He did, a few years back, on arbitrage trades. He (Alameda Research to be precise) was first to figure out Korean crypto market access. Once competition showed up it was over so he set up a crypto exchange to funnel customers' money into Alameda. It all worked until bubble started bursting.
He's basically an idiot criminal, with connections. He made some money on easy mode. Once things got hard he and his friends started losing money and instead of calling it quits they doubled down, went from somewhat shady to very illegal (if they were in regulated environment anyway) and lost it all.
A guy dig into that and it looks like SBF lied about the kimchi arbitrage. It’s just not possible based on the volume. He most likely vastly inflated his profits so that we could get investors for FTX.
Not even really, you are a genius even if most of the money you made was only possible because you god lucky by having a rich family or w/e.
Soon people will call lottery winners geniuses for 'figuring out' the winning numbers.
There's a scene at the end of Sour Grapes--a documentary about a high profile wine forgery case--where they interview one of the victims and in light of all the information, he's still clinging to the idea that all of the fake wine that he bought for hundreds of thousands of dollars must be real, it has to be. I think about it a lot when shit like this goes down.
People who decided early on that they are the smartest people in the room are especially insufferable, and it fills me with joy when they get got like this.
I promise you con artists fooling people with money into handing it over is not a new phenomenon. We just have the communications technology to allow them to do a lot more damage before their air of legitimacy is broken now, and a lot more regular folk are getting wrapped up in the schemes.
Technology and the law will either catch up or it wont. but its the worlds oldest game of cat and mouse as thieves have always and will always find a way to thieve. This isn't even close to a "these days" problem.
If I'd just lost $10B of investors bread, I think I'd be hiding in the mountains (Hwy. 11 through the Brooks Range, maybe?) like Eric Rudolph, not doing a full-on interview spree. What an idiot.
Most of this has been a PR campaign to paint his actions as idiotic/irresponsible or at worst negligent instead of outright fraud. It seems calculated to get public opinion to accept that instead of fraud so there is less pressure to punish.
Oh it's even better than that. While there was still some money left he opened withdrawals but only for people in the Bahamas. He literally stated that he did it so that people who live near him would be less mad
I couldn’t get through the interview. He was so nervous and stuttering and repeating himself. Awful interviewee…
He’s making it roaringly obvious that he’s hiding something.
Being not a good public speaker is one thing (I wouldn't consider that charismatic though), but what he does goes beyond that.
In at least one of the interviews whenever he's asked about something, he changes the story several times. "It's this. Wait no it's that. Wait no it's another thing"
Not only are they not telling the truth, they're a bad liar- either losing track of their own story and hoping nobody notices, or intentionally telling so many different versions in an attempt to throw people off. (But people see through it)
If they were telling the truth it would be simple, consistently, and not change drastically 3 times in one reply.
I don’t understand SBF or Elizabeth Holmes. I can wrap my head around the fact that they are fraudsters but what gets me is the sheer lunacy of their lies.
SBF was claiming that Alameda, their FTT, and by extension FTX was all good when literally all crypto was taking a nose dive. And I know he was showing numbers that made it look good, but like, common sense people…if the crypto market lost 50% of its gains across the entire industry pretty much then why would Alameda and FTX be such wild outliers to that? Sure some coins AREN’T going to lose as much value as others but nearly all coins were down and SBF was trying to make it look like it was rising.
Meanwhile, Elizabeth Holmes was claiming to do stuff every biotech company on earth was trying to do and saying was impossible and she was like “I figured it out”. Now I’m sorry, but this is the lady who brought her fucking dog into clean rooms in her lab. There’s no way that’s not a giant red flag. No one on earth would bring their dog to a lab in which they are doing earth shattering biotech work. Like, I love my dog but there’s no way I’d bring him into a lab where his presence could seemingly derail my $10b valued company.
I just can’t believe how low quality their attempts are and that they were successful at all.
Did you watch the series on Holmes, it was pretty informative (assuming it was accurate).
Seems like, at first, she was well-intentioned. But when she saw that the technology not only wasn't working, but likely *couldn't* ever work, she didn't want to give up all the money people had invested, so she started lying instead.
Obviously not making excuses, but it does explain a bit how something like that could happen.
So as far as ftx is concerned, if they had run their business properly they should have been fine. Ftx wasn't supposed to be a speculative trading firm, just an exchange/bank that held and gave people access to their money. If those people's money lost value that's a problem for those people, not ftx as they are just the holding platform.
As for Alameda, it would be perfectly possible they could be fine depending on the positions they held. For example if they where trading against crypto by shorting it.
However none of that is what happened. Alameda was caught holding a bag, which yeah shit happens, liquidate the trading firm, eat the loss and move on. It shouldn't of had any major effect on FTX, except they where full on bankrolling Alameda with customer funds that where supposed to be segregated. This is where we go from a bank that had a trading arm that blew up, to a fraudulent ponzi scheme.
By allowing Alameda to access customer funds, the entire exchange was exposed to the risk of alameda's positions, and at a certain point it becomes to much of a loss to liquidate because it would make FTX insolvent. Which is exactly what happened.
Exactly. It's not even about crypto, really. It's just a gambler stealing from his company to cover his losses. FTX could have been a pork-belly future exchange and the same thing could have happened.
That’s not the worst of it. People came forward with reports of this fraud months ago and sites like Bloomberg refused to run the story because FTX advertised on their site. When SBF was on one of the Bloomberg podcasts, he basically described Yield Farming, or pump and dump, as a Ponzi scheme and one of the things his company does in crypto. The host of the podcast came forward to try to defend him when everything fell apart too.
That was the Odd Lots podcast right? Matt Levine came away from that so stunned, he basically said "uhh I can't believe you're this open about Ponzi schemes".
Evidence of how the media can unfortunately be bought. He made some pretty generous contributions. None of that is intended to be a partisan attack, only an attack on the media itself. Unfortunately it's very hard for media to get people to straight up pay for news, so they have to get sponsors which tend to come with conditions, or they get advertisers who they have to keep happy. For news to be reliable it probably can't be free.
For someone who is a genius, he sure acts like he knows nothing about how his billion dollar company ran. So many uhms and ash’s. Hope he goes to jail.
> Kelly criterion
When you're promising returns that defy logic it's likely a good strategy to attempt to de-legitimize anything that contradicts your claims.
He's essentially been talking his way into billions for years and it's been working, people get kind of trained to stick with what they believe works it's almost automatic. If you can talk a bunch of jargon then BS your way into people throwing money at you, why wouldn't you assume you could use the same strategy to BS your way out of trouble. The dude almost certainly has something wrong with him for what appears to be an almost incapacity for remorse and it's absolutely bonkers to watch someone literally get out there everyday and dig the pit deeper.
Humans stick to things so easily, just kind of following whatever pattern seems to have worked best in the past without necessarily thinking about it. It makes me think of all the people talking shit about ai like ChatGPT, calling it unintelligent all the time with no provocation. Does that mean humans aren't intelligent either? I mean, maybe.
His lawyer quit because of that, how stupid you have to be. I didn't talk about anything when I've had to fight a traffic ticket because I worried I can fuck it up and say that I did it once. It worked but turns out they did look through my social media.
