7 ms·
FTX bankruptcy examiner's report [pdf]
- sram1337 2y ago[flagged]
- woah 2y ago> Venture Investments and Related Parties: The FTX Group’s venture investments were marked by a lack of due diligence, rapid decision-making, and unsupported valuations. Many investments involved entities tied to senior FTX executives, further complicating the financial landscape and recovery efforts . Seriously asking- how does this differ from any other VC fund?
- itsoktocry 2y agoThere's a lot of sketchy finance that nobody cares about...until you lose a lot of other people's money.
- doctor_eval 2y agoA VC fund is set up explicitly to operate this way. Investors know what they’re getting into; investors are the customer and are aware of the risks. They know they’re gambling. FTX was supposedly a safe place to exchange funds, the customers were uninformed as to the risks they were taking. In fact they were encouraged to believe the risks were low. They did not know they were gambling. It’s really different.
- rybosworld 2y agoThe primary difference is that FTX was far more reckless than the typical VC.
- wmf 2y agoNah, the difference is that FTX was investing stolen money. No one would care otherwise.
- iamacyborg 2y agoI’d be amused if FTX made better investments than the average VC fund.
- refulgentis 2y agoYou're right, it doesn't: this isn't human insight, it is GPT spam
- refulgentis 2y agoGPT spam
- sram1337 2y agothis comment sparked more discussion than some others on this thread, including yours
- refulgentis 2y agoIdk man, discussion was "uhh wtf?" Sorry about your spam comment getting nuked
- bijection 2y agoIf you generated this with an LLM, you might consider labeling it more clearly. Wrote copy-and-pasting of llm outputs seems contrary to the ‘thoughtful and substantive’ north star of hacker news comments. And just in case I’m wrong, apologies - it would be a good bit of irony if I turned out to be the one hallucinating.
- sram1337 2y agoI think its pretty clearly from an LLM and disagree its not thoughtful and substantive.
- chollida1 2y agoPretty damning in this report is the section about SBF admitting that Alameda's NAV is very dependent on how you account for FTT way back in 2019. Also interesting that they apparently loaned money to Deltec bank to help shore up its balance sheet. Deltec being Tether's bank at the time.
- ai_what 2y agoThe irony of his mom being on the Board of Advisors of Stanford University’s Ethics is astounding. Page 177: Joseph Bankman, Bankman-Fried’s father, is a tenured Stanford Law School professor who served as an officer, director, manager and/or pro bono counsel to a number of FTX Group entities. Barbara Fried, Bankman-Fried’s mother, is a Professor Emerita of Stanford Law School. She served as a member of the Board of Advisors of Stanford University’s Ethics. Or this part about this dad on page 183: And the Debtors allege that Joseph Bankman directed “donations of more than $5.5 million” to Stanford University in an attempt to “curry favor with and enrich his employer at the FTX Group’s expense.”
- EGreg 2y ago[flagged]
- jessriedel 2y ago> The irony of his mom being on the Board of Advisors of Stanford University’s Ethics is astounding. Your sentence was cut off? She is a member of the Board of Advisors to the Stanford Ethics in Society Program. That means she helps direct an academic program researching ethics, not that she enforces ethical rules within Stanford. Professional ethicists and moral philosophers do not, and generally do not claim to, act morally better than others. Their profession is about researching the consistency and implications of moral rules. Judges are generally held to a higher standard than the general public, so I guess there is irony/hypocrisy when they commit a crime they have convicted others of. But that’s not what Fried was doing.
- TheOtherHobbes 2y agoIndeed. Academic ethics are more theoretical then practical.
- atherton33 2y agoThose who can, do. Those who can't, teach.
- 2y ago
- paulpauper 2y agoI am amazed at how fast the whole thing progressed, starting from the failure of FTX, to his arrest, the trial, etc. The Enron case took a decade
- pants2 2y agoTo the >100% recovery for creditors!
