Come for the politics, stay for the snark.

Spilling the end game before they can coat it in frankl luntz-approved dogwhistles.

The words do not have to be perfect.

Optimism opens the door to great things.

That’s my take and I am available for criticism at this time.

This year has been the longest three days of putin’s life.

Battle won, war still ongoing.

Their freedom requires your slavery.

I’ve spoken to my cat about this, but it doesn’t seem to do any good.

Something needs to be done about our bogus SCOTUS.

I was promised a recession.

The willow is too close to the house.

The revolution will be supervised.

It may be funny to you motherfucker, but it’s not funny to me.

How can republicans represent us when they don’t trust women?

I like you, you’re my kind of trouble.

If you tweet it in all caps, that makes it true!

I did not have this on my fuck 2022 bingo card.

Incompetence, fear, or corruption? why not all three?

If you are still in the GOP, you are an extremist.

When I decide to be condescending, you won’t have to dream up a fantasy about it.

Fuck the extremist election deniers. What’s money for if not for keeping them out of office?

It’s always darkest before the other shoe drops.

Conservatism: there are some people the law protects but does not bind and others who the law binds but does not protect.

Prediction: the GOP will rethink its strategy of boycotting future committees.

You are here: Home / Economics / C.R.E.A.M. / Late Night Open Thread: Sam Bigly Fraud Bankman-Fried, Still Grinding His Grifts

Late Night Open Thread: Sam Bigly Fraud Bankman-Fried, Still Grinding His Grifts

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Barely had SBF’s lawyers signed the latest set of ‘revised bail conditions‘ designed to keep their client from further incriminating himself than… Surprise!

In new charges unveiled in the US, officials accuse the entrepreneur of authorising a bribe of “at least $40m” (£32.5m) to try to gain access to trading accounts frozen by Chinese authorities.

The allegations add to the fraud case filed last year after FTX’s collapse…

The updated indictment says Mr Bankman-Fried authorised the bribe after Chinese authorities froze accounts holding roughly $1bn (£811m) worth of cryptocurrency that belonged to his trading firm, Alameda Research.

The accounts were released after the transfer, which went to a private cryptocurrency wallet, according to the filing…

The incident happened before FTX’s dramatic collapse last year, when reports about the company’s finances led to a rush of withdrawals, pushing the firm into bankruptcy.

In the wake of the collapse, which left many people unable to access their funds, the US filed criminal charges against Mr Bankman-Fried, accusing him of improperly using customer deposits at FTX to fund his other firm, Alameda Research, buy property and make millions in political donations.

The episode cast a dark cloud over the crypto industry, which was already suffering from big falls in the values of Bitcoin and other assets.

It was also a sharp fall from grace for Mr Bankman-Fried, who had been one of the most high-profile figures in the sector, leading an exchange which had more than 1 million users and ranked as the world’s third largest trading platform by some measures…


Speaking of Effective (for Our Purposes) Altruism…

The leading so-called philosophers of the Effective Altruism movement were warned as early as 2018 that Sam Bankman-Fried was a liar who slept with multiple subordinates, according to new reporting from Time. They reportedly responded in part by threatening those warning the golden boy wasn’t all he seemed.

Despite formal attempts by Alameda Research staff to push Bankman-Fried out at the time, figures including Oxford professor William MacAskill continued publicly burnishing the FTX founder’s image as he built one of the largest financial frauds of all time. MacAskill and others were ultimately rewarded for their defense of Bankman-Fried’s behavior in the form of funding and prestige as FTX appeared to succeed in later years.

This was not a matter of dismissed rumors and personal grudges, but of well-documented corporate processes derailed, in part, by people whose entire careers are premised on cultivating moral action. In April 2018, four top Alameda managers called a meeting to offer Bankman-Fried a buyout to leave the hedge fund, based on already-extensive concerns about his disdain for basic corporate processes and accounting.

Documents for the meeting described Bankman-Fried as indulging in “gross negligence,” being “unethical” and “misreporting numbers.” Among other actions leading to the intervention, Time reports Bankman-Fried reneged on a deal to share ownership of Alameda, and illicitly registered himself as the sole owner…

MacAskill didn’t just dismiss the allegations against Bankman-Fried but “basically threatened” those raising the concerns, according to Naia Bouscal, a former software engineer at Alameda.