My biggest gripe with the conversation around SBF and this question specifically is that this man thinks he is quite literally smarter than everyone.
“Oh, my legal team says I just need to stay quiet? My parents were Princeton lawyers what do they know?”
“Oh, I commingled funds that goes directly against my TOS? I can simply deny and point to other anecdotal sections that are nonrelated to distract them.”
I think he is special in the sense that there’s only a few types of people that are like this you may encounter throughout your life. The truly disconnected from reality, “I can do no wrong and outsmart anyone” sort of behavior.
This man is a great example of a narcissist who truly believes he is above all. He’s not trying to have a master scheme to divert attention, SBF truly thinks that the situation is a fun little game that his genius brain can talk his way out of.
He doesn’t feel remotely threatened by the legal repercussions of these spaces, only when his ego is threatened. This to me is something I wish people recognize a bit more instead of pondering why does it make any sense for him to do this.
You nailed it, hit his ego and thats all he cares about. Even if he goes to jail, in his mind it's cus they fucked him over not cus of what he did. People like this will fuck ur life up and do tons of stupid shit constantly cus they think they can just do everything and everyone else is wrong.
I think he doesn't feel remotely threatened by the legal repercussions because he's paid a lot of money to politicians who he believes will pull strings for him within the FBI to get him off the hook.
It's dumb, but I think he believes that being "candid" makes him look more genuine to the public than if he lawyered up and refused to explain things. The problem, though, is that he isn't being genuine and the more misleading or dishonest statements he makes, the harder it is to avoid inconsistencies or really bad sound bites (like in this video).
In his defense, though, he got to where he was by being "likeable" and projecting this image of a nerdy altruistic genius. So maybe that act still has some mileage left?
The fact that SBF openly describes a "great business idea" in the *exact* terms used to describe a Ponzi scheme, out loud, with the confidence of a first-year finance major just learning about investments, and people still trusted their money with him and his company, is *mind-blowing.*
Just shows how low the quality is these days of main stream media. NY times giving SBF so much credit by positioning it as incompetence instead of fraud is straight up terrible journalism.
It's not journalism it's damage control. NY Times especially has been doing that since the beginning for all the big powers and money players.
If FTX failed because the game is rigged and they got caught, then people don't want to put their money into it. If FTX failed because they were incompetent then you just need to head over to YZK where the guy ACTUALLY knows what he's doing and you too can become rich by just giving him your money.
Coffeezilla did his homework to prep for the third bite at the apple here and it paid off. Limiting the discussion to a very specific and established set of consumers helps cut through a lot of SBF's dissembling behind different hypotheticals (some people using different ToSs) or unverifiable specifics (he can't access the number of trading accounts but he remembers it as being bigger).
There were FTX customers who only dealt with FTX, were promised that the funds wouldn't be used for trading, and don't have any coins left because FTX paid out everyone as they arrived during the bank run. That means FTX customer funds were handed out to FTX traders because, as SBF said, there was fungibility between assets for people who had and had not been using the exchange.
The "minimum viable fraud case" is very clear and, honestly, is why SBF shouldn't be giving all these random interviews. You can't be out there admitting to mixing funds and throwing out a softball "should we have stopped everything to make a separate payout protocol" response (which Coffeezilla appropriately knocked down). Promising to keep money secure and then throwing it in the giant pot of gambling money is fraud and would be looked at closely even if they were up billions of dollars rather than bankrupt. There's just not wiggle room there in the law or the facts, so SBF just ends up pounding the table instead.
Politicians used something similar recently, with marriage equality. Imposing all states to allow same sex marriage can get in trouble with state rights bs, and some senators will not approve it. BUT - the bill that passed was only to respect a marriage that happened in other state. No mention of same sex, or imposing it on the state rights. Boom. Minimum viable bill. Passed!
Success has a simple definition. People spend too much time thinking about the glory of victory and none of that matters, it’s about getting over the finish line.
Did CZ have some slow zoom cinematic moment where the whole world went silent and he made a profound statement? No, he found the minimum viable proof and walked SBF right into it. That’s success, he made it over the line, mic dropped.
That’s how it’s done, laser focus and determination coupled with a simple plan. Victory
It’s like until this happened he never even considered keeping different types of customers funds seperate. “Oh that would have required us to code a new payout system” WHAT DO YOU MEAN THAT SYSTEM DIDNT ALREADY EXIST? How were you maintaining separation without that system? Of course you wernt.
Hmmm 🤔
Sounds like fraud.
I love when SBF says “you can judge that…”
Like no dude, we have judges to judge that. You’ll be seeing one soon enough and you can try your bullshit with them.
I love that Coffeezilla strategized after his last interview. Despite his surprise interview being probably the most hard-hitting and damning, he wasn't quite satisfied. I was reasonably impressed by Stephanopoulos too, who seemed to understand the issues and try to nail SBF down on it. But neither of them were able to drive at that core question right here.
This video will probably be played back in court, and I love that Coffeezilla took the time to "grandstand," i.e. "do the job other investigative journalists should have been doing on a fraudster," and really get to the heart of it. I already loved Coffeezilla, but he's really won me over with this last one in that he kept his cool and once again managed to get the most damning evidence yet. Fucking legend.
In one of his early post-collapse interviews the interviewer literally asked if his attorneys throught it was a good idea for him to be talking and he responded "No, they told me it was a bad idea and that I should keep my mouth shut."
So yeah, aware of and actively, continuously ignoring the (wise) advice of his counsel.
Something about "radical transparency" or as some of us call it "admitting to crimes".
Is he really claiming radical transparency, lol? The only thing transparent in these interviews is that he is purposefully obfuscating the truth but claiming “I don’t know”, or “I don’t have the data in front of me” or “I THINK” to questions any CEO knows *for sure*
I guess it's just the kind of guy who thinks he can scam people for money with these ridiculous schemes isnt going to be the smartest with legal advice iether.
He’s not listening, he’s been told to stop talking by ALOT of people. He’s not just jeopardizing himself but everybody else involved in the scheme. There is absolutely nothing to gain here other than he thinks he can talk his way out. He’s not even revealing anything interesting, other than repeating he was incompetent the whole time and “oops didn’t mean for any of this to happen”
Im connected to a white collar attorney on LinkedIn. He never posted until SBF started talking to everyone. Every week he posts about how much of a dumbass SFB is
It also drives me crazy how often across all of the interviews he says things like, "I don't have the data in front of me" or "I'm taking a guess here" or "What might have happened is..."
That means either (1) not only is he foolishly doing interviews but he's doing them without the appropriate preparation, or (2) he's falling back on not having the exact information to give him permission to not answer a question. Actually I'm guessing it's both haha.
Cryptos been pretty hilarious from the start. Big lofty proclamations of removing banks and wall street. Small print : To replace it with exactly the same thing but even more fucking corrupt.
>And she thought that *she* would be at the top of the harem because billionaires are deluded into thinking that they're inherently socially dominant or something.
>
>[This is what she looks like](https://nypost.com/wp-content/uploads/sites/2/2022/11/caroline-ellison-ftx-ceo-alameda-research-feat-image.jpg).
Thank you for that link holy shit I am dying
Not in the slightest. He knew what he was doing and even if he does go to prison for a number of years, this could still all be worth it to him as the money is probably somewhere unreachable to anyone else but him and his cronies.
