Caroline Ellison and Gary Wang are cooperating in the criminal case against SBF(nytimes.com)
nytimes.com
Caroline Ellison and Gary Wang are cooperating in the criminal case against SBF
https://www.nytimes.com/2022/12/21/technology/ftx-fraud-guilty-pleas.html
337 comments
SEC Complaint with more details. https://www.sec.gov/news/press-release/2022-234
I have read more SEC complaints this year than in all of my previous years combined.
—- Edit 1
Caroline’s guilty plea: https://www.documentcloud.org/documents/23495436-crypto-coop...
I have read more SEC complaints this year than in all of my previous years combined.
—- Edit 1
Caroline’s guilty plea: https://www.documentcloud.org/documents/23495436-crypto-coop...
Actual complaint / PDF: https://www.sec.gov/litigation/complaints/2022/comp-pr2022-2...
Interesting: On page 4, there's a section listing out the crimes she will not be further prosecuted for. As you'd expect this includes the 7 counts listed earlier, but there's also an 8th section that's been redacted. Any ideas on what this could be referring to?
> As you'd expect this includes the 7 counts listed earlier, but there's also an 8th section that's been redacted. Any ideas on what this could be referring to?
My guess would be that it refers to a conspiracy (or other “group” offense, like RICO [0]) for which she was not charged, and which no one else had been publicly charged yet, such that not redacting it would reveal otherwise nonpublic information about how DoJ expects that it might charge other people.
[0] RICO is cited simply as an example of a group offense that is distinct from conspiracy; I am not predicting RICO charges, to be clear.
My guess would be that it refers to a conspiracy (or other “group” offense, like RICO [0]) for which she was not charged, and which no one else had been publicly charged yet, such that not redacting it would reveal otherwise nonpublic information about how DoJ expects that it might charge other people.
[0] RICO is cited simply as an example of a group offense that is distinct from conspiracy; I am not predicting RICO charges, to be clear.
[deleted]
I assumed it was related to campaign finance because that is noticeably absent but it’s possible she/Alameda weren’t involved in that aspect of the grift.
Wait, so she won't be prosecuted despite pleading guilty? Or how does this work?
> Wait, so she won't be prosecuted despite pleading guilty?
She won't be further prosecuted (i. e., beyond the charges she is pleading guilty to) for conduct related to the acts specified, if she cooperates fully as agreed. In other words, supposing there are other charges related to that cobduct which could be filed, DoJ is bound not to pursue them if she upholds her end of the agreement. If she does not, DoJ can add those additional charges on top of the existing charges (or, replacing the existing charges with more serious ones related to the same conduct.)
She won't be further prosecuted (i. e., beyond the charges she is pleading guilty to) for conduct related to the acts specified, if she cooperates fully as agreed. In other words, supposing there are other charges related to that cobduct which could be filed, DoJ is bound not to pursue them if she upholds her end of the agreement. If she does not, DoJ can add those additional charges on top of the existing charges (or, replacing the existing charges with more serious ones related to the same conduct.)
Thanks for explaining some of the subtleties of these kinds of agreements.
I hope (and assume) these details will have no practical value to my life! But it's good to know how the world works.
I hope (and assume) these details will have no practical value to my life! But it's good to know how the world works.
I suspect she had some involvement with the campaign contributions which SBF is facing charges. My guess is it details some facts about her involvement, and then says she won’t be charged assuming major new facts don’t emerge.
110 years! I wonder how many she'll get out of that for being the first out of the woodwork.
The "maximum" sentence here isn't even a theoretical maximum; it's just what happens if you take the statutory limit on what could be sentenced in the worst possible combination of circumstances, and it assumes that charges don't group or get served concurrently. It's annoying that they cite this number at all, because it simply has no bearing as to how things get sentenced in reality.
> The "maximum" sentence here isn't even a theoretical maximum;
Yes, it is.
> it's just what happens if you take the statutory limit on what could be sentenced in the worst possible combination of circumstances, and it assumes that charges don't group or get served concurrently.
Which is, in fact, the theoretical maximum, because while the Sentencing Guidelines call for grouping and concurrent sentences in certain circumstances, the Supreme Court has ruled that the Guidelines are, as the name suggests, more what you'd call “guidelines” than actual rules, and judges are free to depart from them, in either direction, within the mininimum and maximum sentences, if any [0], prescribed for each crime in its own statute.
It’s true that most sentences will conform to the Guidelines, but the Guidelines rules do not set outer boundaries on what is possible.
[0] some crimes have statutory minimums, most have statutory maximums, but some federal crimes specify only imprisonment for “any term of years”.
Yes, it is.
> it's just what happens if you take the statutory limit on what could be sentenced in the worst possible combination of circumstances, and it assumes that charges don't group or get served concurrently.
Which is, in fact, the theoretical maximum, because while the Sentencing Guidelines call for grouping and concurrent sentences in certain circumstances, the Supreme Court has ruled that the Guidelines are, as the name suggests, more what you'd call “guidelines” than actual rules, and judges are free to depart from them, in either direction, within the mininimum and maximum sentences, if any [0], prescribed for each crime in its own statute.
It’s true that most sentences will conform to the Guidelines, but the Guidelines rules do not set outer boundaries on what is possible.
[0] some crimes have statutory minimums, most have statutory maximums, but some federal crimes specify only imprisonment for “any term of years”.
> more what you'd call “guidelines” than actual rules
I look forward to a blog on "The Pirates Code as applied to criminal prosecution in the US." I mean, it is already clear that you can avoid punishment by producing enough pieces of eight, so I wonder what other similarities there are.
I look forward to a blog on "The Pirates Code as applied to criminal prosecution in the US." I mean, it is already clear that you can avoid punishment by producing enough pieces of eight, so I wonder what other similarities there are.
Isn’t the size of the fraud one of the major factors in the guidelines? If so, it may not be 110 years, but it’s got to be a big number?
The number does indeed get larger with bigger losses - but most of the charges also have statutory maximums (e.g. 20yrs for wire fraud) and they'll almost certainly be served concurrently. With this level of fraud a sentence approaching 10 years might be in play, but we'll have to see what the prosecutors say.
Elizabeth Holmes was sentenced to 11 years and she didn’t steal any money for personal gain. Madoff was sentenced to 150 years.
Based on what we know so far about Caroline’s misuse (abuse) of funds and possible mass market manipulation all of which has resulted in billions of dollars in investor losses. 10 years in this case seems light, no?
Based on what we know so far about Caroline’s misuse (abuse) of funds and possible mass market manipulation all of which has resulted in billions of dollars in investor losses. 10 years in this case seems light, no?
Elizabeth did use the money for personal gain, to sponsor an extremely lavish lifestyle and billing luxury home rental expenses,chartered flights, security details and private investigators to the Theranos account.
Sunny Balwani, otoh, didn't benefit, wasn't the CEO, didn't make most of the false statements and got a heavier sentence.
Sunny Balwani, otoh, didn't benefit, wasn't the CEO, didn't make most of the false statements and got a heavier sentence.
She was found not guilty of defrauding patients. He was guilty on all accounts.
It's difficult for me to see how Balwani was defrauding patients but Holmes wasn't.
Holmes didn’t plead guilty and cooperate.
Neither Madoff nor Holmes took deals.
You can look up the formula in the federal sentencing guidelines. IIRC the scale of sentencing points to dollars is sorta-logarithmic
Guidelines are just that, guidelines. Judges have a lot of latitude.
Including going above the guidelines.
It's how they make an intimidating threat to push for cooperation and look maximally generous when the sentence is reduced. Makes perfect sense.
That doesn't make any sense, everyone on the receiving end of these threats has a lawyer. Even the shittiest public defender will translate this for you.
These numbers exist solely for the audiences at home.
These numbers exist solely for the audiences at home.
Same with the "street value" they cite in drug busts. Sure, that guy with 100kg of coke is going to be selling it in little 1g baggies.
Getting OT here but at least the end-user cost in that case is some kind of "normalized impact on society" if you're looking for a number to compare different busts with.
Well, that's a lie which at times has real impact on trial outcomes. I wouldn't really put it in the same category.
Sentences for federal drug crimes are based on substance weight, not value.
> Sentences for federal drug crimes are based on substance weight, not value.
Depends on which federal drug crimes. The drug kingpin law is based on $, not weight.
Depends on which federal drug crimes. The drug kingpin law is based on $, not weight.
Yes, but federal drug crimes are not the only kind of drug crimes.
110 years, fine of up to 2x the "pecuniary gain" of the fraud, and last but certainly not least, a "$100 mandatory special assessment" for each of the seven counts. Gotta pay for those Federal investigators somehow!
Also, I like how the they're very clear that restitution must be made as "a sum of money in United States currency", as opposed to, say, FTT tokens or Bored Ape NFTs. However, the section on forfeiting the proceeds of the crime does explicitly include "property including but not limited to" USD, meaning the Feds may end up with a pile of shitcoins and monkey JPGs after all!
Also, I like how the they're very clear that restitution must be made as "a sum of money in United States currency", as opposed to, say, FTT tokens or Bored Ape NFTs. However, the section on forfeiting the proceeds of the crime does explicitly include "property including but not limited to" USD, meaning the Feds may end up with a pile of shitcoins and monkey JPGs after all!
The token will definitively be bid at. The fact that they are being sold on a US government auction will give them some value. Drama never ends in crypto land.
David Friehling was up for 100 years for the Bernie Madoff Ponzi scheme but because of cooperation did not serve any time in prison IIRC, just supervised release or home detention.
My guess is she will get 10. 30 for the crimes, less 10 for being a first time offender and not the ring leader and less 10 for cooperation and contrition.
I don’t think shell end up doing any time.
And gets out after 5 years for “good behavior”.
Federal sentences come with a maximum of 54 days per year [1] of good time credit, and there is no parole when serving federal time. This all but guarantees that a 10 year sentence will result in 102 months of incarceration and release no earlier than that.
[1] https://www.federalregister.gov/documents/2022/02/11/2022-02...
[1] https://www.federalregister.gov/documents/2022/02/11/2022-02...
Look up the recent case of Aaron Singerman. He was sentenced to five years, but was out in ten months. Didn't spend a single Christmas behind bars. Now, this was presumably for some form of cooperation, and the circumstances are unclear -- but it's just not true that the Feds won't let you out early if they feel like it.
> Look up the recent case of Aaron Singerman. He was sentenced to five years, but was out in ten months. Didn't spend a single Christmas behind bars. Now, this was presumably for some form of cooperation, and the circumstances are unclear -- but it's just not true that the Feds won't let you out early if they feel like it.
His sentence was reduced to 36 months in a court action that was publicly reported, and there were several subsequent sealed actions between then and the release.
> but it's just not true that the Feds won't let you out early if they feel like it.
A reduction in sentence is a very different thing than early release.
His sentence was reduced to 36 months in a court action that was publicly reported, and there were several subsequent sealed actions between then and the release.
