“In a video meeting with Alameda employees late Wednesday Hong Kong time, Alameda CEO Caroline Ellison said that she, Mr. Bankman-Fried, and two other FTX executives, Nishad Singh and Gary Wang, were aware of the decision to send customer funds to Alameda”
Of course they knew - someone needed to sign off on that transfer.
I posted this comment in another thread, but some very good on-chain evidence that Alameda was posting a huge chunk of FTT that it received as part of the original FTT ICO back to FTX as collateral, and that SBF tweeted lies about that transaction at the end of September: https://news.ycombinator.com/item?id=33568688
That’s really interesting. Seems, though, like there are two elements missing that would really tie this down (and maybe details of these elements have subsequently emerged in recent days or will emerge):
1. Shouldn’t the FTX.us president’s resignation have occurred back in Q2 when FTX customer money was allegedly being used to prop up Alameda? I don’t understand why whatever happened in Q2 was OK with him (unless he didn’t know about it, or course), but repaying FTX was a bridge too far for him.
2. As I read the thread you linked, it doesn’t seem like there was any on-chain indication of Alameda/FTX transactions in Q2?
Still, really interesting theory and tantalizing evidence.
Edit: Ah, just saw another post below that SBF had a backdoor to obfuscate transfers between Alameda and FTX. That could explain #2.
All of the senior executives (including CEOs) were living together in the same house in the Bahamas and allegedly were involved in a polyamorous relationship.
So under those circumstances surely everyone knew what everyone else was doing.
I don't think you have to be quite as nice about this, these people did just steal about $10 BILLION dollars from people in what is likely one of the biggest frauds in history.
It was a bunch of 20 year olds living in an orgy penthouse in the bahamas doing drugs and scamming people out of money. It honestly sounds like a cult. Some of the leaked emails from SBF where he pushes drugs onto people for "performance" makes it absolutely sound like a cult.
Jeez. In her last Tweets which were sent just 6 days ago, she states:
>"A few notes on the balance sheet info that has been circulating recently:
- that specific balance sheet is for a subset of our corporate entities, we have > $10b of assets that aren’t reflected there"
This is how the FTX-Alameda perpetual motion machine worked. Alameda was a bad/failing prop trading firm. FTX appeared to be valuable because smarter firms were attracted to the exchange by the opportunity to take money from Alameda. In order to perpetuate the appearance, FTX had to inject money into Alameda, so Alameda could continue their negative strategies, so the exchange appeared to be busy. The more Alameda lost, the more smarter people showed up to take their money, and the faster FTX had to shovel funds into the hole. This abruptly stopped working as soon as inflows to FTX stopped arriving.
The whole scheme has now entered the "whoopsie we got hacked" phase that inevitably concludes every crypto scam, in which the insiders are liquidating and laundering depositor's coins, and buying real estate in non-extradition countries.
I think the other poster is saying that if Alameda or FTX were losing money on trades, someone smarter was on the other side of those trades, but I dont think that is necessarily true.
“ Reuters and The Block confirm that SBF had a backdoor that could move funds between FTX/Alameda without triggering internal audits or accounting. This allowed Sam to borrow 1:1 any amount of user deposits between the two "separate" entities.”
“ In a subsequent examination, FTX legal and finance teams also learned that Bankman-Fried implemented what the two people described as a "backdoor" in FTX's book-keeping system, which was built using bespoke software.
They said the "backdoor" allowed Bankman-Fried to execute commands that could alter the company's financial records without alerting other people, including external auditors. This set-up meant that the movement of the $10 billion in funds to Alameda did not trigger internal compliance or accounting red flags at FTX, they said.”
It could be because Argentina has a lot of “Cuevas” which is an illegal exchange where you can swap crypto for USD. Plus a host of other things you can get away with down there.
Is anyone really buying SBF's excuse that they "accidentally" used the funds because the accounts were labeled incorrectly. I mean, come on. Of course they did it willingly. You don't just trade to the tune of $5-10B without knowing where the money came from.