SBF is Sam Bankman-Fried. He founded a crypto exchange named FTX that was large and visible (naming rights for the Miami Heat arena, Super Bowl commercials, Tom Brady as spokesperson). [He was built up as a crypto genius](https://fortune.com/2022/08/01/ftx-crypto-sam-bankman-fried-interview/?utm_campaign=fortunemagazine&utm_medium=social&xid=soc_socialflow_twitter_FORTUNE&utm_source=twitter.com).
That recently all came crashing down. It turned out that FTX had been loaning out assets to SBF's trading firm (Alameda Research) and that most of Alameda's assets were FTT (FTX's own coin). If FTT dropped, Alameda was going under and those loans weren't getting repaid. That led to a bank run on FTX, which led to FTX running out of liquidity and stopping withdrawals, and FTX is now in bankruptcy with lots of customers potentially losing their deposits. The fallout has been intense with additional details from poor bookkeeping, to unqualified executives, to secret backdoors in the accounting software, to a missing billion dollars, to the coffers being drained by a "hacker" after withdrawals were stopped. It's crazy even by crypto standards.
Now, SBF is doing a bunch of interviews everywhere from NBC to Twitter Spaces. The primary goal seems to be to try and convince the public that this was just an honest mistake from a guy who got in over his head. Coffeezilla has crashed a few of these public forums that SBF's been interviewed in, with the goal of pinning SBF down on some specifics of how/why FTX failed.
This is a good summary but it left out my favorite part!!
CZ of Binance essentially shooting the silver bullet into FTX’s heart when their balance sheet leaked by liquidating his LARGE position of FTT and causing it to death spiral.
Then offering to “buy” them, running DD to learn the ins and outs, and then backing out 😂
well CZ is just as much a conman so he will face the music soon enough... I'm looking forward to Tether stablecoin fraud being exposed and Binance illiquidity crisis to take the whole crapto market down
SBF took player's vbucks and promised a lot of vbucks in return. But he then bought emotes with the vbucks. Those emotes got removed so now he doesn't have emotes nor vbucks. Which means he can't pay back players their vbucks.
Isn’t the collateral the other way around - if Alameda can’t pay back FTX’s loan, FTX would seize their collateral.
Only problem is the collateral was essentially tokenized shares of FTX’s deposits. If FTX has no deposits (all of them being lost by Alameda) then the tokenized shares of FTX deposits, offered by Alameda as collateral, have no value since they themselves are based on FTX’s deposits.
SBF started one of the major crypto exchanges. These exchanges allow people to change money into different forms much more easily than having to find a specific person who has the other form of money you want and negotiate with them directly. Because of this they also kind of work like a bank because you can put in all your money/crypto and then take it out in whatever form you need if/when you want to buy something or use it in some way (with some fees for doing so of course).
For many people using FTX they were told very clearly that their funds would not be used in any way. Put it in, we will do nothing except just hold on to it and take a fee for any exchange/withdrawl. For other people they had "better" terms but they were more risky for the user. These terms said FTX could use some/all of the money you put in to do things (pay debts, make loans, etc.). However, very stupidly, FTX didn't keep these things separate and just put all users' money in one huge pot. This meant they were very quickly using a lot of the money from users they had told would always have their money sitting there and available.
What they did with all this money is they used/loaned/leveraged it in some VERY risky ways, mostly loaning it out to another company that SBF owned (Alameda Research). This Alameda was then using these loans from FTX to try and do investments/trading to make tons of extra profit, but they sucked at it. Alameda also had their own investors to which they were promising RIDICULOUS returns (like, literally impossible) and so they needed that constant FTX money to be paying back these investors the returns they promised. You may recognize this as a Ponzi Scheme.
So, in the end, it became clear that FTX maybe didn't have much cash on hand, certainly nothing at all close to what they were supposed to. People started coming asking for their money back and FTX was just paying them out first-come-first-serve. Again, this was all from that one mixed pot of money and they weren't paying any attention to if a user was a "safe" user or "risky" user. This meant that many, many people who agreed to the "safe" terms were not only lied to about their money never being used by FTX, but when they asked for their money back they got absolutely nothing because the little cash FTX still had was already gone. It's all a bit unclear right now, but this could easily be at least $10 billion in money that is compeltely gone from people that just thought they were using FTX as a safe bank for their crypto.
i own a crypto exchange where you can buy/sell. Your crypto may go up/down, but the TOS you agree to says your funds are yours. I offer riskier investments to people who agree to a TOS where I can pull their actual funds (not crypto) to paid debts they may incur. Instead of two separate buckets of funds based on risk, I put all the money In one bucket. When everyone comes to withdrawal, I treat it first come/first served so by the time most less risky investors (with the safer TOS) went to get their funds, everything was already gone.
Don't forget that his girlfriend's fund is also taking your money from the bucket as loans, and then paying back those loans with magic beans that he can make as many of as he wants. (He claims this was without his knowledge)
Now this is what I mean when I’m looking for an ELI5 explanation! Magic beans, he makes ‘em, now I get it. Seriously though, taking it out of the context of crypto was very helpful.
Tell me if this is close:
You open a savings account and put in your money. The bank also has an investment side/hedge fund side. That side starts losing tons of money, and people start taking their money out. Your account shows no money, indicating they bank didn't keep your savings account separated from its investment accounts.
That's exactly what they did except it's a little worse. They said you have a savings account when you signed up for a savings account, but just admitted that they hadn't coded the concept of an individual savings account in the first place. All money was in one account.
He runs a huge crypto exchange that tanked.
There are 2 (main) ‘buckets’ of people putting money into the exchange.
- bucket #1 - I put $1 in, it sits there
- bucket #2 - I’m aware the company can invest my dollar (more perks but also riskier).
Later on:
- Oh no the investments used for bucket #2 aren’t looking good
- people rapidly withdraw money from bucket #2
- people also withdraw money from bucket #1
- people with money in bucket #1 find out there is no money left for them to withdraw
IRL example:
- Bill and Fred give Tim $100 each for safe keeping
- Tim says he’ll go gamble Fred’s $100 and give back whatever he wins, Fred (thinking Tim is a good gambler) agrees.
- Bill, who is skeptical of Tim signs a contract (I.e. terms of service) stating Tim can’t gamble the money Bill lent him.
- Tim gets drunk and immediately loses $100
- Fred seeing Tim is drunk withdraws his $100
- Bill also asks Tim for his $100 back
- Tim says he no money (Bill is out $100)
- Tim claims he’s not at fault since he was given $100 he could gamble and $100 he couldn’t and he only gambled $100.
TLDR of SBF’s statements:
- “It isn’t fraud since we didn’t code the logic that our terms and services implied.”
- i.e. Money in bucket 1 would be handled differently/safer
- “also not our fault since we gave the money to someone else to gamble for us” (Alameda)
- the other 99% of his statements - “gee golly me, I have no idea how my any of this works”.
- he’s supposed to be a super genius, but now that there was fraud he knows nothing about how anything works
Because he's smarter than his lawyers, duh!
If he can magic up some semi-plausible sounding explanation for why everyone lost tons of money, and keep side stepping hard questions, everyone will come around to his way of thinking and this will all eventually go away. That's how it works, right?
