It's insane he could have cashed out as a billionaire and lived the high life for the remainder of his life but doubled down instead and is now facing a stretch in prison. I'd also like to put my hand up and say I was one of those who was cynical that he'd end up in prison so glad that seems to be happening.
I reckoned he'd escape some how being let off on some technicality of some prosecutor not following due diligence.
I doubt there was any time in his career where all the accounts were fully legit and he could have cashed out. There would always have been some investors who hadn't got the returns they expected and would have gone digging.
> It's insane he could have cashed out as a billionaire
hah no. The billionaire claim was bull used to promote himself and his businesses. I wouldn't be surprised if a detailed accounting showed that he has never had a positive liquidation value for FTX and Alameda at any point in time.
It's a common problem people have in reasoning about fraudsters-- there is a tendency to only peel back one layer of fraud and get caught because the fraud continues all the way down. :)
> I reckoned he'd escape some how being let off on some technicality of some prosecutor not following due diligence.
Or [0]...
This is peak HN, as is the bulk of the top post, you guys are entirely clueless and refuse to see anything that detracts from your own insular narrative(s). Seriously, if you think SBF was a conman, which he is, thenyou should really take a dose of reality and see what pillars SV and big tech as a whole is built on. it really is no differnt than that of Mega corps, Wall Street and Banks.
He and his ex-gf worked at Jane Street, and are part of a SV elite in-class, they (but specifically SBF) were already living the high-life before they even knew what Cryptocurrencies were. That was probably never thier goal, they probably sought relevance in a World that was curated and manicured for them because of what class they belong to; only to find out that this space will eat you up and ridicule you to no end if you suck at it mercilessly: I speak from experience as a founder in this space. And to be honest, these two are worse than RazzleKhan and her bf (look it up) as they take the cake at sheer incompetence.
Sidenote: I'm glad it was downvoted as I know it struck a nerve and serve dit's intended purpose; but I'm also really starting to feel I am becoming a sort Tech-Diogenes around here, and I'm not sure if that's good or bad seeing as how I know how is fate ended.
> I reckoned he'd escape some how being let off on some technicality of some prosecutor not following due diligence.
Call me cynical and conspiratorial, but I expect that the camera glitches are being set up as we speak. The sleepy guards being scheduled. The one photo of "his body" being generated. On the bright side, at least SBF isn't tall enough to simply stand up if he were to "kill himself" in his cell by hanging.
What gives me optimism is that if this is done, we can at least have some visibility into his accounts.
If you watch some of his interviews after the news of the scam broke out, he was incriminating himself every time he opened his mouth. Almost as if he thought laws are just for plebs.
Think of what he did to his parents too… Two bright Stanford professors/lawyers now with black marks on their careers. Silver lining is they surely have enough tucked and hidden away to live very comfortable once this blows over. Albeit in disgrace.
> I'd also like to put my hand up and say I was one of those who was cynical that he'd end up in prison so glad that seems to be happening.
If you read the article, all it says it that he's going to jail for the completely legal act of publishing correspondence that was sent to him. He hasn't been sentenced or convicted or anything. The judge just doesn't like him.
Theoretically, you deny bail to people who are flight risks.
There was an illuminating interview he had before being arrested:
COWEN: ...let’s say there’s a game: 51 percent, you double the Earth out somewhere else; 49 percent, it all disappears. Would you play that game? And would you keep on playing that, double or nothing? So, what’s the chance we’re left with anything? Don’t I just St. Petersburg paradox you into nonexistence?
BANKMAN-FRIED: Well, not necessarily. Maybe you St. Petersburg paradox into an enormously valuable existence. That’s the other option.
For anyone wondering about the verb to St. Petersburg paradox:
The game is a simple 50/50 for a win or loss. You begin with one unit (say: $1). Every round you don't lose the stake doubles. The game terminates if you lose. How much should you pay (expected value) to enter such game?
