For everyone on this thread making broad proclamations about how SBF won't go to jail because of American corruption--I'll see you back here in a year or two. Then we can have that conversation.
In the meantime, I suggest that you consider whether you would reevaluate your priors in any meaningful way if, as I expect, SBF is ultimately prosecuted.
For everyone on this thread making broad proclamations about how SBF will go to jail because of American justice--I'll see you back here in a year or two. Then we can have that conversation.
In the meantime, I suggest that you consider whether you would reevaluate your priors in any meaningful way if, as I expect, SBF is ultimately not prosecuted.
My bet is that he tries his hardest to never set foot on US soil again. He flees the Bahamas to a country without an extradition treaty and who also doesn't want to prosecute him -- the Bahamas likely does. So in a way, I think he may avoid prosecution, but not because of US corruption, but because he flees.
This is also why SBF can not testify to congress in person as he will likely be arrested once on US soil as a flight risk. Also why he didn't attend the recent NYTimes event in person -- again he can not step foot on US soil right now or probably ever again.
Can't be very expensive, probably minimum is a few hundred thousand to get setup somewhere new. With billions missing and dozens of shell companies and various assets all over the place in his name (because FTX lent him personally 100s of millions if not more), I have to imagine he has a few million accessible.
SBF can easily escape the first world and probably even the arm of the law.
But what is life like for someone living outside the law who stole billions from angry people including likely many criminals? His life expectancy would not be long.
Though cute, this is a vacuous reply. The fact is, the US justice system is quite good at prosecuting white collar crimes where:
1. A lot of money was lost, especially rich people's money.
2. The fraud is particularly egregious, that is where it wasn't just a one time thing, but where the whole enterprise was a house of cards.
3. Where there is a clear smoking gun.
1 and 2 are obviously true in the FTX case, and I think given what has been reported so far that #3 will also be fairly apparent (e.g. there are tweets SBF made at the end of September that were lies that deliberately tried to hide the token movement between Alameda and FTX).
I'd easily bet that SBF will, when all is said and done, spend at least a decade in jail.
Also SBF or FTX is not big existing financial institution with multiple layers of connections in network. His parent might be somewhat influential, but I don't think it goes too deep. And donations don't really matter if money doesn't keep coming.
Let's not forget extradition is in Bahamian jurisdiction. The Bahamian politicians will most likely want their cut and stall extradition, and to do that they can either 1) shake down FTX leaders or 2) cut a deal with US extradition courts for cash. I don't see 2) working out since the case is so public. There wont be a snatch and grab either. I don't see a extradition until all the local cash is gone from FTX leaders and the Bahamians lose interest which could be years if not a decade. I bet the Bahamians already took FTX leaders passports and are seizing properties.
SBF, the name of the visible head, is as good a collective label for the network of individual criminals and the many dozens of companies they used in their crimes as FTX, just one of the companies, is.
Except FTX is already a collective label, SBF is not.
Using SBF as a collective is a confusing and incorrect. If you want to use it as part of a collective label, you could use "SBF & co.", "SBF et al" or similar conventions for creating a collective label from a singular one.
We "overpayed" for her and everyone knows it. Getting taken advantage of is kind of the opposite of putting pressure on another country to make them do something that's a crap deal for them.
Depends on optics. This is controlled by executive branch and if they want portray themselves as hard on corruption, they’ll do it. You’ll see this on Americans arrested overseas. If it makes the media, the executive branch will flex its power. Just happened today with the basketball player caught with drugs in Russia.
"US blacklisting Bahamas with the various tools at its disposal isn’t worth it for Bahamas."
Really for SBF? Removing financial systems? I think this is a far stretch. Fraudsters are held up in extradition messes all the time. The US doesn't change international policy for a single case (usually).
Henry Kissinger (former United States Secretary of State);
Jim Mattis (retired Marine Corps four-star general);
George Shultz (former United States Secretary of State);
Richard Kovacevich (former CEO of Wells Fargo);
William Perry (former United States Secretary of Defense);
William Foege (former director of the Centers for Disease Control and Prevention).
She is like a little FTX in that sense.
But I don't believe the Clintons' are uniquely corrupt, rather just as corrupt as similarly powerful US politicians. I am not a believer if QAnon conspiracies.
She had connected investors who felt defrauded. That increased the odds of her getting convicted. If they thought there was still a chance of getting value out the odds would probably lean the other way.
I think if the system were as corrupt as you guys say, Holmes would have committed suicide or suffered some debilitating accident or something. Going to jail for just a few years doesn't feel like much of a dose of vengeance
Yes. What the performatively cynical crowd is missing is that SBF, like Elizabeth Holmes, stole from the rich.
Even for people who believe that everything is 100% corrupt 100% of the time in the American justice system, SBF going to jail should be seen as confirmation of that bias.
I believe SBF stated in a recent video that it might be possible for US clients to be “made whole” (indirectly stating everyone else will be fucked). So if he manages to return funds to US investors, would he still be likely to be prosecuted?
Everything is probabalistic. That would reduce the odds by reducing the number of powerful people putting pressure on prosecutors. But plenty of rich and powerful non-US people have influence in the US.
And stealing from the rich isn't the only factor at play here. Even if all of the money was returned to everyone, there are plenty of rich/powerful people and institutions who dislike crypto for various legit and corrupt reasons, so there would still be some pressure to prosecute.
IMO he's fucked, even aside from the stealing from the rich angle. It's just too high profile and too embarrassing to too many regulatory agencies. He's well into "make an example of" territory.
SBF also stated that he just needed to raise $8B and everything would be okay. I'm not sure if he's delusional or lying, or some combination of the two, but I think we're past the point where we should believe much of what he says.
Madoff had ‘borrowed from Peter to pay Paul’ and the victims were rich enough that they didn’t really spend the money so it was possible in the end to shuffle almost all of it back to its rightful owners.
Even if we take him at face value here (which we probably shouldn't) it isn't just money, he also made the rich people look like idiots. So retribution feels inevitable.
While FTX US did operate in the US, its finances were never nearly as fucked up as FTX (The Behamas company) was, especially with its relationship with Alameda.
Technically, updating priors wouldn't necessarily be warranted. Consider a statement X implies Y, e.g. The government is corrupt, which implies SBF won't go to jail. Just because X implies Y does not mean ~Y implies ~X. E.g. SBF going to jail does not imply the government is not corrupt.
Sure but it is a simple result in Bayesian statistics that if event X increases your confidence in fact Y then ~X should decrease your confidence in Y.
For example, if SBF evading jail would increase your confidence in the statement "The US justice system is wholly corrupt" then SBF being sentenced should decrease your confidence in it.