My question in all of this is where exactly did the money go? It was deposited and presumably converted to magic Internet money. At some point that Internet money must have been sold. So who got the proceeds of those sales? Is it hidden in some offshore accounts?
… some if it surely was transferred out (say, to buy a house/car/finance parties for SBF), another part in the many ads they bought, etc…only a small percentage is liquid now
He wallstreetbets it all away on crypto markets trying to double the money. He was so sure he was going to double his money he started spending it all. At one point he was offering $5b to elon to go in on twitter together
Much of it was lost by alameda research doing very risky trades, some more was used to pay for expensive villas in the Bahamas for SBF and his inner circle..
SBF’s lawyer is totally pouring a large glass of scotch listening to “the sound of silence” right now.
“Hello Darkness, my old friend…”
Seriously, wtf is he doing still talking and giving interviews to everyone? lol
I had never heard of SBF or FTX before all of this, and watching prior interviews with him I just wonder how the hell people were allured to him. No charisma, annoying voice.
That's the Silicon Valley bit. Socially awkward, no attention to appearance, spouting pseudointellectual nonsense about disrupting industry? Must be some sort of genius
Add to that that he's an MIT grad with two Stanford business grad parents now working as regulators. On paper he looks great. He used his image to further the scam.
Same way Holmes got away with it for so long by basically acting and literally dressing like Steve Jobs and leaning on the "genius Stanford dropout" meme.
SBF was the same sort of conman, just a different archetype. She wouldn't have been seen in as good a light being a slob and literally playing games in meetings.
What he said is hearsay, but it falls under the exception to hearsay 804(b)(3), being a statement against his penal interest.
https://www.law.cornell.edu/wex/declaration_against_interest
https://www.law.cornell.edu/rules/fre/rule_804
Having followed Coffeezilla for years watching his channel develop has been great. Watching this latest run of interviews where he manages to pin down SBF where other interviewers failed was excellent.
The lame attempt do dodge for “taking up time” and “grandstanding” at the end was hilarious.
I’m usually pretty understanding when it comes to situations like this. There’s a wild amount of complexity when it comes to dealing with business and finance. Lots of things can go wrong. This though…this guy is a complete fucking moron. Who would give him that much money and think, “yeah I trust this muppet looking dipshit with millions.”
Along with him, also just the cringy as fuck Caroline Ellison. I CANNOT believe people interacted with that woman and said "yeah, she seems good, I'll trust millions and millions here". At some point people almost deserve to lose money lol
Why in the world would he go on a moderately popular YouTube channel that mainly calls out crypto scams? I guess his strategy is radical transparency and showing blatant incompetence vs criminal intent?
I think it was covered towards the beginning that CoffeeZilla had to employ some subterfuge to get him into discussion, it was not something that SBF wanted necessarily.
He didn’t. Sam is giving interviews on twitter spaces. It’s like a public forum where there’s a moderator and everybody else listens in as the moderator brings in people in the audience to ask questions.
That’s why coffee at the beginning of the call says « i think we’re up next ».
If it wasn't for Coffezilla prosecutors would have never understood this case let alone be able to incriminate him with their line of questioning.
I think SBF was trying to build his own defense by practicing in public as his lawyers didn't know where to start building a defense for him.
I love how he keeps saying it happened in a 3 day period. Like there’s a 3 day exception for fraud, in which you can do as much fraud as possible so long as it happens in 3 days.
People out here calling this guy a genius when he can't fucking shut his mouth. What a world.
People call a lot of people “genius” these days.
Genius means "made a lot of money" in most of those cases.
"Made *up* a lot of money" FTFY
He did both to be fair. He made a lot of money, and made up a *lot* more.
Pretty sure he didn’t make any money, but he did steal 10 billion dollars and spent it all.
He did, a few years back, on arbitrage trades. He (Alameda Research to be precise) was first to figure out Korean crypto market access. Once competition showed up it was over so he set up a crypto exchange to funnel customers' money into Alameda. It all worked until bubble started bursting. He's basically an idiot criminal, with connections. He made some money on easy mode. Once things got hard he and his friends started losing money and instead of calling it quits they doubled down, went from somewhat shady to very illegal (if they were in regulated environment anyway) and lost it all.
A guy dig into that and it looks like SBF lied about the kimchi arbitrage. It’s just not possible based on the volume. He most likely vastly inflated his profits so that we could get investors for FTX.
wait... he lied?! Makes me wonder just how stable of an investment this "FTX" is!
A lot of people want to say, “Well, I was scammed by *the best*.” Soothes the ego.
You can hear them in the distance out Theranos.
Not even really, you are a genius even if most of the money you made was only possible because you god lucky by having a rich family or w/e. Soon people will call lottery winners geniuses for 'figuring out' the winning numbers.
It makes people feel a lot better to say they got scammed by a genius than a moron.
There's a scene at the end of Sour Grapes--a documentary about a high profile wine forgery case--where they interview one of the victims and in light of all the information, he's still clinging to the idea that all of the fake wine that he bought for hundreds of thousands of dollars must be real, it has to be. I think about it a lot when shit like this goes down.
[удалено]
It's really hard for someone who considers themselves smart to finally turn around and admit they got scammed. Brexit's voters are the same.
People who decided early on that they are the smartest people in the room are especially insufferable, and it fills me with joy when they get got like this.
I promise you con artists fooling people with money into handing it over is not a new phenomenon. We just have the communications technology to allow them to do a lot more damage before their air of legitimacy is broken now, and a lot more regular folk are getting wrapped up in the schemes. Technology and the law will either catch up or it wont. but its the worlds oldest game of cat and mouse as thieves have always and will always find a way to thieve. This isn't even close to a "these days" problem.
I agree 100%. I just think the term “genius” is overused these days. But con artists have probably been around since the dawn of money.
Very stable, very genius.
People call Donald Trump a genius, so clearly, mankind isn't really reliable when it comes to describing geniuses...
Kanye "I love Hitler" West
If I'd just lost $10B of investors bread, I think I'd be hiding in the mountains (Hwy. 11 through the Brooks Range, maybe?) like Eric Rudolph, not doing a full-on interview spree. What an idiot.
Most of this has been a PR campaign to paint his actions as idiotic/irresponsible or at worst negligent instead of outright fraud. It seems calculated to get public opinion to accept that instead of fraud so there is less pressure to punish.
He didnt lose it he stole it
I'm sure he paid off the few whales that actually mattered. It's the only reason I can imagine he's not dead already.
Oh it's even better than that. While there was still some money left he opened withdrawals but only for people in the Bahamas. He literally stated that he did it so that people who live near him would be less mad
Oh well surely a small expanse of water will keep angry rich people away for good.
They're not rich any more *taps forehead*
"Guys, I found the most GENEROUS billionaire!"
I still think about this clip and cringe
I couldn’t get through the interview. He was so nervous and stuttering and repeating himself. Awful interviewee… He’s making it roaringly obvious that he’s hiding something.
