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Old 22nd November 2022, 05:46 AM   #1
Puppycow
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Sam Bankman-Fried

As of this writing, as far as I know, he is a free man and no warrant for his arrest has been issued. But I can't imagine he won't end up in a court of law at some point. Certainly he will be sued. In fact, there is already a lawsuit that names celebrities and sports teams that had endorsement deals with FTX as co-defendants.

Sam Bankman-Fried tries to broker FTX bailout from his home in the Bahamas, despite being booted from the crypto company (CNBC)

Quote:
Sam Bankman-Fried is hunkered down in an upscale neighborhood of Nassau [in the Bahamas], still scrambling to raise billions to plug a hole in now-bankrupt FTX.
Who is he? Well his parents are both very respectable people. Law professors at Stanford University. (Wikipedia)

He was also very prominent as a philanthropist in the "effective altruism" movement. (The New Yorker)

Was he just very sloppy, or malevolent? Was it a Ponzi scheme by design or just a terribly run business?

FTX’s Balance Sheet Was Bad (Matt Levine in Bloomberg)

Quote:
But there is a range of possible badness, even in bankruptcy, and the balance sheet that Sam Bankman-Fried’s failed crypto exchange FTX.com sent to potential investors last week before filing for bankruptcy on Friday is very bad. It’s an Excel file full of the howling of ghosts and the shrieking of tortured souls. If you look too long at that spreadsheet, you will go insane.
I quite like this bit:
Quote:
If you try to calculate the equity of a balance sheet with an entry for HIDDEN POORLY INTERNALLY LABELED ACCOUNT, Microsoft Clippy will appear before you in the flesh, bloodshot and staggering, with a knife in his little paper-clip hand, saying “just what do you think you’re doing Dave?”
Sam Bankman-Fried, the disgraced boy king of crypto, explained (Vox)

Quote:
A week ago, Sam Bankman-Fried was the boy-wonder face of crypto: A 30-year-old who founded one of the biggest cryptocurrency exchanges in the world, a celebrated philanthropist worth an estimated $16 billion, and a major Democratic donor who quickly found favor in Washington. By Friday, he was at the center of an epic flameout that left his empire and his image as an uncannily sharp, altruistic billionaire in ruins.

In the annals of crypto disasters, the tale of Bankman-Fried may go down as one of the most jaw-dropping. He resigned from his crypto exchange, FTX, as it collapsed from a domino effect of a surge in customers trying to withdraw their funds, and the company filed for bankruptcy. The Wall Street Journal has reported that Bankman-Fried may have illegally taken about $10 billion in FTX customers’ funds for his trading firm, Alameda Research, whose future is also in peril. And Bankman-Fried is now worth close to nothing.

The downfall of FTX isn’t a typical story of crypto’s volatility or investor risk-taking; it didn’t crumble due to bad luck, but what now appears to be unsustainable layers of deception. On the surface, FTX appeared to be thriving — in the past year, it made several high-profile acquisitions and bailed out other failing crypto companies. In reality, it was drowning in debt. At least $1 billion in customer funds is reportedly missing. The stunning contrast between image and reality has resulted in Bankman-Fried facing a reputational fall from grace swifter than any in recent memory. According to reporting from several news outlets, the DOJ and SEC are investigating FTX, and his friends and admirers in crypto, philanthropic, and political circles have quickly begun distancing themselves from the man widely dubbed the king of crypto.
The do-gooder movement that shielded Sam Bankman-Fried from scrutiny (Washington Post)

Quote:
During Bankman-Fried’s ascent, media portrayals invariably noted that the crypto wunderkind drove a Toyota Corolla and planned to give his billions away, even as he courted celebrities and Washington power brokers. Indeed, his proximity to EA’s brand of self-sacrificing overthinkers often helped deflect the kind of scrutiny that might otherwise greet an executive who got rich quick in an unregulated offshore industry.
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Old 22nd November 2022, 08:50 AM   #2
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The bottom line is, he was making very risky investments bets with other people's money. I'm actually unsure if that was a crime or not given that FTX wasn't regulated as a bank.

Whether he was doing this for self enrinchment or to maximize "functional altruism" isn't know... but the following article sure makes me think he was doing it for himself and his friends/family... why would someone guided by a passion to help the worlds most needy people buy $121 million in property in the Bahamas? Instead of living in a meager apartment.