> but it's just not true that the Feds won't let you out early if they feel like it.
A reduction in sentence is a very different thing than early release.
how could you suspect there would be jailhouse cooperation from a guy they call Singerman?
(for non-native English speakers, giving information to the police is called "singing" in early/mid-20th century slang)
(for non-native English speakers, giving information to the police is called "singing" in early/mid-20th century slang)
> Federal sentences come with a maximum of 54 days per year [1] of good time credit, and there is no parole when serving federal time.
Right, to the extent a federal convict has supervised release time, its not “I got out early from my prison sentence” but “I was sentenced to supervised release on top of my prison sentence.”
Right, to the extent a federal convict has supervised release time, its not “I got out early from my prison sentence” but “I was sentenced to supervised release on top of my prison sentence.”
The most you can get off for good behavior in the federal system is 15%.
I expect between 0 and 3 years.
I expect between 0 and 3 years.
This is federal so it is statutory at 54 days per year max.
I hope they all do jail time or none of them do.
Also, reading what SBF says about his lawyer, he seems a bit sketchy as well (but obviously that is a one-sided account).
Also, reading what SBF says about his lawyer, he seems a bit sketchy as well (but obviously that is a one-sided account).
They all could have just been basic rich people pulling $600k[0] a year at Jane Street, but they just couldn’t get enough.
[0]This number is completely made up and betrays my total lack of knowledge about what finance people make.
[0]This number is completely made up and betrays my total lack of knowledge about what finance people make.
As far as I understand they were making pretty good bank with Alameda doing crypto arbitrage. Could probably have been set for life just doing that.
Human psychology is funny. Not content with being stinking rich in their 20's, they embarked on a massive fraud to get even richer.
To give them the benefit of the doubt, I'm not sure they set out to commit fraud, just make money off suckers, but when the temptation presented itself they couldn't resist it seems.
Human psychology is funny. Not content with being stinking rich in their 20's, they embarked on a massive fraud to get even richer.
To give them the benefit of the doubt, I'm not sure they set out to commit fraud, just make money off suckers, but when the temptation presented itself they couldn't resist it seems.
Their margins got squeezed quickly. Like the trader that makes a million one year and can’t repeat the random walk the next and starts pitching his “trading course” on YouTube instead of continuing to lose money, same for this but replace “trading course” with a much more sophisticated level of how to fleece retail. And they believed in themselves. I still think they don’t consider what they did “fraud”. They’re just now cooperative because the legal needle has pierced their Bahamas and SV bubble.
> doing crypto arbitrage.
They were, but arbitrage can only last so long and theirs ran out. They were convinced of their own genius I think which is what got them on the FTX train.
They were, but arbitrage can only last so long and theirs ran out. They were convinced of their own genius I think which is what got them on the FTX train.
Agreed. I am just fascinated by the fact that they made an few million easily, and instead of rolling that into something productive they went for fraud.
Early career it's less than that unless you have done something exceptional for them and threatened to leave.
I mean, realistically, making a buck or 2 a year isn't that much.
The real issue is that ftx and alameda could have been massively successful without any fraud.
The real issue is that ftx and alameda could have been massively successful without any fraud.
You mean if they hadn’t gotten involved in cryptocurrency?
Reveals, not betrays.
Betrays is fine here. https://www.macmillandictionary.com/us/collocations/american...
[deleted]
The thing that makes me very uneasy about this is... it's crypto. If you let people walk away with anything less than decades in prison you're setting a bad precedent. Why? Because the entire design of crypto is to allow you to squirrel money away, honestly what are the chances that these guys have some cold wallet lying around with a few million dollars in bitcoin? That's what I'd do if I was running this scam.
You're assuming that FTX is the extent of the DOJ and SEC investigations. SBF is going to be offered a deal - "Spend the rest of your life in prison or give us CZ/Binance and all the other big players and be out in 10". Remember, in addition to their chat group labeled "Wirefraud" they also had another one called "Exchange coordination" that the heads of other exchanges participated in. In addition to SBF, CZ (Binance), Powell (Kraken), Ardoino (Tether), and Sun (Tron) were participants.
Not saying that nefarious things weren't happening, but keeping lines of communication open between exchanges is reasonable and is not per se evidence of wrongdoing.
For example, if someone steals a bunch of coins from exchange A then you would want exchanges B and C to be able to made aware of that ASAP so that they can stop the movement of those coins.
For example, if someone steals a bunch of coins from exchange A then you would want exchanges B and C to be able to made aware of that ASAP so that they can stop the movement of those coins.
Good luck getting CZ extradited to the US.
They will all get deals to avoid trial because nobody in power wants to dig into political donations or possibly even money laundering from US funds that went to Ukraine with some of it stolen and washed through FTX.
> money laundering from US funds that went to Ukraine with some of it stolen and washed through FTX.
Source? Isn’t this just a theory with no evidence?
Source? Isn’t this just a theory with no evidence?
It’s not even a theory it’s Russian propaganda.
The bigger story is that in their complaint, the SEC is declaring FTT to be an investment contract and therefore a "security".
https://finance.yahoo.com/news/sec-calls-ftt-exchange-token-...
Since all exchange native tokens more or less work the same way, that would mean they are all securities. That would include BNB. If this holds, the crypto exchange game is over.
https://finance.yahoo.com/news/sec-calls-ftt-exchange-token-...
Since all exchange native tokens more or less work the same way, that would mean they are all securities. That would include BNB. If this holds, the crypto exchange game is over.
That seems like the obvious interpretation though, rather than a surprise. What does a hypothetical exchange-issued token look like that could “fail” the Howey test?
> all exchange native tokens more or less work the same way, that would mean they are all securities... If this holds, the crypto exchange game is over.
Exchanges don't need tokens to be a place to swap and park coins. I don't see Kraken or Coinbase using a house token/security. Some exchanges will be okay.
Exchanges don't need tokens to be a place to swap and park coins. I don't see Kraken or Coinbase using a house token/security. Some exchanges will be okay.
Can someone enlighten me on why exchanges created their me-too coins in the first place? As a way to move out of crypto into a sort of non-fiat purgatory before taking a position again later on? Like, why does BNB even need to exist?
BNB and FTT exist(ed) so their exchanges can raise/create a lot of money. It's a little similar to why stocks exist, which is why they are clearly securities.
This has been the SEC's stance since at least 2020 when they went after Ripple (XRP) for selling "unregistered securities" in their ICO.
It's the SEC's position that you can issue tokens, but they have to be "registered," specifically with them.
https://www.sec.gov/ICO
It's the SEC's position that you can issue tokens, but they have to be "registered," specifically with them.
https://www.sec.gov/ICO
This is just a jurisdictional turf war. SEC calls them securities and CFTC calls them commodities. The courts will decide. Re FTX via CFTC:
"The complaint charges all three defendants with fraud and material misrepresentations in connection with the sale of digital commodities in interstate commerce."
https://www.cftc.gov/PressRoom/PressReleases/8638-22
"The complaint charges all three defendants with fraud and material misrepresentations in connection with the sale of digital commodities in interstate commerce."
https://www.cftc.gov/PressRoom/PressReleases/8638-22
> This is just a jurisdictional turf war. SEC calls them securities and CFTC calls them commodities.
Doesn't seen to be a turf war; SEC seems to be saying the FTT token and direct investment in FTX were securities (and thus, decieving investors in those waa securities fraud), CFTC is saying that the bulk of the crypto traded on FTX were commodities (and thus, decieving people trading in them was commodities fraud), and DoJ—which has included both in the criminal charges as well as each regulatory agency filing civil charges for offenses with their respective civil area of jurisdiction—agrees with both.
Doesn't seen to be a turf war; SEC seems to be saying the FTT token and direct investment in FTX were securities (and thus, decieving investors in those waa securities fraud), CFTC is saying that the bulk of the crypto traded on FTX were commodities (and thus, decieving people trading in them was commodities fraud), and DoJ—which has included both in the criminal charges as well as each regulatory agency filing civil charges for offenses with their respective civil area of jurisdiction—agrees with both.
FTT was clearly a security because something like 25% of FTX revenue was used for FTT buybacks. Other crypto tokens don't entitle you to a share of some businesses money, so less clear if they're securities.
They offered margin trading and all kinds of other things, the pitch being "like an exchange but with crypto". Why would anyone think it's not securities?
The tokenomics are important. They could create as many PoW blockchains as they wanted without the coins being securities. The important part is that they created all tokens themselves and then sold them via ICO with funding rounds to investors who expected to make a profit from it.
https://www.coingecko.com/en/coins/ftx-token/tokenomics
I think it is more of a stretch to call FTT a cryptocurrency than calling it a security.
https://www.coingecko.com/en/coins/ftx-token/tokenomics
I think it is more of a stretch to call FTT a cryptocurrency than calling it a security.
Wasn't this already the SEC's position?
The original position was that cryptocurrencies were commodities not securities, and that is what allowed all the bullshit to flourish. In July of 2017 the SEC issued a ruling that any coin issued via ICO could be considered a security on a case by case basis. Yesterday is the first time I've seen the SEC make the argument that exchange native tokens are investment contracts and therefore securities.
Exchange tokens are amongst the more obvious securities IMO. I think they tick all marks of the Howey Test:
- An investment of money
(Send money/BTC, get token)
- In a common enterprise
(the exchange)
- With the expectation of profit
(Token burns)
- To be derived from the efforts of others
(Exchange pays with profits for token burns)
Having scanned the documents, I can imagine a dynamic where Ellison was the CEO, but SBF was really pulling the strings.
I bet many companies are like that, where investors or a chairman are the real decision maker and the CEO is managing downwards only. Especially when you have a complex corporate setup where you are told to request funds and resources from a parent org etc.
If I am in a C-level position again I would definetly avoid a situation where I was C-level in name only, if only to avoid the legal risk.
I bet many companies are like that, where investors or a chairman are the real decision maker and the CEO is managing downwards only. Especially when you have a complex corporate setup where you are told to request funds and resources from a parent org etc.
If I am in a C-level position again I would definetly avoid a situation where I was C-level in name only, if only to avoid the legal risk.
That restaurant at the corner that never has guests, but doesn't go bankrupt, is probably the same.
I get where you are coming from, but if she was CEO, she was responsible for her actions (and inactions) in that position. Letting some people off is not just and the various narratives these people are all spinning to avoid responsibility for their actions are ALL equally BS.
Of course. That’s the price you pay for getting a high salary and big benefits. And that’s why the effective beneficiary cares about who owns the things or who actually really control the thing. I have seen this dynamic way too many times (especially with spouses being “CEOs” or directors)
As the CEO of a company then you are still subservient to the chairman, board, investors, CEO of the group etc. Its a difficult dynamic at the level when you start to carry civil and criminal liability too.
> If I am in a C-level position again I would definetly avoid a situation where I was C-level in name only if only to avoid the legal risk.
How much are they paying, exactly?