I get what you mean, but I think you've formulated this incorrectly. Let P(Y) be your prior about government corruption. Let X be the event that SBF is arrested. You want to compute P(Y|X) using the Bayesian update formula and then set P(Y) = P(Y|X). That is what is meant by re-evaluating your priors.
You're modelling X and Y as propositions and you're correct about the inference of ~X and ~Y, but Bayesian updating is about degree of belief in those propositions, which your inference is not a claim about.
¬Y=='Gov not corrupt' is not an option for those people who argue that the government is corrupt.
In conclusion, naysayers say he wont be convicted is imying and thus proves that the gov is corrupt. The top comment says he may get a sentence, meaning the government is not necessarily corrupt. Yaysayers say the gov is not corrupt and he will get a conviction iff he is guilty.
This is trivial, but difficult to formalize. Thanks for your correction.
I would formalize it as "(corruption ? ¬guilty) <-> ¬jail".
- If the government is corrupted it does not matter if SBF is guilty, he will not go jail.
- If the government is not corrupted and SBF is not guilty, he will not go to jail.
- Only if the government is not corrupted and SBF is guilty, he will go to jail.
The problem is: There are more factors in life that just a corrupted government and guilt. There are jurys, capable lawyers, incapable DAs, loopholes, you name it.
So in truth we have "(corruption ? ¬guilty ? X) <-> ¬jail", with X being the unknown. Thus, if SBF does not go to jail, it could be true that the government is not corrupted, that SBF is guilty, but any of the other factors were at work.
I think this is what people are really arguing about: what will be causally relevant for the outcome. Mind you, even a conviction would not convict (ha!) people that the convernment is not corrupt. They'd rather say that somebody did not pay enough, other interests were at work, aliens, and so on.
The truth is that you cannot infer much based on a singular outcome if you do not have extremely good insight into the mechanics behind the outcome. Which is precisely why people rather update priors as a way to build up an evaluation based on statistics over a longer time frame. Quite ingenious, if you ask me.
> Just because X implies Y does not mean ~Y implies ~X.
As others have mentioned, X implies Y does in fact require ~Y implies ~X. I think your example is confusing because "the government is corrupt" means many different things, but you're using it in a rather specific way ("the government is protecting SBF"). The equivalence of `X implies Y` and `~Y implies ~X` is more manifest through the following example
"The government is protecting SBF, so SBF won't go to jail"
and
"SBF went to jail, so the government wasn't protecting him."
In your example, according to logic, if X implies Y, then if you don't have Y, you necessarily don't have X. If this were a logic exercise, then not "SBF goes to jail" necessarily implies not "the government is not corrupt."
However, in real life there's no connection between the two.
There are two main stages to get through, for him to go to jail and then for him to stay in jail long enough for it to not seem like a total farce. At this point, maybe the former will still happen considering that it's been a month and no one's forgotten about him yet, but the latter is still pretty questionable.
Plus, if you were to ask me, I don't really have a specific sentence duration in mind which I would consider to be sufficiently long, so it would entirely come down to my takeaway from whatever the judge says.
Eg if the judge gives him ~10 years stating that he did indeed intentionally fraud people out of $8B, it'd be okay. But on the other hand, if it seems like they're intentionally avoiding the obvious fraud to make his charges weaker, it obviously won't be satisfying.
The guy was called literally Made off (paraphrasing a comedian). I'm not a believer in QAnon conspiracies but this one is hilarious.
Prison time won't bring back the money, meaning it is really just to satisfy a primitive urge for revenge. So what are you talking about, at that rate I won't do it, seems to work, see how it deterred SBF?!?
Some people feel that extreme sentences are deterrents, but studies show that people don't rationally calculate the expected value of their punishment. Almost nobody committing crimes thinks they'll get caught, so doubling jail time doesn't have much of a deterrent effect.
Almost everyone who commits crimes while expecting to get caught is in desperate circumstances (near starvation, jail preferable to available housing, loved one in big trouble, etc.), where the time isn't a big deterrent, either.
It's much more effective to increase (at least the perception) of the probability crimes will be caught and prosecuted. Excessive jail sentences presumably result in greater costs, meaning less money available on the investigation and prosecution side. (Yes, this makes faulty assumptions about how government budgeting works in practice.)
It's important to consider the impact of excessive jail sentences not only on the offenders, but also on society as a whole. Incarceration can have significant social and economic costs, including strained relationships between the incarcerated individual and their family and community, as well as reduced employment opportunities and income potential upon release. These factors can contribute to recidivism and create a cycle of crime and punishment.
At the same time, it's important to consider that there is an important emotional component to jail sentences. They aren't meant to be strictly utilitarian. Crimes of a large enough scale deserve severe punishment in part because it is important for the victims and society to feel that justice was served.
People are vocalizing their lack of trust in the government to serve justice in part because cases where people whom they feel deserved more punishment didn't receive it and similarly with people whom they feel didn't deserve as much punishment as they got.
I'm not a psychologist, but my feeling is that US culture's over-emphasis on punishment as a means for victims to find closure is a disservice to crime victims and their families. Particularly for major crimes that result in long trials, it seems like many victims or their families are strung along with the hope that the outcome of the trial will finally make them emotionally whole, only to discover at the end that no amount of punishment will make them feel whole. Their time, effort, and anxiety put into following the trial would have been much better spent trying to quickly move on to integration and acceptance. Waiting for the trial to end delays the healing process by years.
I think the importance of punishment as a factor isn't just a US thing. I think every justice system gives some importance to it. Plus, the idea (IMO) isn't that it'll make them whole, I think they're usually pretty cognizant of the fact that it won't. It's somewhat like the idea of karma.
An example that comes to mind is that for all the layoffs happening lately in the tech industry, a common sentiment here on HN seems to be that CEOs are talking about taking responsibility but usually don't really face proportional negative consequences to demonstrate how they're doing that. Similarly with criminals, of course you can and should rehabilitate them to prevent re-offending, but if that's all you focus on, you kind of miss out on making them take responsibility for their actions.
> so doubling jail time doesn't have much of a deterrent effect.
Doubling jail time probably doesn't move the needle much, but I would be very surprised if there wasn't a significant behavioral difference between "go to jail" and "don't go to jail at all".
Not a lawyer, but I'll piggyback to say that the inevitable indictment will likely require proving criminal intent, specifically that SBF knowingly and willingly engaged in fraud. The Justice Department won't indict SFB until they have ironclad evidence demonstrating as much.
Consider a rushed indictment: SBF can always invoke his right for a speedy trial (i.e., the prosecutors must be ready for trial within 6 months of indictment). The prosecution would thus be in the ineviable position of simultaneously gathering evidence and building the case. Alternatively, they could wait to indict until after they've gathered evidence, which will give them ample time to meticulously build a case against him.
Since the harm of losing the case is greater than the harm of letting him roam free for a couple years, a delayed indictment seems like the clearly better option.
