'I Don't Even Know How To Code': FTX's Sam Bankman-Fried Has Long, Candid Talk With Vlogger (cointelegraph.com) 55
Former FTX head Sam Bankman-Fried (SBF) selected cryptocurrency vlogger Tiffany Fong for a series of lengthy and candid telephone interviews. In the two interviews that had been released on YouTube at press time, SBF speaks about many of the major questions connected with the collapse of FTX. CoinTelegraph reports: The first interview was conducted Nov. 6 and released Nov. 29 on YouTube. [...] The recording began with SBF saying, "You don't get into the situation we got in if you, like, make all the right decisions." Taking her cue from that, Fong started her interview by asking about the "backdoor" that allowed SBF "to execute commands that could alter the [FTX] company's financial records without alerting others." SBF expressed surprise at the very idea. "And this is something I would be doing?" he asked. "That I can tell you is definitely not true. I don't even know how to code. [...] I literally never even opened the code for any of FTX." This set the tone for the rest of the conversation, in which Fong politely asked hardball questions and SBF answered with seeming openness.
SBF went on to comment on FTX's FTT coin. "I think it had real value. That being said, there are a few problems. [...] This was f*****g embarrassing given my background. [...] I think it was basically more legit than a lot of tokens in some ways. Its was more economically underpinned than the average token was," he said. "Illiquidity didn't cause the crash," SBF continued. Rather, it was "the massive correlation of things during market moves, especially when they are triggered by fear over the position itself." SBF agreed with Fong that "the recovery looks pretty slim" for international customers, while "U.S. is a hundred percent. If its Amazon account had not been turned off, "they could already be withdrawing." Speaking about his political activities, SBF said, "I donated about the same to both parties. [...] All of my Republican donations were dark." [...]
In the second, undated, phone interview, SBF addressed the use of FTX customer funds by Alameda Research. Struggling for words, SBF said that he should have thought more about "what a hyper-correlated cross-scenario looks like. It's the oldest game in the book in finance. [...] There was no one person in charge of monitoring risk positions at FTX." Fong pressed for specifics from the situation, with little success. SBF took a moderate position on the role of Binance CEO Changpeng Zhao (CZ) in the FTX downfall. "Things would certainly be a lot more stable and there would be a lot more ability to generate liquidity [...] and I don't know for sure." Asked about the impact of the collapse of FTX and surrounding scandal on him, SBF said, "I wake up each day and think about what happened, and I have hours per day to ruminate on it. [...] It's different than what it seems to other people."
SBF went on to comment on FTX's FTT coin. "I think it had real value. That being said, there are a few problems. [...] This was f*****g embarrassing given my background. [...] I think it was basically more legit than a lot of tokens in some ways. Its was more economically underpinned than the average token was," he said. "Illiquidity didn't cause the crash," SBF continued. Rather, it was "the massive correlation of things during market moves, especially when they are triggered by fear over the position itself." SBF agreed with Fong that "the recovery looks pretty slim" for international customers, while "U.S. is a hundred percent. If its Amazon account had not been turned off, "they could already be withdrawing." Speaking about his political activities, SBF said, "I donated about the same to both parties. [...] All of my Republican donations were dark." [...]
In the second, undated, phone interview, SBF addressed the use of FTX customer funds by Alameda Research. Struggling for words, SBF said that he should have thought more about "what a hyper-correlated cross-scenario looks like. It's the oldest game in the book in finance. [...] There was no one person in charge of monitoring risk positions at FTX." Fong pressed for specifics from the situation, with little success. SBF took a moderate position on the role of Binance CEO Changpeng Zhao (CZ) in the FTX downfall. "Things would certainly be a lot more stable and there would be a lot more ability to generate liquidity [...] and I don't know for sure." Asked about the impact of the collapse of FTX and surrounding scandal on him, SBF said, "I wake up each day and think about what happened, and I have hours per day to ruminate on it. [...] It's different than what it seems to other people."
Re: sudden urges (Score:1)
They still don't get it.
You don't need to know how to code... (Score:5, Insightful)
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THIS^^THIS^^THIS^^THIS
Re:You don't need to know how to code... (Score:4, Interesting)
Ponzi schemes are very specific. This is more along the lines of theft and fraud.
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Ponzi schemes use money from new investors to pay "investment returns" to old ones. That seems to be exactly what happened here.
