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Sam Bankman-Fried tries to explain himself (vox.com)
370 points by Hippocrates 72 days ago | hide | past | favorite | 380 comments



It this real? Is he really THAT stupid? His defense against "you took user deposits and gambled the money" is "No, I took user deposits, loaned them to myself and then gambled the money".

I mean this is like nested layers of stupidity. You'd be stupid to do this, you'd be stupid to think it's not a major crime, you'd be stupid to think that this was in any way acts as a defense of your crime and you'd be stupid to actually tell people that this is what you did thinking that it's a defense for the crime you committed.

Guy literally though that Ponzi schemes would be legal if only the perpetrators on the way to court wrote on a document "I hereby lend myself all the money I misappropriated"?


For FTX's Sam Bankman-Fried, incompetence could be a legal strategy - https://www.axios.com/2022/11/16/ftx-sam-bankman-fried-incom...

> Lawyers tell Axios the main criminal risk Bankman-Fried faces is an indictment on charges of fraud — one of the more common charges in white-collar prosecutions. But to convict, prosecutors must prove beyond a reasonable doubt that someone had knowledge or intent to commit fraud, which can be tricky, they say.

> That’s why the defense against such charges typically centers on something like, "It wasn't fraud, I was just really bad at my job."

> "Typically, in a fraud case, the person at the top argues that he was inattentive, delegated to others, and wasn’t focused on the details," Mariotti tells Axios. "The point is to argue that he was sloppy or inattentive, not a fraudster."


He made tweets at the end of September when there were huge movements of FTT from Alameda to FTX where he lied and tried to downplay them as "wallet rotation". I posted about that here: https://news.ycombinator.com/item?id=33568688.

There is a paper/tweet trail a mile long that SBF was trying to cover up malfeasance that pretty clearly shows mens rea in my opinion.


The notion that someone that made it through MIT physics, worked for several years at Jane Street, and actively cultivated the persona of a genius can't understand that making a million tokens, selling one of them to yourself for a dollar, and then calling yourself a millionaire is nonsense, is frankly preposterous.


And then there's also the question of actual deposits, which would still have to be sent to somewhere - intentionally - and given as those were represented, afaik, as deposits and not buying shares in a high-risk hedge fund, that alone constitutes separate fraud, regardless of how he tried to cover it up afterwards. If I tell you "if you give me $1000 I'll keep them safe and return them to you anytime you want" and then I take these money and go gambling to Vegas, I can't say "I was just not paying attention, sorry". I knew I promised to keep them for you and gambled with them instead.


Exactly. People keep referring to FTX as a Ponzi. It's even worse than that.


You’re right, it is preposterous, which is why this is narcissism and not stupidity. The first rule of any fraudster is to never admit the fraud, no matter how obvious. Never apologize for anything, never admit wrongdoing of any kind, and try to deflect and diffuse blame diffuse blame to as many people as possible.


FTT had a real yield that was backed by Ftx trading fees and measured in dollars. (Weekly back backs and burns)

Many analysts did DCF modeling and $22 per FTT looked reasonable.


There's a segment of smart people who go through a lot of hoops to make themselves look stupid. Because for one reason or another being stupid is advantageous. Here, apparently, it's a defense against fraud.


I am a genuine believer that environment plays a big role in all of those "achievements".


Judges won't side with him, like, at all.

>The point is to argue that he was sloppy or inattentive, not a fraudster.

If that's going to be his strategy there's still a lot of laughs to have at his expense.

If only it were that easy, "oh I didn't knew I was crossing the border with a hundred pounds of cocaine in my car", like, how come they never thought of THAT? LOL


Is that not a valid defense? It's my understanding it's not uncommon for criminals to plant stuff on a marks car and then secretly grab it after it crosses the border. Possession of something should require your intent to control/keep it or at least knowledge it exists.


Maybe could get away with light sentencing If it was few billionaire investors. I don't see how he doesn't get life for screwing so many investors.


It is not - drug possession is a strict liability crime for that reason.

That said if it is some random retired couple with zero idea what is going on and 10 kilos of coke in their spare tire, as long as they co-operate, most gov’ts wouldn’t prosecute them.


It is iff you can convince a jury that's the case.


I imagine for him it is going to be something more like, "I didn't know she wasn't 18."


I think I might go rob a bank and use the excuse "I wasn't robbing it, I'm just really bad at withdrawals!"


"I'm sorry, I think I got a label mixed up, you mean this isn't MY account?"


"Poorly labeled @fiat accounts" oh my God.


There's an important nuance there which is that they don't have to prove that the person knew the actions they were taking were illegal, just that they intended to take those actions. As an example:

Knowingly driving a car someone else stole is illegal, even if you don't actually know it's a crime to drive a car someone else stole (after all you didn't steal it, maybe you bought it from the person). Driving a car that was stolen that you didn't know was stolen is not illegal.


He built a special backend endpoint so he could move money from FTX to Alameda without triggering any oversight or audits. They have him on fraud.


Specifically, FTX had a margin pool facility. Clients could specify the assets (not just dollars, but also Bitcoin, tether etc) that they wanted to lend in their wallet. Along with APR. It was strictly opt in.

The system also reported small amounts ($400m) last time I checked.

This misrepresentation is fraud.


Or maybe it's just a hidden, poorly internally labeled fiat@ account, with a negative balance of 8bn dollars? (sic)


It's a bit of both.


Removing the audit trail and reporting from accounts probably turns this into theft according to the definition of the intention to permanently deprive, which forethought hence mens rea is satisfied by plural compounding acts of concealment.


OK, but "I loaned it to myself" is a deliberate step. So the defense is "I took user deposits, loaned them to myself and then gambled the money, and I did not know that that constituted fraud or embezzlement." That seems unlikely to fly.


There are some parallels with Elizabeth Holmes.

And we are yet to see whether they throw the book at her.


She didn't immediately publicly confess to a reporter, though, right?


Hell, to this day she still (publicly) claims that they were thiiiiiiis close and all the naysayers who lead to this point are "hurting humanity" far more than they are hurting her.


So you're saying is that a defense for fraud is stupidity? Oh dear god, it can't be that simple can it?


A large class (but not all!) of crime requires ‘mens rea’ or a guilty mind.

If you can plausibly convince everyone, for instance, that you legitimately thought that the car you got into and drove away was your car, then you didn’t commit car theft.

Good luck with that 99.9% of the time of course.

This is in comparison to strict liability crimes, like drug possession or statutory rape that don’t require knowledge or intent.

Fraud requires that you knew you were lying (essentially), or should have known, to be fraud.

You can’t accidentally commit fraud.

Near as I can tell, SBF would have to somehow convince everyone he had been brain dead while collecting billions of dollars to pull that off here, but hey - defense attorneys have to try something I guess?


I'm no legal expert, but surely this requirement of mens rea doesn't actually require the defendant to know the specific law that they are violating. Surely it just requires that the defendant knows the basic facts of their actions that cause their actions to qualify as illegal under the law. In other words, if it's illegal to loan user deposits to yourself and gamble the money, and he knew that he was loaning user deposits to himself and gambling the money, then doesn't that count as mens rea even if he didn't know that it was illegal?


Correct.

It doesn’t requiring knowing what you’re doing is against some law.

It requires knowing what you’re doing (which is against a law).

If what you did is very different from what you thought you were doing because of a legitimate mistake of fact (aka you thought it was your car, but it was not), then you’re not guilty of the crime, because you didn’t realize what you were doing was the thing that was a crime.

It’s roughy why not guilty by reason of insanity is a legitimate defense in some cases.

If someone is so insane they can’t understand what they were actually doing, or the thing they legitimately thought they were doing isn’t a crime, they weren’t committing the crime. That does mean they are probably such a danger to themselves or others they need to be locked up somewhere though.

As with the car defense, it is a very difficult thing to prove in most cases, and for good reasons


This text resonates with me a bit:

> like, "oh FTX doesn't have a bank account, I guess people can wire to Alameda's to get money on FTX" > ..3 years later.. > 'oh fuck it looks like people wired $8b to Alameda and oh god we basically forgot about the stub account that corresponded to that and so it was never delivered to FTX'

I'm not trying to defend his actions him and I think he should be prosecuted to the fullest extent of the law, but honestly, I kind of get what he's saying. I've worked at enough start ups where everything is always chaos and speed and scrappiness are valued above all else, that I feel like I've seen this multiple times. It's like, someone makes a dumb choice and everyone goes, "we'll that's not great, but it's working and it's not that bad, so I don't want to make it my problem" and eventually that dumb decision is just how things are. Eventually, new people join the company and don't realize things aren't this way intentionally and eventually one of them adds another dumb decision on top of that and the same cycle plays out again.

