5 ms·

This wasn't a failure of investment, it was fraud.

Dalewyn 3y ago
Yes, 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 ago
  You 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 ago
    It 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 ago
      Pretty sure if the money is withdrawn from the account and sent to say Almeada Research it's not longer FDIC insured because it's not money in an FDIC account.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 ago
    Here'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 ago
  What? 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 ago
    Yes 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 ago
      You 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 ago
      Please never give financial advice to anyone. I thought Dave Ramsey was bad!

Yes, 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 ago
You 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 ago
  It 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 ago
    Pretty 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 ago
  Here'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 ago
What? 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 ago
  Yes 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 ago
    You 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 ago
    Please never give financial advice to anyone. I thought Dave Ramsey was bad!