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I still don't understand why they did it. SBF came from a period as a successful trader. He didn't need to defraud people to be successful. The same thought

I still don't understand why they did it. SBF came from a period as a successful trader. He didn't need to defraud people to be successful. The same thought came to me when watching the Netflix show about Madoff: his pyramid scheme was only a sideline to a successful market-making business, he could have shut it down before his losses became too great, and the losses were only going to get bigger as time went on.

s1artibartfast 2y ago
I dont think it was greed. I think he legitimately thought he was doing the right thing, thought it was fun, and thought it was interesting.
- throw_m239339 2y ago
  > I dont think it was greed. I think he legitimately thought he was doing the right thing, thought it was fun, and thought it was interesting. It was absolutely greed by the original sense of the word, which isn't necessary only about money, he knew he was breaking the laws given the step he took to cover his tracks, badly, but he was very well aware of the fraud he was partaking in, it was proven during his trial. There is the crime and then there is the cover up, or attempt at doing so. And ever after Sam was arrested he tried to intimidate and discredit, publicly, his co-defendant. He was fully aware of the crimes he committed, he just thought he could miraculously get out of his situation on top, like a trader who just lost and still going to bet everything: that's greed.
  - s1artibartfast 2y ago
    I didn't say he was oblivious to the crime. I think he thought we was doing good by his moral compass
    - throw_m239339 2y ago
      > I didn't say he was oblivious to the crime. I think he thought we was doing good by his moral compass I didn't say you claimed he was oblivious to his crime either. What you claim being 'his moral compass' didn't stand basic scrutiny during his trial. It was demonstrated he fully knew he was committing fraud, he just didn't care because he was greedy.
      - s1artibartfast 2y ago
        Fraud is a crime. That doesn't mean he thought it was bad. Did he feel bad about that fraud? Do you think he thought it was bad? That it was unjustified? People break laws all the time but don't think they did anything morally wrong. Hell, I can think of plenty of laws I think are bad or not applicable
        throw_m239339 2y ago
        > People break laws all the time but don't think they did anything morally wrong. His trial proved he knew he was breaking the law for personal profit. His behavior absolutely fits the definition of greed. your original argument is > I dont think it was greed. I think he legitimately thought he was doing the right thing, thought it was fun, and thought it was interesting. Again it's all in the trial and the mountains of evidences against him. Personal enrichment was the motive for the fraud, plain and simple. He even admitted the whole 'effective altruism' was a farce to get on the good side of the progressive elite and their media, as he was also funneling money to republicans but more discretely all for the same reasons: political connections. And it worked given the initial portrait left wing media made of him, "someone who got way over his head", they gave him the benefit of the doubt for a long time and he thought he could roll with that image which would get him off the hook... while he was intimidating his co-defendants by releasing personal informations about them... do you also deem the latter just "fun"?
        s1artibartfast 2y ago
        I never said anything was "just fun". I dont know why you would guess that. Inversely, do you think he had no fun in his time with FTX, and it was all misery?
lfmunoz4 2y ago
Borrow a little from you depositors because you have sure way to make money. Then you fall short a little and now you double down etc. Rinse and repeat.
arder 2y ago
Nate Silver interviewed as SBF as part of research for his book and I think the big take away from it was basically that Sam's attitude to risk was pathological - he was willing to take any sized bet that he thought was positive expected value. The obvious problem with that is that you if you continually take higher and higher risk bets it's certain that you'll eventually lose one of them.
- UncleMeat 2y ago
  SBF has been widely presented as a person who was constantly running these probabilistic computations and comparing expected values, but this strikes me as total horseshit that is a group invention of SBF himself and journalists who have a much more interesting story when he is a wunderkind. I'll totally buy that he thinks about risk differently than other people, but not in some more mathematical sense.
  - arder 2y ago
    Well for a start to run an even passable market making operation and to get into the jobs Sam did you have to be atleast fairly good at the mathematics behind probability. He's definitely more able to reason about probabilities than the average person. But sure, "I'm gonna go steal all these guys deposits to go gambling" wasn't an aggressive but understandable bet, it was the act of a degenerate gambler.
  - SilasX 2y ago
    There were two things going on: A) Betting more aggressively than the Kelly Criterion, which indicates a bad understanding of how to reason about risk and EV[1], and, separately B) taking unnecessary, negative EV risks that have no justification beyond laziness. B) include things like "having such sloppy accounting that you simply forget about major accounts[2] and are unintelligible to potential buyers" and "storing critical private keys in a text file that lots of people have poorly logged access to". [1] lay explanation: https://sarahconstantin.substack.com/p/why-infinite-coin-flipping-is-bad https://sarahconstantin.substack.com/p/why-infinite-coin-fli... [2] the infamous "hidden, poorly labeled fiat account" for example

s1artibartfast 2y ago

I dont think it was greed. I think he legitimately thought he was doing the right thing, thought it was fun, and thought it was interesting.