He also assured everyone on Twitter that FTX US was fully solvent and then filed for bankruptcy hours later.
Disgusting. Everyone trusted him because he and his family are basically washington insiders. He used that trust to scam millions of people. Just goes to show if you become buddy buddy and make contributions to congress you can get away with anything...
44 comments
[ 3.2 ms ] story [ 106 ms ] thread1. "Invest" (borrow/steal) large amount of money
2. Bet as a madman and obviously win big cause I'm such a hot shot
3. Repay every debt and take profit!
4. How could that have gone wrong?!?!!1
What's the difference?
>Alameda CEO @carolinecapital's Dad, Glenn Ellison, is the Department Head of Economics at @MIT
Source: https://twitter.com/jagoecapital/status/1590751676105125888
Given that both SBF's parents are Professors at Stanford, this couple were very much ivory tower children.
It would really be something if Gary Gensler was part of the SEC probe looking into the FTX collapse.[3]
It's practically a Hollywood screenplay that almost writes itself.
1. https://ocw.mit.edu/courses/15-s12-blockchain-and-money-fall...
2. https://www.youtube.com/watch?v=EH6vE97qIP4
3. https://thenewscrypto.com/sec-chairman-gensler-discusses-cry...
I posted this comment in another thread, but some very good on-chain evidence that Alameda was posting a huge chunk of FTT that it received as part of the original FTT ICO back to FTX as collateral, and that SBF tweeted lies about that transaction at the end of September: https://news.ycombinator.com/item?id=33568688
1. Shouldn’t the FTX.us president’s resignation have occurred back in Q2 when FTX customer money was allegedly being used to prop up Alameda? I don’t understand why whatever happened in Q2 was OK with him (unless he didn’t know about it, or course), but repaying FTX was a bridge too far for him.
2. As I read the thread you linked, it doesn’t seem like there was any on-chain indication of Alameda/FTX transactions in Q2? Still, really interesting theory and tantalizing evidence.
Edit: Ah, just saw another post below that SBF had a backdoor to obfuscate transfers between Alameda and FTX. That could explain #2.
So under those circumstances surely everyone knew what everyone else was doing.
It was a bunch of 20 year olds living in an orgy penthouse in the bahamas doing drugs and scamming people out of money. It honestly sounds like a cult. Some of the leaked emails from SBF where he pushes drugs onto people for "performance" makes it absolutely sound like a cult.
Here's Caroline (Sam's girlfriend, and the person who was running Alameda Research, the fund that he was shoveling customer deposits into to prop up) talking about her amphetamine use: https://twitter.com/carolinecapital/status/13790363463003054...
>"A few notes on the balance sheet info that has been circulating recently: - that specific balance sheet is for a subset of our corporate entities, we have > $10b of assets that aren’t reflected there"
The whole scheme has now entered the "whoopsie we got hacked" phase that inevitably concludes every crypto scam, in which the insiders are liquidating and laundering depositor's coins, and buying real estate in non-extradition countries.
>"The more Alameda lost, the more smarter people showed up to take their money, and the faster FTX had to shovel funds into the hole."
I am not following this. How exactly did "smarter firms" take Alameda's money by using FTX's exchange?
https://twitter.com/autismcapital/status/1591459380742225922...
They said the "backdoor" allowed Bankman-Fried to execute commands that could alter the company's financial records without alerting other people, including external auditors. This set-up meant that the movement of the $10 billion in funds to Alameda did not trigger internal compliance or accounting red flags at FTX, they said.”
https://www.reuters.com/markets/currencies/exclusive-least-1...
I doubt he's coming back.
People don't even bother to stop for 5 minutes to ask if their conspiracy theories make sense even if everything in the theory is true.
https://en.wikipedia.org/wiki/Joe_Lewis_(British_businessman...
He also assured everyone on Twitter that FTX US was fully solvent and then filed for bankruptcy hours later.
https://en.wikipedia.org/wiki/Affinity_fraud