NEW PROVIDENCE, Bahamas, Nov 22 (Reuters) - Sam Bankman-Fried's FTX, his parents and senior executives of the failed cryptocurrency exchange bought at least 19 properties worth nearly $121 million in the Bahamas over the past two years, official property records show.

Most of FTX's purchases were luxury beachfront homes, including seven condominiums in an expensive resort community called Albany, costing almost $72 million. The deeds show these properties, bought by a unit of FTX, were to be used as "residence for key personnel" of the company. Reuters could not determine who lived in the apartments.


https://www.reuters.com/technology/e...ln-2022-11-22/
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Old 22nd November 2022, 02:28 PM   #3
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Originally Posted by Puppycow View Post
As of this writing, as far as I know, he is a free man and no warrant for his arrest has been issued. But I can't imagine he won't end up in a court of law at some point. Certainly he will be sued. In fact, there is already a lawsuit that names celebrities and sports teams that had endorsement deals with FTX as co-defendants.

Sam Bankman-Fried tries to broker FTX bailout from his home in the Bahamas, despite being booted from the crypto company (CNBC)



Who is he? Well his parents are both very respectable people. Law professors at Stanford University. (Wikipedia)

He was also very prominent as a philanthropist in the "effective altruism" movement. (The New Yorker)

Was he just very sloppy, or malevolent? Was it a Ponzi scheme by design or just a terribly run business?

FTX’s Balance Sheet Was Bad (Matt Levine in Bloomberg)

I quite like this bit:


Sam Bankman-Fried, the disgraced boy king of crypto, explained (Vox)



The do-gooder movement that shielded Sam Bankman-Fried from scrutiny (Washington Post)
It takes time to build a case. You don't want to indict until you have noug evidence to make the indcitment stick.
"Law and Order" was right about one thing: you often have the siutatin where the DA knows who did it, but cannot indict until he has enough evidence that will stand up in a court of law. It is often not that easy to get.
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Old 22nd November 2022, 04:27 PM   #4
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Classical case of "I'm so much smarter than everyone else, I don't need to follow the rules of investment or accounting".
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Old 22nd November 2022, 04:36 PM   #5
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Sam Bankman-Fried tries to explain himself (Vox)

His DMs with a reporter.

Quote:
I didn’t expect him to respond — typically, people under investigation by both the Securities and Exchange Commission and the Department of Justice don’t return requests for comment.

Bankman-Fried, though, apparently wanted to talk.
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Old 22nd November 2022, 10:29 PM   #6
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Bankman-Fried issues mea culpa in letter to former FTX employees (Financial Times)
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Old 23rd November 2022, 01:14 AM   #7
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If what he was doing wasn’t illegal then that’s a all you need to know to stay far away from crypto. Holy ****!
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Old 23rd November 2022, 01:33 AM   #8
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Expect the next billion dollar scam to use "quantum" instead of "crypto".
Everything else will stay the same.
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Old 23rd November 2022, 05:33 AM   #9
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Originally Posted by The Great Zaganza View Post
Expect the next billion dollar scam to use "quantum" instead of "crypto".
Everything else will stay the same.
I'm still trying to figure out how anybody ever thought anything with the word "crypto" involved sound like a good thing.
Seriously, what good thing, other than Superboy's dog* is called "crypto"?




*Yes, I know it's spelled different.
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Old 23rd November 2022, 09:01 AM   #10
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Originally Posted by Mike! View Post
I'm still trying to figure out how anybody ever thought anything with the word "crypto" involved sound like a good thing.
I'm starting to wonder if people have internalized the rugpulls and fraud and have twisted it into a "but I'm different" narrative right before they pour their life savings into the Next Big Thing. It's like a hot potato money match.
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Old 27th November 2022, 02:32 PM   #11
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Originally Posted by Mike! View Post
I'm still trying to figure out how anybody ever thought anything
with the word "crypto" involved sound like a good thing.

