I like how the article acknowledged, ...FTX operated a highly complex corporate structure with dozens of companies... without pointing out that one of the reasons for the complex structure was to make the fraud harder to track down.
Are you sure? FTX was collecting deposits in many countries, so I think they had to have local subsidiaries to enable that...The corporate structure seems orthogonal to their fraud
Sorry to be contrary but... Is that actually true in this case? It seems to me that the fraud was very very simple no? The CEO "lent" money from this business (which was really client money) to another business he controlled. That's not exactly complex or novel. I don't even think there was deception within the company was there, he just told people to do it and they did. It isn't like he played a careful, decade long shell game like Enron. This was the digital equivalent of someone putting their hand in the till...
Everyone is making a big fuss over the complex corporate structure, and while suspicious, it's also not totally out of the norm. If you've ever seen real-estate syndication deals (another activity with many investors over varying classes), those regularly have a web of dozens of entities just to wrap around a single property.
It's also extremely common for totally legit purposes as well.
I have some money in fundrise(RE investing crowdfunding), and they have a number of subsidiaries for various reasons invisible to the end user until tax time.
Isn't that the point of dealing with unregulated businesses? To cut through the red tape of protective regulation and responsibility? Huge risk, but potentially huge rewards.
The bankruptcy will divide whatever value is still left to be divided. Some of the missing value may be obtained from the malicious people behind the company through lawsuits, and some people may go to jail for knowingly scamming people.
In the end, this is not a bank, and the regulations protecting people from scummy banks, even the new legislations written after the 2008 crisis, don't apply.
This isn't the first business with millions of customers to go bankrupt. When such a company fails, getting your money back is your problem. Large-scale mismanagement and uneducated customer bases like this is the reason banks and other finance companies are under so much regulatory pressure.
I really don't understand how NYTimes, Vox, Vice are all seemingly refusing to accurately tear down how evil Sam and associates were for screwing over so many people.
The NYTimes was quick to destroy owners of other exchanges (whom I also do not view favorably) but is mysteriously lenient, deflecting criticism, outright censoring themselves.
How does this happen? Just what is the relationship with these media outlets, Sam?
The party mantra from the Democrats and their supporting media outlets seem to be to remove Sam as much as possible and downplay the role he played in causing havoc.
Already a handful of people have committed suicide as a result of this FTX fiasco, Sequoia, WEF, have all deleted their praising words for Sam and playing dumb.
I have this feeling that something is going to break. It's going to get really ugly for this country and other entities will fully utilize the chaos to seize whatever they can.
When MtGox collapsed I held .01 BTC there worth about $1 at the time, about $170 today. I'd transferred just enough for me to play around with.
The sheer number of letters I have gotten in the mail about the bankruptcy from the Japanese government easily cost a pretty penny more than my initial $1 in postage alone. I was honestly a little impressed they managed to hunt me down.
The Times should be deeply embarrassed by that article.
SBF is equal parts Bernie Madoff and Elizabeth Holmes but the Times is trying to paint him as an unlucky entrepreneur, down on his luck. The author doesn't even seem to understand that he stole billions from his customers to try and paper over losses from his trading.
Tons of comments, here and elsewhere, that say that NYT should be really embarrassed by this piece. I thought the same after reading snippets posted by others, but after reading the full piece end-to-end, I disagree.
I think the article is a fairly straightforward account of what happened. I think there are places that it could have emphasized the fact that "borrowing customer funds" is accurately called theft, but it didn't come across to me as a "puff piece" that people are calling it.
For example, I thought this paragraph was pretty informative and actually extremely damning to the people involved - what is described here is clear theft, plain and simple:
> Around the time the crypto market crashed this spring, Ms. Ellison explained, lenders moved to recall those loans, the person familiar with the meeting said. But the funds that Alameda had spent were no longer easily available, so the company used FTX customer funds to make the payments. Besides her and Mr. Bankman-Fried, she said, two other people knew about the arrangement: Mr. Singh and Mr. Wang.
With that one statement I don't see in any way how SBF, Ellison, Singh and Wang avoid lengthy prison terms.
Cal-Berkeley is removing the FTX logo from their football field. They had a ten year naming rights deal to call it 'FTX Field' and the company paid in crypto. I wonder if Cal got the full amount up front and converted it into cash or not.
I wish there was more focus on the “buying political influence with dark money” angle, and less on “young tech guy gets rich and destroys the economy” angle of the story.
