So this guy Bankman-Fried now known as a thief and fraudster is a son of a Stanford tax law professor.
His girlfriend and accomplice, on the run now, is the daughter of an MIT economics professor. Who was colleage to the current head of the Securities and Exchange Commission which was supposed to regulate these "markets".
These are the people running things. And they learned from they fathers didn't they? Do huge frauds, spend millions bribing, erm "donating to" politicians, and expect to get away with it.
Is it just a case of the generation being even more arrogant, overdoing it and having things blow before political cover is bought and put into place? I think not. It's worth researching just who is doing these frauds. They're no innocent youngsters, they are the sons and daughters of the "elites" running things. They're not doing it on their own.
And make no mistake, all these exchanges and funds are frauds, they produce nothing and have no viable business model other than stealing. Fees on an unproductive activity cannot work long term. Traditional banking and exchanges, financial services", are leeches on an economy that produces real stuff. Cryptocrap produces no wealth. Leeches can only get fat by outright stealing from the others playing along.
Right now, the scam is mostly around the idea that you can conveniently store crypto. I think there's no real scam about intrinsic value, where mostly people know that there isn't any and know that they're taking a risk as to why their guess that it will later is true.
But, you know what? As I type I realize: I don't know if the people being scammed just can't get their money out or if they literally cannot access their tokens. Like, if you own crypto in a failing and locked down exchange ... can you just trade it elsewhere and it's your actual money that's been lost?
The really funny thing is that all the talking points used to pump bitcoin were total lies. The alleged advantages didn't exist in actual use. All all those building the cryptography infrastructure knew this perfectly well and were providing services that exploited the flaws. Pretending (and failing) to fix them
Anonymity - as soon as out into use it isn't, by design. Transactions are recorded forever, opposite cash. Therefore "mixers" - which are honeypots.
Safety - it requires a connection to the internet. It's hackable and inconvenient, therefore exchages - which are theft centrals.
Scalability - it wasn't scalable, by design. It can't replace banking, therefore also exchanges and online wallets - see above.
And decentralized? Only in the sense that no state insures loses due to those exchanges stealing your invested funds!
So this guy Bankman-Fried now known as a thief and fraudster is a son of a Stanford tax law professor.
His girlfriend and accomplice, on the run now, is the daughter of an MIT economics professor. Who was colleage to the current head of the Securities and Exchange Commission which was supposed to regulate these "markets".
These are the people running things. And they learned from they fathers didn't they? Do huge frauds, spend millions bribing, erm "donating to" politicians, and expect to get away with it.
Is it just a case of the generation being even more arrogant, overdoing it and having things blow before political cover is bought and put into place? I think not. It's worth researching just who is doing these frauds. They're no innocent youngsters, they are the sons and daughters of the "elites" running things. They're not doing it on their own.
And make no mistake, all these exchanges and funds are frauds, they produce nothing and have no viable business model other than stealing. Fees on an unproductive activity cannot work long term. Traditional banking and exchanges, financial services", are leeches on an economy that produces real stuff. Cryptocrap produces no wealth. Leeches can only get fat by outright stealing from the others playing along.
John Ray III might be feeling stunned disbelief, but a million people? are counting on him and the remaining employees to get some of their money back.
Apparently this crypto thing has "whales" that must draw in small fish and eat their money so as to exit wealthy. Before the scheme blows.
I'm just wondering why it's taking so long for all the other crypto-ponzi schemes to blow.
Billions of dollars of customer funds secreted over to his girlfriend's trading company for some good old wheeling and dealing?
We are all eager for details of what actually happened!