How much are they paying, exactly?
Yeah, how much would you really lose sight of a multi billion dollar business you own 90% of?
(at least I read that it was 90%)
(at least I read that it was 90%)
This was inevitable. All their money and reputation is gone. They stand to face many decades in prison. What choice do they have. Anyone who engages in financial fraud should prepare for all their friends to rat them out. There are no friends.
>decades in prison
Something tells me they'll be okay. Just look at Liz Holmes of Theranos.
Something tells me they'll be okay. Just look at Liz Holmes of Theranos.
She got 11 years of which she'll have to serve at least around 9 because it's federal, and that was for something that probably wasn't fraudulent from the very beginning. So, seems like they... won't be okay.
She's going to a prison that more resembles a country club (it has no fences or walls) There is no way she'll serve 9 years. She's appealing and the feds are extremely forgiving if you have great lawyers when it comes to white collar crime.
What would be the appropriate prison, one where she lives in depravation and is regularly assaulted by guards and other inmates? Our prison system is deeply unjust and more people should be going to her kind of prison rather than vice versa by my view.
I don't need your stump speech, thanks.
I thought FTX was not fraudulent from the beginning. It only went that way when Alameda started losing cash (it was originally very profitable). When, instead of just letting it die, SBF decided to use customer money to save it (and also to pay himself and others bonuses and buy people free houses and other shit)?
All of crypto is a fraud in a literal sense because it is self referential and a zero sum game. But the regulators are not willing to face that question so the companies keep going.
In that sense, the concept of a token created by you and traded largely by your firm being used as collateral for loans was incredibly fraudulent. The fact that the DoJ is acting only after the token fell and revealed that SBF used customer funds to rescue it, is either a strategy or an oversight. Same way they don’t want to touch Tether just yet even if it’s so obviously a fraud.
In that sense, the concept of a token created by you and traded largely by your firm being used as collateral for loans was incredibly fraudulent. The fact that the DoJ is acting only after the token fell and revealed that SBF used customer funds to rescue it, is either a strategy or an oversight. Same way they don’t want to touch Tether just yet even if it’s so obviously a fraud.
She got 11 years for not delivering 10x to the VC's. Just imagine what you would get for fucking with peoples health.
My imagination is awful, but I’m guessing somewhere around 0 years.
Ask Sacler family members...
She got 11 years for lying about her product in order to defraud people...
Well, we have to better define "people ". IIRC she was only found guilty of defrauding their rich/large investors, not the general population. It was her boyfriend who was found guilty of that.
Now, regarding SBF, I can imagine there are some big wigs that had their money in there, not only nobodys like you and I. That's the only reason why I think they will get shafted.
Now, regarding SBF, I can imagine there are some big wigs that had their money in there, not only nobodys like you and I. That's the only reason why I think they will get shafted.
And? Sorry but musk sold robot-taxi by 2020 and cheaper trucking by 2019. And precommands.
I don't see any differences between the two. I admit I did look at thunderfoot's videos on musk and was convinced since 2019 he was a small conman. I don't understand how Holmes is any different.
I don't see any differences between the two. I admit I did look at thunderfoot's videos on musk and was convinced since 2019 he was a small conman. I don't understand how Holmes is any different.
Lying about future products, “it will do X” is much different than lying about what you have in the market right now “it is doing X”.
Elon engages in the first, Holmes in the second. I think, if Holmes merely went bankrupt because she couldn’t get to a functional product rather than releasing a product and knowingly lying about its capabilities, she’d be in much less hot water.
Elon engages in the first, Holmes in the second. I think, if Holmes merely went bankrupt because she couldn’t get to a functional product rather than releasing a product and knowingly lying about its capabilities, she’d be in much less hot water.
What about the previous CEO of Alameda, Sam Trabucco?
Caroline only took over recently, I haven't heard anything about his legal standing at this point.
Caroline only took over recently, I haven't heard anything about his legal standing at this point.
I think Sam Trabucco of FTX is going to be like Lou Pai of Enron. If you resign at exactly the right time and put some distance between you and the fraud, you can get away with it and ride off into the sunset.
https://www.npr.org/templates/story/story.php?storyId=541142...
Nice comparison. Trabucco resigned in August but Caroline was on record saying he hadn’t been around for months. Some Alameda loans were called in May, and that is when SBF and Caroline did some obviously shady stuff. I think that is when he walked, as that is when the trading strategy became limited to just propping up FTT to fake the balance sheet. He seemed like a legit trader based on his Twitter. It takes about $3 million in legal bills to defend against the feds, and he easily has that kind of money. He is going to be hard to prosecute.
He made several stupid claims on his twitter about trading that anyone in the industry would immediately infer was a complete misunderstanding of the basics of finance. As did SBF and Caroline. Nothing about them was smart. It was a lot of jargon thrown into their talk that should tickle most people’s spidey senses.
Exactly this. All of their "What happened?" threads were hot air, sprinkled with some instances of "ev+" that cryptotwitter quant wannabes latched on to.
I’m sure there will be other charges coming as more information is gleaned. I’m very curious to see if the parents are charged.
I was wondering about Trabucco as well. His name is nowhere to be seen, but he was leading Alameda together with Caroline up until last summer.
If SBF is also going for plea bargain, will various government institutions ask from him to get some dirt on Tether (and on Binance)? Might be that they are more interested in campaign financing.
If SBF is also going for plea bargain, will various government institutions ask from him to get some dirt on Tether (and on Binance)? Might be that they are more interested in campaign financing.
> he was leading Alameda together with Caroline up until last summer
In the last paragraph on page 3 of the plea letter, we see that most of the counts cover the period from 2019-2022 (2020 for the money laundering). Thus, the crimes that Ellison is pleading guilty to were going on while Trabucco was the co-CEO.
According to Wikipedia, he "officially became the co-CEO in October 2021", and resigned in August 2022.[1]
[1] https://en.wikipedia.org/wiki/Sam_Trabucco
In the last paragraph on page 3 of the plea letter, we see that most of the counts cover the period from 2019-2022 (2020 for the money laundering). Thus, the crimes that Ellison is pleading guilty to were going on while Trabucco was the co-CEO.
According to Wikipedia, he "officially became the co-CEO in October 2021", and resigned in August 2022.[1]
[1] https://en.wikipedia.org/wiki/Sam_Trabucco
> but he was leading Alameda together with Caroline up until last summer.
According to the SEC civil lawsuit against SBF, SBF was running Alameda the whole time, including when Ellison and Trabucco were nominally the co-CEOs. The CFTC lawsuit against SBF, FTX, Aand Alameda asserts the same, and that SBFs resignation as CEO of Alameda was done to create the false image of strong separation between Alameda and FTX.
Ellison apparently had a real role in the fraud, but I don’t know that it’s clear that Trabucco was anything other than a face set up as a distraction, in terms of substantive role.
According to the SEC civil lawsuit against SBF, SBF was running Alameda the whole time, including when Ellison and Trabucco were nominally the co-CEOs. The CFTC lawsuit against SBF, FTX, Aand Alameda asserts the same, and that SBFs resignation as CEO of Alameda was done to create the false image of strong separation between Alameda and FTX.
Ellison apparently had a real role in the fraud, but I don’t know that it’s clear that Trabucco was anything other than a face set up as a distraction, in terms of substantive role.
I don't think SBF is going to be given the chance to plea down-- that's the whole point of getting Ellison and Wang to cooperated, to construct an ironclad case against SBF so that they don't need him to cooperate in any way, and can still likely convict him of enough crimes to put him in prison for 30+ years.
An important component of accepting a plea bargain is telling the truth. I was also wondering if SBF might be used as a witness for other cases. I think his reliability is a major concern for any testimony.
I wonder why all the citizen jornalists havent been doing their digging and discovered the co-CEO
There is a good chance SBF will be released on bail so he does not have to spend time in detention in NYC. The charges against him are all nonviolent crimes. The question I have is if the judge releases him from custody, "Will SBF do more interviews?"
Lots of people are speculating on sentencing, some are comparing SBF to Holmes, but IMHO it's likely in this case he is going to plead guilty. Whatever comes out in a criminal trial, e.g., testimony, could be used against SBF in the civil cases brought by the SEC and CFTC. Assuming SBF will plead guilty, given the amount of the losses he has caused, which far exceed the amounts involved in Holmes' fraud, what sort of plea agreement will SBF be offered.
One theory of why these charges against SBF were brought so quickly is that the US attorney is extraordinarily confident he can obtain a conviction. The "brilliant" SBF's idiotic public behaviour after the bankruptcy filing has no doubt has made the government's job much easier. This makes sense because as many readers will know, generally federal prosecutors do not like to lose and they will not gamble. Their egos and reputations may be at stake. They want slam dunks. For Damian Williams this is probably a slam dunk. Assuming he does not make any significant mistakes.
Lots of people are speculating on sentencing, some are comparing SBF to Holmes, but IMHO it's likely in this case he is going to plead guilty. Whatever comes out in a criminal trial, e.g., testimony, could be used against SBF in the civil cases brought by the SEC and CFTC. Assuming SBF will plead guilty, given the amount of the losses he has caused, which far exceed the amounts involved in Holmes' fraud, what sort of plea agreement will SBF be offered.
One theory of why these charges against SBF were brought so quickly is that the US attorney is extraordinarily confident he can obtain a conviction. The "brilliant" SBF's idiotic public behaviour after the bankruptcy filing has no doubt has made the government's job much easier. This makes sense because as many readers will know, generally federal prosecutors do not like to lose and they will not gamble. Their egos and reputations may be at stake. They want slam dunks. For Damian Williams this is probably a slam dunk. Assuming he does not make any significant mistakes.
>There is a good chance SBF will be released on bail so he does not have to spend time in detention in NYC. The charges against him are all nonviolent crimes
I don’t agree with this theory, as I think it’s rather likely SBF will be viewed as a flight risk.
• His heavy involvement in the cryptocurrency space makes it likely he has significant moveable digital cash reserves that cannot be easily seized and which would greatly aid an escape.
• He has shown himself to be extremely mobile and was seemingly already attempting to get some distance from the USA, given that he was arrested in the Bahamas
• The gravity of sentences charges he’s potentially facing are vast, and he has many incentives to flee prosecution if it means potentially dodging spending 10-20++ years in jail
I therefore think it’s very unlikely he gets bail.
I don’t agree with this theory, as I think it’s rather likely SBF will be viewed as a flight risk.
• His heavy involvement in the cryptocurrency space makes it likely he has significant moveable digital cash reserves that cannot be easily seized and which would greatly aid an escape.
• He has shown himself to be extremely mobile and was seemingly already attempting to get some distance from the USA, given that he was arrested in the Bahamas
• The gravity of sentences charges he’s potentially facing are vast, and he has many incentives to flee prosecution if it means potentially dodging spending 10-20++ years in jail
I therefore think it’s very unlikely he gets bail.