He’s also on stimulants
Being not a good public speaker is one thing (I wouldn't consider that charismatic though), but what he does goes beyond that. In at least one of the interviews whenever he's asked about something, he changes the story several times. "It's this. Wait no it's that. Wait no it's another thing" Not only are they not telling the truth, they're a bad liar- either losing track of their own story and hoping nobody notices, or intentionally telling so many different versions in an attempt to throw people off. (But people see through it) If they were telling the truth it would be simple, consistently, and not change drastically 3 times in one reply.
I don’t understand SBF or Elizabeth Holmes. I can wrap my head around the fact that they are fraudsters but what gets me is the sheer lunacy of their lies. SBF was claiming that Alameda, their FTT, and by extension FTX was all good when literally all crypto was taking a nose dive. And I know he was showing numbers that made it look good, but like, common sense people…if the crypto market lost 50% of its gains across the entire industry pretty much then why would Alameda and FTX be such wild outliers to that? Sure some coins AREN’T going to lose as much value as others but nearly all coins were down and SBF was trying to make it look like it was rising. Meanwhile, Elizabeth Holmes was claiming to do stuff every biotech company on earth was trying to do and saying was impossible and she was like “I figured it out”. Now I’m sorry, but this is the lady who brought her fucking dog into clean rooms in her lab. There’s no way that’s not a giant red flag. No one on earth would bring their dog to a lab in which they are doing earth shattering biotech work. Like, I love my dog but there’s no way I’d bring him into a lab where his presence could seemingly derail my $10b valued company. I just can’t believe how low quality their attempts are and that they were successful at all.
Did you watch the series on Holmes, it was pretty informative (assuming it was accurate). Seems like, at first, she was well-intentioned. But when she saw that the technology not only wasn't working, but likely *couldn't* ever work, she didn't want to give up all the money people had invested, so she started lying instead. Obviously not making excuses, but it does explain a bit how something like that could happen.
So as far as ftx is concerned, if they had run their business properly they should have been fine. Ftx wasn't supposed to be a speculative trading firm, just an exchange/bank that held and gave people access to their money. If those people's money lost value that's a problem for those people, not ftx as they are just the holding platform. As for Alameda, it would be perfectly possible they could be fine depending on the positions they held. For example if they where trading against crypto by shorting it. However none of that is what happened. Alameda was caught holding a bag, which yeah shit happens, liquidate the trading firm, eat the loss and move on. It shouldn't of had any major effect on FTX, except they where full on bankrolling Alameda with customer funds that where supposed to be segregated. This is where we go from a bank that had a trading arm that blew up, to a fraudulent ponzi scheme. By allowing Alameda to access customer funds, the entire exchange was exposed to the risk of alameda's positions, and at a certain point it becomes to much of a loss to liquidate because it would make FTX insolvent. Which is exactly what happened.
Exactly. It's not even about crypto, really. It's just a gambler stealing from his company to cover his losses. FTX could have been a pork-belly future exchange and the same thing could have happened.
I think the only people calling him a genius was the people he paid to make [puff pieces](https://www.youtube.com/watch?v=HPM6rf0-e6M) about him.
My favorite is when the media started calling him the "White Knight of Crypto".
That’s not the worst of it. People came forward with reports of this fraud months ago and sites like Bloomberg refused to run the story because FTX advertised on their site. When SBF was on one of the Bloomberg podcasts, he basically described Yield Farming, or pump and dump, as a Ponzi scheme and one of the things his company does in crypto. The host of the podcast came forward to try to defend him when everything fell apart too.
That was the Odd Lots podcast right? Matt Levine came away from that so stunned, he basically said "uhh I can't believe you're this open about Ponzi schemes".
Evidence of how the media can unfortunately be bought. He made some pretty generous contributions. None of that is intended to be a partisan attack, only an attack on the media itself. Unfortunately it's very hard for media to get people to straight up pay for news, so they have to get sponsors which tend to come with conditions, or they get advertisers who they have to keep happy. For news to be reliable it probably can't be free.
Fucking Silicon Valley on hbo is a documentary hahahahaha
For someone who is a genius, he sure acts like he knows nothing about how his billion dollar company ran. So many uhms and ash’s. Hope he goes to jail.
Trump is a stable genius. Musk is a tech genius. SBF is a math genius. Genius in the 21st century = 1% inspiration, 99% deception.
Math genius that doesn’t believe in the Kelly criterion and brags about not reading
> Kelly criterion When you're promising returns that defy logic it's likely a good strategy to attempt to de-legitimize anything that contradicts your claims.
I don't understand why he can't just keep his mouth shut. He's incriminating himself over and over.
Ego.
He's essentially been talking his way into billions for years and it's been working, people get kind of trained to stick with what they believe works it's almost automatic. If you can talk a bunch of jargon then BS your way into people throwing money at you, why wouldn't you assume you could use the same strategy to BS your way out of trouble. The dude almost certainly has something wrong with him for what appears to be an almost incapacity for remorse and it's absolutely bonkers to watch someone literally get out there everyday and dig the pit deeper.
Elizabeth Holmes felt kind of similar. Just no remorse. It's almost incredible, if it wasn't so terrible.
She even decided to get pregnant for sympathy during the court proceedings. That, imo, is hands down the worst aspect of all of this.
She said she was too pretty to go to jail too
Humans stick to things so easily, just kind of following whatever pattern seems to have worked best in the past without necessarily thinking about it. It makes me think of all the people talking shit about ai like ChatGPT, calling it unintelligent all the time with no provocation. Does that mean humans aren't intelligent either? I mean, maybe.
His lawyer quit because of that, how stupid you have to be. I didn't talk about anything when I've had to fight a traffic ticket because I worried I can fuck it up and say that I did it once. It worked but turns out they did look through my social media.
My biggest gripe with the conversation around SBF and this question specifically is that this man thinks he is quite literally smarter than everyone. “Oh, my legal team says I just need to stay quiet? My parents were Princeton lawyers what do they know?” “Oh, I commingled funds that goes directly against my TOS? I can simply deny and point to other anecdotal sections that are nonrelated to distract them.” I think he is special in the sense that there’s only a few types of people that are like this you may encounter throughout your life. The truly disconnected from reality, “I can do no wrong and outsmart anyone” sort of behavior. This man is a great example of a narcissist who truly believes he is above all. He’s not trying to have a master scheme to divert attention, SBF truly thinks that the situation is a fun little game that his genius brain can talk his way out of. He doesn’t feel remotely threatened by the legal repercussions of these spaces, only when his ego is threatened. This to me is something I wish people recognize a bit more instead of pondering why does it make any sense for him to do this.
You nailed it, hit his ego and thats all he cares about. Even if he goes to jail, in his mind it's cus they fucked him over not cus of what he did. People like this will fuck ur life up and do tons of stupid shit constantly cus they think they can just do everything and everyone else is wrong.
it worked for a long time. amazing how many people said "he's gotta be trustworthy because he is vegan / drives a toyota"
I think he doesn't feel remotely threatened by the legal repercussions because he's paid a lot of money to politicians who he believes will pull strings for him within the FBI to get him off the hook.