After a few years, you end up with multiple of your processes or parts of your infrastructure based on these chains of bad choices and the one of them collapses. When you're close to the problem, each of the decisions on their own don't look too bad, but when you step back and summarize it in one sentence, it's clear how fucked up things are.

It's funny because he smugly spends the start of this article arguing about how pointless regulators are, but I feel like if there was actually regulation in the space, there's a good chance they would have slowed things down enough to catch these bad decision chains.


If they could afford to hire an on-staff performance coach, they probably could and should have hired an on-staff accountant to manage literally billions of dollars rather than having the CEO put things in a spreadsheet.


Agreed. He absolutely could have caught this if he had cared to, but my guess is he was too caught up in the "move fast and break things" mindset to really give a shit and that's why I fully support him going to jail for this.

I don't think he intentionally lost peoples' money, but I think he was intentionally reckless and for that reason he should be prosecuted.


IIRC during some of the interviews with Madoff, he didn’t “intentionally” lose peoples money either. Fraud like this is often many little “well, I just need to $x and everything will be OK”.


> I don't think he intentionally lost peoples' money

How do you suppose they took a directional bet, with customer funds, and lost, unintentionally?


> 'oh fuck it looks like people wired $8b to Alameda and oh god we basically forgot about the stub account that corresponded to that and so it was never delivered to FTX'

SBF's claim is that FTX customers sent money to Alameda and nobody remembered to categorize it as FTX client money.

This is about as believable as my 11yo saying he didn't realize he had to pay for the $50 worth of Pokemon cards he took from Wawa. (This was after he originally claimed the cards were a gift from a friend at camp -- a friend whom he could neither name nor describe to us.)


It’s a financial exchange. These guys think they are so smart, they don’t even need an accountant.

I’m still trying to understand why investors would entrust their money with them. Why did the press fawn all over him? He talked a big game, but so have literally hundreds of others!


I have worked in plenty of fast-moving and chaotic environments, and while I can see some stuff slipping through the cracks, it is hard to see something so core to your business getting this bad without realizing it.

Like, if you are releasing financial documents and a large entry is "HIDDEN POORLY INTERNALLY LABELED ACCOUNT.", it is hard to explain that without getting into outright malice or negligence so extreme that it is difficult to differentiate from malice. Even rudimentary reviews of their finances would have highlighted stuff like this, and they clearly had money to pay people to help them do it.


Yes, I get what you're saying. At our old startup we didn't setup a bank account either, why bother, we just had investors deposit the money into our CEOs trading account, seemed easier that way.


You're laughing, but I was an early employee at a start up run by 20-somethings that's now grown into a company worth over a billion dollars and there were plenty of WTF moments like that until they started hiring adults.

No one was doing things like that intentionally, but as the company started to grow, so did peoples' egos and they people begin to confuse being reckless with being innovative.


Funny how these honest mistakes always tend to happen in a way that benefits the ones making them.


Not to mention, "what would you do different?"

> more careful accounting

Maybe it's just me being cynical. Maybe benefit of hindsight. Maybe a little of both. And talking with my partner, who is working towards a CPA and absolutely loves forensic accounting.

"Careful accounting" doesn't in any way mean "doing the right thing financially", though it is certainly meant to imply that.

"Careful accounting" is "hiding where the bodies/cash is buried".


“That’s as good as money sir. Those are IOUs.”

https://m.youtube.com/watch?v=n73DD0kv2l4


>It this real? Is he really THAT stupid?

No, it's media damage control. Gets you to think about unverifiable stuff like personal motivation instead of what his company actually did.

It revelatory that VOX interviews him instead of investigating him.


I think he probably declared it. "I declare bankruptcy".


You have to walk in a circle three times after stating this.


And throw a pinch of salt over your left shoulder.


Maybe he's going for the insanity defense.

Could be legit, he's literally digging, admitting to blatant criminal behaviour like it's normal stuff.


Think about that next time somebody says: "Trust me, I am smart, I have a Physics degree from MIT..."


Market makers on stock exchanges are allowed to naked short with abandon (more leverage than retail). Almeda was a market maker on an exchange that allowed 100x leverage to retail. leverage on margin is a loan. The shocking part is they took on so much leverage and lost, not that they were extended margin like any other market maker or even market participant on ftx.

Really not so different from archilego/ hwang or London metals exchange fiasco or gilt fiasco or oil going negative or cds fiasco or LTCM.


Even if he gets convicted of anything non-trivial, how does he actually stay in jail for very long? Call me cynical or a conspiracy theorist or whatever, but a guy who's rubbed shoulders with the "elite" and who probably has at least a billion dollars in crypto stashed away can probably figure out who to bribe to walk out the jail's back door and take a private flight to a country who won't send him back.


“That’s as good as cash”!


> I was trying to make sense of what, behind the PR and the charitable donations and the lobbying, Bankman-Fried actually believes about what’s right and what’s wrong — and especially the ethics of what he did and the industry he worked in.

This seems like a weird thing to worry about right now, I imagine my question would be "hey, where'd all the deposits go?" Like, I'm sure it's all interesting in a psychological and sociological way, but "what does SBF really believe" feels like it should take a back seat to what did he do. That's much more interesting! It's easy for someone like SBF to just say stuff about what's going on in his head, whether it's true or not. But, we're talking about real (and, okay, a lot of fake) money here.

There's this weird assumption in a lot of reporting that a rich person must have interesting things to say, or beliefs that are worth getting to the bottom of. Sometimes that's true, but sometimes they're just not very interesting people. Which is fine! Lots of people aren't very interesting, but really rich people get to be treated as interesting even if they're actually boring.


I think this is... journalism.

You can't text a fraudster in the bahamas and say "Hey, why are you so shit". You have to text "Hey, you're a precious flower with a special story" and then they tell you why they're shit. There's very clearly a level where SBF feels safe to talk honestly, in a self-incriminating way to a friend, where that friend is actually a reporter working for Vox.


Oh absolutely, it's just weird when that tone leaks into the text of the article. A sort of winking style that expects the reader to read between the lines, which is fine as far as it goes! But imagine beginning an article about Bernie Madoff in the weeks after his Ponzi's collapse pretending that you just wanted to learn more about his ethical principles.


It’s an earnest attempt at staying as unbiased as possible. If you go into an interview believing one thing and structuring all of you questions with that supposition you are far more likely to get the answer you want as oppose to whatever the reality is.


I'm not complaining about the interview technique- which clearly worked great here!- just the framing. I guess it's a nitpick really considering the rest of the content of the piece.


I think its more akin to asking a religious leader who turns out to be a con artist what his true beliefs are. SBF's beliefs were integral to his success and the only reason some like me had every heard of him. Madoff actually did raise a lot of money by appealing to Judaism (hence the large investment by Brandeis) and I'm sure Jewish publications covered that angle of it right after it happened.

A lot of people (including myself) had listened to him talk (on Sam Harris, on Odd Lots, on Conversations with Tyler) because of his interesting beliefs. I had no idea who CZ was until this week because I am not interested in the minutiae of crypto. But SBF leveraged his image for this.

Ultimately it seemed the amount of actual money of other people he lost was a few billion? Which is extremely awful but less interesting than the media landscape which lead to it, imo, especially if you are not a finance reporter.


> Madoff actually did raise a lot of money by appealing to Judaism

Affinity fraud, one of the oldest and truest tools in the conman's toolbox.


> I imagine my question would be "hey, where'd all the deposits go?"

But we know where they went. To Alameda Research. Then Alameda Research sent them somewhere else. The money isn't coming back, and Alameda Research's collateral of FTT tokens is worthless. So that's that, its done.

Its actually quite a simple story here. FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that other group lost the money.


> FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that other group lost the money

One minor clarification: "lent" should be "stole". If I can't pay my mortgage, I'm not allowed to go break in to my neighbor's house to steal some cash that I'll "borrow" in the hopes of paying back later.

FTX's Ts&Cs we're very clear - customer deposits were not FTX's to lend.