Confiscate his passport, put his face on the no-fly list, and electronic tag him?
Although possibly more relevant is the reasons Kevin Mitnick was denied bail; what can he do from a computer?
Although possibly more relevant is the reasons Kevin Mitnick was denied bail; what can he do from a computer?
Both Ellison's and Wang's plea agreements contain the same unmodified provision from the US Attorney's Office requiring them to agree to surrender their travel documents as a condition of bail in exchange for the US Attorney promise not to object to their release on bail.
It’s hard to know for sure but I agree. SBF might catch a break for looking innocent and young, but this really is a textbook example of when bail should not be granted. Bail may happen if he ends up cooperating.
I’m very interested to see if the parents are charged.
I’m very interested to see if the parents are charged.
The IRS likely can get the parents on gifts of property and travel. I guess the parents will walk, though.
>looking innocent
lol. lmao even
lol. lmao even
Sam Baby Face
if the judge releases him from custody, "Will SBF do more interviews?"
Because he has such a great tendency to shoot himself in the foot in the legal sense, it sounds as if encouraging the judge to grant his release so he can carry on incriminating himself in interviews would be a smart strategy from the prosecutor's POV
Maybe his own lawyer will be arguing against release
Because he has such a great tendency to shoot himself in the foot in the legal sense, it sounds as if encouraging the judge to grant his release so he can carry on incriminating himself in interviews would be a smart strategy from the prosecutor's POV
Maybe his own lawyer will be arguing against release
Neither Ellison's nor Wang's plea agreements contain recommended sentences, or waivers of any right to appeal sentences, so I am probably wrong to assume SBF's would be any different in that respect. When speculating about sentencing I always consider that sentencing guidelines are just guidelines. They are not rules. I had a bet with a friend on Holmes' sentence, and we based our numbers on sentencing guidlines. That worked quite well. But with SBF there are more charges, the losses are so much higher, and things are moving so much faster, so I am not sure.
> Lots of people are speculating on sentencing, some are comparing SBF to Holmes, but IMHO it's likely in this case he is going to plead guilty. Whatever comes out in a criminal trial could be used against SBF in the civil cases brought by the SEC and CFTC.
This includes the convictions and statement of the offense that comes with a guilty plea, though, too.
This includes the convictions and statement of the offense that comes with a guilty plea, though, too.
A guilty plea in the criminal trial will be introduced at the civil trial as a per se admission of guilt. I'm not following your logic.
The statement refers to what happens if he does not plead guilty.
>The question I have is if the judge releases him from custody, "Will SBF do more interviews?"
That's a funny question to consider. I wonder if this has sufficiently shattered his world-view such that he'll no longer do interviews.
That's a funny question to consider. I wonder if this has sufficiently shattered his world-view such that he'll no longer do interviews.
Very well put.
Any ideas why these prosecutions are moving forward so fast? Usually this stuff takes forever as evidence is carefully gathered. Curious if anyone has any insights here.
This is what happens when your top lieutenants flip on you for plea deals and you provide the government piles of evidence by doing continuous media interviews and your attempts to disguise your fraud amount to saying "crypto" while you wave your hands.
Literally because they have found two cooperating witnesses, who have provided much of the information prosecutors need to convict Mr. SBF.
> Any ideas why these prosecutions are moving forward so fast?
Because two people near the top of the conspiracy, with broad knowledge of its details and where the supporting evidence is, have decided to fully cooperate.
And because SBF likes to talk and told his (original) lawyers to, as he tells it, “go fuck themselves” when they advised him to stop publicly confessing his crimes.
Because two people near the top of the conspiracy, with broad knowledge of its details and where the supporting evidence is, have decided to fully cooperate.
And because SBF likes to talk and told his (original) lawyers to, as he tells it, “go fuck themselves” when they advised him to stop publicly confessing his crimes.
Despite the smoke and mirrors it is actually an incredibly basic crime to unravel.
In the modern era of email / slack / whatever - every smoking gun piece of evidence is a ctrl-f away. SBF is publicly testifying and pointing to where the bodies are buried, FTX the company is cooperating and co-conspirators are cooperating.
In the modern era of email / slack / whatever - every smoking gun piece of evidence is a ctrl-f away. SBF is publicly testifying and pointing to where the bodies are buried, FTX the company is cooperating and co-conspirators are cooperating.
You'll be surprised how ephemeral things can be, and many more controversial white collar communication conventions develop to avoid the "on paper" evidence trail.
Half of keeping your nose clean and keeping people accountable is cornering them into reading/writing something. This is a great way to make yourself nobody's friend, but also a good weapon for halting something by refusing to do it without getting it in writing first.
Half of keeping your nose clean and keeping people accountable is cornering them into reading/writing something. This is a great way to make yourself nobody's friend, but also a good weapon for halting something by refusing to do it without getting it in writing first.
Likely the prosecution's case is strong, e.g. there is a hard-to-disguise paper trail that clearly implicates these first cooperators.
Because there is an administration in power that is more willing to prioritize prosecuting financial crimes.
And the previous administration never prosecuted any financial crimes, especially not Elizabth Holmes, right?
"In June 2018, Theranos announced that Holmes was stepping down as CEO. On the same day, the Department of Justice announced that a federal grand jury had charged Holmes, along with Balwani, with nine counts of wire fraud and two counts of conspiracy to commit wire fraud." [0]
[0] https://www.businessinsider.com/theranos-founder-ceo-elizabe...
"In June 2018, Theranos announced that Holmes was stepping down as CEO. On the same day, the Department of Justice announced that a federal grand jury had charged Holmes, along with Balwani, with nine counts of wire fraud and two counts of conspiracy to commit wire fraud." [0]
[0] https://www.businessinsider.com/theranos-founder-ceo-elizabe...
In 2018, Elizabeth Holmes has the misfortune of having multiple cabinet members, Presidental ally Rupert Murdoch and Republican stalwarts like Kissinger and former Senators among her defrauded investors. Other than Theranos there was little financial crime prosecution.
It is true that white collar prosecutions have declined but this is part of a long running trend (https://www.vox.com/2015/8/5/9099935/federal-white-collar-cr..., https://trac.syr.edu/tracreports/crim/514/). It is also true that the former president was on the record as against the FCPA but there were more enforcement actions in his term than most other presidents (https://www.gibsondunn.com/wp-content/uploads/2021/01/Chart2...). If there is any increase this year it's likely going to be due to a bunch of low hanging fruit PPP fraud cases.
Not necessarily disuputing this, but do you have anything to back up this claim?
And all the donation cheques bounced.
Some crimes are inherently hard to prosecute. Fraud for instance requires you to prove intent. International fraud is a mine field of overlapping jurisdictions and definitions and legal systems etc.
Other crimes are very easy: misleading (prospective) investors just requires that you fail to disclose something. No need to prove intent, even something very small will do. And as long as there is at least some connection to the US, US courts will hear the case.
Prosecuting SBF for defrauding customers would take years. But getting him for failure to disclose to investors (which seems to be what they're after) is really easy. So they're powering through.
They also now have 2 co-operating witnesses.
Other crimes are very easy: misleading (prospective) investors just requires that you fail to disclose something. No need to prove intent, even something very small will do. And as long as there is at least some connection to the US, US courts will hear the case.
Prosecuting SBF for defrauding customers would take years. But getting him for failure to disclose to investors (which seems to be what they're after) is really easy. So they're powering through.
They also now have 2 co-operating witnesses.
A couple weeks ago you had people here asking why they were moving forward so slowly.
And why no charges for Celcius and other ponzis? Are they harder to prove fraud?
This time SBF just kinda dumped a huge bag full of evidence on the Justice department's doorstep like it was an early christmas present. The trial is going to be hilarious.
[deleted]
I'm going to guess plea deals.
Since everybody else is guessing, I'll guess because it's politically inconvenient for powerful people and they'd like this to be wrapped up next year and keep the investigation as quick and narrow as possible.
I find the timing of the announcement somewhat interesting. Just right when SBF is en route to NY.
Good catch. I assume it was to mitigate the risk of him fighting the extradition or outright fleeing. If he had known their case was this strong, with his former colleagues flipping on him, I wonder if he would have agreed to be extradited or if he would have tried to delay it.
(Or maybe he already knew and it’s just a coincidence).
(Or maybe he already knew and it’s just a coincidence).
I noticed that too, I imagine it was given to the press with an embargo until SBF was on the plane.
Curious to see if they also strike a deal with Nishad Singh. He was the director of engineering at FTX that supposedly authored the code that exempted Alameda from liquidation.
How many deals do they need? I'm afraid of prosecutors cutting too many deals, being too lenient on the guilty, just to make their jobs easier - making practically certain cases 1% more certain in exchange for not punishing appropriately.
I think it's good to get one or two insiders - Ellison and Wang seem ideal. Why does the state need more?
I think it's good to get one or two insiders - Ellison and Wang seem ideal. Why does the state need more?
I think that's hugely dependent on whether you believe the cost function for prison is linear? I would expect most people to say no. The difference between 0 and 10 years is much greater than 10 and 20 years.
If that is the case, then putting 10 people away for 10 years due to greater certainty of conviction, but also more lenient sentences, has greater social utility (as a detterrent) than only putting one person behind bars for 100 years, with 9 others getting off scot-free.
If that is the case, then putting 10 people away for 10 years due to greater certainty of conviction, but also more lenient sentences, has greater social utility (as a detterrent) than only putting one person behind bars for 100 years, with 9 others getting off scot-free.
> How many deals do they need? I'm afraid of prosecutors cutting too many deals, being too lenient on the guilty, just to make their jobs easier
Saving taxpayer money, too.
Saving taxpayer money, too.
It depends on how lenient they are. Many times, deals just for pleading guilty are a thing, leaving conspiracies aside.
That's also bad. Prosecutors hold a huge sentence over people and compel them to confess - it's a kind of hypothetical torture, forcing you to confess by the bad stuff they'll probably do to you.
Prosecutors, along with their investigators, should come to a position on whether a party is guilty and if so what punishment they deserve. They should then make that case in court. Courts would need much greater throughput to handle this, but the current method seems much worse.
Prosecutors, along with their investigators, should come to a position on whether a party is guilty and if so what punishment they deserve. They should then make that case in court. Courts would need much greater throughput to handle this, but the current method seems much worse.
[deleted]
Review your Pull Requests people!
Hope both of them spend some time in prison too. It would be pretty insane if don't go to prison as part of a plea deal (where they testify against SBF or something).
She has to hope that Sam goes to trial. If he does, her testimony against him earns her that 5k1.1. motion to reduce sentence. If he doesn't, the government may or may not file the motion. And if there's no 5k, there's no Rule 35.
Despite the noise, it doesn't look like either Carol or SBF profited much from this scheme. At the end of the day, the "luxurious lifestyle" looks pretty spartan. Bernie funded years of living large off of his victims; not the case here.
The clawbacks and value of the FTX positions long term will be interesting.
