Cryptocurrency! Either it's going to disrupt everything and usher in a new era of artistic and consumer freedom, or it'll hasten the climate apocalypse while largely benefitting a tiny number of investors. Let's yell about it!
Sh*t.
Jake Moody BANGS a 21-yard field goal, to use the phrasing Al Michaels did for the kick.
Can I buy an NFT of this?
*Legion* wrote:Jake Moody BANGS a 21-yard field goal, to use the phrasing Al Michaels did for the kick.
Can I buy an NFT of this?
Yes, and can I also interest you in these NFTs of a bridge?
Michael Lewis's "Going Infinite", the story of the rise (and presumably the fall) of Sam Bankman-Fried is fantastically entertaining for anyone with even a wisp of interest in the Crypto scene, or just weird tech people in general. Writing from first-hand engagement as well as hundreds of interviews with people who encountered him in various roles, there are no slow parts to this book. Bankman-Fried is far more weird that you might have expected, and much more of a True Believer than I did, but against expectations, not at all a Libertarian Crypto-bro. Instead, he comes from a quant trading background with an internal life that is... close to unique. It will be a great supplement to what happens in his trial.
Interesting. Do feel like it sensationalizes or glamorizes crypto stuff?
Not in any way. I say that strongly with no equivocation. It's not a puff piece. It's Michael Lewis talking about a particular financial figure and his companies and cohorts, just as he's done in his previous books.
There's no way Michael Lewis is a huge fan of Crypto, anyway, given his background. He doesn't really talk about it except when he needs to explain a technical point to understand a company's moves. Everything else treats it as something that exists, but he does not in any way at all advocate for it or for the Libertarian position (or any other), although he mentions various takes on it that people he talks to hold. If anything, there is a vague air of bewilderment on the part of many as to how this whole financial structure evolved.
He does talk a lot about Ethical Altruism, which seems interesting at first, but then you realize (as he does) that the people it attracts tend to be pretty extreme in their "rational" approach to life. He explores this as if he was looking at some new type of social structure, which in fact he is.
I think it's his best book since The Big Short, and maybe Liar's Poker.
Yeah... Nah.
This isn't a Ponzi scheme… If no one had ever cast aspersions on the business, if there hadn't been a run on customer deposits, they'd still be sitting there making tons of money," the "Big Short" author said
FTX was fraud from top to bottom, like the entire crypto industry, and SBF is going down.
Try Number Go Up for some better crypto writing.
Both can be true. It wasn't a Ponzi scheme, but it was still ultimately a scheme and required no one look too closely at it in order for it to work.
Both can be true. It wasn't a Ponzi scheme, but it was still ultimately a scheme and required no one look too closely at it in order for it to work.
The observation I made 10 years ago about crypto has remained impressively durable. I said that the most charitable description I could use to describe it was that it is an unregulated speculative commodity. It is basically Beanie Babies for techbros, incels, and other antisocials. I have seen nothing in the ensuing ten years to suggest I should modify my assessment.
Lewis asserting that FTX was fine and could have continued if not for the run shows his book is not a serious analysis of SBF and FTX.
Lewis asserting that FTX was fine and could have continued if not for the run shows his book is not a serious analysis of SBF and FTX.
Is there a longer quote?
Stating it's not a Ponzi scheme isn't any endorsement. People get specific when Ponzi is attributed to certain scenarios where it's not applicable. A Ponzi scheme is a very specific type of fraud and not a catch all.
I don't see that quote as any type of endorsement. Questionable that he calls it a 'business' though. If the fraud was allowed to continue though, yes they would of continued to make $$$$$.
Bruce wrote:Lewis asserting that FTX was fine and could have continued if not for the run shows his book is not a serious analysis of SBF and FTX.
Is there a longer quote?
Stating it's not a Ponzi scheme isn't any endorsement. People get specific when Ponzi is attributed to certain scenarios where it's not applicable. A Ponzi scheme is a very specific type of fraud and not a catch all.
I don't see that quote as any type of endorsement. Questionable that he calls it a 'business' though. If the fraud was allowed to continue though, yes they would of continued to make $$$$$.
Exactly what I am thinking. Technically, AmWay is not a Ponzi Scheme either, but it is still very much a grift.
Coffeezilla's take:
This definitely makes me want to make sure that none of my investment accounts are exposed to any of this crypto bullshit.
Where did Lewis say it was fine? From your quote, he said that if the run had not occurred, they'd still be in business. That's a literal truth, and nothing more.
