Originally published at: Lawsuit: Sam Bankman-Fried gave $16.4m house to his parents, paid for with fraudulently-obtained money | Boing Boing
…
6 Likes
“We were just being good parents by giving our precious and special offspring a leg up in life, and he rewarded us appropriately.”
This won’t be too far off from their attempt to keep the goodies their crooked son gave them.
8 Likes
It should, hopefully, be a little tricky for Mom and Dad to play the naive and unsophisticated rubes who got snookered through no fault of their own; given their areas of expertise.
14 Likes
Not that they won’t try. I’m sure their son didn’t come by his own arrogance and contempt for the intelligence of others solely through his own nature.
16 Likes
I’m still hoping for an explanation of what his company was supposed to be doing. Why would someone be a client or customer? I don’t need an explanation of blockchain based currencies, but rather an explanation of why anyone who had some of this pseudo-currency would pay money to SBF’s company. Was his company a bank? A safe-deposit box?
7 Likes
I strongly suspect li’l Sammy never heard the word “no” at home.
7 Likes
There were two intertwined companies: a cryptocurrency arbitrage pyramid scheme (the FTX exchange) and a hedge-fund investment Ponzi scheme (Alameda Research). Each fed into the other. Studiously Schlubby Sam was touted as a tech genius who had the secret to spinning investments in both into steady 14%+ ROIs, and who was going to use his magic to save the world through “effective altruism” (yet another billionaire-friendly scam).
14 Likes
OK, so he would take responsibility for investing other people’s money and instead did fraud. Got it. Thank you.
9 Likes
Pretty much. Someone would buy crypto on his “special” exchange and then be steered toward Alameda, or would give their fiat cash to the “special” trading firm and then get steered into buying crypto on FTX. Round and round it would go, propelled by greed and self-dealing and inside information and loss-covering.
No matter how complex the confidence game, it always comes down to the idea that the grifter is some kind of superhuman genius who’s figured out a way to legally beat an aspect of reality.
What’s been interesting to me is the behaviour of the corporate media in all of this. They’re now conveniently forgetting the years they spent building up Sammy into an Einstein-level galaxy brain, to the point where he glowingly appeared in the daily news feed of anyone interested in tech or finance right up until the day the indictments were handed down.
16 Likes
And it just so happens that the extreme volatility of cryptocurrency exchange rates makes it the ideal hiding place for grifters. “It wasn’t a pyramid scheme, I was just waiting for the price to go back up like it always does!”
Even if you didn’t start it with the intention of running a shell game, by planning to take advantage of the volatility you’re at the very least a get-rich-quick sucker. And if you start a business based on it, you don’t understand the “let it ride” strategy only ever benefits the house.
8 Likes
“I’m a financial adviser. I invest other people’s money until there’s none left.”
– Woody Allen
8 Likes
A crypto exchange functions as a bank to hold users crypto as well as a foreign exchange to let users trade one coin for another. Gamblers need a place to exchange evil fiat (i.e. “real”) money. They will keep most of their money in a somewhat legit/stable coin, like bitcoin or etherium and use it to bet on lesser alt/memecoins (i.e. shitcoins) which sometimes explode in value, giving the earliest investors a big payday before inevitably collapsing.
Exchanges hold big pools of many coins and internally swap between customers (taking either a transaction fee or a slice of the float (difference between sell price and buy price). For some reason gamblers are naive enough to trust that these completely unregulated, offshore exchanges will be fair players and not use their privileged position to do their own trading when they see trends. Which is literally what the Alameda Research side of the business was doing.
9 Likes
This would be the house that they used ostensibly to secure his bail?
If SBF wasn’t enough of an idiot to spend time on social media trying to intimidate witnesses so he could speed up restarting his scampire, he’d have been able to easily flee to some middle-eastern extradition free douchbag zone with whatever other money he’s been able to hide away.
5 Likes
Yup. Rule one in casinos- the house always wins.
4 Likes
Facing a huge trial, shooting his mouth off, intimidating witnesses, enlisting family to help in the coverup & move money - the son Trump never had !
4 Likes
See, also, Holmes, E.
The media wants an easy narrative more than anything. And “wunderkind” or “girl boss” is an easy one to hype.
6 Likes
This topic was automatically closed after 5 days. New replies are no longer allowed.