Despite the noise, it doesn't look like either Carol or SBF profited much from this scheme. At the end of the day, the "luxurious lifestyle" looks pretty spartan. Bernie funded years of living large off of his victims; not the case here.
The clawbacks and value of the FTX positions long term will be interesting.
[deleted]
I hope they get much more than a slap on the wrist, even though they're cooperating now.
They're as much liable as SBF in this whole scheme.
Also, where's Sam Trabucco?
They're as much liable as SBF in this whole scheme.
Also, where's Sam Trabucco?
Ryan Salame took out $60 million in “loans” from FTX, donated tens of millions to republicans, and bought up a bunch of restaurants in the Berkshires. How are all these guys not being arrested?
> How are all these guys not being arrested?
This article is about precisely the process in which that happens.
They now have cooperating witnesses with significant internal visbility into what went on, and more importantly, people who can speak to the intention behind what went on.
This article is about precisely the process in which that happens.
They now have cooperating witnesses with significant internal visbility into what went on, and more importantly, people who can speak to the intention behind what went on.
<fraud discovered>
"These people will never see a day in prison."
<surprisingly fast case made against the principals>
"Well, what about this other guy over there?"
"These people will never see a day in prison."
<surprisingly fast case made against the principals>
"Well, what about this other guy over there?"
Notably:
> Ellison and Wang are cooperating with the SEC’s ongoing investigation...
> Ellison and Wang are cooperating with the SEC’s ongoing investigation...
Huh. This got merged in from another thread, and now I look like a doofus.
Oof I didn’t realize that was a feature. That seems like a very poor feature with no UI to acknowledge the fact.
[deleted]
if you engage in financial fraud, prepare for everyone to snitch on you
Does this cooperation mean that those fraudsters don't go to prison?
The whole team knew about stealing billions of dollars of money, clearly there's more than 1 person (and more than 1 company's executives) that need prison time.
The whole team knew about stealing billions of dollars of money, clearly there's more than 1 person (and more than 1 company's executives) that need prison time.
It means they get less prison time in exchange for helping prove the cases that give lots of prison time to others.
Yup, there's no dilemma among the potential prisoners here -- the best policy is to "do the rat thing".
As the letter mentions, that's entirely up to the sentencing judge to decide. All the DOJ can do is to inform the judge that Ellison cooperated with them.
Prosecutors can't promise the judge will do anything; the judge doesn't work for them. However, judges have the same vested interest in honoring these deals as the prosecutors do; the prosecutors or the defendant have to really piss off the judge to have it disregarded entirely.
It doesn't say specifically but if there was a grant of immunity it would probably say so. More likely they are pleading guilty which usually gets a lesser sentence in exchange for full cooperation and no trial.
Well she’s agreed to plead guilty so she definitely wasn’t granted immunity...
> Both were involved in effective altruism — a community focused on using data to maximize the long-term impact of charitable donations.
> She got into crypto, she explained on another episode, because she was hoping to make lots of money to give away as part of her commitment to effective altruism.
Should the term be capitalized, as Effective Altruism?
It seems to be a new, branded definition, and not in common usage like the generic terms effective and altruism.
It's also bringing some bad associations to good old-fashioned altruism.
Also, in the space of questionable philosophy appealing to insulated rich kids, Objectivism is already capitalized.
> She got into crypto, she explained on another episode, because she was hoping to make lots of money to give away as part of her commitment to effective altruism.
Should the term be capitalized, as Effective Altruism?
It seems to be a new, branded definition, and not in common usage like the generic terms effective and altruism.
It's also bringing some bad associations to good old-fashioned altruism.
Also, in the space of questionable philosophy appealing to insulated rich kids, Objectivism is already capitalized.
I also can’t think of Effective Altruism without thinking of the inverse radical Objectivism. I don’t agree with Ayn Rand’s amateur philosophizing [1] but it’s a great example of using the Rational vs Altruistic dichotomy for extreme ideological ends.
Both just happen to be able to justify the acquisition of infinite capital without typical counter-weights that society puts forward… and inversely to justify authoritarian state control of everything for either purely rational or purely altruistic pursuits as was in vogue in the 1910-1940s.
[1] https://en.wikipedia.org/wiki/The_Virtue_of_Selfishness
Both just happen to be able to justify the acquisition of infinite capital without typical counter-weights that society puts forward… and inversely to justify authoritarian state control of everything for either purely rational or purely altruistic pursuits as was in vogue in the 1910-1940s.
[1] https://en.wikipedia.org/wiki/The_Virtue_of_Selfishness
Interesting insight.
Sometimes it seems like the ultra wealthy need some sort of story to tell themselves (and others) as to why they are different, why they have earned and deserve these vast richest, etc. Philosophy more and more seems to be a rich mans game. Wonder if it has anything to do with Imposter Syndrome? As if preaching a philosophy can somehow make up for the ruthlessness (and I have to believe some emptiness) underneath it all?
Also, there seems to be an element of fashion involved. Like when it was in vogue for celebrities to adopt foreign kids (only to have them raised by nannies). Gotta virtue signal. Maybe that explains why the beliefs come and go, Objectivism was so last year, etc.
Sometimes it seems like the ultra wealthy need some sort of story to tell themselves (and others) as to why they are different, why they have earned and deserve these vast richest, etc. Philosophy more and more seems to be a rich mans game. Wonder if it has anything to do with Imposter Syndrome? As if preaching a philosophy can somehow make up for the ruthlessness (and I have to believe some emptiness) underneath it all?
Also, there seems to be an element of fashion involved. Like when it was in vogue for celebrities to adopt foreign kids (only to have them raised by nannies). Gotta virtue signal. Maybe that explains why the beliefs come and go, Objectivism was so last year, etc.
The Effective Altruists bought two castles. Why? The ambiance helps them think clearer and hold better events of course! Since they are the main character (ironically Rand-ish), the castles are a better use of donations than cheap mosquito nets, famine relief, etc.
Anybody who generates wealth via business ownership is different from most of us - business risk should have at least a chance of reward, otherwise why take the risk? Of course rent-seeking, regulation-gaming & parasitical industries such as finance and real estate muddy the waters, but fundamentally the existence of some number of ultra-rich individuals is a natural outcome of the opportunity to generate wealth via business.
Capitalized, yes. It should also have air quotes.
"Effective Altruism" is more appropriate in this case.
"Effective Altruism" is more appropriate in this case.
There are audio recordings of Fried saying that it was something he needed to say in order to fit in with the right crowd.
There were never any philanthropic objectives.
It was always a scam from the get go.
Also look into one-coin and Ruja Ignatova.
There were never any philanthropic objectives.
It was always a scam from the get go.
Also look into one-coin and Ruja Ignatova.
Are those recordings publicly available or any source?
Would also appreciate a link. What I have (maybe GP is mixing these up?):
Alleged Twitter DM conversation between SBF and Vox reporter that fits otherwise: https://www.vox.com/future-perfect/23462333/sam-bankman-frie...
Audio recordings of two calls between SBF and Tiffany Wong where he says he donated to Democratic Party publicly but equivalent amount to Republican Party dark to play both sides:
https://piped.video/watch?v=6DezodR9hNI
https://piped.video/watch?v=xP54LZB3WRw
Maybe there's more in those, I found it too tiring to listen to all of it due to it being hard to make out what SBF is saying.
CoffeZilla commented and subbed parts: https://piped.video/watch?v=0rL35_WV3lE
Alleged Twitter DM conversation between SBF and Vox reporter that fits otherwise: https://www.vox.com/future-perfect/23462333/sam-bankman-frie...
Audio recordings of two calls between SBF and Tiffany Wong where he says he donated to Democratic Party publicly but equivalent amount to Republican Party dark to play both sides:
https://piped.video/watch?v=6DezodR9hNI
https://piped.video/watch?v=xP54LZB3WRw
Maybe there's more in those, I found it too tiring to listen to all of it due to it being hard to make out what SBF is saying.
CoffeZilla commented and subbed parts: https://piped.video/watch?v=0rL35_WV3lE
On that Vox article, almost halfway down the page, the alleged chat messages labeled "Yesterday, 9:53 PM" looks pretty damning.
And then, maybe 90% down the page, a little more on how he feels about ethics.
(It's too bad that this whole HN thread is still flagged, because it seems very relevant to the story, and one of the more interesting facets.)
And then, maybe 90% down the page, a little more on how he feels about ethics.
(It's too bad that this whole HN thread is still flagged, because it seems very relevant to the story, and one of the more interesting facets.)
Not audio recordings, they were screenshots of a twitter conversation
My bad. I heard a reenactment.
The point stands. He said what he thought he needed to say and there were never any philanthropic objectives.
This is what I meant:
https://cdn.vox-cdn.com/thumbor/3FuCAM_X4mREv2FJTnDv_QMmD6M=...
Or this:
https://youtu.be/qMKEvAui9SU?t=580
https://youtu.be/qMKEvAui9SU?t=860
The point stands. He said what he thought he needed to say and there were never any philanthropic objectives.
This is what I meant:
https://cdn.vox-cdn.com/thumbor/3FuCAM_X4mREv2FJTnDv_QMmD6M=...
:format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/24202642/Screen_Shot_2022_11_16_at_7.34.01_AM.png){kind=link}
Or this:
https://youtu.be/qMKEvAui9SU?t=580
https://youtu.be/qMKEvAui9SU?t=860
Curiously this was flagged @dang? I personally can't tell why.
It absolutely should be!
This also applies to "open source" vs "Open Source". The former has regular connotations from regular English usage. The latter, and only the latter, should refer to the proprietary definition offered by the OSI.
This also applies to "open source" vs "Open Source". The former has regular connotations from regular English usage. The latter, and only the latter, should refer to the proprietary definition offered by the OSI.
> Should the term be capitalized, as Effective Altruism?
I've seen it written both ways, though it looks like lowercase is more common. Ex: Wikipedia uses lowercase https://en.wikipedia.org/wiki/Effective_altruism
I've seen it written both ways, though it looks like lowercase is more common. Ex: Wikipedia uses lowercase https://en.wikipedia.org/wiki/Effective_altruism
Basically, it seems that earn to give isnt the best way. Billionaires like Jeff Bezos got that way by building a very successful organization that helps a lot of consumers (being able to do so thanks yo wage slavery until automation started kicking in).
Since then, it has grown a lot and Bezos has to do nothing to reap the benefits but keep his shares.
But just because Bezos built one great thing that helps so many consumers, does that make him the best at giving away wealth? He claims it is actually HARD to do effectively. His ex-wife seems to bave given a lot more than he has. And Warren Buffett outsourced it to Bill Gates. And tons if people even hate Bill Gates for his vaccination programs in Africa - despite eradicating Polio.
Bill also speaks to world leaders and wants to spray mist in the atmosphere to cool the planet. And kill all mosquitoes. Pretty big plans.
Plus Bill buys a huge amount of farmland for some reason. What makes people think central planning would be the best way to allocate donations in the world?