Bankman-Fried reportedly wielded his connection to MacAskill as a cudgel within Alameda. “[Bankman-Fried] was like, ‘I could destroy you,’” one person characterized the then-Alameda CEO’s behavior to Time. “’Will [MacAskill] and Holden [Karnofsy] would believe me over you. No one is going to believe you.’”

Seemingly, in part, thanks to MacAskill’s defense, Bankman-Fried was not forced to resign after the April 2018 meeting. Instead, the four executives who initially raised the concerns left, along with about half of Alameda’s employees at the time…

MacAskill, Karnofsky and Beckstead, then, seem to have played a direct and key role in enabling the FTX fraud – and they were richly rewarded by their pet con man. After FTX’s explosive growth starting in 2020, MacAskill enjoyed a wave of interest generated by the supposed Effective Altruist billionaire he had spent years cultivating. Beckstead would be named head of the FTX Future Fund, a Potemkin nonprofit that helped build Bankman-Fried’s fluffy image – and attract more victims…

Reader Interactions

55Comments

  2. 2.

    Mr. Bemused Senior

    On Earth the lords of the Instrumentality met. The presiding chairman looked about and said, “Well, gentlemen, all of us have been bribed by Raumsog. We have all been paid off individually. I myself received six ounces of stroon in pure form. Will the rest of you show better bargains?”
    Around the room, the councilors announced the amounts of their bribes.
    The chairman turned to the secretary. “Enter the bribes in the record and then mark the record off-the-record.”

    Just business as usual.

  4. 4.

    YY_Sima Qian

    A vice governor of the People Bank of China (PBOC, China’s central bank) was arrested on suspicion of corruption last Nov. In the government reorganization unveiled earlier this months, PBOC’s position was reduced in China’s financial regulations framework. Might be related to the SBF bribe.

    As an aside, the PBOC is not like the central banks of other developed economies. It is a technocratic ministerial level organization under the State Council, China’s cabinet. It manages China’s money supply & interest rate, like other central banks, but it does not enjoy the same level of independence. Its governor answers to the larger state bureaucracy as part of the State Council, which in turn answers to the CCP (& the Party & State bureaucracies are deeply intertwined anyway). In any case, the Chinese government has many more levers to control the economy through direct state intervention than other developed economies.

    Through the aughts and teens, the PBOC nevertheless attained significant influence beyond its official organizational standing. It has seen its privileged position reduced during the latest reorg.

  9. 9.

    Steeplejack

    And it looks like Bankman-Fried is funding his legal defense with
    money he funneled from FTX to dear old Dad. The criming continues.

    Sam Bankman-Fried, founder of fallen cryptocurrency exchange FTX who claimed to have just $100,000 in his bank account last November, is preparing for trial in October backed by a roster of powerful attorneys. But it has remained unclear, until now, how the former billionaire would afford his pricey defense.

    Forbes has learned that Bankman-Fried has been paying legal fees from a multi-million-dollar gift he gave his father with money borrowed from FTX’s sister company.

    In 2021, while CEO of FTX, Bankman-Fried made a large monetary gift to his father, Stanford Law professor Joseph Bankman, two sources with operational knowledge of both companies told Forbes. It was funded by a loan from the exchange’s trading firm, Alameda Research, they said.

  12. 12.

    SpaceUnit

    @NotMax:

    Yeah.  A pet rock could work as a paperweight.

    Crypto is like shelling out cash for purely hypothetical magic beans.

  14. 14.

    HumboldtBlue

    I just asked my cat, Salad, why he was pussy footing around as he sneaked and peeked at my lap, oddly enough, filled with a laptop.

    He’s not happy, but he’s good at pussy footing around.

  15. 15.

    Ken

    @SpaceUnit: So are the DOJ, CFTC, SEC, FDIC, and their state and international equivalents. There have been a lot of arrests and indictments in the past few weeks.

  17. 17.

    Steeplejack

    @NotMax:

    Thanks a lot! Bookmarked. Food is a big deal in Montalbano, especially seafood. One of my favorite episodes is “Montalbano’s Croquettes,” which features Montalbano hurrying to solve the murder lest he miss out on his housekeeper’s New Year’s arancini.

  18. 18.

    SpaceUnit

    @Ken:

    That bodes well.

    It really bothers me when I spot a Bitcoin kiosk in a mall or supermarket, knowing that they’re just looking for suckers to pony up an entrance fee for a rigged financial game of musical chairs.

  26. 26.

    SpaceUnit

    @Ruckus:

    I dunno.  Maybe it’s the dude’s hair.

     

    ETA:  I mean, if you’re worth a billion dollars you ought to be able to afford a comb.

