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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?

FTXís 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-Friedís failed crypto exchange FTX.com sent to potential investors last week before filing for bankruptcy on Friday is very bad. Itís 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 ďjust what do you think youíre doing Dave?Ē
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 customersí 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 isnít a typical story of cryptoís volatility or investor risk-taking; it didnít crumble due to bad luck, but what now appears to be unsustainable layers of deception. On the surface, FTX appeared to be thriving ó 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-Friedís 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 EAís 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
lobosrul5
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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?

FTXís 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 wasnít illegal then thatís 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
The Great Zaganza
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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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