As a group of mostly young tech guys and girls, we should be concerned about the narrative society, especially Wall Street and their media outlets, convey about us. Recall when redditors buying GME stock was being blamed for the many ills of capitalism. The whole robbinhood saga. The scapegoat is always a smart, wealthy young technologists.
SBF is more of a Soros than an Aaron Swartz. Wall Street loves to blame Silicon Valley, but it’s bs.
They did this whole piece about him donating to effective altruism, but they didn't even mention that he's a top political donor, let alone investigate it.
FTX’s Collapse Casts a Pall on a Philanthropy Movement
Sam Bankman-Fried, the chief executive of the embattled cryptocurrency exchange, was a proponent and donor of the “effective altruism” movement.
Isn't buying political influence with money what most people with absurd amounts of money do? I don't like it one bit either, but it's hardly unique to SBF.
With SBF, there seems to be this attempt at drawing guilt-by-association because of his donations to the Democratic Party. I don't think this makes a lot of sense.
For an example on the other end of the parliamentary spectrum, say, if Musk's future Twitter profits (good luck with that) were to come from the savings from firing half of the company's employees, and he then donated those to the Republican Party, it would be absurd to blame the Republican Party for the loss of jobs that it indirectly benefited from.
Obviously firing employees is not equivalent to fraud, and donating illicit profits could be part of a scheme to launder them. But unless a causal link can be proven, it all looks like speculation to me.
>As a group of mostly young tech guys and girls, we should be concerned about the narrative society, especially Wall Street and their media outlets, convey about us. Recall when redditors buying GME stock was being blamed for the many ills of capitalism. The whole robbinhood saga.
Source? I hate statements like these because it sounds like there's a central blame committee out there handing down blames (or at least some sort of consensus), when in reality in all likelihood it's a hot take by some Bloomberg columnist.
I'd be mad beyond belief. FTX was playing shell games with the money, had a secret back door to steal with, and gave money away for political contributions.
But is it really "money"? I'm pretty sure they just owe them some large numbers, there are plenty of large numbers where those ones came from I'm sure they can make some more
I wonder if bailouts are, one step removed, really for the big investment firms behind the political parties offering the bailouts, presumably invested in who is being bailed out.
[+] [-] btilly|3 years ago|reply
[+] [-] boeingUH60|3 years ago|reply
[+] [-] LatteLazy|3 years ago|reply
[+] [-] mNovak|3 years ago|reply
[+] [-] oh_sigh|3 years ago|reply
I have some money in fundrise(RE investing crowdfunding), and they have a number of subsidiaries for various reasons invisible to the end user until tax time.
[+] [-] vyrotek|3 years ago|reply
When you owe the bank several billion, the bank has a problem.
When the unregulated-bank owes billions to millions of people, I guess the people have a problem?
[+] [-] stefan_|3 years ago|reply
https://twitter.com/molly0xFFF/status/1550160830762782724
I think when massive scams like FTX start airing Super Bowl ads, we all have a problem.
[+] [-] ru552|3 years ago|reply
[+] [-] JamesianP|3 years ago|reply
[+] [-] jeroenhd|3 years ago|reply
The bankruptcy will divide whatever value is still left to be divided. Some of the missing value may be obtained from the malicious people behind the company through lawsuits, and some people may go to jail for knowingly scamming people.
In the end, this is not a bank, and the regulations protecting people from scummy banks, even the new legislations written after the 2008 crisis, don't apply.
This isn't the first business with millions of customers to go bankrupt. When such a company fails, getting your money back is your problem. Large-scale mismanagement and uneducated customer bases like this is the reason banks and other finance companies are under so much regulatory pressure.
[+] [-] agumonkey|3 years ago|reply
the people are the problem
[+] [-] rodgerd|3 years ago|reply
That should definitely be the case. The moral risk of anyone else covering this would be catastrophic.
[+] [-] splitstud|3 years ago|reply
[deleted]
[+] [-] azlyrics|3 years ago|reply
The NYTimes was quick to destroy owners of other exchanges (whom I also do not view favorably) but is mysteriously lenient, deflecting criticism, outright censoring themselves.
How does this happen? Just what is the relationship with these media outlets, Sam?
The party mantra from the Democrats and their supporting media outlets seem to be to remove Sam as much as possible and downplay the role he played in causing havoc.
Already a handful of people have committed suicide as a result of this FTX fiasco, Sequoia, WEF, have all deleted their praising words for Sam and playing dumb.