This is a simple, straightforward case of fraud and theft. No additional "crypto-specific regulations" are needed to reach that conclusion.


> One minor clarification: "lent" should be "stole"

Not a lawyer, but I think the correct term is "embezzled".

> The crime of embezzlement is defined as the fraudulent appropriation of property of another by someone who has been entrusted with its possession. Unlike theft where the property is taken unlawfully, in embezzlement the property comes lawfully into the possession of the embezzler who then fraudulently or unlawfully appropriates it. The key aspect of embezzlement is the fiduciary relationship that exists between the embezzler and the victim of the embezzlement as embezzlement requires that the property be appropriated by a person who was entrusted with its possession. A senior executive who uses company funds to pay for his personal yacht is guilty of embezzlement even if he intended to return the funds or had the means to do so.

Source: https://www.bayarea-attorney.com/CM/Articles/Theft-Offenses-...


Agreed that this is embezzlement, but in all the definitions I've seen (including plain old Webster's), embezzlement is a form of theft, e.g. https://ryanbeasleylaw.com/2019/07/theft-embezzlement-and-fr...


True. That's fair


Not to mention, he literally tweeted a week ago that "We don't invest client assets (even in Treasuries)." FTX is not bank. It's not supposed to be susceptible to a bank run.

This entire line of tweets makes no sense. SBF is a lying fraud that deserves prison.


How do you think margin works ?


Margin doesn't include theft of other people's assets.


> So that's that, its done.

Not at all.

If Alameda really lost billions or tens in billions in trades, who was on the other side to collect the money? To random people who sold BTC at $64K and then all the way down?

Or were the losing trades a way to syphon billions somewhere else?

Seen the amount involved, the policital donations, the articles in the media portraying the guy as an altruistic genius and seen that tether/USDT/Bitfinex/Deltec are also in the Bahamas, it looks like, maybe, fucking maybe, it's time for actual journalism, actual research, actual congress hearings (at least one is coming in december btw), etc. about what's going on.

Do you really believe it's just a few trades gone wrong?

> Its actually quite a simple story here. FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that other group lost the money.

For a start you're forgetting the part where FTX was also pumping and then dumping tokens on their customers. Some tokens they created themselves. They're also somehow tied to hundreds of million of USDs getting frozen by authorities, where FTX then quickly raised money. That's fraud, too.

It's much more than "simple". There's serious shit going on.


Your hypothesis is a small cabal of insiders at FTX/Alameda purposely blew up the hedge fund and exchange to siphon off billions (hiding it in the losses) to enrich themselves while simultaneously making themselves some of the most hated people in the world, and also rolling the dice on going to prison for decades.

Seems very thin to me....


As I said yesterday, there's a guy (Irving Picard, AFAICR) who's clawed back most of the money that Bernie Madoff stole from his clients. In that case, Bernie took one person's deposits and gave the money to the previous sucker, so Irving unwound all that.

In this case, apparently some people's money was fraudulently given to charities, so do they have to give it back? And what if they can't?

There's a job almost no one would want to undertake.


It makes a lot of sense given the nature of SBF’s charitable donations and the purported rationale(s) behind them. Kelsey Piper is pretty deeply associated with the EA movement, which is heavily interested in picking the right ways to deploy money to solve the world’s problems, and much of SBF’s charitable giving was too.


> In 2018, Vox launched Future Perfect, with the goal of covering the most critical issues of the day through the lens of effective altruism. In this talk, Kelsey Piper discusses how the project worked out, her experience as a Vox staff writer, and her thoughts on the key challenges of EA-focused journalism.

I just commented in this thread about how this story magically keeps getting worse, and then it got worse...


Yeah when I saw it was Piper as the journalist, I was expecting to see a massive disclaimer/disclosure on the article. There still isn’t one.

My own disclosure: I have many mutual friends with Piper and participate in the local EA group and contribute to EA causes.


Piper's journalistic duty was to disclose her ties to EA much more fully in that piece, or recuse herself from writing it. I'm curious about the ties that she and other prominent Bay Area EAs have to SBF as well. Everyone is in a rush to distance themselves from they guy who bankrolled them.


And to be clear, Piper and Ellison go way way back. I think there is a very good chance that SBF did not know that that chat was on the record. So Piper may have failed to disclose in two directions, to both her source and her audience.


There's a disclosure that SBF actually gave Vox money as part of a journalism grant. This business of billionaires buying journalists outright by calling payments philanthropic grants is way out of control. It's bad enough when Gates does it.


A grant alone should not count as "buying journalists". They clearly aren't acting in his interests (as they shouldn't!).


It does seem like the (some now erstwhile) EA billionaires supposed that buying professional, high-tier take-havers/explanatory-journalists was going to be an effective way to mainline their ideology. SBF had his eye on Matt Yglesias, for example.


> what did he do?

FTX loaned money to Alameda, the crypto hedge-fund made a series of bets and probably put some cash in illiquid assets too, but mostly irresponsible bets. Crypto market collapsed, bets that were worth billions with a decent liquidity now became worth millions with not so much liquidity.

They turned to their most harsh competitor hoping for a bailout kinda like how Microsoft saved Apple in the 90s . All that didn't happen, it was the the straw that broke the camel's back.

That's about it, when you are leveraged adverse market events can literally put any company out of business, no matter how giant it is. Chapter 11 is not the end of the world for old companies making real stuff that people will always want (say General Motors or Hertz), but in crypto where everything is about reputation there is no way FTX will ever be heard of ever again.

In the case of the crypto market adverse events of massive proportions repeat themselves every 5 years or so. It happened this year , together with inflation. It was due, at some point the chickens had to come home to roost.....whatever the fuck that means lol.


> FTX loaned money to Alameda ... [it was a bad bet] ... That's about it

He took money from an exchange, client money, and without permission used their money ("t" "h" "e" "i" "r" " " "m" "o" "n" "e" "y" -- channeling the genius' tweets here) and put it in his own company, the "hedge fund" called Alameda.

So that is fraud and not a bad bet.

A 'good bet' is that an organization (which merely includes FSB) who due to circumstances was exposed red handed in fraud involving billions of dollars and famous people, which then benefits from "f" "r" "e" "e" PR by established media, starting with "The New York Times", is a protected outfit of some sort, and that the playful sociopaths in FTX/Almada know it full well.


We have a lot of info on where the money went: A stadium name deal, F1 sponsorship, penthouse in a Bahamas resort, political donations, several DeFi ponzis that fell apart, acquisitions of BS companies, and similarly, bailing out numerous failed crypto projects over several years.

With such a large sum gone, the tougher question is "where didn't he piss the money away?"

We haven't seen as much commentary from him post-incident to reconcile who he appeared to be before the collapse, with who he apparently is. I think that angle is actually pretty interesting, but ultimately he sounds like just another deranged sociopath. No surprise there. Still interesting.


Alameda got long on crypto, crypto crash, billions lost. Funds from FTX was covering Alameda's losses. My guess there, was never a distinct point in which money was moved from FTX to Almeda. I felt they always ran both as two hands belonging to the same body.


Technically he’s probably one of the poorest people in the world


yeah i find it hilarious how all these articles are trying to get to his inner philosophical self. But, at least based on this particular exchange, it seems that he was just trying to make a buck or two, and treated everything else as PR/BS.


Author: "so the ethics stuff - mostly a front?"

SBF: "yeah"

Absolutely gobsmacked.

I saw these screenshots on Twitter and I thought they were fake until I read the article. The rest of the messages from him are pretty terrible as well.

I thought he just fucked up, but no. He was wilfully unethical and maintains he did nothing wrong: "Sometimes life creeps up on you".

And the thing he regrets most is filing for Chapter 11 bankruptcy...

What a cruel fucking joke for all the people who invested with/in FTX.


The ethics discussion along with the FTX/Alameda discussion is such a fascinating juxtaposition for me. It makes the article so much more interesting in my view.

On the one hand, you’ve got this ethics discussion, which in context happened previously, about the ethics of running an immoral business to do good things. Then an ethical discussion about how that answer was BS and all that really matters is perception, and how perception doesn’t mirror reality.

And here I’m trying to reflect on these topics. How do I feel about these things, how would I answer?

Then the next part begins soon after with “messy accounting.”

I view it the way I’d view Michelangelo’s David if it were displayed at a local county fair.


