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"AUSA Nicolas Roos: Samuel Bankman-Fried stole $8 billion dollars. It was theft, from customers spread all over the world. It was a loss that impacted people si
by Vicinity9635 3y ago
"AUSA Nicolas Roos: Samuel Bankman-Fried stole $8 billion dollars. It was theft, from customers spread all over the world. It was a loss that impacted people significantly and caused damage. I want to address a few of the new victim letters"
"AUSA Roos: They lost their life savings. A man who lives in Portugal - the day before bankruptcy his daughter was born. He was marred by the ominous specter of financial instability and his daughter's future. Then there's the 23 year old from Morocco"
"AUSA Roos: He is the eldest son. He kept money on FTX not to loan it out to the defendant but for family's security. One more - a couple in the later stages of their life, late 60s, they invested with life savings. They were depressed, they had to go back to work"
https://twitter.com/innercitypress/status/1773365759999127957 https://twitter.com/innercitypress/status/177336575999912795...
- Dalewyn 3y ago[flagged]
- Vicinity9635 3y agoThis wasn't a failure of investment, it was fraud.
- Dalewyn 3y agoYes, it was fraud. That is besides the point. See from your citation, emphasis mine: "AUSA Roos: He is the eldest son. He kept money on FTX not to loan it out to the defendant but for family's security. One more - a couple in the later stages of their life, late 60s, they invested with life savings. They were depressed, they had to go back to work" Savings should be handled appropriately as savings, not investments or "savings". SBF stole money, but there is a point to be made that people might also need better education on handling their own money.
- feoren 3y agoYou are victim-blaming. Many customers thought they were "savings accounts" that were completely distinct from the investment arm; they were deceived. SBF stole money from his "savings accounts" arm to fund his investment arm.
- groggo 3y agoIt wasn't FDIC insured, was it? For example, you can buy crypto with Robinhood, but any uninvested cash is stored in partner banks which are FDIC insured. Even if the CEO of Robinhood wanted to commit fraud, would they be able to? How do FDIC protections work exactly? (genuine question here!) So was part of it a process failure? Like even when SBF wants to commit fraud in his situation, where should regulations have stopped him?
- lesuorac 3y agoPretty sure if the money is withdrawn from the account and sent to say Almeada Research it's not longer FDIC insured because it's not money in an FDIC account. Not that I'm saying the money was every within an FDIC [1] insured account. -- Depends on the kind of fraud that Robinhood wanted to do. CEO/CFO definitely have the ability to arbitrarily transfer money amount to accounts they personally control. FDIC only protects against bank failure, it doesn't save you from somebody credential stuffing your bank to authorize a wire transfer. [1]: https://www.fdic.gov/resources/deposit-insurance/brochures/deposits-at-a-glance/ https://www.fdic.gov/resources/deposit-insurance/brochures/d...
- Dalewyn 3y ago>You are victim-blaming. Yup, I absolutely am. People who spend their savings (let alone life savings) on investments will end up ruining their lives sooner or later because they are ignorantly misunderstanding what "saving" and "investing" are and what government bank notes and cryptocurrency are. If you invest money that you do not want or cannot afford to lose, you need help from a proper, good accountant to set you straight.
- Repulsion9513 3y agoHere's a free life lesson: sometimes there are things that victims could have done, or could do in the future, to avoid harm. Talking about those things is not bad. Would you complain about victim blaming when a kid burns themselves on a hot pan and their parents tell them "well then don't do it again"?
- ubercow13 3y agoWhat? It's completely not beside the point. This was fraud - he stole peoples' money. That 60s couple could have played it "safe" and kept their life savings in a regular bank account, and the owner of their bank could still have attempted to steal their money. That would also be fraud, and they would have gone to jail. This crime is nothing to do with whether bitcoin is a risky investment. What do you mean by "handled appropriately as savings"? Cash is riskier than stocks over the long term. Investing is the safe way to handle your life savings.