Also, there is considerable career risk involved for the prosecutor. This is a high-profile case and the prosecutors can say goodbye to whatever ambitions they have if they botch this.
The grand jury part of the process has nothing to do with the speedy trial clause because a) the grand jury part of the process is non-adversarial (so the potential defendant doesn't even know about it), b) it precedes indictment.
It does have to do with speedy trial, if the accused is arrested prior to indictment, since speedy trial rights attach at the first of any of a number of places, including arrest. (In the federal system, there is a 30 day clock for indictment or information from arrest.)
I wonder if this counts for the people in DC jail for Jan 6, or is that some quasi-federal thing since DC is a district by itself? But then I’d think it was at least somewhat a federal matter, and a speedy trial, one would hope, should apply at any level.
In principle the right to speedy trial applies to all federal defendants, and DC is under federal jurisdiction. But a speedy trial, while a good right to have, is a difficult one to exercise. IIUC, and IANAl, you have to exercise it in early proceedings, but in early proceedings the defendant is at a disadvantage because prosecutors have had ample time to prepare and they knew they were going to indict while the defendant did not, so the defendant has 71 days to prepare a defense while the prosecutors had no time limit in preparing their case. I suspect few defendants ever demand a speedy trial.
The right to a speedy trial may well have been incorporated against the States, but I don't know. In any case, a speedy trial mostly seems to mean that there must be a statutory limit to how much time can pass between indictment and the start of the trial, and between the start of a trial and closing arguments. Different States have different limits, and the variation in those limits surely must be constitutionally allowed, provided that in general they are a) statutory, b) not very long. I suspect a State could get away with 90 days from indictment.
EDIT: Defendants don't actually get to waive the right to a speedy trial, but if they don't assert that right, then they don't get to ask for dismissal of charges due to violations of the right to a speedy trial.
> The right to a speedy trial may well have been incorporated against the States,
The right to a speedy trial is incorporated against the states, yes. Klopfer v. North Carolina, 386 U.S. 213 (1967).
> a speedy trial mostly seems to mean that there must be a statutory limit to how much time can pass between indictment and the start of the trial
No, it doesn’t, nor does it provide such fixed limits on its own, instead being applied lookong at reasonableness case by case. The Speedy Trial Act of 1974 providing federal limits was largely a reaction to this, rather than required by it.
I was referring to the Sixth Amendment right to a speedy trial, since the amendment itself does not set such limits, the question is: what does "a speedy trial" mean? I've not looked at case law, but ISTM that having statutory limits and remedies must be a big component of what the right actually means.
Federal courts (including in DC) issued emergency orders tolling Speedy Trial Act timelines during the pandemic (this impacts the statutory timelines, the Constitutional guarantee, which is enforced with a multifactor balancing test, is unimpacted.)
70 days from indictment or arraignment to trial, 30 days from arrest to information or indictment, under the Speedy Trial Act of 1974. But those timelines can be paused for many reasons. (Enforcement of the Constitutional rule does not use a hard timeline, but looks holistically at the length, reason, ans effect of delay and whether and how the defendant has asserted his right.)
So $2.5 million isn't nothing (not by a long shot), but 'scot-free' is probably not a fair characterization, especially considering she has a conservator monitoring all her purchases now (to make sure she's not hiding cash).[1]
Plus her sons, who actually turned their dad in: one killed himself over this, and the other died of lymphoma (won't comment on psychological stress, but you have to imagine the fallout from the scandal didn't help).
What I love about Hacker News is that a person can be convicted of a crime, die while still convicted of that crime, but then have the conviction thrown out after they have left this mortal plane and someone will still be like "Ummm actually he was never convicted of any crimes"
I guess I'm glad that Alan Turing was never convicted of 'Gross Indecency' then! Makes the UK look a lot more progressive!
For those curious how that works see [1]. How common is this? I don’t recall ever hearing about it, even though I went to law school. I don’t know if I just forgot about or it just never came up.
Madoff was arrested fast because his sons went to prosecutors and admitted to the fraud. That's very strong evidence + direct witnesses vs. here where they have to prove fraud and gather evidence.
> What would you say is different about this case, or what about the environment has changed, as compared to Madoff in 2008?
Madoff confessed to his sons and said he was imminently going to surrender to authorities, his sons called the FBI, the FBI interviewed him at home (no arrest, no warrant, no indictment), and he confessed to the scheme being a large scale fraud to the FBI.
And Madoff was physically within US jurisdiction.
And Madoff had much clearer records and much less complicated an organization that the FTX network of companies, which seems to have been highly optimized to conceal specific evidence of fraud and theft by, between, and by insiders against the companies in the network.
Madoff was also involved in a highly regulated industry. That's one thing that confuses me about all of this. A main selling point - probably _the_ main selling point - for crypto has been that it allows users to avoid the current legal framework. And that was also the main reason FTX gave for moving to the Bahamas - there was much less regulations.
It's strange to see people actively seeking a space outside of the government's legal jurisdiction, and then getting incensed that the government isn't entering that jurisdiction more quickly to protect them when things inevitably go sideways.
You’re confusing things. Centralized exchanges like FTX are acting as asset custodians in the same way as a bank, or a stock broker. FTX is not a cryptocurrency.
Crypto users that espouse freedom from government are usually talking about being able to use crypto, on chain, without government interference. They don’t want to be taxed for using bitcoin as a currency, be able to use decentralized services without complex regulations and tax laws, etc. etc
I’ve never heard the case made that asset custodians should be able to steal assets from their customers regardless of the underlying asset.
The story of what happened to Bernie's family after he confessed is pretty tragic. Definitely appears as if they were just as surprised as everyone else, and struggled to cope with the dishonesty and destruction caused by a close family member.
One of his sons, Mark, committed suicide on the 2 year anniversary of Bernie's arrest. It was his second attempt. The suicide note he left (his first attempt) read in part: "Now you know how you have destroyed the lives of your sons by your life of deceit. F*ck you"
> the inevitable indictment will likely require proving criminal intent, specifically that SBF knowingly and willingly engaged in fraud. The Justice Department won't indict SFB until they have ironclad evidence demonstrating as much.
IANAL but I'm not sure that's true. I believe they can charge him with fraud or negligence. The latter carries lesser penalties, and everything SBF is doing now is trying to steer the inevitable indictment in that direction.
Relevant cite for what counts as intent to defraud for US federal stuff anyway.
‘Reckless indifference for truth or falsity’ and "The requisite intent under the federal mail and wire fraud statutes may be inferred from the totality of the circumstances and need not be proven by direct evidence."
Yes, and as former federal prosecutor and current white-collar defense attorney Ken White explains on Twitter, moving too fast also prevents them from using their best tools: flipping witnesses for lying and the Grand Jury.
