Letter SBF sent today to FTX employees(twitter.com)
twitter.com
Letter SBF sent today to FTX employees
https://twitter.com/lizrhoffman/status/1595183732989779970
25 comments
> "Stuff I made up and then assigned arbitrary value to"
This pretty well summarizes all of crypto.
This pretty well summarizes all of crypto.
There are different types of magic beans.
BTC and ETH are assigned arbitrary values by people outside of FTX, which makes all the difference here.
BTC and ETH are assigned arbitrary values by people outside of FTX, which makes all the difference here.
> when we all know that's tokens like FTT.
Yeah, this is just absurd. It's an illiquid self made token which only a small percentage was circulating. Even a fairly unsophisticated trader would know that you can't just mark that to market at spot and get a reasonable price!
I agree that has to be a feint to avoid criminal charges. I hope the prosecutors see it for what it is, it's essentially one notch improvement to writing: "Our bank account is down to $5000. However, I checked the break room and our copy Monopoly still has $20,000 so we're solvent against our liabilities of $19,000 and can continue to operate as usual."
The letter does include a hint to where more of the real assets could have gone: "included buying out binance". -- presumably clawing back that transaction is at the top of the bankrupt entities priorities. The realestate purchases for SBF and his family are more obvious but taking those back is less urgent.
Yeah, this is just absurd. It's an illiquid self made token which only a small percentage was circulating. Even a fairly unsophisticated trader would know that you can't just mark that to market at spot and get a reasonable price!
I agree that has to be a feint to avoid criminal charges. I hope the prosecutors see it for what it is, it's essentially one notch improvement to writing: "Our bank account is down to $5000. However, I checked the break room and our copy Monopoly still has $20,000 so we're solvent against our liabilities of $19,000 and can continue to operate as usual."
The letter does include a hint to where more of the real assets could have gone: "included buying out binance". -- presumably clawing back that transaction is at the top of the bankrupt entities priorities. The realestate purchases for SBF and his family are more obvious but taking those back is less urgent.
This does not even remotely jive with his comments over Twitter DM's with the Vox journalist[1].
This feels like a transparent attempt to mitigate his inevitable fraud trial and claim ignorance rather than wilful malice / theft.
[1] https://www.vox.com/future-perfect/23462333/sam-bankman-frie...
This feels like a transparent attempt to mitigate his inevitable fraud trial and claim ignorance rather than wilful malice / theft.
[1] https://www.vox.com/future-perfect/23462333/sam-bankman-frie...
As several replies to these tweets have noted, the author works for Semafor, a Bankman-Fried backed outfit. That doesn’t change the letter. But the commentary, which reduces what increasingly looks like gross negligence, embezzlement, theft and fraud to “just a bank run,” should be ignored.
SBF's definition of collateral is far too whimsical to believe anything he's saying here.
The gist still seems to be "we took customer money to ponzi our way back to solvency before anyone found out".
The gist still seems to be "we took customer money to ponzi our way back to solvency before anyone found out".
Hilarious. Still on the "I can't believe I got caught" train. No, the problem wasn't that they didn't have enough collateral to withstand a huge crash. The problem was that they decided to hand over customer deposits without telling anybody in the first place.
I think it's still an open question about how many customer deposits there were (obviously not zero).
People keep thinking of FTX as though it were a classic Bitcoin exchange. It wasn't.
In a classic bitcoin exchange, Alice deposits Bitcoin, Bob deposits dollars. They trade on the market. The amount of assets (dollars+bitcoin) in customer balances stays constant, minus a small amount of each that go to the exchange as fees with each trade. So the only way that the exchange can fail to cover withdraws is if they lose them to embezzlement, gambling, data loss, or getting "hacked".
FTX was primarily a shitcoin casino, a bucket shop, offering high leveraged 'futures' products.
From what I've seen: On FTX Bob could deposit dollars, purchase "bitcoin" with 100x leverage, and end up with a positive bitcoin balance all without anyone ever having deposited bitcoin remotely similar in value to Bob's deposits, potentially without anyone ever having deposited any Bitcoin at all.
These sorts of nutty results are all the more possible with crazy volatile and illiquid rando-tokens, especially when some traders weren't subject to automated risk management.
So when its claimed that FTX has 8 billion in liabilities to customers this doesn't necessarily mean that a full 8 billion in dollars of actual assets were ever in their possession and had vanished. It could be that customers deposited a billion in assets made trades where they received paper assets, and eventually after embezzling only a modest billion dollars FTX is left insolvent and with records reflecting 8 billion in liabilities.