I'm wondering if there is some kind of mass insanity occurring in the world right now with this and the behaviour of numerous influential figures.


No, it is wrong to think it is a "mass" phenomena. A very small group of people around the planet are involved here.

What is happening is what happens in all long running systems where the generational selection process becomes ineffective due to (typically) nepotism, hedonism, and corruption. What was once, if arguably ethically challenged, but competent elite gives way to an openly corrupt and incompetent set. Healthy systems check this phenomena -- it happens in all power entities historically -- and correct it. When they fail to correct it, they suddenly collapse.


Wealth reveals. Just like alcohol.


Money is a helluva drug!


cheap money and low interest rates, to be precise


Yep. It's a spectrum. At one end you have normal companies, in the middle you have pseudo-companies like Uber or Lyft or perhaps even Twitter where they're just indirectly guzzling printed money for decades after it's laundered through several different intermediaries, and then at the end you have FTX which is a fully fraudulent non-business. Where does all the crazy money come from? Ultimately from the central banks.


You might be interested in Adam Curtis' documentaries. Check them out.


Something to do with neo-nicotinoid.

It would explain a lot.


He doesn't say he thinks it is okay to act unethically, he says that in general acting unethically doesn't matter the way he previously said it did because public perception is shaped more by winning than it is by whether the winner was ethical or unethical.

Elsewhere in the DMs he says "I didn't want to do sketchy stuff [...] and I didn't mean to" and "it as never the intention".

None of this reads like bombshell level "Wow this guy is terrible". He comes across as maybe terrible or maybe someone who played a little too fast and loose with an explosively growing business of which he lost control.


Wow...

> He comes across as maybe terrible or maybe someone who played a little too fast and loose with an explosively growing business of which he lost control.

Same type of statement would be like... They came across as maybe terrible or maybe someone who just had a few too many drinks and then lost control of a new sports car that they were not familiar with and accidentally drove into a crowd of people.


LoL, exactly. "Well, it wasn't pre-meditated 1st degree murder... just good old grossly-negligent homicide."


Yes and that's a great analogy because it's possible that your person driving the new sports car did not intentionally get drunk and drive into a crowd of people.

Most people wouldn't call that driver a sociopath who intentionally murdered a crowd of people, they'd say "wow, that person made a couple of really poor decisions and they really messed up and ended up ruining a lot of lives".


You do realize that states recognize ignoring the risk means that person was intentional and they are convicted of murder? Anything can be seen as a poor choice. By your logic Hitler made really poor decisions and ended up ruining a lot of lives.


It's possible for SBF to be both guilty of a variety of crimes and also not an intentionally terrible human.

I don't know if he is or isn't a sociopath who lied to everyone while stealing billions. I just find the "wow, this guy is a monster" outrage interesting as the source DMs here don't really uphold that portrayal.


You could argue there’s no such thing as a “terrible person”, we are all at the mercy of our sensory inputs and the innate properties of our neurons. In order to keep society functional we need to enforce boundaries on human behavior, and in some cases label people as untrustworthy and possibly lock them up to stop them from doing more damage. If “terrible person” is the wrong label, we could pick a different one.


Yes they do. They show classic narcissistic and sociopathic behaviors.


The next bit of that exchange is: "each individual decision seemed fine and I didn't realize how big their sum was until the end".

That's a classic "ends justify the means" slippery slope.

And even if he didn't want or mean to, he was more than happy to engage in that kind of behaviour if needed.

Someone like that is absolutely a terrible person in my book. I would not trust or be friends with someone who has that attitude. He is more concerned with "winning" than behaving ethically.

Imagine if you were an FTX employee, customer or investor who was in the dark. Would you really just chalk this up to playing "a little too fast and loose with an explosively growing business"? Would you be happy to work with SBF again? I know I wouldn't.


"each individual decision seemed fine and I didn't realize how big their sum was until the end"

This reads to me as "I was viewing all these situations in isolation instead of looking at the full system" not your reading which seems to be more "I thought I could get away with each individual thing".

To your last point, Parker Conrad was dragged through the mud and shunned everywhere when Zenefits imploded but he came right back with Rippling and is a tech darling now.


They are effectively the same reading to me. He's the CEO. It's his job to understand the whole system. Whether he looked at things in isolation, or thought he could get away with each one he was still reckless.

From a quick reading of what happened with Zenefits (Was not keeping track of tech back then), it seems bad but not as bad as FTX.

I'm also not saying that everyone would not want to work with someone like that again. I'm sure some (Most?) people would, but for me it would take lot to convince me they're not going to repeat that behaviour.


Most non-sociopaths would experience a huge amount of shame/stress from stealing billions of dollars from trusting people and losing it. SBF shows none of that.


He says in the DMs that the most important thing in his life now is making customers whole and returning their funds.

"that's basically all that matters for the rest of my life"


Are you f'ing kidding me, taking this at face value?

Note in other tweets he said he was trying to "raise capital". The man is likely going to prison for years, he is either delusional or trying to promote his delusions to pretend the he didn't know what he was doing was wrong.


Looks like pretty classic desperation, which is an expected response to this situation for plenty of personality types that aren't indicative of anti-social personality disorder.


> Are you f'ing kidding me, taking this at face value?

Well we can't cherry-pick the sociopathy as real and then start second guessing the bit where he sounds a lot less like a sociopath... can we?


Considering that sociopaths (by definition) do damaging things to people while also:

-Using intelligence, charm, or charisma to manipulate others.

- Not learning from mistakes or punishment.

- Lying for personal gain.

It seems fair to call out that you can’t trust their statements this way, if that is what is going on. It’s pretty much the nature of the disorder.


My issue is only using the half of the source that backs up the assessment (of sociopathy) and ignoring the other half that contradicts it. That is not fair, balanced or even good guessing, its just seeing what you want to see in the data by excluding what doesn't support your theory.


Are you responding to me, the original poster who was claiming sociopathy, or responding to the world in general?

All I was doing is pointing out that if person A claims person B is lying about their motivations and good deeds and actually causing harm because they are a sociopath, saying person A can’t claim that doesn’t make much sense.

I have no particularly strong opinion in if anyone is or is not a sociopath. I’m just pointing out that lying about your intentions and good deeds while causing harm is a pretty textbook element of ASPD. It’s certainly not unique to ASPD of course!

Do you have specific elements of sociopathy you think can’t apply?

Or more just pointing out all of this is bullshit speculation anyway because no one can diagnose someone off a couple of tweets in the middle of a scandal anyway?


hn_throwaway is the user that wants to use this as a source to prove SBF's sociopathy but then mocks another user for taking anything he says in the same source at face value. That's why I'm commenting, because that looks to me like a double-standard.


For HIS life, meaning he’s likely to go to prison if he fails to make his depositors whole. He doesn’t care about his customers which is why he embezzled the money, didn’t do any accounting, created a backdoor in the finance software, and tried to keep the charade going for as long as he could.


I don't interpret it that way. I interpret this as "the most important thing is getting myself out of this jam - because otherwise I'm going to prison and my life is fucked."


I agree that after all of his lies, and they are numerous, today is the day we should start trusting what he says. /s


And "more careful accounting". Not accurate/right accounting. Just "be more careful".


How can you think he "just fucked up", and not unethical? He was selling magic beans. He was going "this thing I just made up, I declare it with billions".


I understand what you're getting at (Though this is not really about printing FTT in particular). What I'm trying to verbalize is that before, I gave him the benefit of the doubt in regards to intention.

He mentions that he didn't mean to do sketchy things, but he was definitely more than willing to engage in unethical behaviour.

Previously, I did not think he was being brazenly unethical. Now, I have the impression he will do anything it takes to "win".


> he was definitely more than willing to engage in unethical behaviour

> Now, I have the impression he will do anything it takes to "win".

Not sure what's the distinction you're making here.


The guy is likely a psychopath. I mean just compare: https://en.wikipedia.org/wiki/Antisocial_personality_disorde... and see how many boxes he checks. When a high-skilled evil psychopath gets going, he (or she) usually leaves a trail of people asking themselves "how could we not see it for so long?!".


the yeah could also be the answer to the second question in the bubble!


I think there is a word for it. Sociopath.


