Huh. Sounds interesting. And it’s available in eBook at my library.
For those interested in further reading.
And yeah, Lewis really screwed up with this.
Lewis opens by talking about how he advised his friend to invest in FTX. I’m pretty sure he knows he screwed up.
I know a bunch of people who know Bankman-Freid, and one woman who worked for him. They’ve all been pestered by the press since this blew up, but I’m curious how it looked “before”. So im kinda intrigued by the Lewis book for personal reasons.
But i see that Numbers go up is also available from my library. Woot!
It kind of feels like he’d made a commitment to have the book to a publisher by a given date, and so he didn’t have much time to change what he’d written and so kind of slapped on the end. It’s a short book - about 250 pages. There is really very little discussion of why FTX fell apart. As one review put it, it’s as if in “Moneyball,” Lewis had spent the whole book talking about how the A’s used sabermetrics to build a good team, and then in the last few pages he just quickly mentioned in passing that they’d actually been bribing the umpires the whole time.
The book was very disappointing, because the first 80 percent was pointless and the last part where he gets to the actual scandal he is unwilling to discuss what Bankman-Fried did wrong. Or what ANYONE did wrong; he doesn’t mention that Gary Wang wrote code specifically to hide the fact money was being surreptitiously taken out of FTX, doesn’t mention that Bankman-Fried’s parents were deeply involved in FTX, doesn’t mention anything Caroline Ellison did wrong (she is just cast as a jilted girlfriend and little else) and doesn’t mention that Nishad Singh committed a vast bevy of crimes, including campaign finance offenses.
There’s HINTS of problems; he mentions that Bankman-Fried refused to hire a CFO or have a real board of directors. There is an incredibly obvious thread between that and the catastrophe that followed, and there is a rather interesting thesis to be built there, something like “No matter how brilliant you are, without governance, the business will fail.” Lewis mentions that FTX was subject to a number of frauds, heists of cryptocurrency worth hundreds of millions of dollars, and he barely delves into that at all. Who stole $450 million (!!!) right AFTER the crypto collapse? Lewis cares not, and he thinks it’s hardly worth mentioning that that happened. But that’s not what he set out to write, and I guess he didn’t want to re-write it all.
As a sidenote, Lewis is also incredibly generous (no pun intended) to the Effective Altruism movement. He just seems to assume that’s all real.
We are certainly in the era of man–baby whinings being translated into legal filings, aren’t we?
And? his point is?
I had the same comment about Trump’s complaint regarding “punitive damages.”
It’s like they’re baffled that they’re being punished. “I was found guilty, isn’t that punishment enough?”
Meanwhile bitcoin is approaching an all time high
Sentencing is on March 28th. Prosecutors want 40 to 50 years. Defense want’s six to seven.
I read one line from the article above:
“Those who know Sam also know how deeply, deeply sorry he is for the pain he caused over the last two years,” his attorney’s wrote.
And wanted to scream at them (yes, I know, they’re doing their jobs) “You let him talk on the stand! There was bloodly little of that to be seen in his pathetic, self serving defense.”
I know, I know. But honestly, and of course, fully IMHO, the wonderful reporting and quoting of the trial made it clear that IF he was if not actively intending to break the law, he was at least utterly uncaring of the law, his responsibilities to the investors, and desperate to conceal the magnitude of the situation when it started to come apart.
I’m equally IMHO convinced that if he’d gone with the ashes and sackcloth route, accepting responsibility, while claiming remorse for “excessive enthusiasm” he’d have been a lot better off when it comes to sentencing.
Bloomberg Business Week reports that, “Fraud was built into FTX from the very beginning”. SBF ran a not-particularly-successful hedge fund, named Alameda. He figured out that he could make money by setting up a crypto exchange in the Bahamas (FTX), taking in money from people who want to buy crypto, sending out statements reflecting this alleged ownership, then taking the proceeds and buying other stuff under the Alameda umbrella. In other words, lying. Using FTX as a piggy bank sounds fun, but it’s not a sustainable business: no Ponzi scheme is sustainable.
According to C Ellison, the former CEO of Alameda, “Trying really hard to find new sources of money,” was a big topic of conversation with SBF.
Since the bankruptcy crypto has bounced back, in anticipation of regulatory approval of crypto ETFs. Because once you have an ETF, it becomes an investment class, and once it’s an investment class, big institutions will want to put money into them for diversification purposes. Some money goes into homes, some into factories, some into safe banks, and some into an operating furnace. That way if once sector goes south, you always have the other ones to fall back on or into.
There’s very little that’s new in this story. All Ponzi schemes are built on dreams, some of them imagined by the perp. Many of them involve affinity fraud: this has that as well.
At the same time, my sympathy for the vics is attenuated. Due diligence is a thing, and it’s applied too sparingly in crypto-world, IMHO.
Gifted article, good for 7 days.
If Sam Brankman-Fried accelerated the collapse of crypto by a couple of years through his rampant fraud, he would have been a great benefactor to humanity and to the planet. Unfortunately, that didn’t happen: crypto has bounced back and the FXF investors are expected to claw back a fair amount according to the Bloomberg article I linked to.
I don’t know anyone who has chatted with him recently, but i know a bunch of people who lived with Sam when he was at MIT, and they’ve been reading the letters submitted to the court asking for mercy with a very critical eye. Because they don’t think he has shown any remorse. And they are pissed with the letters that say, “poor dear is autistic and doesn’t know any better.”
25 years. Couldn’t happen to a finer fellow.
That seems about right to me. Not having access to tech will be misery for him. He will be aware of all of the amazing innovations and not be able to touch them
A little over 21 years actual time served after Federal time off for good behavior guidelines. Maybe another 15 months off for time served? He should get out around age 52. His life isn’t over, but pretty well circumscribed. It seems pretty appropriate.
Also, the judge recommended a medium security prison so no Club Fed