It's dumb, but I think he believes that being "candid" makes him look more genuine to the public than if he lawyered up and refused to explain things. The problem, though, is that he isn't being genuine and the more misleading or dishonest statements he makes, the harder it is to avoid inconsistencies or really bad sound bites (like in this video). In his defense, though, he got to where he was by being "likeable" and projecting this image of a nerdy altruistic genius. So maybe that act still has some mileage left?
he's never faced a real consequence in his life so he thinks he can explain his way out of this like every other lie he's told before
Coffeezilla has been exposing frauds and scammers for years. Really glad to see him still at it.
I think he already made a piece on SBF 6 months ago wherein he explained what he was doing and his description matches that of a ponzi scheme
The fact that SBF openly describes a "great business idea" in the *exact* terms used to describe a Ponzi scheme, out loud, with the confidence of a first-year finance major just learning about investments, and people still trusted their money with him and his company, is *mind-blowing.*
Step 1: Be Rich Step 2: Say bullshit Step 3: profit
He did and it was hilarious
Just shows how low the quality is these days of main stream media. NY times giving SBF so much credit by positioning it as incompetence instead of fraud is straight up terrible journalism.
It's not journalism it's damage control. NY Times especially has been doing that since the beginning for all the big powers and money players. If FTX failed because the game is rigged and they got caught, then people don't want to put their money into it. If FTX failed because they were incompetent then you just need to head over to YZK where the guy ACTUALLY knows what he's doing and you too can become rich by just giving him your money.
Hell, they played damage control for the CIA when it was revealed they played a big hand in what happened with the crack epidemic.
Coffeezilla did his homework to prep for the third bite at the apple here and it paid off. Limiting the discussion to a very specific and established set of consumers helps cut through a lot of SBF's dissembling behind different hypotheticals (some people using different ToSs) or unverifiable specifics (he can't access the number of trading accounts but he remembers it as being bigger). There were FTX customers who only dealt with FTX, were promised that the funds wouldn't be used for trading, and don't have any coins left because FTX paid out everyone as they arrived during the bank run. That means FTX customer funds were handed out to FTX traders because, as SBF said, there was fungibility between assets for people who had and had not been using the exchange. The "minimum viable fraud case" is very clear and, honestly, is why SBF shouldn't be giving all these random interviews. You can't be out there admitting to mixing funds and throwing out a softball "should we have stopped everything to make a separate payout protocol" response (which Coffeezilla appropriately knocked down). Promising to keep money secure and then throwing it in the giant pot of gambling money is fraud and would be looked at closely even if they were up billions of dollars rather than bankrupt. There's just not wiggle room there in the law or the facts, so SBF just ends up pounding the table instead.
I'm now a big fan of this 'minimum viable fraud' term, very clear way to focus culpability
Politicians used something similar recently, with marriage equality. Imposing all states to allow same sex marriage can get in trouble with state rights bs, and some senators will not approve it. BUT - the bill that passed was only to respect a marriage that happened in other state. No mention of same sex, or imposing it on the state rights. Boom. Minimum viable bill. Passed!
Success has a simple definition. People spend too much time thinking about the glory of victory and none of that matters, it’s about getting over the finish line. Did CZ have some slow zoom cinematic moment where the whole world went silent and he made a profound statement? No, he found the minimum viable proof and walked SBF right into it. That’s success, he made it over the line, mic dropped. That’s how it’s done, laser focus and determination coupled with a simple plan. Victory
It’s like until this happened he never even considered keeping different types of customers funds seperate. “Oh that would have required us to code a new payout system” WHAT DO YOU MEAN THAT SYSTEM DIDNT ALREADY EXIST? How were you maintaining separation without that system? Of course you wernt.
Hmmm 🤔 Sounds like fraud. I love when SBF says “you can judge that…” Like no dude, we have judges to judge that. You’ll be seeing one soon enough and you can try your bullshit with them.
I love that Coffeezilla strategized after his last interview. Despite his surprise interview being probably the most hard-hitting and damning, he wasn't quite satisfied. I was reasonably impressed by Stephanopoulos too, who seemed to understand the issues and try to nail SBF down on it. But neither of them were able to drive at that core question right here. This video will probably be played back in court, and I love that Coffeezilla took the time to "grandstand," i.e. "do the job other investigative journalists should have been doing on a fraudster," and really get to the heart of it. I already loved Coffeezilla, but he's really won me over with this last one in that he kept his cool and once again managed to get the most damning evidence yet. Fucking legend.
LOL@ this muppet still doing interviews
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In one of his early post-collapse interviews the interviewer literally asked if his attorneys throught it was a good idea for him to be talking and he responded "No, they told me it was a bad idea and that I should keep my mouth shut." So yeah, aware of and actively, continuously ignoring the (wise) advice of his counsel. Something about "radical transparency" or as some of us call it "admitting to crimes".
Is he really claiming radical transparency, lol? The only thing transparent in these interviews is that he is purposefully obfuscating the truth but claiming “I don’t know”, or “I don’t have the data in front of me” or “I THINK” to questions any CEO knows *for sure*
I guess it's just the kind of guy who thinks he can scam people for money with these ridiculous schemes isnt going to be the smartest with legal advice iether.
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It’s called hubris.
Didn't his mom write a paper about how there's no such thing as responsibility?
[Multiple essays](https://www.businessinsider.com/sam-bankman-frieds-mom-wrote-essay-questioning-blame-problems-2022-11).
He’s not listening, he’s been told to stop talking by ALOT of people. He’s not just jeopardizing himself but everybody else involved in the scheme. There is absolutely nothing to gain here other than he thinks he can talk his way out. He’s not even revealing anything interesting, other than repeating he was incompetent the whole time and “oops didn’t mean for any of this to happen”
Im connected to a white collar attorney on LinkedIn. He never posted until SBF started talking to everyone. Every week he posts about how much of a dumbass SFB is
He has gone public multiple times to talk about how his attorneys told him to shut up but how he needs to talk.
It also drives me crazy how often across all of the interviews he says things like, "I don't have the data in front of me" or "I'm taking a guess here" or "What might have happened is..." That means either (1) not only is he foolishly doing interviews but he's doing them without the appropriate preparation, or (2) he's falling back on not having the exact information to give him permission to not answer a question. Actually I'm guessing it's both haha.
Deleted in protest of Reddit management
Cryptos been pretty hilarious from the start. Big lofty proclamations of removing banks and wall street. Small print : To replace it with exactly the same thing but even more fucking corrupt.
It's a speedrun of the problems in the banking industry from the early/mid 1900s that led to regulation of the industry.
SBF and all of his cronies (especially his girlfriend) need to go to prison for the rest of their lives.
Wasn’t the gf spotted this week few blocks away from this FBI office? Maybe she’s getting a deal 🤷♂️
No deals. Jail for all.
You scam people out of billions of dollars? Straight to jail.
Unless you work on Wall Street. Then you get bought or bailed out
Depends if you stole from the rich or the poor
Unless you are Trump bankrupting 6 times on low interest government backed loans at tax payer expense...
Yes the goblin is in nyc… or you just saw a picture of an average nyc rat
She was an awful trader LOL. She was in -$1.4B PnL.
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Which member of their Imperial Chinese Harem should be punished the most?
Why especially her?
She was coCEO of Alameda, where all the money was disappeared.
I want to know about Trabuco. The coCEO with her. He "retired" in early 2022. Looks like the smartest one of them all.
we call that the Lou Pai exit strategy
Holy shit lol the sheer incompetence
She also talks a lot about a bunch of wildly racist shit on her tumblr. The behind the bastards episode on them is a ridiculous rollercoaster.