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It does. While classical Ponzi operates on individual investor/victim level, crypto-"currencies" operate on a more global scale though. But if you look at a crypto-"currency" as a whole, the only money that comes out is money paid in by investors/victims and that is what it makes it a variation of the "Ponzi"-theme. As in a classical Ponzi-scheme, no value is generated (value is destroyed though), but the illusion of massive value generation is maintained while it runs and critical to attract more investors
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This is all absolutely true. But focusing just on the likes of FTX, which you can consider to be a scam even if you don't think the underlying crypto is a scam, what happened here was that the returns came from later FTX investors rather than from gains made from trading in the underlying crypto.
If you consider the underlying crypto to be a Ponzi scheme, as I do, then FTX could be considered to be a Ponzi squared scheme - a Ponzi scheme built on top of another Ponzi scheme
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Aehm, I do think the underlying crypto-"currency" is a scam?
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As time proves again and again. You also need no other skills besides the ability to convince people to give you their money. "Used car salesperson" type with some fake sophistication added, basically.
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“Oh, so money laundering combined with a Ponzi scheme! No I’m not into that.”
Then watch them melt down.
lying like a Putin. (Score:2)
This guy is competing with Vladimir Putin for the Liar Of The Year Award.
Waking Up in all the wrong places (Score:5, Insightful)
I wake up each day and think about what happened, and I have hours per day to ruminate on it.
Note he wakes up each day in his large mansion and ruminate on this instead of spending 24x7 ruminating in a prison somewhere... How this is possible I have no idea.
Well, I have some idea, money and lots of it applied to the right people.
Lawyers (Score:5, Insightful)
Open ended interviews when SBF is facing potential criminal charges is going to make it hard to find any lawyer that would still be willing to represent him. Especially since he's broke.
Re: Lawyers (Score:2)
Re:Lawyers (Score:4, Interesting)
Open ended interviews when SBF is facing potential criminal charges is going to make it hard to find any lawyer that would still be willing to represent him. Especially since he's broke.
No, that's not correct. He can find "any" lawyer to represent him whatever his financial status is. If he doesn't have money, he won't be able to get a "good" lawyer to represent him, which would be very very bad for him. There will certainly be lawyers who are willing to roll the dice on his case, even if for free, to try to make their name. As a reminder, former US Senator and Vice Presidential candidate John Edwards made his fame and fortune taking on - by himself - a car accident case that the senior partners he worked for wanted completely dropped. So yes, SBF can get somebody to be his lawyer even without money.
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Am pretty sure he has at least a few millions somewhere which people will not usually think to look. Or he has given away to people he trusts, which he can get back in an emergency.
Like his parents.
If I was a billionaire, am sure at least a few of my close friends will become millionaires due to their proximity to me. Gifts from me, extra business from me, etc. And I should be able to get some assistance from them if I suddenly end up in shit overnight.
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So prisoners can get some sex? I'm pretty sure this guy would make a great prison bitch.
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Prison? You really want a man like this in prison? Whatever the fuck for?... etc
I don't think this should be modded troll or whatever, I think it's a vey subtle joke and you're all missing it.
The American system of entrepreneurs depends upon that small, elite, privileged club being able to make investments and run businesses without fear, without the constant worry that someone might take away everything they ever had. Just because he failed and other people of equal honesty (or even less honesty) succeeded doesn't mean he shouldn't be allowed to try again.
Is pretty funny when you think about it. Also true, and sad.
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Note he wakes up each day in his large mansion and ruminate on this instead of spending 24x7 ruminating in a prison somewhere... How this is possible I have no idea.
Well, I have some idea, money and lots of it applied to the right people.
Indeed. The "cult of money" at work, where having (or successfully pretending to have) enough money makes you a minor deity and untouchable. And that status takes a time wear off, even if that money is gone.
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As much as I hate to stand up for the guy he has not been convicted of anything yet. He has not even been formally charged with anything illegal. Gross incompetence is legal, and so is being a smart ass.
The mess he made will take some sorting out to determine exactly what the charges are, and then he will be arrested and properly tried.
Maybe. Hunter Biden is not in jail even though he falsified the form to buy a gun. So once they have an exact charge worked up, then it comes down to who's protecting him. A
What value did this blogger bring? (Score:5, Insightful)
People pretending to be journalist interviewing a person pretending to be honest. Where are the hard hitting questions.
SBF knew exactly what he was doing, it wasnâ(TM)t a problem with the coin nor the market, the problem was that he took money he was supposed to bank and used it to fund other priorities (such as political donations, funding green initiatives etc).
SBF is saying is that once the shit hit the fan he couldnâ(TM)t get the money out of the investments fast enough to maintain the appearance of liquidity, he is basically saying: âoeI wouldnâ(TM)t have been caught if it werenâ(TM)t for those meddling investorsâ.
That and the other âoeinterviewâ where he basically admitted he used FTX as a way of redistributing wealth shows the dude has zero remorse.