- ForHackernews 2y agoAll those prudent Beanie Baby investments are paying off in a big way!
- hackernudes 2y ago100% of the USD value at time of bankruptcy.
- WrongAssumption 2y agoMore than that, they are getting substantial interest on top of the original notional value.
- rurp 2y agoSort of, everything is based on the dollar value of what they had at the time of bankruptcy. Anyone who had assests that have increased in value since then, like bitcoin, are getting back quite a bit less than they otherwise would have had.
- spiderice 2y agoThis distinction sounds important but I don’t know why it is. Enlighten me?
- sgammon 2y agoAny fluctuation — particularly increase - in those assets, since then, is not eligible for consideration
- localfirst 2y ago[flagged]
- wpietri 2y ago> Had it not been for SBF's political contributions/connections, he would most certainly be locked away for life. Well gosh, if you're that certain, you must have a fair bit of evidence here, right? If so, let's see it. And I'd say you're entirely wrong about "undemocratic countries". The state may be supreme, but the law generally isn't. That applies from banana republics to oligarchies like Russia to the Chinese state, where connections make a huge difference. E.g.: https://en.wikipedia.org/wiki/Princelings https://en.wikipedia.org/wiki/Princelings
- localfirst 2y ago[flagged]
- jacknews 2y agoWhat a croc. In undemocratic countries the leaders' decisions (or whims) are supreme, and that situation is far more exposed to corruption, indeed it's often the modus operandi, and how they maintain power. It has nothing to do with the state or the law, which are often just used to window-dress the leaders' schemes.
- rurp 2y agoI can't believe this kind of take is still bouncing around given the sentence SBF got. After FTX collapsed there were a lot of people claiming that he wouldn't do any time at all, based on nothing more than a cartoonish understanding of how political donations and influence work. SBF got a totally reasonable punishment for a first time offender who stole a massive amount of money, and he will spend many years in prison.
- OccamsMirror 2y agoIt's hilarious how people think you can make a few donations and ride that good will for ever. Once you stop being able to give future donations your political capital falls to nil.
- w10-1 2y agoThere seems to be a sweet spot for fraud: small enough to not be worth chasing down Given the high cost of investigation and the limited potential return, it would not be accretive to the estates for the Debtors’ counsel or the Examiner to investigate the circumstances surrounding each of the hundreds of small and medium-sized Venture Book investments I wonder, though, if having hundreds of investments that are lacking in due diligence is itself evidence of fraud that could justify some recapture.
- dmurray 2y agoNobody needs any more evidence of fraud at the large scale: SBF is already in prison. To claw back individual investments (some as low as $1,000, which can't justify much DD) you'll need more evidence than "this was made without sufficient diligence".
- helsinkiandrew 2y ago> I wonder, though, if having hundreds of investments that are lacking in due diligence is itself evidence of fraud that could justify some recapture. I just think the Quinn Emanuel law firm just charge a too high hourly rate to justify investigating each investment that was less than $5M. I wonder if they open sourced the data (with a bounty) someone would find some returns. "Finally, Quinn Emanuel worked with Alvarez & Marsal to summarize basic information regarding the remaining, smaller Venture Book investments, i.e., those under $5 million. Quinn Emanuel did not investigate each of these investments, reasoning that the cost of such investigations relative to their limited value would not be accretive to the bankruptcy estates. These investments totaled approximately $286 million, making up approximately 4.8% of the Venture Book’s total value."
- blindriver 2y agoIf they held off for 6 months no one would have known and SBF would still be a hero. I wonder how many billionaires are in the exact same situation.
- aimazon 2y ago“Just one more roll” the gambler says to himself, “I can make it all back.” FTX’s fate was sealed long before its collapse, an extra 6 months would not have changed the outcome.
- naijaboiler 2y agoTheir extreme lack of controls and total disdain for rules was ALWAYS going to end up in disaster. It’s just a matter of when