Notable elements of the criminal enterprise disguised as decentralised platform of “the future”. (From the affidavit you posted)
The FTX Group’s approach to human resources combined employees of various entities and outside contractors, with unclear records and lines of responsibility. At this time, the Debtors have been unable to prepare a complete list of who worked for the FTX Group as of the Petition Date, or the terms of their employment
The Debtors did not have the type of disbursement controls that I believe are appropriate for a business enterprise. For example, employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis
In the Bahamas, I understand that corporate funds of the FTX Group were used to purchase homes and other personal items for employees and advisors. I understand that there does not appear to be documentation for certain of these transactions as loans, and that certain real estate was recorded in the personal name of these employees and advisors on the records of the Bahamas
The Debtors have located and secured only a fraction of the digital assets of the FTX Group that they hope to recover in these Chapter 11 Cases. The Debtors have secured in new cold wallets approximately $740 million of cryptocurrency that the Debtors believe is attributable to either the WRS, Alameda and/or Dotcom Silos. The Debtors have not yet been able to determine how much of this cryptocurrency is allocable to each Silo, or even if such an allocation can be determined
The FTX Group did not keep appropriate books and records, or security controls, with respect to its digital assets. Mr. Bankman-Fried and Mr. Wang controlled access to digital assets of the main businesses in the FTX Group (with the exception of LedgerX, regulated by the CFTC, and certain other regulated and/or licensed subsidiaries). Unacceptable management practices included the use of an unsecured group email account as the root user to access confidential private keys and critically sensitive data for the FTX Group companies around the world, the absence of daily reconciliation of positions on the blockchain, the use of software to conceal the misuse of customer funds, the secret exemption of Alameda from certain aspects of FTX.com’s auto
-liquidation protocol, and the absence of independent governance as between Alameda (owned 90% by Mr. Bankman-Fried and 10% by Mr. Wang) and the Dotcom Silo (in which third parties had invested)
I don’t think ALL crypto-ponzi schemes will blow. Some of them will, a small% out of ~22000 total, as usual. The fallout from world recession, which was initiated last November, is claiming the weak. As soon as tech sector, and the general economy, recovers from shock, “casino stocks” aka crypto will follow, everyone will quickly forget the ponzi part and recommence investment into the dark anarchic decentralised future.
Apparently this crypto thing has "whales" that must draw in small fish and eat their money so as to exit wealthy. Before the scheme blows.
I'm just wondering why it's taking so long for all the other crypto-ponzi schemes to blow.
I guess two things are going on: firstly the values of other schemes have dropped and speculators are often reluctant to accept
such losses by withdrawing and so dither; and secondly from reading between the lines in the Times (DTF) articles it seems that
the line being put about is that the collapse of FTX is causing a panic in sound schemes such as ours so we are slowing withdrawal
transactions down, they are likely hoping such delay will enable them as insiders with contacts to disengage before collapse occurs.
@Moriarte and @EnglishEdward I'm afraid you will be both right. Losers in denial and that excuse of "preventing panic" will allow more thieves to take the loot and disappear. And people won't learn any long-lasting lesson. There's also always new marks being born isn't it?
Sam Bankman-Fried, who co-founded major exchange FTX which he recently declared insolvent, has taken to Twitter to tell the community that he would like to start his business all over
cryptonews.net
15) A few weeks ago, FTX was handling ~$10b/day of volume and billions of transfers.
But there was too much leverage--more than I realized. A run on the bank and market crash exhausted liquidity.
So what can I try to do? Raise liquidity, make customers whole, and restart.
Crypto wunderkind Sam Bankman-Fried is now the 25th wealthiest person in America, four months before his 30th birthday, after a $421 million funding round for his FTX exchange.
www.forbes.com
Spoiler:
The son of two Stanford law professors, he toyed with the idea of becoming a physics professor while studying the subject at MIT, but ultimately decided to seek a more lucrative career because he thought it would enable him to donate more money to charity. His firm belief in “effective altruism,” the utilitarian-inflected notion of doing the most good possible, led him to take a job trading ETFs for quant firm Jane Street and donate a chunk of his six-figure salary. Then it led him to quit that gig and plunge into the crypto world, where he spied an opportunity to make a fortune arbitraging bitcoin by buying it in the U.S. and selling it in Japan for up to 30% more.
“I got involved in crypto without any idea what crypto was,” Bankman-Fried told Forbes last month. “It just seemed like there was a lot of good trading to do.”