From the CEO of NuGenesis network and Metalabs global:

- Someone was dumping our coin

- We found out it was Alameda

- We asked them to stop market making, yet they continued dumping, all on Liquid

- We have a lot of proof showing the above

- We've known about the FTX scam months and months ago & contacted the SEC

- Media did not listen to us

- No one was listening because no one wanted to believe FTX & SBF was a scammer, even some of the biggest VC firm

- I sent everything to the FTC multiple times, MONTHS AGO, & they didn't even reply

- I won't comment on whether Gary Gensler was involved

- Many exchanges & entities are likely wash trading like FTX. This issue is systematic

More summary here https://twitter.com/marionawfal/status/1592947918146654208

Source is the Spaces chat here, starts around 4:51 https://twitter.com/nugenmediahub/status/1592941623306252288


This Mario person is a charlatan who recently deleted the entire contents of his web site because it was publicly advertising that his career is the sale of fake engagement to pump shitcoins


It's so weird, I had seen that profile a few days ago. Everything about him screams charlatan. The profile images, the "thoughtful" pose, his "I'm getting interviewed", "I'm a speaker" and his "I have an audience watching me dance", it just screams it. Then I went to his website and it ups the volume to 11. He even has a corny motto "Do good - Do it consistently - Be patient".

I'm sure lots of people fall for it and think he's legit. Is that just an age thing or are some people just that gullible and when you have global reach via Twitter and Instagram, you'll find them all?


Mario is just the messenger here and host of that chat, not the speaker.


to be clear:

- he lent his own hedge fund $8b collateralized by tokens he controlled issuance of (FTT, SRM, MAPS, OXY). At full size, the liquidation price of these tokens was 0 (he also purchased billions worth of FTT off the market when he could print them himself for free?).

- Sensing alameda was insolvent and customer funds were misappropriated, customers withdrew until they ran out of liquidity.

- Withdrawals were suspended

- Citing Bahamian authorities requests to unfreeze assets of bahamian residents, withdrawals were opened back up for bahamian residents. Hundreds of millions were withdrawn. Bahamian authorities have since made statements that no such requests were made (so this was just insiders stealing even more).

- Approx $500m of assets were drained from FTX wallets at the same time as FTX databse records were cleared (obviously not a hack, just insiders stealing even more).

- SBF goes on twitter to make new one-letter tweets while simultaneously deleting incriminating tweets so as to not trigger deletion bots picking up that he deleted said tweets.

Ongoing theft and destruction of evidence out in the open after stealing 10 billion dollars from over 1 million depositors. SBF has still not been arrested. This all but confirms the wildest of conspiracy theories.


> still not been arrested

"Under supervision".[1] Rumors that he planned to escape to Dubai. But Dubai signed an extradition treaty with the US a few months back.

Extradition to the US may be pending.[2]

This is the sort of situation where, if there is an arrest, the perp gets held as a flight risk.

[1] https://cointelegraph.com/news/sam-bankman-fried-is-under-su...

[2] https://www.dailymail.co.uk/news/article-11433541/FBI-planni...


> - SBF goes on twitter to make new one-letter tweets while simultaneously deleting incriminating tweets so as to not trigger deletion bots picking up that he deleted said tweets.

This part seems to have been mostly speculation. He deleted 118 tweets & retweets, so his one letter tweets did little to cover his tracks[1]. I have no idea why he did the one-letter thing. Maybe to get attention?

[1] https://www.cryptonews.net/news/other/16170687/


I dont think he didnt delete any tweets. The counts were off because people like Tom Brady and other famous people associated him where deleting re-tweets.

....that is what I read and it makes sense.


Just to be clear, where do you think he is and who do you think would be arresting him if not avoiding it for what reasons?


You kind of went off the rails there in the final sentence. Are you saying that any of this adds credence to the silly idea that Democrats are beholden to SBF campaign money?


It’s a silly idea that being the second largest donor to a political party in the US buys you special favors? Why else would anyone give that kind of money to politicians without expecting something in return?


I'd expect that the something in return buys you a king's seat at the regulatory table, not quite a get-out-of-jail-scott-free-for-stealing-billions card.

I'm sure that in a few years, once the courts get everything sorted out, we'll learn which of our prejudices is closer to reality. As of today, though, we're both just speculating.


Bingo, and the line from electoral politics -> regulation is straight, legal, and requires one step. While filtering political donations through judicial + investigative bodies with egads of separate oversight & career employees & little to no electoral influence would be impossible to manage. Not for 28 million, you would have to buy a loooooot of people off and get extremely lucky. That’s why it doesn’t happen. The get out of jail free card, that is.


Fair enough. You are correct it is all speculation. We’ll see.


Donations buy you access, not specific outcomes. Just the ability to get a hearing for whatever kinda-reasonable-ish parts of the stuff you want there might be is really, really valuable.

And yes, both are corrupt, but one is business as usual and the other is a serious federal crime that prudent members of congress avoid.


"Getting a hearing" and "not getting a hearing" are specific outcomes.


"This tax credit gets extended" is an outcome. "30 minutes with the Member and their chief of staff to discuss the vital importance of this tax credit to industry X" is not an outcome. You can problematize and subvert any scheme of categorization if you like, so go wild if it makes you happy, but honestly who has the time?


Sorry but the "wildest conspiracy theory" is that Democrats sent money to Ukraine, Ukraine deposited the money at FTX, and SBF donated the money to Democratic congressional campaigns. Nothing about what we know today lends any credence to that theory.

That some guy with access to a lot of cash tried to buy influence is not a "conspiracy theory" because it is unilateral. And, if that's what he was trying to do, it seems like a really poor strategy since you cannot really buy influence over law enforcement that way.


> Nothing about what we know today lends any credence to that theory.

I'm personally much more interested in the billions or the tens of billions that disappeared (in the bank account of tether/Deltec?) than in the petty amount that went to the democrats but... It's a fact that media were posting articles explaining how crypto was helping Ukraine (and there was a government ran website in Ukraine accepting crypto donation).

SBF's very mom was running a political fundraising thinggy.

It's also a fact that at least one US congressman is saying Gary Gensler was allegedly working hand in hand with FTX to allow SBF/FTX regulatory capture of crypto exchanges.

I'm not saying they did: I'm saying a US congressman says he has records indicating that.

These are facts. Now did these donations to Ukraine found their way back to FTX? (and if that's the case there's at least some truth to the conspiracy for it's a fact that SBF was donating stolen money to her mommy's fundraise)

I think it's a bit early to dismiss with the back of the hand the information people are digging out.

The one thing that seems certain is that if we were to depend on the journalists from the New York Times to investigate on that we wouldn't go very far.

The usual angle is also going to be used for sure: "The wildest conspiracy theories are false, hence nobody besides SBF did anything wrong".

People are trying to connect the dots. And with 130 companies, blinded journalists, a political party receiving $40m in donation, etc. there are certainly dots that do need connecting.

Congress hearings in december for a start. Should be interesting (even if I don't have high hopes).


I could see Ukraine donations that hadn't been withdrawn getting caught up in all of this, but I'm highly doubtful there was some weird shell game going on. Not because it wasn't possible, but because it wasn't necessary. SBF was openly throwing cash around to buy political and media influence. There wasn't any need to skim government cash when he could use ~$8b of customer's deposits as his slush fund.


I've heard a lot of wild conspiracy theories, but that one is new to me. To be fair, I do not believe the conspiracy theories, just that the inaction we're seeing is feeding credibility to the people peddling them.


I think that donating money one time buys you a photo. I think donating every cycle and especially anticipated into the future buys you access - which is correlated but not the same as outcomes.


> Why else would anyone give that kind of money to politicians without expecting something in return?

Because they think the candidates they support will make the world better either personally for you or in a more general sense? Oil companies give money to manchin because they know he agrees with them and if he wins will fight for their legislation, whether they funded him or not.


> Oil companies give money to manchin because they know he agrees with them and if he wins will fight for their legislation, whether they funded him or not.

Neither they or you know that. And nobody but you assumes that Manchin fights for his beliefs, rather than for what benefits him personally. And no, I'm not assuming the opposite. I instead choose not to fantasize about his internal states, or speculate about what he would do if an industry that has always supported him ceased to support him.


Sure, it's just speculation. That's what was being asked for. There are reasons to donate to politicians other than quid pro quo.


>Why else would anyone give that kind of money to politicians without expecting something in return?

There's a polite theory it is done for altruistic reasons to make the country a better place for all and that it is the exercise of free speech and you are also free to give Trump, Biden, Pelosi & McConnell vast amounts of cash.