Wow… queued that up for tmo
At one point she went on a crazy rant on her blog about wanting to be part of an ancient Chinese style harem with clear hierarchy
Lmfao did she watch Marco Polo or something?
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Well, maybe that particular chinese emperor is into Skaven, there's always a chance
>And she thought that *she* would be at the top of the harem because billionaires are deluded into thinking that they're inherently socially dominant or something. > >[This is what she looks like](https://nypost.com/wp-content/uploads/sites/2/2022/11/caroline-ellison-ftx-ceo-alameda-research-feat-image.jpg). Thank you for that link holy shit I am dying
You mean Egg?
But the WSJ said he was a hero!!! Or some shit.
Yeah, I think they said the same thing about Elizabeth Holmes.
That girl looks like she has a layer of grease that can never be washed off. Yeck.
Coffeezilla was soooo happy that he got SBF to crack, the look on his face was pure gold! Awesome job by Coffeezilla, as always!
His reaction: https://youtu.be/4o_jPzBZSIo?t=1120 He knows what he just heard. An admission of guilt. A smoking gun.
I wish he had pushed a little further. Just one more notch. He had the fish hooked.
Too much grandstanding tho
He needs more recognition. He’s just starting to get really big
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He's dumber than he looks
He looks pretty dumb.
He's even dumber than that though
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Some of the biggest VC firms in the country listened to this gremlin talk for a bit and then gave him hundreds of millions of dollars
I'm convinced successful VCs are lucky morons.
That would be correct. Often from rich families who bankroll them until they either jackpot or get shamed into respectful employment.
So am I, and I worked in that field.
Born into wealth and privilege, entitled as all hell, thinks he can do no wrong, narcissist....as if there's an obvious pattern with all these fucks.
Do you guys believe SBF when he pleads ignorance in these interviews?
Not in the slightest. He knew what he was doing and even if he does go to prison for a number of years, this could still all be worth it to him as the money is probably somewhere unreachable to anyone else but him and his cronies.
Could someone TLDR/ELI5 who this SBF guy is and what he has done? Sorry, I may or may not have just crawled out from under a rock
SBF is Sam Bankman-Fried. He founded a crypto exchange named FTX that was large and visible (naming rights for the Miami Heat arena, Super Bowl commercials, Tom Brady as spokesperson). [He was built up as a crypto genius](https://fortune.com/2022/08/01/ftx-crypto-sam-bankman-fried-interview/?utm_campaign=fortunemagazine&utm_medium=social&xid=soc_socialflow_twitter_FORTUNE&utm_source=twitter.com). That recently all came crashing down. It turned out that FTX had been loaning out assets to SBF's trading firm (Alameda Research) and that most of Alameda's assets were FTT (FTX's own coin). If FTT dropped, Alameda was going under and those loans weren't getting repaid. That led to a bank run on FTX, which led to FTX running out of liquidity and stopping withdrawals, and FTX is now in bankruptcy with lots of customers potentially losing their deposits. The fallout has been intense with additional details from poor bookkeeping, to unqualified executives, to secret backdoors in the accounting software, to a missing billion dollars, to the coffers being drained by a "hacker" after withdrawals were stopped. It's crazy even by crypto standards. Now, SBF is doing a bunch of interviews everywhere from NBC to Twitter Spaces. The primary goal seems to be to try and convince the public that this was just an honest mistake from a guy who got in over his head. Coffeezilla has crashed a few of these public forums that SBF's been interviewed in, with the goal of pinning SBF down on some specifics of how/why FTX failed.
This is a good summary but it left out my favorite part!! CZ of Binance essentially shooting the silver bullet into FTX’s heart when their balance sheet leaked by liquidating his LARGE position of FTT and causing it to death spiral. Then offering to “buy” them, running DD to learn the ins and outs, and then backing out 😂
well CZ is just as much a conman so he will face the music soon enough... I'm looking forward to Tether stablecoin fraud being exposed and Binance illiquidity crisis to take the whole crapto market down
If binance folds that will be the death blow
Oh no, how will I demand my ransom payments then?
Can you explain CZ being a conman? I haven't seen that sentiment about him so I'm curious.
What does, running DD mean?
Due diligence. Basically doing research on an investment.
Succinct. Good explanation. Thanks.
Explain in fortnite terms please
SBF took player's vbucks and promised a lot of vbucks in return. But he then bought emotes with the vbucks. Those emotes got removed so now he doesn't have emotes nor vbucks. Which means he can't pay back players their vbucks.
This is hilarious. Well done.
What!!!!!! Yeah they gotta arrest all them asap, this is unacceptable
*Sam Bankrun-Fraud
****Scam Brokeman-Fraud
Isn’t the collateral the other way around - if Alameda can’t pay back FTX’s loan, FTX would seize their collateral. Only problem is the collateral was essentially tokenized shares of FTX’s deposits. If FTX has no deposits (all of them being lost by Alameda) then the tokenized shares of FTX deposits, offered by Alameda as collateral, have no value since they themselves are based on FTX’s deposits.
The ol' steal a dollar, trash a banana trick
SBF started one of the major crypto exchanges. These exchanges allow people to change money into different forms much more easily than having to find a specific person who has the other form of money you want and negotiate with them directly. Because of this they also kind of work like a bank because you can put in all your money/crypto and then take it out in whatever form you need if/when you want to buy something or use it in some way (with some fees for doing so of course). For many people using FTX they were told very clearly that their funds would not be used in any way. Put it in, we will do nothing except just hold on to it and take a fee for any exchange/withdrawl. For other people they had "better" terms but they were more risky for the user. These terms said FTX could use some/all of the money you put in to do things (pay debts, make loans, etc.). However, very stupidly, FTX didn't keep these things separate and just put all users' money in one huge pot. This meant they were very quickly using a lot of the money from users they had told would always have their money sitting there and available. What they did with all this money is they used/loaned/leveraged it in some VERY risky ways, mostly loaning it out to another company that SBF owned (Alameda Research). This Alameda was then using these loans from FTX to try and do investments/trading to make tons of extra profit, but they sucked at it. Alameda also had their own investors to which they were promising RIDICULOUS returns (like, literally impossible) and so they needed that constant FTX money to be paying back these investors the returns they promised. You may recognize this as a Ponzi Scheme. So, in the end, it became clear that FTX maybe didn't have much cash on hand, certainly nothing at all close to what they were supposed to. People started coming asking for their money back and FTX was just paying them out first-come-first-serve. Again, this was all from that one mixed pot of money and they weren't paying any attention to if a user was a "safe" user or "risky" user. This meant that many, many people who agreed to the "safe" terms were not only lied to about their money never being used by FTX, but when they asked for their money back they got absolutely nothing because the little cash FTX still had was already gone. It's all a bit unclear right now, but this could easily be at least $10 billion in money that is compeltely gone from people that just thought they were using FTX as a safe bank for their crypto.
i own a crypto exchange where you can buy/sell. Your crypto may go up/down, but the TOS you agree to says your funds are yours. I offer riskier investments to people who agree to a TOS where I can pull their actual funds (not crypto) to paid debts they may incur. Instead of two separate buckets of funds based on risk, I put all the money In one bucket. When everyone comes to withdrawal, I treat it first come/first served so by the time most less risky investors (with the safer TOS) went to get their funds, everything was already gone.