Short answer: "It is magical."
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Old 11th December 2022, 08:37 PM   #12
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YouTube Video This video is not hosted by the ISF. The ISF can not be held responsible for the suitability or legality of this material. By clicking the link below you agree to view content from an external website.
I AGREE


A reporter tries to pin SBF down on why customer assets which were not the property of FTX nor to be loaned to or borrowed by FTX per the terms of service disappeared.
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Old 12th December 2022, 02:48 AM   #13
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Originally Posted by Puppycow View Post
YouTube Video This video is not hosted by the ISF. The ISF can not be held responsible for the suitability or legality of this material. By clicking the link below you agree to view content from an external website.
I AGREE


A reporter tries to pin SBF down on why customer assets which were not the property of FTX nor to be loaned to or borrowed by FTX per the terms of service disappeared.
They disappeared because no one who is worth 29 billion would make the mistake of not concealing one lazy billion in case something went wrong with the 29 billion.
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Old 12th December 2022, 06:02 PM   #14
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Indictment issued, SBF under arrest in the Bahamas.

Quote:
FTX founder Sam Bankman-Fried was arrested by Bahamian authorities Monday evening after the United States Attorney for the Southern District of New York shared a sealed indictment with the Bahamian government, setting the stage for extradition and U.S. trial for the onetime crypto billionaire at the heart of the crypto exchange’s collapse.
No word on the specific charges; the indictment will be reportedly unsealed tomorrow morning.
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Old 12th December 2022, 06:07 PM   #15
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First step:

https://www.bbc.com/news/business-63953096

Quote:
The Bahamas police have arrested Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX, the country's attorney general has said.

The Bahamas said it received formal notification from the US of criminal charges against Mr Bankman-Fried.
There's a statement from the Attorney General of the Bahamas that has been published stating that they intend to extradite him to the United States when a formal request is made. Which, should be coming shortly.

Also this statement from US authorities:
Quote:
"Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US Government, based on a sealed indictment filed by the SDNY [Southern District of New York]. We expect to move to unseal the indictment in the morning and will have more to say at that time," the US Attorney's office in Manhattan said in a tweet.
So he has been indicted already.

ETA: Sorry, got ninja'd there by Brainster. But this development was anticipated. It was just a matter of when. Some people were starting to wonder why it was taking so long. I guess it's been just over a month since FTX collapsed.
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Last edited by Puppycow; 12th December 2022 at 06:09 PM.
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Old 13th December 2022, 12:12 AM   #16
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Originally Posted by Puppycow View Post
First step:

https://www.bbc.com/news/business-63953096



There's a statement from the Attorney General of the Bahamas that has been published stating that they intend to extradite him to the United States when a formal request is made. Which, should be coming shortly.

Also this statement from US authorities:


So he has been indicted already.

ETA: Sorry, got ninja'd there by Brainster. But this development was anticipated. It was just a matter of when. Some people were starting to wonder why it was taking so long. I guess it's been just over a month since FTX collapsed.
There was some mention of him and some of the other top execs being held in the Bahamas so they could not run to Dubai or some other extradition haven.

One thing I see in these scammers is that their pedigree is superb. SBF himself is the son of two Stanford Law professors. Caroline Ellison, the head of Alameda Trading, the arm of SBF's empire that seems to have lost all the money? Daughter of two MIT profs.

Both of them also seem to have cultivated an air of complete nerdiness; just google her if you want some confirmation. She seems to have decided that the Mayim Bialik character on BBT was an inspiration, if a little too sexy.
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Old 13th December 2022, 12:43 AM   #17
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Originally Posted by Brainster View Post
One thing I see in these scammers is that their pedigree is superb. SBF himself is the son of two Stanford Law professors.
Yeah, I did mention that in the OP. It makes it interesting for sure. Very respectable people.
Quote:
Caroline Ellison, the head of Alameda Trading, the arm of SBF's empire that seems to have lost all the money? Daughter of two MIT profs.

Both of them also seem to have cultivated an air of complete nerdiness; just google her if you want some confirmation. She seems to have decided that the Mayim Bialik character on BBT was an inspiration, if a little too sexy.
I hadn't heard of her yet. But SBF seems to be throwing her under the proverbial bus. Did you watch the Coffeezilla video yet? (The one I posted yesterday)

So, I Googled her and found this New York Post Op-Ed:
King and queen of the crypto con may be turning on each other
Quote:
They were one part of a “Chinese harem polyamory” group set up in the Bahamas that mixed sex, pills and crypto. Now Sam Bankman-Fried and Caroline Ellison, the two executives at the center of the collapse of cryptocurrency firm FTX, appear to be turning on each other.