I have this feeling that something is going to break. It's going to get really ugly for this country and other entities will fully utilize the chaos to seize whatever they can.
[+] [-] propogandist|3 years ago|reply
[deleted]
[+] [-] donatj|3 years ago|reply
The sheer number of letters I have gotten in the mail about the bankruptcy from the Japanese government easily cost a pretty penny more than my initial $1 in postage alone. I was honestly a little impressed they managed to hunt me down.
I made zero attempts at getting that money back.
[+] [-] uh_uh|3 years ago|reply
[+] [-] elif|3 years ago|reply
[+] [-] memish|3 years ago|reply
https://www.nytimes.com/2022/11/14/technology/ftx-sam-bankma...
[+] [-] nostromo|3 years ago|reply
SBF is equal parts Bernie Madoff and Elizabeth Holmes but the Times is trying to paint him as an unlucky entrepreneur, down on his luck. The author doesn't even seem to understand that he stole billions from his customers to try and paper over losses from his trading.
[+] [-] hn_throwaway_99|3 years ago|reply
I think the article is a fairly straightforward account of what happened. I think there are places that it could have emphasized the fact that "borrowing customer funds" is accurately called theft, but it didn't come across to me as a "puff piece" that people are calling it.
For example, I thought this paragraph was pretty informative and actually extremely damning to the people involved - what is described here is clear theft, plain and simple:
> Around the time the crypto market crashed this spring, Ms. Ellison explained, lenders moved to recall those loans, the person familiar with the meeting said. But the funds that Alameda had spent were no longer easily available, so the company used FTX customer funds to make the payments. Besides her and Mr. Bankman-Fried, she said, two other people knew about the arrangement: Mr. Singh and Mr. Wang.
With that one statement I don't see in any way how SBF, Ellison, Singh and Wang avoid lengthy prison terms.
[+] [-] anonporridge|3 years ago|reply
[+] [-] Mountain_Skies|3 years ago|reply
[+] [-] thehappypm|3 years ago|reply
[+] [-] 4ggr0|3 years ago|reply
[0] https://www.reuters.com/lifestyle/sports/mercedes-f1-team-su...
[+] [-] 2devnull|3 years ago|reply
As a group of mostly young tech guys and girls, we should be concerned about the narrative society, especially Wall Street and their media outlets, convey about us. Recall when redditors buying GME stock was being blamed for the many ills of capitalism. The whole robbinhood saga. The scapegoat is always a smart, wealthy young technologists.
SBF is more of a Soros than an Aaron Swartz. Wall Street loves to blame Silicon Valley, but it’s bs.
[+] [-] memish|3 years ago|reply
FTX’s Collapse Casts a Pall on a Philanthropy Movement
Sam Bankman-Fried, the chief executive of the embattled cryptocurrency exchange, was a proponent and donor of the “effective altruism” movement.
https://www.nytimes.com/2022/11/13/business/ftx-effective-al...
[+] [-] sdiacom|3 years ago|reply
With SBF, there seems to be this attempt at drawing guilt-by-association because of his donations to the Democratic Party. I don't think this makes a lot of sense.
For an example on the other end of the parliamentary spectrum, say, if Musk's future Twitter profits (good luck with that) were to come from the savings from firing half of the company's employees, and he then donated those to the Republican Party, it would be absurd to blame the Republican Party for the loss of jobs that it indirectly benefited from.
Obviously firing employees is not equivalent to fraud, and donating illicit profits could be part of a scheme to launder them. But unless a causal link can be proven, it all looks like speculation to me.
[+] [-] gruez|3 years ago|reply
Source? I hate statements like these because it sounds like there's a central blame committee out there handing down blames (or at least some sort of consensus), when in reality in all likelihood it's a hot take by some Bloomberg columnist.
[+] [-] loceng|3 years ago|reply
[+] [-] esotericimpl|3 years ago|reply
[deleted]
[+] [-] mise_en_place|3 years ago|reply
[deleted]
[+] [-] twiddling|3 years ago|reply
Lol. I guess he won't be giving
[+] [-] RickJWagner|3 years ago|reply
There better be a good long jail time from this.
[+] [-] Taniwha|3 years ago|reply
[+] [-] impetus21|3 years ago|reply
[+] [-] lencastre|3 years ago|reply
Assuming there is a KYC database that survived…
[+] [-] Ptchd|3 years ago|reply
[+] [-] jjtheblunt|3 years ago|reply
I have no evidence but I do wonder.
[+] [-] varelse|3 years ago|reply
[deleted]