But yes we're all adults here.


Sure but FTX was throwing money to both parties https://www.coindesk.com/policy/2022/04/11/ftx-co-ceo-donate...


It’s unclear to me how that affects anything? If anything it lends credence to the idea that he was making these donations solely for special favors and not for altruistic reasons.


Not just the democrats. Republicans, Bahamian officials, members of the media, regulators, etc. The most recent New York Times piece did not mention fraud or criminality a single time, painting SBF as someone who simply got in over his head.


Democrats have received exactly double the SBF money received by Republicans. All exits were oiled here, just in different amounts.


OMG. "The dog ate my homework" would have been a better excuse.

> like, "oh FTX doesn't have a bank account, I guess people can wire to Alameda's to get money on FTX"

> ....3 years later...

> 'oh fuck it looks like people wired $8b to Alameda and oh god we basically forgot about the stub account that corresponded to that and so it was never delivered to FTX'

So they "basically" forgot about $8B not transferred to FTX.

But somehow FTX customers saw the funds deposited in their accounts, otherwise they would have complained.


Since more than one thing can be true at the same time, why not a combination of a) total lack of internal controls, understanding of basic accounting and book keeoing, b) total lack of competence when it comes to manage these amounts of money and c) actively defrauding customers by stealing their deposits?


All of the above.

Alameda Research was clearly in the top of the worst hedge funds ever, and clearly they had terrible controls and accounting.

However, without (c) you don't get this epic disaster. From SBF's tweets it is clear that they were aware they had to keep customer funds segregated.

Remember the time they tried to pretend that USD is protected by the FDIC?

https://www.cnbc.com/2022/08/19/crypto-firm-ftx-receives-cea...

Well, actually it was protected by the FDIC, but not from FTX.


It doesn't make sense and could all be lies, but to try to interpret it: they saw that the money arrived in the "poorly labelled account" and increased the customer's balance. But in some sense, the money never got to FTX and was still with Alameda. Or alternatively, FTX and Alameda commingled funds using the "poorly labelled account" and it was used for whatever payments either company needed to make, like withdrawals. This lack of separation means the balances were never really backed and it was a Ponzi all along.


Not seeing much remorse here, but what can you expect from a guy that gambled with billions of dollars worth of people's savings. Don't buy that he didn't realize what they were doing until it was too late. He admits in this interview to lying about previous public positions, so wouldn't trust anything he says here either.

I just hope crypto learns from this and normalizes Proof of Reserves


I’m not sure why people are surprised. He was a crypto guy, of _course_ he was a scammer. It’s so obvious.


At this point, I'm not sure who is honestly considering investing in a crypto exchange. I'm not sure there's a "feature" they could implement to make me consider placing my money there. I'm not sure why crypto people don't see the writing on the wall that the events of the last 6 months all but guarantee an exodus from the space - or at least from the weird exchange model, which seems to completely do away with everything good about crypto and replace it with facsimiles of traditional finance concepts.


Proof of reserves only proves (for the sake of the argument let's assume it's an actual proof) the exchange has some amount of reserves, which is mostly meaningless. The quantity of interest is the share of deposits that are backed with reserves, not the absolute amount of reserves.


Interesting, is this intentional then? Or is there some other reason why showing the absolute amount of reserves would not be feasible?


I don't know, it looks like a half-baked idea, like everything surrounding crypto-currencies. Someone probably came up with this proof of reserves idea, and everybody else said yeah let's do this, because it sounded like it does what they wanted to do, except it doesn't.


Yeah, the original Proof of Reserves proposals (and this is probably a decade ago, on the bitcointalk forum) was a merkle scheme IIRC in which each user could verify that their amounts were added into the proven total.

Most people seem to be just using "prove you hold some amount" which is a very poor cousin. However, it is pretty clear that FTX would have failed even that, so maybe we should lower our expectations?


What about you just keep custody of your own damn coins? Isn't that the point of cryptocurrency, that it's like cash except you don't have to physically carry it.


I'm very critical of SBF and what went on here, but let's not over sentimentalise this, they gambled billions of dollars of peoples deposits, not savings. Which clearly is a crime, but you don't store your savings on a crypto exchange, BTC arguably the most reliable of the crypto-currencies is down 70% in the last year. Moves that happen once in a lifetime in real markets happened multiple times in crypto. No one reasonable has their savings in crypto exchanges.


> but you don't store your savings on a crypto exchange... No one reasonable has their savings in crypto exchanges.

Many, many, many people have absolutely bought into the crypto dream, put their savings on an exchange and absolutely ended up entirely destitute. There are swathes of evidence of exactly this.


It can be hard to tell. On one hand, as a longtime observer of spaces like r/wsb and various crypto/opensea spinoff communities, people will very seriously gamble and lose vast quantities of money (and, to be fair, sometimes win vast quantities) in risky bets that they don't understand, and then post about it on the internet as if they didn't understand what the term "betting your life's savings" meant. On the other hand, I find enough schaudenfreude in reading such posts that I can see exactly why and how someone would fabricate such a story merely for their own amusement. It's a good heuristic to take anything with a grain of salt, including this half-baked explanation from SBF on exactly what went down with FTX.


The Ontario Teacher's Pension Plan lost around a $100M because of FTX. It isn't that unbelievable that other individuals also put a significant amount of their savings into crypto. The trust for FTX was there.

It was a stupid decision, but at least from their PoV, it was only a stupid decision in hindsight.


He's being honest here, and we should listen to him.

Point 1: Most personalities are shams. Ethics/politics among the powerful is a lie/shibboleth.

Instinctively you know this to be true, but hope in a great savior is deeply ingrained.

Point 2: Regulators make things worse. They are actively working against our interests.

He would know best; they created him. Again, we want to believe in the great savior myth, but they are just people: lazy, corruptible, political, etc.

Point 3: Chapter 11 made things worse.

He's probably right about this too. He's saying that he would have the power to pay back depositors first. Chapter 11 only gives him legal protection, and puts depositors last. They will liquidate everything to USD, pay a 10% commission for a horrible rate, and then pay the lawyers, then the counterparties, then the investors, and then a tiny fraction back to depositors, years down the road. Another MTGOX/BITFINEX.

As a reference, the Irving Picard recovered $9.3B from Madoff and paid only $5.4B to depositors. The rest evaporated in liquidation expenses and legal fees of $700M. The legal fees for Lehman Brothers liquidation was $1.6B. The people running the show now are not your great saviors; they are incompetent, greedy, and morally disconnected.


I fail to see how regulators made this worse. I see loud and clear how the absence of regulators made this worse, whatever SBF says.


Chapter 11 proceedings will not pay investors before depositors.


IANAL, but they may have structured their investment as senior debt, and depositors may have some other funny legal status. Also Alameda has to be dissolved before FTX, so technically FTX depositors are a creditor to Alameda while the Alameda investors are depositors, and typically Chapter 11 discharges debts. Also, Alameda is under Bahamian law, and so is FTX, and US courts will only get what's left.


Is this satire? The dude is likely a sociopath who is speaking for whatever he think meets his interests and/or vanity.


Some words of wisdom from our 43rd:

https://www.youtube.com/watch?v=rQ6N-sb7SVQ


> Irving Picard recovered $9.3B from Madoff and paid only $5.4B to depositors.

Is this accurate? That's absolutely insane. _That_ sounds like fraud/theft.


Did you know that Madoff didn't charge fees? His crime was faking the numbers, but the way he made money is, much like SBF, through leverage of managing that money.

I don't know much about it, but until the lawyers got involved, the only losses were the made-up gains. Then they took $4B in real money.

So, who's the real crook?

https://money.cnn.com/2013/05/06/news/companies/madoff-picar...


>Disclosure: This August, Bankman-Fried’s philanthropic family foundation, Building a Stronger Future, awarded Vox’s Future Perfect a grant for a 2023 reporting project. That project is now on pause.


Well there's a sense of contrition there, so that's good.

However there's no reasonable excuse. You can't be like "aw man, I wish we'd been more organized". A big piece of this is on the investors. All those depositors would have been saying "Hey Sequoia and OTPP are in there, they must have checked things are sound". Was that foolish of them, to assume reputable investors had done their due diligence? You're between a rock and a hard place when you answer this. Either they should have all done their own DD, basically not invested because who can do DD as a little guy, or large investors are not responsible for what everyone else thinks they did, which is a rather major indictment of how our financial system works.