After Bankman-Fried suggested she might be to blame for a missing $8 billion in customer money, Ellison could be signaling she’s willing to flip on her old boyfriend with the hiring of the law firm Wilmer Hale.
Take it with a grain of salt of course.

The fact that she hired top-tier lawyers and wants to save her own skin is well, duh, of course she would. The polyamory thing? Well, the NY Post is a tabloid after all. They want to titillate. But the fact that in his interviews, SBF was trying to distance himself from Alameda suggests that maybe he's trying to find someone else to blame.

Also, they both worked at Jane Street.

It all feels kinda like something from the show Billions. There's even the SDNY connection.
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Old 13th December 2022, 01:32 AM   #18
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Originally Posted by Puppycow View Post
Yeah, I did mention that in the OP. It makes it interesting for sure. Very respectable people.


I hadn't heard of her yet. But SBF seems to be throwing her under the proverbial bus. Did you watch the Coffeezilla video yet? (The one I posted yesterday)

So, I Googled her and found this New York Post Op-Ed:
King and queen of the crypto con may be turning on each other

Take it with a grain of salt of course.

The fact that she hired top-tier lawyers and wants to save her own skin is well, duh, of course she would. The polyamory thing? Well, the NY Post is a tabloid after all. They want to titillate. But the fact that in his interviews, SBF was trying to distance himself from Alameda suggests that maybe he's trying to find someone else to blame.

Also, they both worked at Jane Street.

It all feels kinda like something from the show Billions. There's even the SDNY connection.
Promising story board to say the least.
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Old 13th December 2022, 01:37 AM   #19
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Originally Posted by Puppycow View Post
Yeah, I did mention that in the OP. It makes it interesting for sure. Very respectable people.


I hadn't heard of her yet. But SBF seems to be throwing her under the proverbial bus. Did you watch the Coffeezilla video yet? (The one I posted yesterday)

So, I Googled her and found this New York Post Op-Ed:
King and queen of the crypto con may be turning on each other

Take it with a grain of salt of course.

The fact that she hired top-tier lawyers and wants to save her own skin is well, duh, of course she would. The polyamory thing? Well, the NY Post is a tabloid after all. They want to titillate. But the fact that in his interviews, SBF was trying to distance himself from Alameda suggests that maybe he's trying to find someone else to blame.
The whole polyamory thing has been discussed quite a bit in the media even outside the Post. Not saying it's true; it may have been part of the image-making. Billionaire kids in Bahamas "Crypto Friends" reality show.

As for Ellison v SBF it really will come down to who lost the money. I suspect that Ellison lost the money but under severe pressure from SBF to prop-up the collapsing crypto empire they had built.
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Old 13th December 2022, 01:58 AM   #20
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Originally Posted by Brainster View Post
As for Ellison v SBF it really will come down to who lost the money. I suspect that Ellison lost the money but under severe pressure from SBF to prop-up the collapsing crypto empire they had built.
Losing money isn't a crime. Stealing money that was entrusted to you is.

I do wonder how the jurisdiction works. These companies were apparently not domiciled in the US. But I'm not a lawyer. Maybe it doesn't even matter. The fact that US customers were defrauded still means the US can prosecute them. They are also US citizens, fwiw.
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Old 14th December 2022, 12:57 AM   #21
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He has been denied bail, so his freedom is over.
I see him as a character like Elizabeth Holmes, the idiots that funded him deserve to have "done their dough".
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Old 14th December 2022, 04:47 AM   #22
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Well this is going to throw a wrench in the hyper-rights narrative that the Dems are letting him get away with it.
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Old 14th December 2022, 06:09 AM   #23
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Originally Posted by Mike! View Post
Well this is going to throw a wrench in the hyper-rights narrative that the Dems are letting him get away with it.
Not really, they've been shamed into it by the negative publicity that the right's attention drew. Without that, he'd still be getting away with it and in any case, the trial will be a sham and he'll walk away scot-free.
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Old 14th December 2022, 06:15 AM   #24
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Knowing nothing of this, I thought the thread title was in relation to someone on death row.
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Old 14th December 2022, 09:20 AM   #25
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I posted about Keven O'Leary's shilling for FTX in the Bitcoin thread (he was paid $15-million to promote it) but it is relevant here:

'Shark Tank' investor Kevin O'Leary says that he'll get his money back from FTX and that the exchange needs to be audited before Sam Bankman-Fried can be found guilty of wrongdoing

Quote:
* Kevin O'Leary said that he'd get his money back from FTX and that FTX needed to be audited.
* "Who's going to jail? I have no idea. Who was fraudulent? I have no idea. But I will find out," he said.
* He previously defended Sam Bankman-Fried, saying fraud allegations were baseless until an audit.
He also said that all would be revealed as everything was recorded on the blockchain.