> specifically that SBF knowingly and willingly engaged in fraud
He very well may go to prison for something other than defrauding FTX customers. See Al Capone for tax evasion and Elizabeth Holmes for defrauding investors (not patients).
For instance some of the money may really be gone but if he has tries to hide any of it he can get busted for that act. I don’t think it is safe for him to travel to the US or many other jurisdictions right now.
there are different charges for intentional vs non-intentional crime, with usually more lenient sentencing for non-intentional crime, so the distinction does matter
Is there anything to prevent him from moving to a country without a US extradition treaty in the meantime? That seems like a pretty big risk of waiting too long.
Make a list of the countries that don't have an extradition treaty.
Then cross off the countries that have people you screwed or governments that might find it politically advantageous to prosecute you. And then cross off the countries that might send you back even without an extradition treaty.
And then cross off countries that have worse internet than prison.
I agree with you, HOWEVER, we have yet to see or hear rumors of any type of search warrant(s) being executed in the Bahamas or the US.
As we saw with the Fyre Festival guy and other similar fraud cases, the government wants to move quickly to secure physical hard drives. In the case of that dude, Fyre happened on Thursday and they executed a search warrant at his apartment on Monday morning.
It’s possible that grand jury subpoenas have already been issued and served, but that doesn’t typically generate the criminal intent evidence they will need for this case.
We also know from former employees that routine business was typically discussed on Signal. That’s probably not a great sign for the government as they will need physical access to the devices used OR they will need to snag an iCloud (or other) device backup and grab the contents from there.
Your points about a speedy trial and losing a case are generally valid BUT the DOJ can always opt to file a superseding indictment once he is in custody. I don’t know the full deal with Extradition from the Bahamas but it’s likely it will take some time (several months). Despite this being a white collar case the government will absolutely seek to keep him incarcerated given his flight risk and resources unaccounted for. Anything he’s embezzled from FTX in the span shortly before bankruptcy will be used by the DOJ as proof he has hidden resources.
Remember, in pretrial arguments, they can come up with pretty far fetched or ridiculous arguments that have no merit or bearing later on. For example, in the case of Marcus Hutchins (the WannaCry kid), prosecutors argued he was potentially violent because he visited a shooting range several days prior. He was, in fact, in Las Vegas for DEFCON and went to one of many shooting ranges advertised on the Strip.
For Elizabeth Holmes, the original articles which brought her down came out in 2015. She was indicted 2018. She was sentenced 2022. These things take time and the Fed is very thorough. I'm fairly confident SBF is going to get jail time. How much, IDK. It is fascinating to see someone craft their lying in real-time, though.
For the sake of conversation; what happens if it can’t be proven that SBF engaged in fraud? Can criminal charges for negligence be brought forth? I’d imagine there’s a ton of civili liability in this whole mess.
Ha! I guess I should've predicted a "couple days" instead of a "couple years". Still, I hope people now realize that "failure" to indict immediately is not the same as failure to indict.
My cynical take is that the fact that the well to do are screeching about how he won't go to jail all but ensures he will. The system always saves face.
The ruling class needs the PMC to see the system as legitimate and they'll happily throw one of their own in jail to do it.
That's an apples to oranges comparison. First, the WSJ article came out in 2015, and things didn't really start clamping down until 2016. In 2018 they were charged by the SEC.
Nobody is saying the FTX saga will be concluded in 1-2 years, but it's quite reasonable to think the principals will have been indicted by then with legal proceedings underway.
> Nobody is saying the FTX saga will be concluded in 1-2 years
As per the original comment:
> how SBF won't go to jail because of American corruption--I'll see you back here in a year or two.
Going to jail implies he will be found guilty and it will be concluded. If SBF is only indicted, he is still innocent until proven guilty.
> That's an apples to oranges comparison.
Would like to know more about this. I am not saying he won’t go to jail, but why would prosecutors be faster in indicting SBF?
Lastly, I am caught off guard by how emotional you seem about wanting to demonstrate how efficient the US legal system is. I am not saying it isn’t, but 1-2 years to conclude (again per original comment) seems quick for any legal system.
You should include the next sentence in the quote. "Then we can have that conversation." I also think two years from now would be a better time to have the conversation about whether we believe SBF will go to jail. The trial certainly may take longer than that, but we'll have a better sense of which way the wind is blowing.
Agree. For the record, I do think he is going to jail. The facts are probably there, I think the part that will be challenging is proving intent. Did he intentionally funnel money to his trading firm. Once they build a strong enough case, they will go after him.
I wonder how having evidence of fraudulent transactions publicly accessible on the blockchain will affect the investigation time. It seems like once they figure out exactly which addresses to look for, they'll have timestamped fingerprints that trace back to all sorts of irrefutable evidence.
Sure he could have, it just might have been spotted sooner. How many pump-and-dump shitcoins have there been to date?
If "Crypto" has proven anything over the last few years the only thing it mathematically prevents is reversing transactions, which is really useful when you want to steal money.
I’m a crypto skeptic so I may be missing something. This sounds impossible. If users deposit to a wallet SBF has control of, he can fraud all he likes. It’s mathematically his money now. If users deposit but retain control of the wallet, it axiomatically isn’t a deposit.
* A contract (a piece of software) hosted on the network
* This contract is immutable (its code cannot be changed)
* This contract defines rules such as allowing deposits, withdrawals, and trades, and those functions of withdrawing deposits or enacting trades require transactions signed by the depositor
In that scenario, it is a deposit, is controlled (and thus owned, both legally and cryptographically) by the users.
In real life, these contracts are generally mutable, so there is the possibility that users can still get fucked over.
Contracts and law being mutable and open to interpretation by squishy brained humans is a feature not a bug. Yeah too much mutability you get room for corruption and selective enforcement/application, too little you have a contract that might do what it says or it might accidentally empty your bank account with no recourse because a flawed human implemented it and the world is complicated.
There's no rugpulling possible if you don't give someone else your private keys. What is everyone missing about this? That's the entire glory of crypto. No one owns your coins but you... unless you use an intermediary. I'm guessing by far most transactions are done via centralized exchanges so that autonomy is lost both in practice and in headlines.
I'm fine with highly regulated exchanges despite that being counter to that glory of crypto. Also, move your large bags to cold storage.
Uh what? How could it do that. Fraud isn't even a technical layer issue. It's an identity issue and identity is pretty much entirely abstracted out of the crypto ecosystem. So, if you think about it that way, it's actually impossible for crypto to "mathematically prevent fraud". That you even said something so ridiculous without any reflection speaks to your intuitions in this space.
People really think "cryptocurrencies are based on code" means no fraud can happen with them.