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People pretending to be journalist interviewing a person pretending to be honest.
Nice summary. Gave me a good laugh.
Interview sounds like bull (Score:4, Informative)
The man said "hyper-correlated cross-scenario... oldest game in the book."
The oldest game in the book is not called a hyper-correlated cross-scenario. Those are modern jargon that no one 100 years ago would have heard of, and the best experts 10 years ago would have asked what they mean.
Worse, if you run a 'tech bro' business you have to be able to look at the code, even if you pay other to do so. Not even being capable of doing it means you have no idea what your code really does which means you do not care about the code, just the money. In other words, you are a con man who is trying to get money, not build a company.
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So...he's the fall guy for...? (Score:2)
Let's call him Mr. X.
If Mr. X knew what he was doing, he's chillin' somewhere in the quiet anonymity of plain sight and enjoying his riches inconspicuously.
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Am not.
But quite the social hacker (Score:1)
He can learn to code (Score:4, Insightful)
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Right. If you "invest" in something with no intrinsic value, you shouldn't feign surprise when it ends up being worth nothing. Risk/reward, people only looked at the possible reward, and ignored the huge risk. Gambling doesn't pay anyone except the house.
This is the canary in the coal mine... (Score:2)
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You know he's not in the US, right?
Yeah, none of his customers bothered to check either.
It must be said: (Score:2)
Do you even code, bro?
The Feds aren't his only problem (Score:2)
Interviewed by a crypto vlogger. Yes that really is Washington Post/Watergate levels of investigative journalism.
At this point he isn't just hiding from the feds, but other gentlemen who sniffing easy very large sums of money will quite happily grab him and torture him slowly to see what he has left and what he can give them.
legal defence: "I'm an idiot." (Score:3)
I don't think "I'm a complete fucking moron" is a defence in court, even in the USA. Even if you're a rich white moron doing white-collar crimes.
At least, I hope not. I look forward to him getting a similar sentence as Elizabeth Holmes, and for similar reasons.
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It is for any crime that requires evidence of intent. Those tend to attract more severe punishments than ones involving negligence.
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Prepping a defense. Weak. (Score:2)
This is where the co-conspirators starting turning on each other.
He clearly hasn't (Score:2)
Other people have said that this guy is probably headed for an Elizabeth Holmes type of outcome. I'm inclined to agree. This is gonna cost him a cool decade of his life and most of h
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So what? (Score:3)
Having done more than my share of code reviews back in the day, I can tell you most developers can't code, that doesn't stop them from doing it. They seem to be good at one thing though: Stack overflow. Not the website, the flaw.
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Hyper-correlated cross-scenario (Score:5, Interesting)
This "hyper-correlated cross-scenario" is a very fancy way of saying "we accepted our own token as collateral". While SBF tries to spin it as a liquidity problem, it's worse than that: if it was only a liquidity problem, customers would eventually get their money back as assets are sold off. Instead, their token (FTT) is worth a fraction of the price that it was accepted at and it's unlikely it will ever recover.
Too few people realize or want to acknowledge that for small quantities of tokens you can compute their value by multipying the amount by their current price, but for large quantities it doesn't work that way, as you cannot expect to sell all of them at the same price. People like to throw around huge "market caps" but these do not represent the actual value.
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I saw someone pointing out that we know of at least three cases of Bankman-Fraud pledging the same $450 million stake in Robinhood (perhaps his only actual security - not just crypto vapor) against debts. Probaby he pledged the same $450 million nine times to come up with $4 billion.
Either that or those new Bahamas digs had the world's largest couch.
Well now (Score:1)
Cosmopolis: Cronenberg + DeLillo (Score:2)
You know what to do.
Lawyer's Nightmare (Score:3)
A truly clueless former billionaire who lived his whole life through press hype alone and who does not realize when spin becomes self-incriminating remarks. Very likely he will continue trying to gab his way out this all the way through the trial.
This seems to be a syndrome among narcissistic rich folk - to be prone to burst into a toxic dumpster fire in the court room since all they understand is self-entitlement and self-justification.
Consider Elon Musk who very clearly had massive buyers remorse after impulsively signing the contract to buy Twitter, and then spent eight months trying to get out of it. But the prospect of testifying under oath in the court room before a Delaware Chancery Court judge who is not impressed by billionaire BS was enough to make him fork over $44 billion. His lawyers probably persuaded him that going under oath would be a disaster.
Also notice the old adage at work - "Owe a bank a thousand dollars you cannot pay, you have a serious problem. Owe a bank a billion dollars, the bank has a serious problem." People who are billions of dollars in debt are still somehow "rich" and have continue living lives of luxury.