Did you read the book, Bruce?
The quote comes from the 60 minutes interview.
https://youtu.be/FtzvOZNyXdw?si=s-UD... - about the 23 minute mark.
The quote is worse, he calls FTX a "great real business" and with that phrase incinerates his reputation. He says these things even after FTX staff and insiders have plead guilty to fraud.
So no, I won't be reading that book. The author himself has poisoned that well.
Michael Lewis books are storytelling first, facts second, and the latter is never allowed to get in the way of the former. The Blind Side might as well have been written by the Tuohys (and the football part, the whole "blind side" premise, was exaggerated), and Moneyball basically pretended Mark Mulder, Tim Hudson, Barry Zito, and Miguel Tejada didn't exist, because they got in the way of the story that the team was built from nothing but cheap undervalued players.
Well, thanks for the added info.
Edit - Wait, wait, wait. In that quote, he's describing how this is not a Ponzi scheme that collapsed. It was a real business that was making real money. And he's right. If the run had not occurred, they could have unscrewed the problem and put more protections in place. Heck, all it would have taken was to get venture capitalists to dump in $10B, put the money back in, and just keep going. At the time they could have raised up to about $30B without a problem.
But they didn't. At least, not in time. There's incompetence, a lack of bureaucracy and hierarchy, a bizarre faith in The Leader, obfuscation of the financial relationships between FTX and Alameda, lack of internal oversight and controls. But both companies were actual companies providing actual services, not frauds waiting to be plucked. This was, instead, a classic over-extension and failure to meet financial requirements, which resulted in the fail. That's the point he was making, not something like "Oh, this crypto stuff is great and FTX was a fantastic thing". All he's saying was, it was a real pair of companies doing real business.
But it was not a Ponzi scheme or something like that.
Oh give us a break. It was absolutely a scam. Please don't lead us down the rabbit hole of "butbutbut it wasn't TECHNICALLY a Ponzi scheme!"
Well, thanks for the added info.
Edit - Wait, wait, wait. In that quote, he's describing how this is not a Ponzi scheme that collapsed. It was a real business that was making real money. And he's right. If the run had not occurred, they could have unscrewed the problem and put more protections in place. Heck, all it would have taken was to get venture capitalists to dump in $10B, put the money back in, and just keep going. At the time they could have raised up to about $30B without a problem.
But they didn't. At least, not in time. There's incompetence, a lack of bureaucracy and hierarchy, a bizarre faith in The Leader, obfuscation of the financial relationships between FTX and Alameda, lack of internal oversight and controls. But both companies were actual companies providing actual services, not frauds waiting to be plucked. This was, instead, a classic over-extension and failure to meet financial requirements, which resulted in the fail. That's the point he was making, not something like "Oh, this crypto stuff is great and FTX was a fantastic thing". All he's saying was, it was a real pair of companies doing real business.
But it was not a Ponzi scheme or something like that.
Ya I dunno about this.
I'll give the interview a listen once I have a chance but that version is geo blocked for Canada.
It being a 'legit business' is also very suspect. Just because venture capitalists are willing to bail out the coolest recent tech bro doesn't make something a legit business. I think the legit part sailed when they did the illegal part and got caught.
If they had not done the illegal part and got the VC money to prop up whatever 'business' it was ya sure. Were not a trial now and they are probably bumbling their way towards trying to make the business part stick.
I haven't read the book, but between the 60 minutes stuff and interviews like this one with Time, it's hard to walk away feeling anything other than Lewis is trying to launder SBF's reputation wherever possible. Time calls him on a bunch of stuff he left out of the book which run counter to the book's narrative.
"Oh nobody would have cared about broken laws if only the money hadn't been stolen and caused anyone to look!":
"Oh he didn't actually mean it, he was tired!":
Not a Mark Mulder or Miguel Tejada to be found.
Isn't EA all about, "the ends justify the means"? Is Lewis really trying to argue that "because EA" therefore SBF wasn't criming? Because the history of EA sure does seem to lend itself to anything goes (including fraud, abuse, crimes, etc.) and it all gets made up on the back end because some giant check gets written (to Donald Trump!) which smooths it all out.
EA is the worst argument to show that a person's actions on the path to, one day, maybe, after I just live a life of extreme opulence, buying an indulgence to save one's soul from eternal damnation, were above board.
Oh give us a break. It was absolutely a scam. Please don't lead us down the rabbit hole of "butbutbut it wasn't TECHNICALLY a Ponzi scheme!"