Given the bank - offering you the gamble - has infinite resources the expected value is infinite.
Well of course one way [0] (another more nuanced way is to question the simple axiom of maximizing the expected value [1]) to resolve the paradox is to limit the resources realistically, analogous to Martingale [2].
Given the world's GDP at ~ $100 trillion (or about N ~ 46 rounds) the expected value (beginning with $1) would be only about $(N+1)/2 so in this case $23,5.
This is the epitome of "understands how things work but makes bad decisions".
You do have to be smart to see that there might be a more positive outcome. But you have to be unwise to gamble.
My first boss (trading) told me, "Our job is to be in business tomorrow". Which is relevant because in that business you actually can blow up in a day.
That's reminiscent of a Martingale but the roles are reversed. That was a great question to put to him and gives some insight into how these things happen.
That was a good interview as it exposed SBF. His answers were painfully stupid for a billionaire. I lost a lot of respect for the VC community after listening to that interview, I don't know how they got this so wrong. Perhaps it was just the sham nature of crypto that put blinders on everyone?
Anyway, kudos to Cowen for having SBF on there and letting SBF talk and expose himself.
There has to be a certain mental aftereffect of going from a coddled life where nothing ever happens to you because you're a 'main character' and everybody else is just an NPC to the point where those NPC's put you in jail and hold you responsible for your actions. I've seen the term 'affluenza' in relation to this and it very much reminds me of some of the children of wealthy people that I know. They feel that they have deserved their station in life and that there is absolutely nothing wrong with them getting a free pass for whatever transgressions they make because they're the golden children of the future.
This results in the weirdest excesses and - invariably - they are proven right over and over again. Daddy will bail them out, buy off the authorities or donate to the school and all is forgiven. Running into the wall at this speed has to be a rude wake-up call.
The problem with ponzi schemes is that they need to keep growing and growing but nothing can keep growing indefinitely. Most people, even those without any scruples, understand this and avoid ponzi schemes exactly because they inevitably blow up.
SBF knowingly went down a road that would land him in prison. His current behavior is self-destructive in exactly the same way. You can't expect SBF to behave rationally because if he was capable of that he would still be living the wealthy crypto life. He wouldn't have started a ponzi scheme in the first place.
As He keeps treated with kid gloves, he fails to recognise the seriousness of the situation he's in. A life of privilege does this to people because people in privilege just get all the understanding and benefit of the doubt and when they are nailed, they get a slap on the wrist. It's just how it is, the examples are endless but from a recent popular culture, you can make though experiment about someone of privilege attempting to poison someone at school v.s. someone off privilege doing the same.
When the thing is high profile enough and tightly put into the system they will end up getting the legal punishment but the process for them is way way less painful. Cross a border illegally? you sleep on the ground alone, covered with foil blanked for months in a detention center, you final punishment might not be something very high but your process is painful. You defraud people, go after them and, harass them and if you get caught you are surrounded with people sympathetic to you, trying to make sure that you don't have a time of hardship other than you are legally required. The final punishment can be something like living for many years in a highly secure building with no personal schedule and access to the rest of the society but at no point you suffer beyond that. You also get lot's of people around you trying to make sure that you will live in that building as less as possible.
IMHO He will not grasp the seriousness of his situation until everything is over and starts feeling some pain when he has some brilliant idea about crypto or something but he is locked up and can't pursue it.
Just as a point of interest, in terms of a legal defense in the US, "insanity" isn't what a lot of people think. It's not a medical term, and whether or not you're considered "insane" by the medical community doesn't enter into it.
All it means is that the person is unable to discern between right and wrong. That's it.
And if you successfully employ the defense (which very rarely succeeds), it doesn't mean you go free. It more likely means that you'll be institutionalized differently.