The decentralized nature of most cryptocurrencies makes it difficult for a single entity to manipulate the market or falsify transactions, but it does not completely eliminate the possibility of fraud. In addition, the anonymity of many cryptocurrencies can make it difficult to trace the source of fraudulent activity, which can make it harder to prevent or prosecute.
And you don’t have the culture of controls that exist at real financial institutions. Often you hear a story of some firm like Amaranth or M.F. Global that blew up and what you always find is that the basic controls that prevent an organization from taking on disasterous positions are not in place.
It’s a simple truth that an investment fund that is getting more deposits from withdrawals can vaporize the money and not have any problems until people ask for the money back. That is why financial institutions need strict controls.
Theft and fraud aren't the same thing. Obviously, one can commit theft by the means of fraud. Fraud is a personal representation and trust relationship, and cannot be solved by a mathematical equation. A DEX might preclude the need for trust relationships in order to prevent the circumstances that make fraud possible, but it doesn't solve for fraud and, as FTX proved, crypto itself (using the commonly understood term, as opposed to the one you invented where the only things that are crypto are DEX) doesn't solve for fraud.
I've not at any point contested the differences between DEX and CEXs with you and you should really work on your reading comprehension so you can realize that.
??? Genuinely at a loss. You're conflating CEXs and DEXs to make a point about how "crypto does not prevent fraud". I said sure, if you want to include CEXs in "crypto" then "crypto" does not prevent fraud, but self-custody solutions like DEXs still do.
Because CEX's are undoubtedly part of crypto and nobody could say otherwise without being completely disingenuous. Which is exactly what our debate has been over.
No, people think that if self-custody your private keys carefully, nobody can steal your coins.
If you participate in actual DeFi where you keep your keys and participate via smart contracts, nobody can steal your coins.
All of this was true and is true. What happened is that corporations adopted the language of cryptocurrency to mean something totally different to trick consumers, like calling FTX a DeFi platform.
You want a villain, it ain’t the maxis who kept repeating “not your keys, not your coin”. It’s VCs like a16z, sequoias, and paradigm who lended credibility to centralized exchanges that defrauded people who ignored the cryptocurrency advocates.
The FTX story only strengthens the facts and narratives the cryptocurrency advocates have been saying. The real fraud is happening in venture capital which is rotten to the core.
And by the way, bitcoin is down this year but not nearly as much as VC darlings like Carvana and Affirm.
VC is the scam. VC is the engine of pump and dumps in both TradFi and crypto centralized exchanges. The real voices of cryptocurrency have been vindicated.
It has to do with FTX because people are taking the FTX situation and using it to blame crypto.
SBF stole users' deposits. Fact.
SBF could not have done this had FTX been a self-custody DEX. Fact.
Crypto's sole purpose is to prevent the theft that occurred. Fact.
The theft happened because crypto was not used. The theft happened because users did not self-custody (which they could have, as is demonstrated by the billions of dollars custodied in numerous DEXs today). Fact.
The fact that this happened in the crypto space is prima facie evidence that "Crypto's sole purpose is to prevent the theft that occurred. Fact." is wrong. Full stop.
You're conflating the entire crypto space (rife with theft and fraud) with funds self-custodied on a blockchain (never once has seen theft because it is mathematically prevented).
I'm not conflating anything. This is the crypto space. The crypto space isn't only DEXs, it's full of CEXs and its where the vast majority of money is.
So what? FTX was a crypto company in the crypto economy, trading crypto products. this is some sort of no true scottsman crypto bullshit. the crypto economy clearly exists well beyond DEX's and its also pretty clear that the vast majority of the money is on CEX's so what's your point??
Okay we can use whatever language you wanna use, buddy.
The point is, if you self-custody your funds, no one can take them from you except by threatening you.
Everyone had their funds taken from them because they did NOT self-custody.
Everyone could have gotten all the utility of FTX (trading spot and derivatives) via a self-custody solution (a DEX).
Stop blaming self-custody solutions and stop trying to make self-custody solutions illegal. They literally mathematically prevent this type of theft and fraud.
If you are the one with a password aka private key to an address that holds the coins on whatever reputable chain, then you are the sole owner of said coins. It's that simple. Things get complicated, ironically for the sake of being less complicated, when there is a centralized authority in the middle who holds control of those addresses and their respective private keys.
I use centralized exchanges plenty, and I am also aware that it defeats a large portion of the whole trustless money thing. Therefore, I also keep crypto offline in cold storage. Those addresses and the coins involved will go with me to the grave or until someone threatens me with a hammer.
Crypto exchanges certainly seem to be geared towards fraudulent activities, and they've lured investors in with promises of high returns. The whole so-called 'decentralized finance' world (DeFi) seems to be full of shady actors and money-launderers, but cryptocurrencies themselves - when no used in the way, say, that subprime mortgages were - as vehicles for gambling - don't seem to be inherently corrupt.
FTX/Alameda is now the poster child for Defi, isn't it? Good overview here:
The poster child for DeFi was never a CEX. The obvious poster child for decentralized finance would be the biggest decentralized exchange in the world , Uniswap.
I recognize there are tons of fraudsters who latch onto the vocabulary of cryptocurrency and twist it to trick naive consumers who don’t know the difference. Another example would be “staking” where the original intent meant earning proof of stake rewards without giving up your keys, but was frequently used as a marketing term for things like Blockfi where you literally transferred ownership if your coins.
Despite the manipulation around the terms, it’s unfortunate how a fairly technical audience like Hacker News refuses to have good faith discussions around this.
This crowd should know better than to call FTX DeFi.
This crowd should know better than to call fractional reserve interest programs staking.
I think this crowd does know the difference but chooses to ignore it in bad faith because of a general dislike of cryptocurrencies.
By all means call out the swindlers but a site called hacker news deserves better when it comes to using technical terms accurate and in good faith. And by calling FTX DeFi you’re doing neither.
I think the point is that what happened with FTX couldn't plausibly happen with a real DeFi protocol like Uniswap. FTX might have had ties to some real DeFi protocols, but that seems unrelated to what happened. FTX's collapse doesn't make them bad by association, just as SBF's shenannigans don't make veganism bad by association.
Serum seems like a special case - it was branded as a DeFi protocol, but wasn't really decentralized, since FTX had sole upgrade authority. Because of that Serum collapsed when FTX did. That couldn't happen with something like Uniswap, where governance is actually decentralized.
I think my point is, don't blame us for getting the nomenclature wrong, when it's clear that the crypto people were smearing the nomenclature around too like a cheap maple syrup, letting it stick to anything that looked "defi-ish"
Now only after FTX failed people are saying, "Oh that wasn't really defi, and you're being dishonest if you call it that."
Point taken. It depends who you listen to though. In the right circles, there are plenty of thoughtful discussions about the (de)centralization of protocols (that haven't imploded). See [1] just as an example.