But back to SBF's explanation. It's just juvenile, basically the same as "mommy, you didn't make me clean my room and now I slipped and hurt myself". Whatever the laws are, when someone trusts you with their money, you are responsible for certain basic things like knowing where that money is. All the money in the world and they didn't think to hire an accountant and a risk manager. Or perhaps they did and those people quietly left, we'll never know.

About the regulators, it's quite the about-turn. He goes from saying it's a good thing (which was why CZ got pissed at him?) to saying it was just PR, and that regs basically don't work anywhere. I think this is also a juvenile view. You can make the case that it often leads to unintended consequences, and that it often causes problems, but you can't sweep all regulations in all sectors into the bin, there's just too much evidence that it sometimes does work. In fact you could say that the very reinvention of finance as crypto ought to motivate participants to look at what problems were found in the financial world that were addressed by regulation. Glass-Steagal, deposit insurance, central banking, there's a lot to read about.


Fascinated to read that you thought he came across as contrite. My reading was the opposite - that he was nihilistic, narcissistic and utterly devoid of contrition. Specifically: there seems almost no recognition of his own agency - it’s all just bad stuff that happened to him.


Says he screwed up, wants to make people whole again...

When my old boss blew up it was "hmm they knew what they invested in".


He also says that perception is all that matters and that his talk of "ethics" was a sham.

I believe he'll try to avoid jail at all costs, and that may include making people whole again, but trying to flee seems much more likely.


Agreed, I can't say I was exactly surprised at the lack of contrition, but then again, he made it clear at the end that his entire life revolves around the now-impossible goal of raising $8b in the next 2 weeks. Introspection, I guess, will come after that. I'm guessing that he's still experiencing some denial about the loss of his own status, freedom, and opportunities in life that will come with all of this. As much as everyone hates this guy right now, it's definitely pitiable and interesting to get a snapshot of a huckster mid-downfall, where he hasn't yet realized how much the foundation underneath him has fallen away. Then again, no one knows whatever happened to Do Kwon. Maybe it's not too late for SBF to make a break for it.


> Well there's a sense of contrition there, so that's good.

Sigh. So this is how confidence men and politicians and scammers can make good livings.

He just said that all the good-sounding things he said in the past about ethics and doing the right thing was "this dumb game we woke westerners play where we say all the right shiboleths and so everyone likes us".


SBF: "I always lie except right now"

People: oh wow so true


>Bankman-Fried says his No. 1 priority now is to try to raise $8 billion to make account holders whole.

So, basically start up a new Ponzi. Because that's exactly what raising money from new investors to pay off existing investors is. Note he did NOT say "generate $8B in profit".

At this point he needs to STFU, stop posting on social media, stop giving interviews in the media, and do whatever his lawyers tell him to.


Well you see, he wants to take those $8B and put them in a box, then start printing box-tokens that he can lend to his trading arm, then he can build a market for those box tokens giving them intrinsic value, while he siphons the 8B$ off to ... wait, how he's going to make his users whole? Well you see he just needs to raise 16B$ and put them in a box...


No, this part isn't a ponzi. He has a lot of crypto and he wants someone to buy it all for $8 billion, so he can return that $8 billion to his customers. He says it's worth $9 billion down from $14 billion two weeks ago, so it's a great deal. Now, I would say it's worth far less, maybe hundreds of millions.

This part is "if I firesale all the crypto, can I get enough fiat to pay back my customers so that there's no case for me going to jail because no one lost money, just got stressed out."


I am not sure. If I owe $8B and I raise $8B and then give it to the people whom are owed $8B, what exactly am I giving the investors? Basically he has an $8B hole and let's say everything else nets to zero (e.g. assets - liabilities = -$8B.) No one in their right mind would give $8B to get what is otherwise worth nothing. This is a non-starter, especially now that the brand is also completely tarnished.


He claims he owes $8B and has $9B in crypto/investments that is just hard to sell right now. That is, he claims assets - liabilities = 1B, but assets_that_can_be_sold_on_the_open_market_before_bankruptcy - liabilities = -8B. If that were true, then someone giving him $8B in cash for the assets, liquidating the assets for $9B (making $1B) over time and all his depositors getting their cash is good for everyone.

This isn't "invest in FTX". This is "buy everything at my going out of business sale for one transaction and make money"

Now, I don't think his assets are worth $9B. But if someone out there with the ability to raise $8B thinks so, we'll find out soon.


I guess you are correct. I give you that.

And you are also correct that what he likely is greatly over stating the value of the assets he is holding, which is funny money tokens like FTT, SRM, etc which he is artificially inflating.


I don't think this is an earnest attempt to help his victims. He must know how ridiculous it is to ask for someone to repay his victims losses with nothing to offer in return. Feels like a legal strategy to mitigate criminal and civil consequences.


To pay off creditors, not investors. The people he owes $8bn did not buy an investment product, they bought claims on dollars for dollars.


This is just classic. "OH I'm a crook? Well everyone's a crook!". No Sam. You're a crook, and we're not really intersted in taking moral lessons.It just reads like the lowest effort teenage coping mechanisms. And you know what? Andreesen will fund his next venture. Because it's about class, not returns.


The guy's lawyers need to get him to shut up.


Oh my god, I upvoted you before reading the DMs. I... wow, yeah, they need duct tape.

EDIT: Okay I just cannot get over this, obviously I'm exaggerating but it's pretty much "I didn't want to do bad stuff because that would be bad, and then after I had personally done all of the bad things, I realized that I had, in fact, done something very bad."


Pretty sure he's given up at this point. Nobody would do something this dumb otherwise. And then confirm it the next morning.


You don't think he's going to permanently resign from the game?


"You're only making things worse for yourself!"

Matthias: "Worse?! How could it get any worse?"

--Monty Python's Life of Brian

https://montypython.gifglobe.com/scene/?id=2ZrhmRltHUEk


Seems like he's chosen the path of a real "poster". Trying to "post through it" until things improve or someone finally takes away his phone/computer.


Nothing but respect for that position. Never stop posting.


What’s even more remarkable is that his dad is a lawyer and reportedly with him…


"Fuck regulators (and their gung ho attitude to stopping me defrauding billions from everyone around me whilst high on off-label smart-drugs)"


The "lament about how corrupt the system is and that we are forced to partake in it" excuse has been popular in recent years, not surprised he's going for it. Let's see how that plays out


SBF, his foundation and his family are well connected politically. NYT already did a bizarro puff piece on him, now Vox does this (which apparently directly received FTX foundation money).

It’s absurd as he is essentially a well connected criminal.

edit I do want to correct one thing - this is not a puff piece like the NYT one, actually it implicates him.


This and the NYT interview are not puff pieces. They are handing SBF the rope to hang himself with, putting his confession on the record.

Not sure what what the people pushing this narrative aren’t understanding.

If they wanted to protect him they would refuse to interview him and try to convince him not to speak to anyone but counsel about this.


Maybe you’re right. Actually wrote this before reading the article (typical!) and the article is not friendly to him at all, weirdly he seems to confess his activity. This is super weird because my impression is his father is a lawyer, so is it possible he actually doesn’t think / knows he won’t be convicted of anything?


> Not sure what what the people pushing this narrative aren’t understanding

They are clouded by anger and frustration, I’d wager, many folks lost money in this fraud. Some maybe caught up in the mob mentality and excitement around taking SBF down.

Anything short of absolute demonization is not good enough when you’re mad, I suppose.


I didn't lose anything, maybe I had 10$ in dust on FTX. But yeah I'm pretty mad and I'm even more mad because I believe CZ/Binance are also a super shady time bomb.


> Not sure what what the people pushing this narrative aren’t understanding.

From the other day, it seems, they're angry that the NYT isn't saying, in exact words, "SBF is a massive criminal who committed massive fraud".

And when you respond and say "That's because their lawyers understand the concept of defamation", they say "well, then they just need to talk to people and have them say it so everyone knows he's a criminal and committed fraud".


Also, because he's staying and talking. If you yell at him that he is a bad criminal, it probably ends your interrview


How is this a puff piece? Just posting these chat transcripts is damaging to his reputation and probably his chances in court. He does not come off looking good here.