I think its malignant narcissism. If you believe you are smarter than everyone else for long enough you convince yourself you can get away with anything. If you actually manage to get away with things for long enough as SBF did for a long time, your worldview is probably pretty warped by it and you think you are the only one smart enough to solve the situation you find yourself in. This is why people like SBF and Trump ignore the advice of counsel and just keep running their mouths. They cannot help themselves. They cannot stop. If they are smart, wealthy and lucky enough they get away with it to... until they dont.
It tracks with the rest of the story. Homie is clearly extremely bad at fully understanding the inevitable future consequence of his actions. Somewhat ironic given his parents are esteemed lawyers.
Suppose you are out on bail facing felony charges that could earn you a long prison sentence, but you also think you would have a decent chance of getting acquitted or at least getting a much lighter sentence if a few specific witnesses for the prosecution were not cooperating with the prosecution.
Intimidating those witnesses might then be worth it even if getting caught at that means spending the time between now and the end of your trial in jail.
From another comment it appears that he is someone who would take a bet if it is slightly in his favor, even if the reward is only a little more valuable than the risk.
Why? People do all kinds of nonsense when put under the gun. This is why so many crimes result in the perpetrator making seemingly moronic decisions that easily get them caught.
When faced with a situation like this it can be agonizing and you're powerless. You would definitely harbor fantasies that there's just one little thing you could do to fix everything.
All you have to do is convince yourself that you just might be successful. If your case is hopeless, and the consequences catastrophic, literally anything you try including summoning space aliens is better than accepting certain defeat.
I think I feel the same way. I think it has to do with someone like this going to jail sounds like justice, but it doesn’t really help any of the people he screwed over.
Sort of like when one of the government agencies issued a huge fine to a company that wronged users. Will I ever see a dollar of that? It’s punitive consequences, but not justice.
[+] [-] s_dev|2 years ago|reply
I reckoned he'd escape some how being let off on some technicality of some prosecutor not following due diligence.
[+] [-] londons_explore|2 years ago|reply
I doubt there was any time in his career where all the accounts were fully legit and he could have cashed out. There would always have been some investors who hadn't got the returns they expected and would have gone digging.
[+] [-] nullc|2 years ago|reply
hah no. The billionaire claim was bull used to promote himself and his businesses. I wouldn't be surprised if a detailed accounting showed that he has never had a positive liquidation value for FTX and Alameda at any point in time.
It's a common problem people have in reasoning about fraudsters-- there is a tendency to only peel back one layer of fraud and get caught because the fraud continues all the way down. :)
[+] [-] arrowsmith|2 years ago|reply
Can someone give me a link to a single, concise article that explains this whole thing from the beginning?
[+] [-] tjpnz|2 years ago|reply
[+] [-] Melting_Harps|2 years ago|reply
Or [0]...
This is peak HN, as is the bulk of the top post, you guys are entirely clueless and refuse to see anything that detracts from your own insular narrative(s). Seriously, if you think SBF was a conman, which he is, thenyou should really take a dose of reality and see what pillars SV and big tech as a whole is built on. it really is no differnt than that of Mega corps, Wall Street and Banks.
He and his ex-gf worked at Jane Street, and are part of a SV elite in-class, they (but specifically SBF) were already living the high-life before they even knew what Cryptocurrencies were. That was probably never thier goal, they probably sought relevance in a World that was curated and manicured for them because of what class they belong to; only to find out that this space will eat you up and ridicule you to no end if you suck at it mercilessly: I speak from experience as a founder in this space. And to be honest, these two are worse than RazzleKhan and her bf (look it up) as they take the cake at sheer incompetence.
Sidenote: I'm glad it was downvoted as I know it struck a nerve and serve dit's intended purpose; but I'm also really starting to feel I am becoming a sort Tech-Diogenes around here, and I'm not sure if that's good or bad seeing as how I know how is fate ended.
