor results,) seems both strange and wrong.

yellow_lead 3y ago

Yeah, there are almost certainly suicides from this.

Intralexical 3y ago
This stuff can ruin multiple generations. Poverty is (obviously) correlated with violence, abuse, depression, various forms of trauma, exposure to/victimization by crime, addiction— basically anything that increases despair. Just because you put on a suit and mask doesn't make it okay.