  27. 27.

    Steeplejack

    @HumboldtBlue:

    Thank you! Whew. That was going to keep me awake. Great song, but I didn’t hear it enough back in the day for it to get fully imprinted.

  28. 28.

    NotMax

    @Steeplejack

    If you scroll down the linked page, by Giorgio, there’s a version of arancini.

    Hard pressed to come up with another streaming service which goes to the effort of including a compendium of recipes on its site.

  31. 31.

    Steeplejack

    @NotMax:

    I saw the recipe. Not crazy about the bitter greens, but it’s a good start. I’d probably go with spinach. I’ve looked at other recipes occasionally but have never tried it. Sudden thought: I wonder if you could do it in an air fryer?

  32. 32.

    piratedan

    I wonder if its in the Democratic Party’s best interest to make every race a national race…

    do you believe women have the right to have health care?

    do you believe that a single lone voice should dictate what your child learns?

    do you believe that people that identify as trans deserve the same rights as everyone else?

    do you believe that its better for kids to eat free or be allowed to go to work?

    do you believe that if you’ve broken the law that you shouldn’t be prosecuted for it if you’re a Republican?

    Do you believe in science?

     

    make it simple, make it everywhere….

  35. 35.

    piratedan

    @David 🌈 ☘The Establishment☘🌈 Koch: yes… and how the music can move her, whenever it starts…..

    but in these times when there seems to be so much on the line, I think simple messages are best, cuts thru the bs and makes it black and white/yes or no.

    as the GOP has taught us, if you’re explaining…. you’re losing…. at least as far as dealing with those in the squishy middle are concerned.

  37. 37.

    Ruckus

    @SpaceUnit:

    He might be worth a billion but that doesn’t mean he has actual money. Unless he can turn the paper that says he’s worth a billion into greenbacks, he’s worth a billion but he may not be able to get his hands on a tenth or hundredth of that. Of course those that worship money don’t mind if it’s only being worth that on paper and he has the fluidity of a large block of concrete.

  38. 38.

    🐾BillinGlendaleCA

    OT: Interesting day at the Home of the Orange Apron…I walked into work and one of my co-workers tells me our DH(department head) and one of the ASMs(Assistant Store Manager) had just been fired.

  42. 42.

    🐾BillinGlendaleCA

    @Amir Khalid: It is liability issues for the company, either the shoplifter could sue if they were injured or the associate could sue if they were injured.  We recently had an 82 yo associate(not my store) that was asking for a receipt from a shoplifter and was pushed, fell hit his head and died a week later.

  43. 43.

    JPL

    @🐾BillinGlendaleCA:  That is common about major department stores.

    Local news is covering the fact that Greene is once again locked out of her twitter account for violent statements.   They went on to mention all the times she was locked out and why.

  45. 45.

    Mai Naem mobile

    @🐾BillinGlendaleCA: several years ago I was getting some keys made at an ACE and the associate told me they had had guys come in and cut the chains off the display tools and make off with them and his attitude, correctly, was that he was not going to chase after these people risking  his life just for a Milwaukee drill.

  48. 48.

    mrmoshpotato

    In new charges unveiled in the US, officials accuse the entrepreneur of authorising a bribe of “at least $40m” (£32.5m) to try to gain access to trading accounts frozen by Chinese authorities.

    Is “entrepreneur” being used with dripping sarcasm here?

  52. 52.

    Ken

    @schrodingers_cat: Could be. One of the things that came out when the situation began unravelling, was that during a meeting with some venture capitalists, Bankman-Fried had spent the whole time playing games on his phone. Which apparently impressed them, and they gave him a lot of money.

  53. 53.

    PaulB

    @schrodingers_cat:   Why do they all look like they just got out of bed.

    Basically, it’s because they can. That’s true of pretty much the entire tech industry. Wandering around in t-shirts and sweat pants is almost a rite of passage, a point of pride that they’re not part of the “suit and tie” crowd.

    Speaking as an ex-techie, I’m grateful that I haven’t had to wear a coat and tie in decades, and determined to keep that streak going in retirement.

  54. 54.

    jonas

    For some reason reading the continual drip of news on the SBF/FTX saga, I’m reminded of the Seinfeld bit where George is confronted by Mr. Lippman for having had sex with the cleaning lady in his office and his only (quintessentially George) response is: “Was that wrong?…Should I not have done that? I tell ya, I gotta plead ignorance on this whole thing…”

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