- Dalewyn 3y agoYes it is fraud, and yes it is besides the point. If people are investing their life savings they would have lost that money one way or another eventually. It's unfortunate the loss was caused by a fraudster, but if it wasn't SBF it would have been someone else. I am not saying this is an either-or, I am saying that fraudsters like SBF should be thrown in jail and left to rot and people should be taught better how to handle their money. Yes deposits made with banks still carry risks, but you know what? Most banks are backed by the government (or at least they are in the US, I assume similar setups exist in other countries), meaning depositors generally will not lose their deposits even if the bank loses money. The failure of Silicon Valley Bank is a recent demonstration of those safeguards for peoples' savings at work. Savings are, literally, savings. You should not be spending your savings, much less your life savings, on something as frivolous as investments which are all fundamentally gambling. Investment monies should come from your spending money, money you don't mind losing. If you are investing your savings, you are investing wrong and you need help from a proper, good accountant.
- Zpalmtree 3y agoYou know you can hold USDC on crypto networks? The value is stable at $1, so its not an investment, just a way to park your funds. I'm certain FTX had lots of users holding UDSC. Someone could have had their savings in USDC on FTX.
- rendang 3y agoPlease never give financial advice to anyone. I thought Dave Ramsey was bad!
- namdnay 3y agoI’d say “Don’t gamble money you don’t want to lose”. Because let’s face it, you had to have your head pretty deep in the sand to think that crypto is anything else
- Auracle 3y agoAny individual stock can tank to 0 as well. Enron would be a good example (fraud), though I see you at least had months to pull some of your funds out. Hell, even an index fund won’t be safe if there’s another depression. COVID 2: this time even worse could happen at any point, for instance. Gold might drop if we get asteroid mining going. Bank runs can wipe out your money. There’s no entirely safe way to store funds. Property, maybe, as long as the population keeps going up and the government is still functional. It’s all risk/reward.
- greatwave1 3y agoLol just because everything has risks and rewards doesn't mean that the risk/reward profile is the same for everything, and doesn't change the fact that most crypto trading is closer to gambling than it is to investing
- Vicinity9635 3y agoI don't understand this attitude on HN. Crypto is here to stay and not every coin is the same. BTC cracked $70,000.00 this month. I remember buying it at $6.00 in '09.
- camgunz 3y agoCrypto is a vice. You can say exactly what you said about cigarettes, cigarette brands, and their stock prices.
- madsbuch 3y agothis is a common sentiment, but extremely flawed. if look into any pension scheme you will see that money are invested all they way up to payout. the question is the risk of your investment. as other people called out. this case was fraud.
- plandis 3y agoI disagree. A bank could act fraudulently too. Stop victim blaming people who are victims of a criminal.
- ng12 3y agoIt's probably not the government's job to teach people wise investing practices. It is their job to protect them from outright fraud.
- Dalewyn 3y agoIt is both, because it all comes back to the government's expenditures in the form of public welfare. People who become destitute because they don't know basic fiscal know-how are useless and significant loads to society and therefore the government, so there is vested public interest to teach. Catch and punish fraudsters, and teach the commons that investments and savings are two very different things and how they should be conducted. Both can be done with no negative impact to the other.
- hwbunny 3y agoExactly.
- roughly 3y agoExcept we got rid of pensions in favor of 401ks and have basically geared the entire economy to replace any form of social welfare with personal investing.
- menomatter 3y agoI have not been following any crypto news POST mtgx and pulling all my crypto to local storage. What did this guy actually do? Did he mismanage funds or literally took money from poeple and stashed it away?
- Flammy 3y agoHe let his private equity / investment company (Alameda) borrow unlimited customer funds via a software backdoor for various investments.
- ffsm8 3y ago(and lost most of it by "investing" in shitcoins, basically)
- __loam 3y agoDon't forget the part where they based most of their valuation on a currency they printed.
- deleted 3y ago[deleted]
- toomuchtodo 3y agohttps://youtu.be/KZYqL79GDXU https://youtu.be/KZYqL79GDXU Magic black box yield farming at 21:29 timestamp.
- Breza 3y agoAdditionally, they outright lied about things like their reserves. The website had what claimed to be a real time ticker showing the reserve level that was actually a weighted random number. SBF claimed that he fell victim to poor risk management, but the more investigators dug in, the more evidence they found that there was organized corruption.