throw_m239339 2y ago
> I dont think it was greed. I think he legitimately thought he was doing the right thing, thought it was fun, and thought it was interesting. It was absolutely greed by the original sense of the word, which isn't necessary only about money, he knew he was breaking the laws given the step he took to cover his tracks, badly, but he was very well aware of the fraud he was partaking in, it was proven during his trial. There is the crime and then there is the cover up, or attempt at doing so. And ever after Sam was arrested he tried to intimidate and discredit, publicly, his co-defendant. He was fully aware of the crimes he committed, he just thought he could miraculously get out of his situation on top, like a trader who just lost and still going to bet everything: that's greed.
- s1artibartfast 2y ago
  I didn't say he was oblivious to the crime. I think he thought we was doing good by his moral compass
  - throw_m239339 2y ago
    > I didn't say he was oblivious to the crime. I think he thought we was doing good by his moral compass I didn't say you claimed he was oblivious to his crime either. What you claim being 'his moral compass' didn't stand basic scrutiny during his trial. It was demonstrated he fully knew he was committing fraud, he just didn't care because he was greedy.
    - s1artibartfast 2y ago
      Fraud is a crime. That doesn't mean he thought it was bad. Did he feel bad about that fraud? Do you think he thought it was bad? That it was unjustified? People break laws all the time but don't think they did anything morally wrong. Hell, I can think of plenty of laws I think are bad or not applicable
      - throw_m239339 2y ago
        > People break laws all the time but don't think they did anything morally wrong. His trial proved he knew he was breaking the law for personal profit. His behavior absolutely fits the definition of greed. your original argument is > I dont think it was greed. I think he legitimately thought he was doing the right thing, thought it was fun, and thought it was interesting. Again it's all in the trial and the mountains of evidences against him. Personal enrichment was the motive for the fraud, plain and simple. He even admitted the whole 'effective altruism' was a farce to get on the good side of the progressive elite and their media, as he was also funneling money to republicans but more discretely all for the same reasons: political connections. And it worked given the initial portrait left wing media made of him, "someone who got way over his head", they gave him the benefit of the doubt for a long time and he thought he could roll with that image which would get him off the hook... while he was intimidating his co-defendants by releasing personal informations about them... do you also deem the latter just "fun"?
        s1artibartfast 2y ago
        I never said anything was "just fun". I dont know why you would guess that. Inversely, do you think he had no fun in his time with FTX, and it was all misery?

lfmunoz4 2y ago

Borrow a little from you depositors because you have sure way to make money. Then you fall short a little and now you double down etc. Rinse and repeat.

arder 2y ago

Nate Silver interviewed as SBF as part of research for his book and I think the big take away from it was basically that Sam's attitude to risk was pathological - he was willing to take any sized bet that he thought was positive expected value. The obvious problem with that is that you if you continually take higher and higher risk bets it's certain that you'll eventually lose one of them.

UncleMeat 2y ago
SBF has been widely presented as a person who was constantly running these probabilistic computations and comparing expected values, but this strikes me as total horseshit that is a group invention of SBF himself and journalists who have a much more interesting story when he is a wunderkind. I'll totally buy that he thinks about risk differently than other people, but not in some more mathematical sense.
- arder 2y ago
  Well for a start to run an even passable market making operation and to get into the jobs Sam did you have to be atleast fairly good at the mathematics behind probability. He's definitely more able to reason about probabilities than the average person. But sure, "I'm gonna go steal all these guys deposits to go gambling" wasn't an aggressive but understandable bet, it was the act of a degenerate gambler.
- SilasX 2y ago
  There were two things going on: A) Betting more aggressively than the Kelly Criterion, which indicates a bad understanding of how to reason about risk and EV[1], and, separately B) taking unnecessary, negative EV risks that have no justification beyond laziness. B) include things like "having such sloppy accounting that you simply forget about major accounts[2] and are unintelligible to potential buyers" and "storing critical private keys in a text file that lots of people have poorly logged access to". [1] lay explanation: https://sarahconstantin.substack.com/p/why-infinite-coin-flipping-is-bad https://sarahconstantin.substack.com/p/why-infinite-coin-fli... [2] the infamous "hidden, poorly labeled fiat account" for example