But yes, in other circles, there are "crypto personalities" who cater to an audience that's just hoping to get rich quick. Such people usually don't know or don't care about things like contract upgrade mechanisms.
There does not exist a morality detector that can measure people's true intentions in crypto. SBF may have had a true heart of gold but is just an idiot. Or he's the smartest con-man in the room and squirreled the money away in a series of numbered bank accounts.
Either way, the crypto press gave him very little skepticism, and lauded his venture -- celebrating him as the next financial genius.
In the traditional banking world, I don't need a morality detector. I just need an FDIC bank.
You don't need a morality detector, just a couple rules of thumb:
- Not your keys, not your crypto. I.e. don't trust a random foreign company like FTX to custody your funds. If you really don't want to self-custody, there are reputable, insured custodians like Anchorage or Coinbase Custody.
- Don't use niche DeFi protocols if you don't know much about them; stick to widely-used protoocls like Uniswap, Curve, Aave, etc.
It's not foolproof, but neither is traditional finance. There are plenty of ways to lose your money there, particularly if you're looking to get rich quick with exotic investments.
In fact FTX was getting into equities, so it's not just crypto investors who will probably lose money (pending bankruptcy proceedings). It's anyone who decided to trust a questionable Bahamian company with their assets, crypto or not.
They did have a fairly clean brand, but I wouldn't compare them to say Anchorage, which is a US-based bank and qualified custodian. There are more regulatory as well as technical protections with a firm like Anchorage.
I would compare FTX to say Tastyworks. Clean brand, but they're not a bank, not insured, and not focused on custody, so it wouldn't really be prudent to store idle cash or crypto with them.
This actually gets into "regulated" vs "buyer beware" banking markets. And crypto is still a "buyer beware" market where reputation can be bought with super bowl ads. And then getting "glowing" reviews from the crypto press on their sudden "success".
True custodial banks could in fact be fraudulent for allow e know. But they don't buy super bowl ads to buy reputation -- they've earned it over the course of decades.
These intellectual contortions are great for creating clever arguments, but the entirety of the thefts that were done could only have happened due to centralization. Being a centralization of crypto, FTX was absolutely not and could not have been DeFi. No exchange that centralizes actions, tokens, and crypto is DeFi - even though protocols may appear decentralized.
It's absurd but increasingly common to see such bad, ignorant metaphors of technologies used by people with en emotional vitriol on a site like HN.
The mafia is a emphatically criminal organization made up of people whose unique and specific purpose is to extort, rob, threaten, kill and steal as their core activities.
Crypto is a bundle of interrelated technologies and cryptographic protocols that can be used for bad, good or neutral purposes by humans with all kinds of agendas. In the case of decentralized cryptocurrencies like bitcoin, nobody's even in specific control and claiming they're evil is like claiming a random algorithm is evil, or that encryption is evil because alongside dissidents and social activists, pedophiles and con men also use it to keep their communication private. Ridiculous.
> but cryptocurrencies themselves - when no used in the way, say, that subprime mortgages were - as vehicles for gambling - don't seem to be inherently corrupt.
If you take away gambling and speculation, cryptocurrencies lack a compelling use case when compared to competing technologies.
This is a very dishonest or ignorant response. Good luck sending somebody shells or gold to make a payment. And good luck with shell inflation. And good luck with every store needing to be able to test that gold is real, store it in vaults, etc
Don't be obtuse. Using crypto for payments isn't common.
Maybe you can make 1 on 1 payments to other people who are also convinced to use the same crypto as you. People who don't use that crypto (almost everyone in the world) or your grocery store (most in the world) won't take your payment in crypto.
What does this have at all to do with crypto as a whole? SBF is a single individual. This was a centralized exchange. I'd say CeFI is not really crypto at all. After 2008 was every single U.S. bank corrupt? Downvote.
Judging the entire Crypto based on SBF / Luna is like judging the entire Silicon Valley based on a handful of big-name adtech scums. Sure, they dominate the zeitgeist but there is a lot more to those ecosystems.
The problem isn't whether he will be prosecuted, but for what. His play right now seems to be playing dumb. I don't know if it can work, but he still needs to build a credible alternative story to the criminal behaviour that many here seem to suspect, for the different parties who seem to be happy to keep supporting him.
They will probably start lower down the organization, getting evidence that wrongful behavior was sanctioned by management. Ignorance of the law is not a defence. He will go to jail.
The perils of thinking you're the smartest guy in the room. He apparently didn't even think to set up a victim to take the fall. Retroactively blaming his girlfriend will probably doom her, but isn't doing him any good.
It can't work; there are documents. This stuff is always found in documents. In Madoff's case, aside his confession, they had the original financial documents and the ones manually edited by Madoff which were given to investors. That was sufficient to prove that he knew the truth and was defrauding his investors.
Somewhere in the terabytes of internal emails, screenshots, and discord logs there will be something showing that SBF knew what he was doing, even if it shows up in a completely unforeseen way.
I think part of it is people not following his latest interviews. I was one of those thinking he wouldn't spend a day in jail, however he then proceeded to open his mouth and, in public interviews (Twitter spaces in particular) on the record admitted to a whole host of crimes. Coffeezilla in particular has done excellent work (NYTimes, WaPo, a youtuber with no budget is doing better investigative journalism than you): https://www.youtube.com/watch?v=4o_jPzBZSIo
It would be like if Epstein just came out on a public interview and said "yeah I hosted a pedophile ring for global elites as part of a CIA operation to get dirt on foreign nationals, in particular these ones: <insert list of names> but I didn't know what I was doing!"
I don't see how SBF can walk back all of his very public admissions to date. "Oh I was lying in all of those just to troll the internet", but then he can't make any statement in his own defense. He must really be one of those liars who believes his own bullshit, that's the only explanation for his behavior. He's totally going to jail at this point
SBF is incredibly, blindingly, arrogant. He thinks he can secure his freedom by proclaiming incompetence to anyone who will listen, but along the way happens to occasionally admit doing some very illegal things.
I imagine he is running his mouth in every ill-advised way possible so that when he goes to trial his lawyer can argue he is way too stupid to have knowingly committed a crime.
I feel like we're looking at a new type of narcissism and sociopathy, a generation whose criminals were weaned on social media and virtue signaling. Same old grift, adapted and weaponized in new forms for the digital era.
While I do think that what Coffeezilla did was a terrific piece of journalism I still don't think that what SBF has fessed up to alone can be evidence of fraud. He has admitted to breaking the terms of services with his users but I didn't hear an admission of intent. He can still plead negligence in this case.
Don't get me wrong, I think that doing all of these interviews is really the nail in his coffin. I don't see how anyone can watch these interviews and not think that what this guy did was criminal. I could imagine in an alternate universe, where he just kept his mouth shut, SBF could get some kind of deal if he helps the bankruptcy courts claw back some of the assets improperly paid.