Since then, it has grown a lot and Bezos has to do nothing to reap the benefits but keep his shares.
But just because Bezos built one great thing that helps so many consumers, does that make him the best at giving away wealth? He claims it is actually HARD to do effectively. His ex-wife seems to bave given a lot more than he has. And Warren Buffett outsourced it to Bill Gates. And tons if people even hate Bill Gates for his vaccination programs in Africa - despite eradicating Polio.
Bill also speaks to world leaders and wants to spray mist in the atmosphere to cool the planet. And kill all mosquitoes. Pretty big plans.
Plus Bill buys a huge amount of farmland for some reason. What makes people think central planning would be the best way to allocate donations in the world?
There are no such things as benevolent billionaires.
There’s a problem with a society that enables billionaires to exist at all. It shouldn’t even be possible but we’re here for a lot of reasons.
https://m.youtube.com/watch?v=0Cu6EbELZ6I
There’s a problem with a society that enables billionaires to exist at all. It shouldn’t even be possible but we’re here for a lot of reasons.
https://m.youtube.com/watch?v=0Cu6EbELZ6I
Why? J. K. Rowling created the best selling book series of all time and hundreds of millions of people bought and loved her books to read them. What is problematic about that? Should she have just given the last 6 books away for free because she already created too much value for other people writing the first harry potter?
Nothing is problematic about that. But as a society there is also nothing problematic about raising taxes to 90% on billionaires and giant corporations for their capital gains etc.
I am saying that the ones who generate revenue (money going one way) are not automatically the best to fund social programs (money going the other way).
I am saying that the ones who generate revenue (money going one way) are not automatically the best to fund social programs (money going the other way).
> There are no such things as benevolent billionaires.
Interesting thesis, do you have any reasoning to support your claim?
Interesting thesis, do you have any reasoning to support your claim?
i'll take a crack at it: the act of accumulating a billion dollars is an anti-social act. billionaires should have been giving it away hand over fist long before that happened.
They own part of the company that is worth that much.
They can't liquidate all their assets without harming the company, thus the livelihoods of their employees.
Look at what they create, not only what they are worth.
Also your charity endeavors are more effective with the compound interest of a billionaire vs a multi-millionaire.
They can't liquidate all their assets without harming the company, thus the livelihoods of their employees.
Look at what they create, not only what they are worth.
Also your charity endeavors are more effective with the compound interest of a billionaire vs a multi-millionaire.
Shares represent extracting rents from the value exchange ecosystem the company participates in. Selling shares is fine for growing a company. But the perverse part is shareholders then go ahead and sell them to others, sometimes forming a bubble, other times pushing company management to extract ever more rents / eke out ever more profit for them to support sky-high valuations. This investor bubble hurts both consumers and producers and enriches those who passively park their money in things.
Don’t get me wrong, I think in growth stages, stock exchanges do allocate money to fuel productive sectors of society. But during other periods of a company’s life, they are mere zero sum games, where money goes mostly from retail investors to enrich hedge funds.
I think the problem is that there is no limit to shareholder value extraction. The non-productive sector of society parks their money in shares in order to legally plunder the value exchange of producers and consumers.
Now that we have utility tokens, the network can be owned by the participants. Raise money by selling utility tokens at a discount. They have a ceiling after all (the value of the utility token) and you can only sell as much as people believe there will be demand in the end from actual customers.
You can raise money by selling shares temporarily but have the shares be usable as discounts on utility tokens so you can sell them to customers. And that way you can ignore your shareholders clamoring for you to cannibalize your ecosystem for them.
Don’t get me wrong, I think in growth stages, stock exchanges do allocate money to fuel productive sectors of society. But during other periods of a company’s life, they are mere zero sum games, where money goes mostly from retail investors to enrich hedge funds.
I think the problem is that there is no limit to shareholder value extraction. The non-productive sector of society parks their money in shares in order to legally plunder the value exchange of producers and consumers.
Now that we have utility tokens, the network can be owned by the participants. Raise money by selling utility tokens at a discount. They have a ceiling after all (the value of the utility token) and you can only sell as much as people believe there will be demand in the end from actual customers.
You can raise money by selling shares temporarily but have the shares be usable as discounts on utility tokens so you can sell them to customers. And that way you can ignore your shareholders clamoring for you to cannibalize your ecosystem for them.
that sounds to me like a great excuse a billionaire could use to make himself believe that no, really, me keeping all this money is actually good.
sam bankman-fried is purported to have used a variation of this.
sam bankman-fried is purported to have used a variation of this.
It's hard for me to fathom being so privileged and then essentially throwing away your life. I have no idea what they were thinking.
People are a lot like ChatGPT, in that they fill in their next action based on what is most likely according to their training given what actions came before it.
I really like this model of human behavior and I subscribe to it myself. It's how I explain why some people become pathological liars - because it worked well in the past.
I agree. I have never held to anything special about the way I or my brain function. I appear to be pattern-matching my way through the day 99% of the time — and forgetting 99% of it as well, only noting the perceived anomalies.
It's what happens when smart, privileged people abuse uppers. Rather than break into a truck to steal tools they just go on white collar crime sprees.
A lot of these millenial/Gen-Z types are diagnosed with ADHD and are 100% abusing Dextroamphetamine.
it's exactly because they're so privileged. If you ever see posh people being arrested for incredibly stupid white collar crime it's usually because they live on the assumption that nothing is ever so serious that someone can't bail you out of.
[deleted]
I really hope Caroline and Gary go to prison too.
It would be a slap in the face if they got some absurd plea deal where they didn't have to go to jail if they testified against Sam.
It would be a slap in the face if they got some absurd plea deal where they didn't have to go to jail if they testified against Sam.
Since both are talking, I assume their deal isn't that great. My understanding is that you only get those out-of-jail-free cards if there's no other way to convict and I don't see that being the case here in any way.
On the other hand, great lawyers and connections might still make something out of it.
On the other hand, great lawyers and connections might still make something out of it.
> On the other hand, great lawyers and connections might still make something out of it.
That's my concern. Caroline's father is an MIT professor who was previously Gary Gensler's (head of SEC) boss.
It would be extremely disheartening if Caroline gets an extremely generous plea deal due to her father's connections.
That's my concern. Caroline's father is an MIT professor who was previously Gary Gensler's (head of SEC) boss.
It would be extremely disheartening if Caroline gets an extremely generous plea deal due to her father's connections.
What is up with the conspiracy theories that professors are somehow politically powerful entities? Is everyone putting forth these theories still in college? Do they not know how little power college professors wield outside academia.
Personal connections to the head of the SEC on the other hand are valuable.
Personal connections to the head of the SEC on the other hand are valuable.
> Do they not know how little power college professors wield outside academia
Are you joking?
That's absolutely not the case for Economics (the context we're talking about here).
Why don't you look up the backgrounds of the people on the Federal Reserve Board of Governors?
Or, look up who drafts major legislation? If you watch MIT's Econ 101 course on YouTube, the professor who teaches it was actually the guy behind Obamacare (John Gruber).
Modern Monetary Policy has become a huge part of a base of the Democratic Party, again... drafted by an Economics Professor.
> Is everyone putting forth these theories still in college? Do they not know how little power college professors wield outside academia.
No. I'm not still in college.
You just seem to be completely unaware on how influential Economists (almost all of whom are college professors) are.
> Personal connections to the head of the SEC on the other hand are valuable
Oh yeah, head of the SEC is also an MIT Econ Professor.
But... clearly they have no power outside academia!!
Saying otherwise is a conspiracy theory!!
Are you joking?
That's absolutely not the case for Economics (the context we're talking about here).
Why don't you look up the backgrounds of the people on the Federal Reserve Board of Governors?
Or, look up who drafts major legislation? If you watch MIT's Econ 101 course on YouTube, the professor who teaches it was actually the guy behind Obamacare (John Gruber).
Modern Monetary Policy has become a huge part of a base of the Democratic Party, again... drafted by an Economics Professor.
> Is everyone putting forth these theories still in college? Do they not know how little power college professors wield outside academia.
No. I'm not still in college.
You just seem to be completely unaware on how influential Economists (almost all of whom are college professors) are.
> Personal connections to the head of the SEC on the other hand are valuable
Oh yeah, head of the SEC is also an MIT Econ Professor.
But... clearly they have no power outside academia!!
Saying otherwise is a conspiracy theory!!
I looked up the backgrounds of the Federal Reserve Board of Governors. And? A few were professors for a few years and maybe one made it a major job.
The former head of the SEC was also a partner at Goldman Sachs, where he co-chaired their Finance committee overseeing their internal controls, spent 4 years in an undersecretary position in the treasury department, joined the Senate staff and helped write Sarbanes-Oxley, is former chair of the US CTFC where he overhauled regulations for 6 years.
By my count, that's 12 years of high-level federal government experience, 18 years at Goldman Sachs, and maybe 6 years as a professor. And the professorship was after at least 24 years doing other things at a very high level
You seem to confuse cause and effect
The former head of the SEC was also a partner at Goldman Sachs, where he co-chaired their Finance committee overseeing their internal controls, spent 4 years in an undersecretary position in the treasury department, joined the Senate staff and helped write Sarbanes-Oxley, is former chair of the US CTFC where he overhauled regulations for 6 years.
By my count, that's 12 years of high-level federal government experience, 18 years at Goldman Sachs, and maybe 6 years as a professor. And the professorship was after at least 24 years doing other things at a very high level
You seem to confuse cause and effect
He also forgets that a large part of the federal reserve is, essentially, a research institution. That does research, publishes and critiques papers, and then takes those papers into account when drafting policy.
The question was around whether Economics professors are influential outside of academia.
The answer is unequivocally yes.
You seem to have changed the discussion to something else.
The answer is unequivocally yes.
You seem to have changed the discussion to something else.
The question is around Economics Professors and their effects on society and how well-connected they tend to be. Many Econ professors at business schools are former bankers. Many bankers are former Econ profs (banks have a ton of staff in research roles).
You’ve changed the argument to… i don’t even know?
The question is whether Economics Professors are influential outside of academia and if they’re well connected. The answer is obviously yes. The top professors (i.e. MIT Profs, Harvard Profs, Yale, etc.) are extremely influential far beyond academia.
I'd agree that you're right in other contexts. Like, a history professor or something. But that's not what we're talking about here.
You’ve changed the argument to… i don’t even know?
The question is whether Economics Professors are influential outside of academia and if they’re well connected. The answer is obviously yes. The top professors (i.e. MIT Profs, Harvard Profs, Yale, etc.) are extremely influential far beyond academia.
I'd agree that you're right in other contexts. Like, a history professor or something. But that's not what we're talking about here.
Some business school professors are accomplished former businessmen. Some are just lifelong academics. The ones with power are because of their non-professor credentials and connections.
Schools, business schools especially, like to hire influential people as professors. So there are many powerful professors. But that's not why they are powerful.