People keep thinking of FTX as though it were a classic Bitcoin exchange. It wasn't.
In a classic bitcoin exchange, Alice deposits Bitcoin, Bob deposits dollars. They trade on the market. The amount of assets (dollars+bitcoin) in customer balances stays constant, minus a small amount of each that go to the exchange as fees with each trade. So the only way that the exchange can fail to cover withdraws is if they lose them to embezzlement, gambling, data loss, or getting "hacked".
FTX was primarily a shitcoin casino, a bucket shop, offering high leveraged 'futures' products.
From what I've seen: On FTX Bob could deposit dollars, purchase "bitcoin" with 100x leverage, and end up with a positive bitcoin balance all without anyone ever having deposited bitcoin remotely similar in value to Bob's deposits, potentially without anyone ever having deposited any Bitcoin at all.
These sorts of nutty results are all the more possible with crazy volatile and illiquid rando-tokens, especially when some traders weren't subject to automated risk management.
So when its claimed that FTX has 8 billion in liabilities to customers this doesn't necessarily mean that a full 8 billion in dollars of actual assets were ever in their possession and had vanished. It could be that customers deposited a billion in assets made trades where they received paper assets, and eventually after embezzling only a modest billion dollars FTX is left insolvent and with records reflecting 8 billion in liabilities.
Those employees are going to have a hard time finding a new job. No one is going to want to touch anyone related to FTX. Not even crypto bros.
And him using the word family should have been a red flag. He ruined their careers knowingly running a ponzi scheme.
And him using the word family should have been a red flag. He ruined their careers knowingly running a ponzi scheme.
Why would that be? Marketing did a great job, engineers okayish (no one knew where their latency came from). I'm not sure for the compliance department, but the web devs building the homepage and trading page probably will be doing fine because they can show something.
If you worked for Google, does it help you find your next job? The opposite is also true. Branding can go both ways. And most people aren’t web devs at FTX. They are an online exchange, they hire system programmers.
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That’s bullshit. Working for Google is a plus in job seeking but not because other companies believe you personally made Google great. Same with people coming out of FTX, others aren’t going to assume you where in on the CEO syphoning funds just because you where employed building their web front end.
There are lots of applicants. Why take the one that were part of some fraudulent company when there is another that looks just like them without the baggage?
If they are special enough to escape that analysis, then they were probably important enough to be more exposed from FTX.
If they are special enough to escape that analysis, then they were probably important enough to be more exposed from FTX.
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Exactly this. And if the company has corporate clients, they are one LinkedIn search away from the client wanting to distance themselves from an employee that was part of the another fraudulent company. Especially, if you are a dealing with other people’s money. It’s not worth the additional risk to the company’s image.
plenty of rank and file did fine after Enron collapsed; it's not their fault that leadership failed them and FTX did seem like a desirable place to work before the fall.
I think SBF has realized that he’s going to get his 11 years.
What really disgusts me is after losing billions of dollars these crypto bros try to escape responsibility with a tweets worth of explanation. “Oh well nevermind”. No, those types of losses have a body count. He needs to be held accountable in a court of law.
What really disgusts me is after losing billions of dollars these crypto bros try to escape responsibility with a tweets worth of explanation. “Oh well nevermind”. No, those types of losses have a body count. He needs to be held accountable in a court of law.
Why can he send letters to employees? He's not CEO anymore and the company is under Chapter 11.
IANAL but there are different types of bankruptcy. Some allow for continued operations and some require that you lock the doors, stop answering emails, don't touch the website, that type of thing. I'm not sure of the totality of what FTX has filed, but originally, they made a chapter 15 filing. That can lead to chapter 7 or 11. With chapter 11, you can continue doing some business. I don't know that they are going this route but it is possible to send a communication from a business in bankruptcy.
Sure, but the point is that he's not CEO and associated with company anymore.
>but originally, they made a chapter 15 filing
No, it was made _later_ by Bahamas.
>but originally, they made a chapter 15 filing
No, it was made _later_ by Bahamas.
Good point, I thought he just left the CEO position but looks like he completely resigned. In for a penny, in for a pound.
They currently have filed chapter 11.
Email.
I suspect we will never get to the point where SBF admits "Stuff I made up and then assigned arbitrary value to doesn't really count as collateral". But we'll continually hear "Mistakes were made" as an attempt to avoid jail time.