0: https://news.ycombinator.com/item?id=37128392#37134085
[+] [-] gadders|2 years ago|reply
[+] [-] tenpies|2 years ago|reply
Call me cynical and conspiratorial, but I expect that the camera glitches are being set up as we speak. The sleepy guards being scheduled. The one photo of "his body" being generated. On the bright side, at least SBF isn't tall enough to simply stand up if he were to "kill himself" in his cell by hanging.
What gives me optimism is that if this is done, we can at least have some visibility into his accounts.
[+] [-] throw0101b|2 years ago|reply
I think some people just want/enjoy/need to play the game regardless of what the score is.
[+] [-] febed|2 years ago|reply
[+] [-] Ajay-p|2 years ago|reply
[+] [-] jacquesm|2 years ago|reply
[+] [-] fugdfjxd|2 years ago|reply
[+] [-] thaumasiotes|2 years ago|reply
If you read the article, all it says it that he's going to jail for the completely legal act of publishing correspondence that was sent to him. He hasn't been sentenced or convicted or anything. The judge just doesn't like him.
Theoretically, you deny bail to people who are flight risks.
[+] [-] Baader-Meinhof|2 years ago|reply
COWEN: ...let’s say there’s a game: 51 percent, you double the Earth out somewhere else; 49 percent, it all disappears. Would you play that game? And would you keep on playing that, double or nothing? So, what’s the chance we’re left with anything? Don’t I just St. Petersburg paradox you into nonexistence?
BANKMAN-FRIED: Well, not necessarily. Maybe you St. Petersburg paradox into an enormously valuable existence. That’s the other option.
https://conversationswithtyler.com/episodes/sam-bankman-frie...
[+] [-] dav_Oz|2 years ago|reply
The game is a simple 50/50 for a win or loss. You begin with one unit (say: $1). Every round you don't lose the stake doubles. The game terminates if you lose. How much should you pay (expected value) to enter such game? Given the bank - offering you the gamble - has infinite resources the expected value is infinite.
Well of course one way [0] (another more nuanced way is to question the simple axiom of maximizing the expected value [1]) to resolve the paradox is to limit the resources realistically, analogous to Martingale [2].
Given the world's GDP at ~ $100 trillion (or about N ~ 46 rounds) the expected value (beginning with $1) would be only about $(N+1)/2 so in this case $23,5.
[0]https://en.wikipedia.org/wiki/St._Petersburg_paradox#Finite_... [Note: the numerical examples begin with $2]
[1]https://plato.stanford.edu/entries/paradox-stpetersburg/
[2]https://en.m.wikipedia.org/wiki/Martingale_(betting_system)
[+] [-] lordnacho|2 years ago|reply
You do have to be smart to see that there might be a more positive outcome. But you have to be unwise to gamble.
My first boss (trading) told me, "Our job is to be in business tomorrow". Which is relevant because in that business you actually can blow up in a day.
[+] [-] jacquesm|2 years ago|reply
[+] [-] GreedClarifies|2 years ago|reply
Anyway, kudos to Cowen for having SBF on there and letting SBF talk and expose himself.
[+] [-] unknown|2 years ago|reply
[deleted]
[+] [-] unknown|2 years ago|reply
[deleted]
[+] [-] LatteLazy|2 years ago|reply
But increasingly I think he's just crazy. Not crazy enough for an insanity defence. But too crazy to act reliably...
[+] [-] jacquesm|2 years ago|reply
This results in the weirdest excesses and - invariably - they are proven right over and over again. Daddy will bail them out, buy off the authorities or donate to the school and all is forgiven. Running into the wall at this speed has to be a rude wake-up call.
[+] [-] gizmo|2 years ago|reply
SBF knowingly went down a road that would land him in prison. His current behavior is self-destructive in exactly the same way. You can't expect SBF to behave rationally because if he was capable of that he would still be living the wealthy crypto life. He wouldn't have started a ponzi scheme in the first place.