It's an important distinction. By saying it wasn't a Ponzi scheme, we aren't trying to claim it wasn't some other kind of scam. Even if the author is right that SBF was, in fact, a genuine believer, he was still definitely scamming people to achieve his goals. We already know that companies don't have to be ethical to be considered legitimate under our form of capitalism, so they can be "legitimate" companies providing actual services and still be scamming people.
Stop getting hung up on whether this was a Ponzi.
People have already confessed to fraud. It was fraud.
People have already confessed to fraud. It was fraud.
Caroline Ellison, the former Alameda Research CEO who dated Sam Bankman-Fried, testified against her former partner today in his criminal trial. "In the trial's second week, Ellison said she committed fraud, conspiracy to commit fraud and money laundering along with Bankman-Fried and others," the Associated Press reported.
An exchange like FTX, whether it was offering crypto or any other commodity, has no reason to take on any kind of speculative risks as long as they keep to their core business.
Alameda on the other hand was an investment fund and was inherently in the business of taking on risk. SBF and the others decided it would be a good idea to lend FTX's assets to Alameda so they could take bigger risks.
If it wasn't for that, FTX would have been a perfectly functional, valid business. So it's not really accurate to call it a scam, they offered a legitimate service, even though behind the scenes they were also committing fraud.
It's also worth noting that FTX made $1B in revenue the year before they blew up. That's basically risk free money, and they threw it all away because they thought they could make even more gambling in the markets. Just outrageous levels of greed and stupidity.
Alameda on the other hand was an investment fund and was inherently in the business of taking on risk. SBF and the others decided it would be a good idea to lend FTX's assets to Alameda so they could take bigger risks.
If it wasn't for that, FTX would have been a perfectly functional, valid business.
There's no point in making such a clean distinction between FTX and Alameda, because operationally, no such strong distinction existed.
“FTX was operated as one company (...) As a result there is no distinction between the operations of the company and who controlled those operations. We can confirm that user funds were deposited directly into Alameda instead of FTX.”
Describing it simply as "lending assets" is severely understating how fundamentally enmeshed the two companies were. FTX issued FTT and manipulated its price, while Alameda held FTT and thus had its balance sheet inflated by the manipulation. Two hands belonging to the same body.
Hypothesizing a "perfectly functional, valid" version of FTX is kind of like saying, "that mob front restaurant would be a clean business if only there were no mobsters and it was actually a kid's lemonade stand instead."
Describing it simply as "lending assets" is severely understating how fundamentally enmeshed the two companies were. FTX issued FTT and manipulated its price, while Alameda held FTT and thus had its balance sheet inflated by the manipulation. Two hands belonging to the same body.
Hypothesizing a "perfectly functional, valid" version of FTX is kind of like saying, "that mob front restaurant would be a clean business if only there were no mobsters and it was actually a kid's lemonade stand instead."
Yes 'lending assets' is a simplification, but it is the best succinct description of the fraud. It's not hypothetical to say that FTX could have been a legit business. The fraud was about moving assets from their profitable company (FTX) to prop up the unprofitable one (Alameda).
It's not hypothetical to say that FTX could have been a legit business. The fraud was about moving assets from their profitable company (FTX) to prop up the unprofitable one (Alameda).
I'm struggling to understand this point.
You say not hypothetical and could in the same sentence here. I don't think those concepts line up.
FTX, Alameda, and North Dimension are all the same company.
If the companies had been well run, the transfer would never have occurred, and they'd have been able to continue doing business with all their entities. They were set up to function legitimately, but SBF seems to be batshit crazy and his team was a bunch of business neophytes unconcerned with niceties like laws and financial regulations. But I suspect that's the extent of it. It's entirely possible to commit fraud without intending to, in your self-justication/motivation. The law is full of that sort of thing.
Note that their head lawyer was the first one to bail, after learning about this situation. The others did not really take it seriously soon enough to do anything but wander around the huts waiting for their flights out. Only a few stayed to shut down the company and wait to be arrested. Many seemed to feel this was just part of their careers and were moving on to their next positions when the FBI came down on them.
I suspect SBF and CE considered it a sort of game, where they were in some way breaking rules but felt they could fix it at any time, so where's the harm? Then the situation changed and their users decided to pull money out, and suddenly it was unfixable and the company leadership was left holding the bag.
Given what goes on on Wall Street every day, I think they were conditioned to move fast and break shit, and ask for permission later, or simply try to put things back and keep the initial violation secret. No harm, no foul, right?
But this was harm, so foul. 
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