He may live to regret his faith:

'Plain Old-Fashioned Embezzlement:' Searing House Testimony Paints Picture of FTX’s Collapse

Quote:
Ray, who’s overseeing FTX’s Chapter 11 bankruptcy proceedings and attempting to reunite investors with potentially billions in lost funds described disastrous levels of disorganization and distress at the company. The new CEO said record keeping at FTX was “virtually nonexistent,” leading him to inherit what he described as a “paperless bankruptcy.” Despite achieving a peak valuation of $32 billion, Ray said FTX employees were still handling invoicing over Slack and accounting software program Quickbooks. That “unprecedented” lack of documentation makes tracing and returning lost customer assets all the more difficult. “The company is virtually void of any internal controls or documentations,” Ray said.
It used to be that children were discouraged from playing with matches and then along came the Internet.

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Old 14th December 2022, 11:59 AM   #26
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Originally Posted by Samson View Post
He has been denied bail, so his freedom is over.
I see him as a character like Elizabeth Holmes, the idiots that funded him deserve to have "done their dough".
But most of the lost money belongs to depositors, not investors. He's much closer to Bernie Madoff.
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Old 14th December 2022, 12:07 PM   #27
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Originally Posted by Gord_in_Toronto View Post
I posted about Keven O'Leary's shilling for FTX in the Bitcoin thread (he was paid $15-million to promote it) but it is relevant here:
.....
Here's his congressional testimony. He's still a big fan of crypto.
https://www.foxbusiness.com/politics...y-culling-herd
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Old 14th December 2022, 12:10 PM   #28
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Originally Posted by The Don View Post
Not really, they've been shamed into it by the negative publicity that the right's attention drew. Without that, he'd still be getting away with it and in any case, the trial will be a sham and he'll walk away scot-free.
Unless the Republicans are in power, in which case his extensive "donations" will buy him immunity .
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Old 14th December 2022, 02:23 PM   #29
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Originally Posted by Bob001 View Post
But most of the lost money belongs to depositors, not investors. He's much closer to Bernie Madoff.
I know plenty of sage depositors, not just Warren and Charlie, who would have cut off both arms before putting a dollar anywhere near this guy and the other kids. Loss of capital is a lesson, not a sin
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Old 14th December 2022, 03:46 PM   #30
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Originally Posted by Bob001 View Post
But most of the lost money belongs to depositors, not investors. He's much closer to Bernie Madoff.
The investors lost everything. The depositors may get back some fraction of what they had.

After they collect whatever remaining assets exist, this is the order of who gets paid:

1. Employees.
2. Depositors that supposidly had segregated assets.
3. General debtors.
4. Investors. (and there's nothing for them or they wouldn't have filed bk)
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Old 14th December 2022, 08:59 PM   #31
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Originally Posted by Samson View Post
I know plenty of sage depositors, not just Warren and Charlie, who would have cut off both arms before putting a dollar anywhere near this guy and the other kids. Loss of capital is a lesson, not a sin

Most depositors are not particularly "sage," especially when celebrities they (foolishly) trust endorse the institution.
Quote:
All of the defendants in Moskowitz’s federal class action — including tennis champion Naomi Osaka,NBA star Stephen Curry and entrepreneur Kevin “Mr. Wonderful” O’Leary from the business reality show “Shark Tank” — hyped the brand. In a video posted to his website less than a month before FTX filed for bankruptcy, O’Leary said he had total confidence in the exchange. “If there’s ever a place I could be that I’m not gonna get in trouble, it’s going to be at FTX,” O’Leary said.
https://www.washingtonpost.com/busin...ction-lawsuit/
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Old 15th December 2022, 12:25 AM   #32
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Originally Posted by marting View Post
The investors lost everything. The depositors may get back some fraction of what they had.