His father is a lawyer so I’m confused about his behaviour. Does he think this will help him somehow, to appear like he’s terribly sorry about what happened ? Surely his behaviour is criminal?


His parents are law professors specializing in philosophy, economics, and business.

He would have done better with a street smart criminal lawyer.


Does Saul Goodman deal with crypto these days?


I'm not sure how you'd read this as a puff piece. The reporter described his reaction to the interview as "appalled".


I’ve edited to clarify. I actually posted before I read the article (typical!).


>I actually posted before I read the article (typical!)

I'm not sure whether you're saying "I did something bad, repeatedly, but it's ok because I'm admitting it" (while arguing someone else who did something bad shouldn't be let off the hook for admitting they did something bad), or whether instead you're taking pride in routinely acting in a way that subtracts value from the community (while arguing someone else who acted in ways detrimental to the community should receive harsher judgements than you feel he's received).

Either reading suggests an opportunity for productive self reflection.

Posting criticisms of articles you haven't read isn't the scale of damage that SBF caused, but the belief that "I'm not intending to cause harm so the harm I'm causing isn't real" appears to be at the root of both sets of outcomes. The impact of SBF's actions was higher simply because one day he found himself holding a larger lever than most of us have the occasion to hold. It's good to be in practice, should that day come.


That's an interesting perspective and I certainly agree with it.


I wouldn't exactly call this a puff piece, unlike the NYT one.


People obviously want to hear what he has to say. Are you saying that an ethical media would refuse to interview him? Why?


No not at all, this is completely unlike the bizarro NYT piece.


It's so weird to me how these ideas become widespread so quickly and accepted as fact. I read the NYT piece and it was fine, the interviewer mostly let SBF talk.


Having two professors as parents isn't exactly 'well connected politically'[1]. Two senators, or two billionaires would be.

[1] I can't say I've ever felt that I was well-connected politically...


Did your father work with legislators to try to pass laws?

“When I went to California to try to fight into it, I thought, ‘Well, there’s only 120 legislators. I’ll talk to them all one on one,'” Bankman said. “I found that in order to do it, I had to hire a lobbyist because I just couldn’t handle the details or get the meetings. In Congress, when I went there, now there’s 500 plus, and what I found everywhere I went is that Intuit had already preceded me. They’d already met every representative I was going to meet.”

Did your mother create a political fundraising organization?

“In 2018, the secretive Stanford-connected Democratic fundraising group Mind the Gap (MTG) funneled over $20 million toward competitive U.S. House of Representative elections and get-out-the-vote (GOTV) organizations. In 2020, MTG wants to increase that number to $140 million.

“MTG is led by Barbara Fried, the William W. and Gertrude H. Saunders Professor of Law; Paul Brest, an emeritus professor of law and director of the Law and Policy Lab; and Graham Gottlieb, a Stanford research affiliate. Of the three, Gottlieb has the most direct policy experience, having formerly served in junior roles in former President Barack Obama’s 2012 reelection campaign and in Obama’s White House.”


His aunt is also a member of the World Economic Forum


> Bankman-Fried has maintained that FTX has never invested the deposits of crypto account holders on the exchange. I pressed him on that point via Twitter, and while he continued to insist that FTX did not directly use account money in this way, he said that Alameda — which he also owns — had borrowed far more money from FTX’s balance sheet for investments than he had realized, which ultimately left FTX vulnerable to the crypto equivalent of a bank run.

> Why didn’t Bankman-Fried realize what was happening until it was too late? “Sometimes life creeps up on you,” he said.

This is the central issue of the case. There aren't many paths for an exchange to experience a run unless it's acting like a fractional reserve bank.

So here's an admission that Alameda borrowed from the FTX balance sheet. There's also a denial that FTX invested deposits. There's no way for both statements to be true.


FTX loaned the deposits to Alameda, and Alameda invested them. It's totally different from FTX making the investments themselves!

/s


It's somehow even worse given that according to SBF, they didn't even loan all the deposits. Something like $8B of them were being deposited to Alameda directly from users without their knowledge.

https://cdn.vox-cdn.com/uploads/chorus_asset/file/24202784/S...


A loan is an investment.


tfw you forget the old friend you're dming on twitter about your life problems is now working as a reporter for vox and is going to post your whole dm thread as an article


I'd never heard of the guy until now so maybe it's obvious but you do wonder in these situations, he must have realised that the questions were leading to an article but did he expect the transcript to be published verbatim?


maybe he didn't remember theunitofcaring had become a journalist and thought he could trust her


it turns out my guess above was right: he didn't know she was planning to publish the dm thread

https://nitter.net/SBF_FTX/status/1593014934207881218#m

> Nov 16

> 25) Last night I talked to a friend of mine.

> They published my messages. Those were not intended to be public, but I guess they are now.

theunitofcaring responded at https://forum.effectivealtruism.org/posts/vjyWBnCmXjErAN6sZ/...

journalists are not your friend


This is one of the most amazing things I've ever read. Also, I feel so bad for his lawyers.


How does this story keep getting worse!? Every time something new comes out.


The obvious conclusion here is that SBF is just a cynical but skilled manipulator. But then why send these DMs at all - surely a skilled manipulator would know better, or could at least present himself in a positive light?

Maybe all those stimulants have taken their toll. Or he's totally given up.


> surely a skilled manipulator would know better, or could at least present himself in a positive light?

My bet is that he lost his back country. He was until recently the front-person for a hugely successful enterprise who donated money extremely broadly. Back then he could have yelled "I run a goddamn ponzi scheme" into the loudspeaker of huge credible news outlets and they would have edited to "Master genius is going to revolutionize everything through revolutionary crypto". He's speaking into the same loudspeaker because he still thinks the message that got through back then was due to his skills as a communicator and not because... they where all on the receiving end of the cash flow he was throwing around every which direction. But obviously anyone who was receiving money back and writing favorable about him back then will do their best to distance themselves now.

Case in point, quote from article: (Disclosure: This August, Bankman-Fried’s philanthropic family foundation, Building a Stronger Future, awarded Vox’s Future Perfect a grant for a 2023 reporting project. That project is now on pause.)

Which basically says they where on the payroll. Obviously they aren't going to pay the money back. You have to wonder what great articles about SBF they would have printed in a completely unbiased fashion if not for the implosion.


Great take. Off topic, but I really love the post-history vibes from this guy, elon, even trump a bit. There's something beautiful about living in public, and not hiding your flaws. No PR or corpo speak or defensible positions, just rawdogging life. And not even behind the 7-11 dumpster, right out there in broad daylight.


There are consequences of this. For sbf, orange man, elmo, maybe not yet, but there will be. Which is why most people stay in line.


are we agreeing with his point that morality comes second to winning?


I just saw an explanation for this on twitter. Basically, suppose SBF actually believes in effective altruism, his brand of it at least, and that he is a skilled manipulator. First premise seems iffy, but the second pretty sound, but let us run with it to see where it goes.

Why would skilled manipulator effective altruist SBF do this? He made a big gamble using customer funds to try and keep his business running. This is kind of like his coinflip thought experiment where he would risk the world to gain a second world. His gamble blows up and he loses everything. What's the most effective thing he can do now? Fall on his own sword, discredit himself as an evil charlatan, in an attempt to try and save face for the philosophy he actually believes in.

"No, I'm not really an effective altruist. I'm actually just evil and dumb. Hehe."

I would assign very low probability to this - but it is an explanation that explains, to some extent, his actions here.


Somewhat unrelated to this article, but could someone clear up a point of confusion for me?

There are people blaming the CTFC and Congress and the Democrats that SBF donated to for not regulating this.

But was FTX (the Bahamian entity) even under their purview?

AFAIK, you weren't even allowed to access FTX from a USA IP address, you had to use a VPN. You could access FTX US which was a different thing and offered a much smaller subset of the products FTX did (and that business seems solvent?)

Like what jurisdiction does the USA have over a crypto exchange elsewhere? I know anything that touches a US dollar can be tried in a Manhattan court and maybe he gets convicted of a crime and extradited here. But like Japanese banks touch US dollars as well, but the USA doesn't get to regulate them, right?


FTX US failed too though.


Even though it was supposed to be a completely separate entity (or so we were told).

     ¯\_(ツ)_/¯


> ... by this dumb game we woke westerners play where we say all the right shiboleths and so everyone likes us

Sums up much of the world we live in :/


Not really. That’s an incredibly cynical take.


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