This guy is clearly a narcist who thinks that he will be able to win this in the court of public opinion by smiling at the camera and paying lip service.
...I might counterparty that, just because Michael frigging Liberty got one, and if I did, Murphy would almost surely conspire to keep it from happening, on account of the favorable outcome for me at stake.
Then again, I try not to tempt those that should not be tempted.
His parents are both big shot lawyers who were fairly involved in the whole thing, right? I would be seriously and pleasantly surprised if dude does a day behind bars.
I would still like to know how that all played out. There were credible predictions that the federal sentencing formulas would put her away for life. For next time, I'd be interested in knowing why those predictions were wrong.
Maybe those predictions simply weren't as credible as you thought?
Federal wire fraud (and conspiracy to commit the same) has a maximum sentence length of 20 years. I guess she could have gotten 80 years if all 4 convictions were ordered to be served consecutively. I don't know how common consecutive senteces are vs concurrent.
In federal prison you can only parole at a maximum the last 15% of sentence, so she well serve the majority of the time (if held up on appeal etc., etc.)
Right. She wasn't convicted on the non-wire fraud counts. You may think that's wrong but it's what the jury concluded and I don't think we generally want judges effectively making their own decision to unduly punish defendants because the judge thinks they "got off" on some other charge.
> Maybe those predictions simply weren't as credible as you thought?
They were made by people with solid credentials in the legal field. My guess is that in the end they dropped a bunch of charges to levels that would skate under the multipliers, or she simply wasn't convicted on the ones that had big multipliers. But since I am not the lawyer, that is my non-credible speculation.
Not to mention the years tens of thousands of people (mostly Black again) have gotten for smoking some joint, or much minor theft of 1/1000000 scale to Holmes.
Or immediate execution by some cop for just talking back, or merely walking about...
this is reminiscent of that time I heard that South Korea had prosecuted and found an ex-president[1] guilty of crimes!
There was a Samsung VIP involved too. [2,3]
I was quite impressed because putting ex-presidents on trial is (was?) illegal in my own country! (there was a referendum recently, but I'd need to look up the outcome of that, no ex-presidents are on trial as far as I know)
I'm telling this because 'recently', they overturned that ruling.
so even if he goes to jail, let's wait 3 or 4 more years after any public rulings to check if he's been pardoned.
To be fair, when you learn that South Korea has prosecuted and convicted most of it's ex-presidents (also one assassination and one suicide)... I'm not sure it makes South Korea look uncorrupt. It makes me figure some combination of routine corruption in the presidency and corrupt political retribution by successors.
> To be fair, when you learn that South Korea has prosecuted and convicted most of it's ex-presidents (also one assassination and one suicide)... I'm not sure it makes South Korea look uncorrupt.
Or, alternatively, they realize it's impossible to run a country and not be corrupt. Then, all "presidents" are actually defacto dictators. Not too far off the reality of the matter...perhaps the US should get on this train.
Maybe we should just decide that all presidents go to prison after their term, automatically. If you aren't willing to do that, I guess you don't really want to be president badly enough.
Joking aside (I think I'm joking)... what else would "getting on that train" even look like?
I'm also not sure if what you said was an alternative to what I said. I said it may point out that South Koreas presidency is routinely corrupt, and you said "alternatively, what if they just realize all presidents are corrupt" -- that doesn't seem an alternative, those seem consistent!
Ultimately I think the issue is that the people attracted to power are likely the last people that ought ever be granted such. And democracy makes this even more true since you pair power seeking with fast talking. I wouldn't be surprised of SBF had political aspirations. He'd have fit right in.
the US is on another train, they don't have this problem because POTUS is not the real executive power... that changed for national security reasons probably since around september 2001, or before.. impossible to know.
moreover, the usa security apparatus designed south korea. they're a subsidiary country of the city of washington corporation (or something); i.e. they're on the same train already.
I must add that this is pure speculative guesswork, I ain't got no 'clearance'.
I don't think anyone can make any proclamation as what will happen without the evidence, which neither you or anyone else other than investigators will have access to. On top of that a jury has to find him guilty again not you or almost certainly anyone else here. If you're making a statement about the American judicial system as a whole (pro or con) you're very much generalizing based on the outcome of one case.
Elizabeth Holmes was sentenced to jail. Adam Neumann was not.
Without the evidence we're just hypothesizing, as far as I'm concerned justice could have been served in both cases, I simply don't know and I doubt most people who are so eager to take one side or another truly care deeply enough to actually go through the entirety of those two past cases and look at all the legal arguments and details of the case (which is all public) before reaching a conclusion.
My gut feel says to not believe his dumb kid act. But it's up to federal prosecutors to actually prove to a jury that he knowingly committed fraud or whatever charges they ultimately decide to bring.
The problem I have in this case is that many things are being reported which would be immediately indictable. Billions of dollars was misappropriated, which is a felony that could easily result in decades in prison. Billions more simple disappeared, and there was even a 'back door' in their software enabling unaccountable access of funds. And this all about the time that SBF was splashing around billions of dollars like beads at Mardi Gras - living extremely lavishly, and even trying to get in on Twitter for $3 billion.
Bringing immediate charges against him on the low hanging fruit does not preclude later charging him with anything that may require further work. And it also helps snag him before he decides his little 'blame everybody else and get the corporate media (which I also "donated" to) to back me up' isn't working out and plays a disappearing act. He's a billionaire already living in the Bahamas who could easily spend the rest of his life behind bars. He is an extreme flight risk, yet the DoJ continues to hem and haw.
>Bringing immediate charges against him on the low hanging fruit does not preclude later charging him with anything that may require further work.
The US judicial system is always "one chance to convict (Double Jeopardy), many chances to appeal" and given the whole 'speedy trial' thing (The Feds get about 2 months), building a case is the only reasonable solution before charging him. Again, the Feds need to convince a jury beyond a shadow of a doubt that Sam did this (not that it was done, that Sam did this)
People seem to thing we can let him sit in jail indefinitely pre-trial while we collect the documents and facts, but the Constitution is pretty aggressive about that and no-one even knows what happened yet (not even SBF per his own claims).
A prosecutor can't just point towards ambiguous bad things that happened, they need iron-clad facts that a defense team can't poke holes in (even if those holes are only a shadow of a doubt).
>plays a disappearing act.
I mean, sure, there's always flight risk, but to where? Russia? I mean it "worked" for Snowden I guess, but obviously different circumstances there.
China? They banned crypto, so I doubt they want him potentially stirring up economic tumult there.
Pretty much anywhere else? The US has an extradition treaty and I doubt SBF is going to settle into a quiet life of hiding given his current behavior.