Since that's not why they are powerful, there's no reason to bring it up.
Schools, business schools especially, like to hire influential people as professors. So there are many powerful professors. But that's not why they are powerful.
Since that's not why they are powerful, there's no reason to bring it up.
Again, wrong.
Reread the thread to see why.
Reread the thread to see why.
I agree that the focus on her father's professorship is strange in this context.
More broadly it seems like it might be blurring lines... SBF's parents being specifically Law professors, and having a certain level of access to FTX, would likely have been aware of any criminality occurring and should have tried to prevent it.
You're right that what matters is: - Ellison's father is strongly connected to the SEC head - SBF's mother was a major fundraiser for the DNC
More broadly it seems like it might be blurring lines... SBF's parents being specifically Law professors, and having a certain level of access to FTX, would likely have been aware of any criminality occurring and should have tried to prevent it.
You're right that what matters is: - Ellison's father is strongly connected to the SEC head - SBF's mother was a major fundraiser for the DNC
[deleted]
maxbond(1)
They almost certainly did not think anything they were doing was wrong. Effective altruism and utilitarianism is one helluva drug
Sorry but no. They absolutely know what they were doing was wrong. They just felt right about it. Don't make excuses for white collar criminals.
Lol... I'm not making excuses. If you read my post history, you'll note I've been a constant critic of crypto and the accompanying scams. i'm just pointing out that the people who commit some of the worst crimes often convince themselves they are doing great good. Most of us believe that we would never do bad things. However, most of us are quite capable of it because we justify our actions to ourselves, and it's very easy to do bad while believing yourself good, which is what happened here.
100% this. the most dangerous situation is when people convince themselves that their goal is objectively good and thus adopt a Machiavellian attitude that the ends justify the means. i imagine the thought process goes something like "it doesn't matter how we obtain all these money, as long as we ultimately use the money to do good. the good outweighs the bad, and as long as we get away with it, people will eventually forget the bad with time."
even worse is when the people who have this attitude are extremely ignorant but truly and genuinely believe they have good intentions. they will proceed to do extremely damaging things to other people, causing extreme harm, all because they truly believe their intentions are good, but often their viewpoint is wrong due to incomplete information. these people almost see themselves as heroes and are empowered by their moral conviction from that viewpoint. i've observed this first-hand too many times in my personal life.
even worse is when the people who have this attitude are extremely ignorant but truly and genuinely believe they have good intentions. they will proceed to do extremely damaging things to other people, causing extreme harm, all because they truly believe their intentions are good, but often their viewpoint is wrong due to incomplete information. these people almost see themselves as heroes and are empowered by their moral conviction from that viewpoint. i've observed this first-hand too many times in my personal life.
Until you see them buying massive mansions and hiding their money away and even that is a lie too. If you could show me one truly charitable thing they've actually done, rather than ego reinforcing projections, I'm listening.
Sure, they're justifying their means, but none of it has any actual good intentions.
Sure, they're justifying their means, but none of it has any actual good intentions.
also drugs are a helluva drug
Amphetamine, it’s the powerhouse of the (grifting) cell
Ellison's tweets about adderall are something else. I saw those and was like "People trust her with billions?"
The problem isnt the adderall. Its that she was clearly abusing it. She participated in the theft of billions and she felt great doing it.
The problem isnt the adderall. Its that she was clearly abusing it. She participated in the theft of billions and she felt great doing it.
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renonn(2)
Caroline's dad is an MIT econ prof and wrote a series of books titled Hard Math for X. New installment should surely be Hard Math for Crypto Fraud and Jail Evasion.
Shouldn't be that hard, Michael Milken is doing fine.
"He is known for his role in the development of the market for high-yield bonds ("junk bonds"), and his conviction and sentence following a guilty plea on felony charges for violating U.S. securities laws... With a net worth of $6 billion as of 2022, he is ranked by Forbes magazine as the 412th richest person in the world"
https://en.wikipedia.org/wiki/Michael_Milken
"He is known for his role in the development of the market for high-yield bonds ("junk bonds"), and his conviction and sentence following a guilty plea on felony charges for violating U.S. securities laws... With a net worth of $6 billion as of 2022, he is ranked by Forbes magazine as the 412th richest person in the world"
https://en.wikipedia.org/wiki/Michael_Milken
None of the people involved in this can hold a candle to the force that is Michael Milken
> Caroline's dad is an MIT econ prof and wrote a series of books titled Hard Math for X
He wrote them for caroline and her sister when they were in elementary school, because they excelled in math and wanted more of a challenge.
I bought these books after reading about her when this first started happening a few weeks ago.
No joke, those books are really tough. They are for elementary and middle schoolers, aannnndddd I can't get thru them. lol
He wrote them for caroline and her sister when they were in elementary school, because they excelled in math and wanted more of a challenge.
I bought these books after reading about her when this first started happening a few weeks ago.
No joke, those books are really tough. They are for elementary and middle schoolers, aannnndddd I can't get thru them. lol
[deleted]
Too bad HBO's Silicon Valley isn't still going. The writers would have had a field day.
I had the idea that they should just reboot the show with a new company to follow that's in the blockchain space. There's so many characters and fraudsters and just general shenanigans to riff off of.
I think the actual crypto story lines are too preposterous to be funny. :)
I think while the casting of SBF character would be hilarious, the casting of the Caroline Ellison character would take it over the top.
I mean they're pretty much Gwart and the rest of the stallions.
Thanks for that - now I can't unsee that!
They had some on Mythic Quest this season that were surpassed by reality before they aired.
I think it would make a good bighead storyline
The sequel Silicoin Wallet cannot be too bad.
Unfortunately it seems like almost all the talented writers left after season 3/4.
Seasons 1 and 2 were absolutely hysterical and amazing, but by the end the writing got really terrible.
Seasons 1 and 2 were absolutely hysterical and amazing, but by the end the writing got really terrible.
The final season is high quality too. Not sure what happened in the middle.
[deleted]
The prisoner's dilemma strikes again.
It's like advanced level Prisoner's dilemma being played by prisoners who all took graduate level coursework in game theory. The lack of cooperation among the prisoners probably signals that they realize they aren't playing a version of iterated prisoner's dilemma any more.
"Late stage" iterated PD.
There was so much evidence that even if everyone stayed silent they weren't getting off.
When's the last time SBF stayed silent though
[deleted]
Could Caroline have reported prior to collapse and earned a buttload of cash from the SEC for whistleblowing?
I doubt that the SEC would pay a whistleblower who was themself involved with the crime, as the SEC alleges in their complaint against her:
https://www.sec.gov/news/press-release/2022-234
https://www.sec.gov/news/press-release/2022-234
You can only make money from a share of the fine that gets collected, in the case of an insolvent firm, I doubt that fine and your share will be at the front of the list of creditors.
I have a feeling she took this course:
MIT 15.025 | Spring | Graduate Game Theory For Strategic Advantage
MIT 15.025 | Spring | Graduate Game Theory For Strategic Advantage
[deleted]
braingenious(1)
In previous discussions, I said there was a 0% chance she got some sort of deal. I was downvoted to hell, but this guilty plea shows how it works in real life, not TV. The deal is you cooperate voluntarily and the court is allowed to provide sentencing leniency. The only thing she gets is the prosecution agrees to tell the court she cooperated.
> The only thing she gets is the prosecution agrees to tell the court she cooperated.
That is the deal. It's a cooperating plea deal; prosecutors will accept a much smaller sentence (out of the very wide ranges available) if they follow through on the coperating part.
That is the deal. It's a cooperating plea deal; prosecutors will accept a much smaller sentence (out of the very wide ranges available) if they follow through on the coperating part.
prosecutors will accept a much smaller sentence
Not sure what you mean there. The prosecution recommends a sentence to the judge. They are agreeing to recommend a shorter sentence than they would have if she fought.
Judges (especially federal) are despots and don’t care at all about prosecutors or what prosecutors want. The judge will want to know exactly how much she blew on bad investments, how much she stole for herself, and how useful her cooperation has been. Then, using the sentencing guidelines and the United States Probation and Pretrial Services Office Presentencing report, the judge will impose a sentence.
Not sure what you mean there. The prosecution recommends a sentence to the judge. They are agreeing to recommend a shorter sentence than they would have if she fought.
Judges (especially federal) are despots and don’t care at all about prosecutors or what prosecutors want. The judge will want to know exactly how much she blew on bad investments, how much she stole for herself, and how useful her cooperation has been. Then, using the sentencing guidelines and the United States Probation and Pretrial Services Office Presentencing report, the judge will impose a sentence.
It means they won't do this.
https://apnews.com/article/donald-trump-business-34deb7d885d...
> Prosecutors urged a judge Wednesday to impose a “very substantial” prison sentence on Michael Avenatti for trying to extort millions of dollars from Nike.
> Prosecutors noted in a Manhattan federal court submission that Probation Office officials recommend an eight-year prison term for the California attorney who gained fame three years ago through his representation of porn star Stormy Daniels against then-President Donald Trump.
https://apnews.com/article/donald-trump-business-34deb7d885d...
> Prosecutors urged a judge Wednesday to impose a “very substantial” prison sentence on Michael Avenatti for trying to extort millions of dollars from Nike.
> Prosecutors noted in a Manhattan federal court submission that Probation Office officials recommend an eight-year prison term for the California attorney who gained fame three years ago through his representation of porn star Stormy Daniels against then-President Donald Trump.
Exactly. People were throwing out potential immunity, or other complete nonsense for cooperation. There weren’t even discussions about recommended prison time as that can blow the prosecutions case against SBF. The idea that there is some agreement for say 5 years recommended is not on the table in this type of situation.
> The idea that there is some agreement for say 5 years recommended is not on the table in this type of situation.
That is absolutely the situation. That’s why you take the deal. They got her to plead to seven counts! There’s almost certainly an agreed-upon recommended sentencing.
That is absolutely the situation. That’s why you take the deal. They got her to plead to seven counts! There’s almost certainly an agreed-upon recommended sentencing.
If they agreed to it - it would be in the document. Instead it says:
> This Office cannot, and does not, make any promise of representation as to what sentence the defendant wil receive, and will not recommend any specific sentence to the Court.
That's not in every federal plea agreement. If there was a deal done for sentencing guidance, it would be there to read. A common one is something like "Acceptance of Responsibility", where parties to the agreement say that because of their cooperation, the government will provide evidence to the court to help meet a reduction via the sentencing guidelines.
I would accept this deal if I were Caroline Ellison because the alternative of being found guilty would give me a much harsher sentence.
Pleading guilty, admitting your involvement in the crime, and making restitutions are parts of the sentencing guidelines. Everyone has access to these - you don't need a deal to get them.
You plead guilty - you get a lesser sentence. That's why she (and I would too) did it.
> This Office cannot, and does not, make any promise of representation as to what sentence the defendant wil receive, and will not recommend any specific sentence to the Court.