[+] [-] mrtksn|2 years ago|reply
When the thing is high profile enough and tightly put into the system they will end up getting the legal punishment but the process for them is way way less painful. Cross a border illegally? you sleep on the ground alone, covered with foil blanked for months in a detention center, you final punishment might not be something very high but your process is painful. You defraud people, go after them and, harass them and if you get caught you are surrounded with people sympathetic to you, trying to make sure that you don't have a time of hardship other than you are legally required. The final punishment can be something like living for many years in a highly secure building with no personal schedule and access to the rest of the society but at no point you suffer beyond that. You also get lot's of people around you trying to make sure that you will live in that building as less as possible.
IMHO He will not grasp the seriousness of his situation until everything is over and starts feeling some pain when he has some brilliant idea about crypto or something but he is locked up and can't pursue it.
[+] [-] lordnacho|2 years ago|reply
For me intelligence is having good models of how the world works. Wisdom is making good decisions.
[+] [-] JohnFen|2 years ago|reply
Just as a point of interest, in terms of a legal defense in the US, "insanity" isn't what a lot of people think. It's not a medical term, and whether or not you're considered "insane" by the medical community doesn't enter into it.
All it means is that the person is unable to discern between right and wrong. That's it.
And if you successfully employ the defense (which very rarely succeeds), it doesn't mean you go free. It more likely means that you'll be institutionalized differently.
[+] [-] P_I_Staker|2 years ago|reply
None of this is crazy. You're going to lose for sure, and then there goes your life. Literally anything makes sense to do.
Try to seduce the prosecutor. Hypnosis. That one spell from Harry Potter that lets you control people. All better options than doing nothing.
[+] [-] drexlspivey|2 years ago|reply
[+] [-] wonderwonder|2 years ago|reply
[+] [-] j7ake|2 years ago|reply
Now instead of being able to prepare for the defence at home he has to sit in jail and wait.
Wow…
[+] [-] neom|2 years ago|reply
[+] [-] tzs|2 years ago|reply
Intimidating those witnesses might then be worth it even if getting caught at that means spending the time between now and the end of your trial in jail.
From another comment it appears that he is someone who would take a bet if it is slightly in his favor, even if the reward is only a little more valuable than the risk.
[+] [-] bdcravens|2 years ago|reply
SBF imagined himself among the elite; he's not.
[+] [-] P_I_Staker|2 years ago|reply
When faced with a situation like this it can be agonizing and you're powerless. You would definitely harbor fantasies that there's just one little thing you could do to fix everything.
All you have to do is convince yourself that you just might be successful. If your case is hopeless, and the consequences catastrophic, literally anything you try including summoning space aliens is better than accepting certain defeat.
[+] [-] Simulacra|2 years ago|reply
[+] [-] helsinkiandrew|2 years ago|reply
https://www.nytimes.com/2023/07/20/technology/ftx-caroline-e... https://nypost.com/2023/07/21/caroline-ellison-whined-sbf-br...
[+] [-] plumeria|2 years ago|reply
[+] [-] naijaboiler|2 years ago|reply
[+] [-] padjo|2 years ago|reply
[+] [-] pretext|2 years ago|reply
[+] [-] Simulacra|2 years ago|reply
[+] [-] lolsal|2 years ago|reply
Sort of like when one of the government agencies issued a huge fine to a company that wronged users. Will I ever see a dollar of that? It’s punitive consequences, but not justice.
[+] [-] meling|2 years ago|reply
[1] https://podcasts.apple.com/us/podcast/the-journal/id14693949...
[+] [-] ChrisArchitect|2 years ago|reply
Lots of discussion here from days ago: https://news.ycombinator.com/item?id=37092861
[+] [-] honeybadger1|2 years ago|reply
[deleted]
[+] [-] pixelpoet|2 years ago|reply
[+] [-] j16sdiz|2 years ago|reply
Would be great, expect when it is not.
[+] [-] isaacfrond|2 years ago|reply
https://news.ycombinator.com/item?id=37119179
[+] [-] jacquesm|2 years ago|reply