>He's a billionaire
This is always such a funny thing people say about others. Liquidity matters. Even if Sam has access to hidden billions of liquid crypto, then what? He sells it in secret and secretly buys a yacht from a company that's not worried about having those funds seized by the US Gov't? He can't make any meaningful purchase, other than legal defense, because any counter-party will know that the funds are at risk for seizure (since they are ill-gotten).
It's the same as Putin, like sure Russia's national wealth is his, but what's he gonna spend it on? The palaces he already lives in?
And then by that measure, isn't the current US President probably the wealthiest person (Say what you will, but no amount of money is going to give MBS the power to launch a nuke if he wants).
>He is an extreme flight risk, yet the DoJ continues to hem and haw.
Again, can you really be a flight risk if you're already not in the US's jurisdiction?
> Bringing immediate charges against him on the low hanging fruit does not preclude later charging him with anything that may require further work.
Actually, it very easily could:
Speedy trial rules don't allow delaying trial freely once charged, and a conviction (or acquittal) on a charge that would be a lesser included charge forecloses later charging a more serious offense that includes that conduct with additional evidence, b/c double jeopardy.
Double Jeopardy means that lesser charges effectively cannot be used in future cases. If A is required to prove B, and you convict on A then you can't later convict on B unless it can stand without A. In this case, the countless criminal acts he engaged in are largely independent, so this is not a problem.
And speedy trial rules are regularly "bent" when convenient. See, for instance, the January 6th rioters who have been kept in brutal conditions for what will soon be years, without trial, for far lesser charges than what SBF stands to face - if he ever faces anything.
This is not a defense of the January 6th guys, as I do believe those who broke the law should face justice. But I believe all people should face justice equally. And they're one of the most visible demonstrations, as SBF is becoming, that the justice system in this country is, at best, deeply dysfunctional.
Yes, but only after you're formally charged. The prosecutors have to build their case before that happens, which will likely take years. They're also more than happy to have SBF free and talking to the media right now. He's giving them so much useful evidence.
Honestly, I’d be curious of the impact of this period on the criminal’s psychology, I bet it deeply exhausts their energy, knowing they’re basically in, only question is when and how much. No way to “enjoy” life with relatives or new friends, all avenues are closed, only thing you have is money and fear, and you read books about survival in prison. Perhaps try to make connections among judges and politicians to share your $34bn. The longer this period lasts, I really wonder whether it destroys the individual just as much as prison time. Waiting for a trial would destroy me, as an innocent.
In the US when you're arrested you go to jail (which is distinct from prison, which is for long-term convicts).
When a person is arrested in the USA, one of the first courts is the "Bail Hearing" which determines how the accused person will be kept until their trial. They may be sent home, or given a GPS ankle-monitor, or they may be told they have to pay a large "bail bond", which is a deposit that they will lose if they fail to show up for trial and they will get the money back after the trial, or they may be just taken to jail until the conviction if the judge thinks they're too dangerous.
Jail isn't just for "dangerous" individuals. SBF is a young billionaire, already living abroad, who could easily spend the rest of his life in prison. He is the textbook definition of a flight risk, which is yet another thing that makes the slowness of the case all the more absurd.
He could, in the worst case, simply relocate to a country without an extradition clause and add their leadership onto his little black book of "donations."
There's also the very real question of if the Bahamas want to lock him up first. Since they've been trying to promote themselves as the place to base a crypto business, it makes good marketing sense for them to punish him severely. If they do, the next wave of crypto banks being "based in the Bahamas" could be a sign of legal safety.
He's definitely getting prosecuted. It just takes DoJ a long time to build cases, especially financial cases, because the burden of being able to convince a jury that something intentionally malevolent happened as opposed to simply incompetent.
To Molly White's point, SBF is essentially walking around shouting "I was incompetent! Very very incompetent!" In an attempt to make that, as opposed to his clear fraud, the narrative.
> For everyone on this thread making broad proclamations about how SBF won't go to jail because of American corruption
People are forgetting he stole money from rich people, the worst crime imaginable in America. If instead he made billions killing poor people either by selling them highly addictive drugs or by poisoning their drinking supply his company would be hit with a fine.
Can you provide an example in which a crime was committed by selling addictive drugs or poisoning water supplies?
If you are alluding to pain killers, those were approved for use so whether or not the company knew they were addictive is a moral question not a legal one. A massive fine was also leveed against Purdue.
This belief seems to be especially pervasive amongst tech industry: That because justice/law works at a slower speed than social media, it doesn't work.
I still wait for Elizabeth Holmes to go to jail. I disagree that SBF will go to jail. American justice has a problem in that some people are just too rich, too connected, and too "pretty" to jail.
It will be a very interesting few years. I assume there's a lot less regulations for "cryto exchanges" than for any of the traditional finance companies. Perhaps SBF will skirt jail because of less regulations? Perhaps the "establishment" and traditional finance companies will use this as an opportunity to dismantle the "crypto" industry (and jail SBF for a long time) through regulations to beat down competition.
I don't see why people thought SBF and FTX was any different from any other billion dollar finance company. The old men in suits were young men in suits at some point. BlackRock, with it's trillions of dollars under management, is only 34 years old. There wasn't any change or a new era that was going to be ushered in by FTX/SBF. Just more financial crime, how long would have it gone unpunished if it wasn't for their own incompetence?
American corruption aside, why does everyone expect the US to lead the prosecution of SBF? FTX was an international exchange. He could and should face criminal charges in dozens of countries.
There was a US branch of FTX that SBF has been saying "has funds to make people whole" but is still under Chapter 11 "because he made a mistake declaring bankruptcy", and that branch in independent of the international exchange. US customers still can't withdraw their funds. I am not sure people want the US to "lead" everything as much as they want, as people that invested money on a US company, for the government to help them get it back after it was, allegedly, stolen.
I don't think the crypto world is patient enough to let the government (any government) handle things. So since we're making predictions: if no government acts within a year, I bet he'll be dead within three. I think they call that "slashing".
I was bothered by the level of rhetoric from high-profile people in technology predicting that the US justice system would never pursue SBF, because these claims seem to smuggle in the conspiracy that the US government is controlled by some cabal or hidden element. While of course the US government has many problems, these insinuations don't represent a serious take on the issue, and this FTX debacle seems to be simply a convenient opportunity for "network state" or techno-libertarian proponents to promulgate some more damaging untruths into an already poisoned information environment.
This is one of those cases where “put your (play) money where your mouth is” / “skin in the game” really shines.
Anyone who wants to prognosticate on this subject should record their prediction on Metaculus or similar, and link to it. Anyone not going on record thusly should shut up.
In the meantime, I suggest that you consider whether you would reevaluate your priors in any meaningful way if, as I expect, SBF is ultimately prosecuted.
reply