NY - Samuel Bankman-Fried (FTX), Alleged Fraud, Money Laundering, 2019-2022 *Arrest*

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Howl said:
Well, there you go and thanks for the correction and the thought exercise on how a million and a billion compare.

Goes back to the point that I really can't grasp this amount of money and they are accused of stealing MULTIPLE billions. I may have to default to the indefinite "gazillions" to make it make sense.
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I've always defaulted to bazillions. Is a gazillion more or less than a bazillion? :p
 
arielilane said:
Trailer is less than three minutes. "Are you in?"



RUIN: Money, Ego and Deception at FTX (Trailer)​


Oct 12, 2023

Coming October 25th to Bloomberg Originals: A feature documentary about Sam Bankman-Fried and the stunning collapse of FTX, his cryptocurrency exchange.
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Yup. All in.
 
Gemmie said:
I've always defaulted to bazillions. Is a gazillion more or less than a bazillion?
Click to expand...
A bazillion is a whole bunch of billions. I had to think about this, but I use a gazillion when it's too much work to try to precisely quantify something. Like, there are a gazillion stars in the universe or darn, it must have taken a gazillion Legos to put together that entire Lego Disneyland recreation.
 
  • Indicted FTX founder Sam Bankman-Fried will take the stand in his own defense, his lawyer said.
  • The move is widely considered to be a risky one since it opens him up to cross-examination by prosecutors.
  • Bankman-Fried’s defense had previously said access to his ADHD medication needed to be resolved for the former billionaire to fully participate in his defense.
www.cnbc.com

Sam Bankman-Fried to testify in FTX fraud trial, attorney says

The maneuver puts Bankman-Fried on the stand to tell the story from his own perspective, but also opens him up to examination by federal prosecutors.
www.cnbc.com www.cnbc.com
 
Chelly said:
  • Indicted FTX founder Sam Bankman-Fried will take the stand in his own defense, his lawyer said.
  • The move is widely considered to be a risky one since it opens him up to cross-examination by prosecutors.
  • Bankman-Fried’s defense had previously said access to his ADHD medication needed to be resolved for the former billionaire to fully participate in his defense.
www.cnbc.com

Sam Bankman-Fried to testify in FTX fraud trial, attorney says

The maneuver puts Bankman-Fried on the stand to tell the story from his own perspective, but also opens him up to examination by federal prosecutors.
www.cnbc.com www.cnbc.com
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Maybe Adderall was what fueled FTX? He certainly could've afforded multiple prescribing doctors. MOO
 

Bankman-Fried Adderall Defense Out, Asperger Diagnosis His Last Chance?​

According to crypto legal expert David Lesperance from Lesperance & Associates, it is reasonable to assume that the defense will call on medical professionals to testify that SBF’s medical concoction produced impaired mental acuity.

This could have prevented him from being able to form the mental capacity (also known as “mens rea” or “knowingly and willingly”) necessary to have committed the actions argued in his case.

Lesperance mentioned Asperger’s disease as one factor. Bankman-Fried has often been compared to Tesla’s CEO Elon Musk who spoke openly on his Asperger syndrome.

 
The U.S. government alleges Bankman-Fried knowingly stole customer funds and transferred that money to Alameda Research, an investment firm he controlled, to make risky investments and plug holes in the company's balance sheet.

Prosecutors also argue the former FTX CEO used the money to enrich himself. Jurors saw pictures of Bankman-Fried's $35-million penthouse apartment in The Bahamas, and they heard about other pricey real estate he bought for his friends and family.
 
Chelly said:

Bankman-Fried Adderall Defense Out, Asperger Diagnosis His Last Chance?​

According to crypto legal expert David Lesperance from Lesperance & Associates, it is reasonable to assume that the defense will call on medical professionals to testify that SBF’s medical concoction produced impaired mental acuity.

This could have prevented him from being able to form the mental capacity (also known as “mens rea” or “knowingly and willingly”) necessary to have committed the actions argued in his case.

Lesperance mentioned Asperger’s disease as one factor. Bankman-Fried has often been compared to Tesla’s CEO Elon Musk who spoke openly on his Asperger syndrome.

Click to expand...
Body text BIBM
Medical concoction? (confirmed in quote) Surely they mean medical condition?
 
Chelly said:
The U.S. government alleges Bankman-Fried knowingly stole customer funds and transferred that money to Alameda Research, an investment firm he controlled, to make risky investments and plug holes in the company's balance sheet.

Prosecutors also argue the former FTX CEO used the money to enrich himself. Jurors saw pictures of Bankman-Fried's $35-million penthouse apartment in The Bahamas, and they heard about other pricey real estate he bought for his friends and family.
Click to expand...
From what I've been able to follow in the trial, I feel
those sentences really over-simplify it.

For example, when you deposit money in a bank, they don't just have it all sitting in a vault somewhere, waiting for you to claim it.

They use it to loan money, for eg to your neighbour to get a mortgage.

IMO, SBF was operating along these lines, but he was 'loaning' funds from FTX customer accounts to Alameda. Alameda was supposed to be using those funds to make lots more money, that SBF could then withdraw and spend.

What happened was the crash in crypto, the failures of many of Alameda's risky investments, the deliberate creation of distrust in Ftx by Binance, and then calling in of loans/cashing in deposits by other Alameda lenders and FTX customers.

In other words, similar to an old fashioned bank run.

I think SBF was confident his hedge fund was, and would continue, making tons of money, and that he could always pay back the individual FTX investors. He was wrong of course, and having a 26 year old create and run his own bank, with no rules or oversight whatever, was madness on the part of all the investors.

JMO
 
Cedars said:
From what I've been able to follow in the trial, I feel
those sentences really over-simplify it.

For example, when you deposit money in a bank, they don't just have it all sitting in a vault somewhere, waiting for you to claim it.

They use it to loan money, for eg to your neighbour to get a mortgage.

IMO, SBF was operating along these lines, but he was 'loaning' funds from FTX customer accounts to Alameda. Alameda was supposed to be using those funds to make lots more money, that SBF could then withdraw and spend.

What happened was the crash in crypto, the failures of many of Alameda's risky investments, the deliberate creation of distrust in Ftx by Binance, and then calling in of loans/cashing in deposits by other Alameda lenders and FTX customers.

In other words, similar to an old fashioned bank run.

I think SBF was confident his hedge fund was, and would continue, making tons of money, and that he could always pay back the individual FTX investors. He was wrong of course, and having a 26 year old create and run his own bank, with no rules or oversight whatever, was madness on the part of all the investors.

JMO
Click to expand...

The problem for SBF is that he wasn't running a bank. Banks are inherently risky, which is why FDIC insurance exists to protect customers from bank failures.

SBF was running an exchange. And exchanges are supposed to keep customer money segregated and not loan it out. It's no different than a stock market investment. If you buy shares in the market, the brokerage firm you buy them from will give them to a custodian to hold. They will not use those shares to invest on their own behalf.

Before everything crashed, SBF swore up and down that customer funds were safe and secure and segregated from FTX operations. The company's terms of service was very clear as well.

  • "You control the Digital Assets held in your Account," says Section 8.2 of the terms. "Title to your Digital Assets shall at all times remain with you and shall not transfer to FTX Trading."
  • The terms continue: "None of the Digital Assets in your Account are the property of, or shall or may be loaned to, FTX Trading; FTX Trading does not represent or treat Digital Assets in User’s Accounts as belonging to FTX Trading."


Of course, it all turned out to be a pack of lies.
 
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