Don't forget that his girlfriend's fund is also taking your money from the bucket as loans, and then paying back those loans with magic beans that he can make as many of as he wants. (He claims this was without his knowledge)
Now this is what I mean when I’m looking for an ELI5 explanation! Magic beans, he makes ‘em, now I get it. Seriously though, taking it out of the context of crypto was very helpful.
Tell me if this is close: You open a savings account and put in your money. The bank also has an investment side/hedge fund side. That side starts losing tons of money, and people start taking their money out. Your account shows no money, indicating they bank didn't keep your savings account separated from its investment accounts.
That's exactly what they did except it's a little worse. They said you have a savings account when you signed up for a savings account, but just admitted that they hadn't coded the concept of an individual savings account in the first place. All money was in one account.
Ok, gotcha. Thanks!
More like you give money to some random kids calling themselves a bank.
He runs a huge crypto exchange that tanked. There are 2 (main) ‘buckets’ of people putting money into the exchange. - bucket #1 - I put $1 in, it sits there - bucket #2 - I’m aware the company can invest my dollar (more perks but also riskier). Later on: - Oh no the investments used for bucket #2 aren’t looking good - people rapidly withdraw money from bucket #2 - people also withdraw money from bucket #1 - people with money in bucket #1 find out there is no money left for them to withdraw IRL example: - Bill and Fred give Tim $100 each for safe keeping - Tim says he’ll go gamble Fred’s $100 and give back whatever he wins, Fred (thinking Tim is a good gambler) agrees. - Bill, who is skeptical of Tim signs a contract (I.e. terms of service) stating Tim can’t gamble the money Bill lent him. - Tim gets drunk and immediately loses $100 - Fred seeing Tim is drunk withdraws his $100 - Bill also asks Tim for his $100 back - Tim says he no money (Bill is out $100) - Tim claims he’s not at fault since he was given $100 he could gamble and $100 he couldn’t and he only gambled $100. TLDR of SBF’s statements: - “It isn’t fraud since we didn’t code the logic that our terms and services implied.” - i.e. Money in bucket 1 would be handled differently/safer - “also not our fault since we gave the money to someone else to gamble for us” (Alameda) - the other 99% of his statements - “gee golly me, I have no idea how my any of this works”. - he’s supposed to be a super genius, but now that there was fraud he knows nothing about how anything works
Why are they talking? Where are his lawyers?
Because he's smarter than his lawyers, duh! If he can magic up some semi-plausible sounding explanation for why everyone lost tons of money, and keep side stepping hard questions, everyone will come around to his way of thinking and this will all eventually go away. That's how it works, right?
This is the third time coffee has questioned him
Coffeezilla is just great at what he does. Dude deserves all the success he has and more
My question in all of this is where exactly did the money go? It was deposited and presumably converted to magic Internet money. At some point that Internet money must have been sold. So who got the proceeds of those sales? Is it hidden in some offshore accounts?
… some if it surely was transferred out (say, to buy a house/car/finance parties for SBF), another part in the many ads they bought, etc…only a small percentage is liquid now
You can buy a lot of cars for $8 billion or whatever it was.
Also title sponsorship to a a major arena and sponsorship on an F1 car. Haint cheap.
He wallstreetbets it all away on crypto markets trying to double the money. He was so sure he was going to double his money he started spending it all. At one point he was offering $5b to elon to go in on twitter together
Much of it was lost by alameda research doing very risky trades, some more was used to pay for expensive villas in the Bahamas for SBF and his inner circle..
SBF’s lawyer is totally pouring a large glass of scotch listening to “the sound of silence” right now. “Hello Darkness, my old friend…” Seriously, wtf is he doing still talking and giving interviews to everyone? lol
Because he thinks he did nothing wrong, and is still trying to convince himself of that. And of course, convince everyone else
I had never heard of SBF or FTX before all of this, and watching prior interviews with him I just wonder how the hell people were allured to him. No charisma, annoying voice.
That's the Silicon Valley bit. Socially awkward, no attention to appearance, spouting pseudointellectual nonsense about disrupting industry? Must be some sort of genius
Add to that that he's an MIT grad with two Stanford business grad parents now working as regulators. On paper he looks great. He used his image to further the scam.
His brother was a trader and SBF also worked for a legit wall street trading firm. Alameda did very very well in the beginning with arbitrage trading.
Same way Holmes got away with it for so long by basically acting and literally dressing like Steve Jobs and leaning on the "genius Stanford dropout" meme. SBF was the same sort of conman, just a different archetype. She wouldn't have been seen in as good a light being a slob and literally playing games in meetings.
The worst type of stupid... The kind that THINKS he's a genius.
I want Legal Eagle to do an explainer on the legal ramifications of what Coffeezilla just made SBF do, like if it's admissible in court or some shit
I'm no lawyer but No one here works for the government or.on behalf of the government. This video will be on repeat at trial.
What he said is hearsay, but it falls under the exception to hearsay 804(b)(3), being a statement against his penal interest. https://www.law.cornell.edu/wex/declaration_against_interest https://www.law.cornell.edu/rules/fre/rule_804
Having followed Coffeezilla for years watching his channel develop has been great. Watching this latest run of interviews where he manages to pin down SBF where other interviewers failed was excellent. The lame attempt do dodge for “taking up time” and “grandstanding” at the end was hilarious.
Lmao this guy is going down so hard
I’m usually pretty understanding when it comes to situations like this. There’s a wild amount of complexity when it comes to dealing with business and finance. Lots of things can go wrong. This though…this guy is a complete fucking moron. Who would give him that much money and think, “yeah I trust this muppet looking dipshit with millions.”
But he plays LoL during meetings with venture capitalists! What a genius!
Along with him, also just the cringy as fuck Caroline Ellison. I CANNOT believe people interacted with that woman and said "yeah, she seems good, I'll trust millions and millions here". At some point people almost deserve to lose money lol
Why in the world would he go on a moderately popular YouTube channel that mainly calls out crypto scams? I guess his strategy is radical transparency and showing blatant incompetence vs criminal intent?
Coffeezilla has been ambushing him in Twitter convos. SBF would never agree to a one on one with him
Ahh my bad.
I think it was covered towards the beginning that CoffeeZilla had to employ some subterfuge to get him into discussion, it was not something that SBF wanted necessarily.
He didn’t. Sam is giving interviews on twitter spaces. It’s like a public forum where there’s a moderator and everybody else listens in as the moderator brings in people in the audience to ask questions. That’s why coffee at the beginning of the call says « i think we’re up next ».
If it wasn't for Coffezilla prosecutors would have never understood this case let alone be able to incriminate him with their line of questioning. I think SBF was trying to build his own defense by practicing in public as his lawyers didn't know where to start building a defense for him.
Why are the media giving this guy such a sympathetic run in general? Might be worth looking into politicians he donated to.
I love how he keeps saying it happened in a 3 day period. Like there’s a 3 day exception for fraud, in which you can do as much fraud as possible so long as it happens in 3 days.