After they collect whatever remaining assets exist, this is the order of who gets paid:

1. Employees.
2. Depositors that supposidly had segregated assets.
3. General debtors.
4. Investors. (and there's nothing for them or they wouldn't have filed bk)
I think you mean creditors. And secured creditors will come before depositors and employees when it comes to the pledged security for a loan, e.g. a mortgage holder would have priority for the property mortaged.
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Old 16th December 2022, 03:32 AM   #33
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Originally Posted by Bob001 View Post
Most depositors are not particularly "sage," especially when celebrities they (foolishly) trust endorse the institution.

https://www.washingtonpost.com/busin...ction-lawsuit/
"A fool and his money are soon parted" comes to mind.
Surely it is blind obvious that 29 year old Sam was not a magician plucking billions from top hats.
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Old 16th December 2022, 09:56 PM   #34
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Originally Posted by Gord_in_Toronto View Post
I posted about Keven O'Leary's shilling for FTX in the Bitcoin thread (he was paid $15-million to promote it) but it is relevant here:

'Shark Tank' investor Kevin O'Leary says that he'll get his money back from FTX and that the exchange needs to be audited before Sam Bankman-Fried can be found guilty of wrongdoing

He also said that all would be revealed as everything was recorded on the blockchain.[/url]
Hahaha! Which blockchain? The exchanges operate using multiple currencies (crypto and real) and FTX was using its own fake currency. I'm sure it was a trivial exercise for them to convert crypto deposits to real money before outright stealing it, at which point the blockchain isn't tracking a damn thing.

As for O'Leary still defending Bank-Fraud and FTX, his fortune is based largely on his reputation. His reputation becomes garbage once smart people understand that he completely failed when it came to due diligence here. He's playing out the string but probably knows he's screwed.
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Old 17th December 2022, 05:51 AM   #35
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Originally Posted by Gord_in_Toronto View Post
I posted about Keven O'Leary's shilling for FTX in the Bitcoin thread (he was paid $15-million to promote it) but it is relevant here:

'Shark Tank' investor Kevin O'Leary says that he'll get his money back from FTX and that the exchange needs to be audited before Sam Bankman-Fried can be found guilty of wrongdoing
I would put him in a different category than other celebrity endorsers, like actors and athletes. Obviously, actors and athletes are not qualified to give financial advice. If your public persona is that you are a shrewd investor, that's a little different.
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Old 20th December 2022, 04:45 AM   #36
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YouTube Video This video is not hosted by the ISF. The ISF can not be held responsible for the suitability or legality of this material. By clicking the link below you agree to view content from an external website.
I AGREE


This is another video from Coffeezilla. The interesting thing about this one is that it was published back in April, half a year before the whole Ponzi scheme finally collapsed. So there was at one Cassandra screaming from the rooftops that it was a big scam, long before everyone else finally saw the light.
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Old 20th December 2022, 05:39 AM   #37
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Originally Posted by Puppycow View Post
YouTube Video This video is not hosted by the ISF. The ISF can not be held responsible for the suitability or legality of this material. By clicking the link below you agree to view content from an external website.
I AGREE


This is another video from Coffeezilla. The interesting thing about this one is that it was published back in April, half a year before the whole Ponzi scheme finally collapsed. So there was at one Cassandra screaming from the rooftops that it was a big scam, long before everyone else finally saw the light.
EXACTLY!!! Who could ever do "due diligence" and not have found this interview? It is a SCAM!! No

Ah. Ha. I just checked the link for the original interview. It's gone. I wonder why?
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Old 20th December 2022, 06:24 PM   #38
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Changed his mind again. SBF just signed extradition papers.
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Old 20th December 2022, 07:42 PM   #39
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Originally Posted by marting View Post
Changed his mind again. SBF hjust signed extradition papers.
Expecting bail in New York.
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Old 21st December 2022, 08:09 PM   #40
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Southern District indicts and gets guilty pleas from Ellison and Wang whom they describe as cooperating witnesses.

They urge anyone else "involved" in the FTX fraud to get in touch sooner rather than later. They indicate they are moving quickly and that today's announcement will not be the last.

Dept. of Justice
https://www.youtube.com/watch?v=Kg4MiTAXBIo
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