He founded Alameda Research, a trading firm, and then—frustrated by the quality of the major crypto exchanges, which weren’t equipped to handle professional traders moving large sums at rapid speeds—launched his own exchange in 2019. In just two years of catering to the more-sophisticated trader, FTX has gotten huge: it now handles $14 billion worth of trades every day, according to a press release, placing it among the largest crypto exchanges in the world. Much of its volume comes from derivatives trading—things like bitcoin options or Ethereum futures. Last year FTX generated some $350 million in profit on about $750 million in revenue by pocketing an average of 0.02% of each trade made on its platform. FTX says its user base has grown by 48% and its average trade volume has jumped by 75% since July of this year alone.
That’s when investors like SoftBank and Coinbase Ventures pumped $1 billion into the business at an $18 billion valuation. He’s been using that haul to make strategic buys like a New York-based exchange that could allow FTX to be the first major crypto exchange to offer derivative products in America, ahead of competitors like Binance, Coinbase and Kraken. And he’s been stamping the FTX brand everywhere possible, including a $210 million deal to rename leading esports league TSM and a $135 million deal to rename the Miami Heat’s arena, plus a $30 million ad campaign to promote FTX through ambassadors such as Shark Tank star Kevin O’Leary, NFL legend Tom Brady and NBA superstar Steph Curry, each of whom have equity in FTX.
The immediate goal: to establish his young crypto exchange as something safe, dependable and regulatory compliant. The longer-term plan: to give all the money he makes to charity. “My goal is to have impact,” Bankman-Fried told Forbes. So far, he’s only donated about $25 million, to causes like voter registration, global poverty mitigation and artificial intelligence safety—the rough mathematical equivalent of a typical 29-year-old American stuffing $15 into a Salvation Army bucket. Nearly all of his estimated $26.5 billion fortune is tied up in his ownership of about half of FTX, a share of its FTT tokens and a few billion dollars’ worth of other cryptocurrencies he’s backing. He’s betting he can give away billions more in the long-run by doubling down on crypto instead of cashing out now.
Investor money can be spent frivolously.
So can trading fee profits.
Everyone is wondering about the FTX customer funds.
Alemeda did all their trading as a separate business.
FTX gave a discount on trading fees as a token.
Sort of like a coupon?
33% of trading fee money was used to buy them back constantly and retire them.
Alemeda owned most of these tokens.
They borrowed lots of customers funds from FTX using the tokens as collateral?
FTX's big rival also had a bunch of these tokens.
Tried to sell $500 million worth.
Alameda was alarmed and offered $250 million full price? I think.
Binance said nah, and the price cratered on the free market.
Yeah, that’s the theme with most crypto projects. Ended up near the very top by winds of fortune, to be taken advantage of by a seasoned crowd of finance professionals. Decentralisation, delegation of responsibility, incompetence! How many more of these projects are governed like this? After the fallout (and the economy crash) people are slowly waking up to the fact that only the biggest crypto whales can be somewhat trusted with their vision, procedural framework, if at all. Much like Amazon, Nvidia, Apple, the crypto whales (btc, eth) will slowly grow by integrating smaller projects. There is little trust left in penny crypto, no matter how decentralised it tries to appear.
It sounds like there is an actual market need for stable coin, in order to allow international transfers at scale much more quickly. That would be a branch of crypto use that would be invisible to me, but would actually have value
It sounds like there is an actual market need for stable coin, in order to allow international transfers at scale much more quickly. That would be a branch of crypto use that would be invisible to me, but would actually have value
I totally do not get why. Blockchains are great if no one trusts anyone, but they are spectacularly inefficient in terms of computing resources so it should be much slower to move money with them. Banks have complete control over the system, and at least for inter bank transfers sort of trust the other party. They should be able to move money a million times quicker that on a blockchain., but cannot. There is no technical reason why, so I do not see a technical solution being required to solve the problem.
And yet, as far as I know, settling transfers internationally takes way more time than people would prefer.
Full caveat, I have no idea how Banks transfer money to each other. Like, why they even believe each other when it comes to the amount of deposits they hold.
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