That's not in every federal plea agreement. If there was a deal done for sentencing guidance, it would be there to read. A common one is something like "Acceptance of Responsibility", where parties to the agreement say that because of their cooperation, the government will provide evidence to the court to help meet a reduction via the sentencing guidelines.
I would accept this deal if I were Caroline Ellison because the alternative of being found guilty would give me a much harsher sentence.
Pleading guilty, admitting your involvement in the crime, and making restitutions are parts of the sentencing guidelines. Everyone has access to these - you don't need a deal to get them.
You plead guilty - you get a lesser sentence. That's why she (and I would too) did it.
I just think of the scene in Archer where the interrogations begin with each character saying "I want full immunity.", leads into a montage of them ratting out everything everyone else has ever done, and ends with the interrogator saying "I didn't say anything about immunity, you're the one who brought it up."
Please just read the plea deal.
https://www.documentcloud.org/documents/23495436-crypto-coop...
https://www.documentcloud.org/documents/23495436-crypto-coop...
I think you’re hung up on the number of years thing. The whole reason you cooperate is to get a reduced sentence. So of course that’s part of the deal. That’s the point of it. The formal agreement isn’t going to spell out “we will recommend X years” for a lot of reasons. First, what if she doesn’t cooperate? Or worse, lies and impedes the prosecution? More importantly, having a set-in-stone agreement like that for a specified number of years undermines your witness. And from the government’s perspective that’s the whole reason they do the deal: to have a witness.
Imagine Caroline Ellison on the witness stand. “Ms. Ellison you were looking at charges that could bring 110 years of prison or more, is that correct? And how many years did the prosecutor’s office agree to recommend instead in exchange for your testimony today?” There’s really no good answer, is there? The best answer your witness can give in that situation is something along the lines of “I’m cooperating with the hopes that the prosecution will recommend leniency to the court at my sentencing.” So that’s exactly the situation they’ve put her in. They’re under no obligation, per the agreement, but it’s absolutely on the table. And, assuming she holds up her end of the bargain, they will definitely file a motion with the court to have her sentence drastically reduced. Although the judge will be free to ignore it.
Imagine Caroline Ellison on the witness stand. “Ms. Ellison you were looking at charges that could bring 110 years of prison or more, is that correct? And how many years did the prosecutor’s office agree to recommend instead in exchange for your testimony today?” There’s really no good answer, is there? The best answer your witness can give in that situation is something along the lines of “I’m cooperating with the hopes that the prosecution will recommend leniency to the court at my sentencing.” So that’s exactly the situation they’ve put her in. They’re under no obligation, per the agreement, but it’s absolutely on the table. And, assuming she holds up her end of the bargain, they will definitely file a motion with the court to have her sentence drastically reduced. Although the judge will be free to ignore it.
The defense asks that question to every single cooperating witness. They also ask every single expert witness how much they got paid for their testimony.
It doesn’t sway the jury.
It doesn’t sway the jury.
[deleted]
> People were throwing out potential immunity...
Yes, getting off scot-free seems unlikely.
> The idea that there is some agreement for say 5 years recommended is not on the table in this type of situation.
Sure it is. The Feds will ask to suspend sentencing on these charges until their cooperation is completed. If they cooperate appropriately, they'll spend much less time in prison than if they'd pled not guitly.
Yes, getting off scot-free seems unlikely.
> The idea that there is some agreement for say 5 years recommended is not on the table in this type of situation.
Sure it is. The Feds will ask to suspend sentencing on these charges until their cooperation is completed. If they cooperate appropriately, they'll spend much less time in prison than if they'd pled not guitly.
> In previous discussions, I said there was a 0% chance she got some sort of deal.
Well that prediction didn't age well. Looks like she got herself a deal.
Well that prediction didn't age well. Looks like she got herself a deal.
She got one thing… they won’t pursue tax fraud charges. Wow. Everything else she gets is from the courts.
> She got one thing… they won’t pursue tax fraud charges
I think you massively misread the doc.
Read the doc, its not that long
https://www.documentcloud.org/documents/23495436-crypto-coop...
> Moreover,if the defendant fully complies with the understandings specified in this Agreement, the defendant will not be further prosecuted criminally by this Office for any crimes, except for criminal tax violations
They agreed to not charge her with more crimes other than tax evasion. That's a huge deal given what she could have been charged with.
That's a huge difference from what you quoted.
I think you massively misread the doc.
Read the doc, its not that long
https://www.documentcloud.org/documents/23495436-crypto-coop...
> Moreover,if the defendant fully complies with the understandings specified in this Agreement, the defendant will not be further prosecuted criminally by this Office for any crimes, except for criminal tax violations
They agreed to not charge her with more crimes other than tax evasion. That's a huge deal given what she could have been charged with.
That's a huge difference from what you quoted.
That's not... that's not at all what that letter says.
Her deal is that they won't prosecute her for anything else related to these crimes except that they can't promise she won't be prosecuted for tax fraud.
Her deal is also a sentencing recommendation that a judge is very likely to accept.
Her deal is that they won't prosecute her for anything else related to these crimes except that they can't promise she won't be prosecuted for tax fraud.
Her deal is also a sentencing recommendation that a judge is very likely to accept.
Don't crow some kind of victory until the show is over.
Why is she's out on bail if she has already plead guilty? What's the next step for her?
She will be sentenced after SBF. If all goes well for her, there will be few victim impact statements at her sentencing.
That’s part of “the deal” they struck.
Nothing here happened on a blockchain. If it had there wouldn't have been problems. This is a typical finance market scam.
> In its complaint, the S.E.C. said Ms. Ellison, under direction from Mr. Bankman-Fried, had manipulated the price of a digital currency that FTX created, called FTT, by buying large quantities to prop up its price. Alameda was one of the major firms that was trading FTT and had used the crypto token as collateral for loans it got from other big crypto firms to fund its trading.
FTT is on the Ethereum Blockchain.
FTT is on the Ethereum Blockchain.
Yes, just like the FTX website is on the internet. So, do you blame the HTTP protocol for every online scam?
Anyone can put scam token on Ethereum, just like anyone can publish a website. It has no relevance to Ethereum whatsoever. What the poster meant was that the FTX, the organization, was not an Ethereum protocol, it was just a centralized financial institution that published some random token.
Anyone can put scam token on Ethereum, just like anyone can publish a website. It has no relevance to Ethereum whatsoever. What the poster meant was that the FTX, the organization, was not an Ethereum protocol, it was just a centralized financial institution that published some random token.
That's not at all what OP said:
> Nothing here happened on a blockchain. If it had there wouldn't have been problems.
My response addresses their point exactly. FTT being on the blockchain did not solve the problems, and she is specifically being charged with fraudulent on-chain activity (not just fraud on the edges).
As for the protocols, I don't blame the technology, I blame the culture. The culture that surrounds crypto is uniquely prone to perpetuating scams. That's not the fault of the technologists who started the movement, it's what happened when crypto became a gold rush.
> Nothing here happened on a blockchain. If it had there wouldn't have been problems.
My response addresses their point exactly. FTT being on the blockchain did not solve the problems, and she is specifically being charged with fraudulent on-chain activity (not just fraud on the edges).
As for the protocols, I don't blame the technology, I blame the culture. The culture that surrounds crypto is uniquely prone to perpetuating scams. That's not the fault of the technologists who started the movement, it's what happened when crypto became a gold rush.
1. A bunch of it happened "on the blockchain"
2. You can't entirely separate a thing from its effects, the effects of cryptocurrency have been to enable this massive ecosystem of frauds and scams. That may not have been the initial intent, but it's certainly a large part of the outcome.
2. You can't entirely separate a thing from its effects, the effects of cryptocurrency have been to enable this massive ecosystem of frauds and scams. That may not have been the initial intent, but it's certainly a large part of the outcome.
Exactly, crypto was only peripherally related to the legacy financial fraud. But everyone, including this site, wants you to think this was a, "crypto bro's" scam, SBF was NOT a crypto bro, he was a rich kid.
It was traditional, centralized finance that kept this from spreading. But because it's crypto, they had effectively no auditing or reporting requirements. And part of the central grift was their FTT token.
Crypto was a major factor in this scam and others. True decentralized crypto will never be integrated into society. Crypto fundamentalists can't get past these things.
Crypto was a major factor in this scam and others. True decentralized crypto will never be integrated into society. Crypto fundamentalists can't get past these things.
What disqualifies him as being cryptobro?
Many things.
But for one, he lobbied for a future where individuals would no longer legally be able to use blockchains directly or build businesses on them (aside from pure direct person-to-person payments).
Doesn't get much less "cryptobro" than lobbying against people being able to use blockchains.
But for one, he lobbied for a future where individuals would no longer legally be able to use blockchains directly or build businesses on them (aside from pure direct person-to-person payments).
Doesn't get much less "cryptobro" than lobbying against people being able to use blockchains.
I think he said a lot of things; and did the complete opposite. Why would any one statement carry any weight at all?
Well, since crypto bros actually believe their statements about NFTs etcetera, that's another way of agreeing with the thesis.
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Kind of. One-coin fits your description better.
SBF would have scammed with anything instrument, only the media and gov wants you to believe it had anything to do with crypto
Cryptocurrency is, in many ways, especially useful for fraud. It's relatively anonymous, which makes transactions between individuals more difficult to track. It's unregulated, so there are fewer safeguards against fraud. It's complex, so scammers are able to prey on more people who don't fully understand it. And it's unprotected, in the sense that consumers usually have no recourse in the event that they are scammed.
Can traditional financial instruments (like cash, securities or commodities) be used for fraud? Absolutely. But it's not as easy.
Can traditional financial instruments (like cash, securities or commodities) be used for fraud? Absolutely. But it's not as easy.
> It's unregulated, so there are fewer safeguards against fraud
I work in traditional finance and this imo is a major reason why - the GP is right in that nothing about the fraud was crypto related. But today you could never run an equities brokerage with such absurd lack of anything related to operational competence and customer protections.
I work in traditional finance and this imo is a major reason why - the GP is right in that nothing about the fraud was crypto related. But today you could never run an equities brokerage with such absurd lack of anything related to operational competence and customer protections.
If the atmosphere around crypto makes it easy to scam lots of people out of lots of money (which it does), then I think it's absolutely fair to make this story about crypto, if only so that otherwise-naive people who hear the news will think twice before investing in the next big scam.
It's not necessarily that the technology inherently lends itself to scams, but the culture around it absolutely does. A startlingly large percentage of the biggest players in crypto have turned out to be scams, this isn't a one-off thing.
It's not necessarily that the technology inherently lends itself to scams, but the culture around it absolutely does. A startlingly large percentage of the biggest players in crypto have turned out to be scams, this isn't a one-off thing.
If people will run scams in crypto the same as they'll run scams in tradfi - shouldn't they be regulated the same, too?
No true crypto
http://web.archive.org/web/20221222025052/https://www.nytime...