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jdmgto t1_iy570v0 wrote

Reply to comment by TheNotGirthyAuthor in How a CoinDesk scoop led to the fall of Sam Bankman-Fried and implosion of FTX by redhatGizmo

The underlying problem was more fraud than Ponzi. Basically people were putting money and coins into theirbFTX accounts. The money was just supposed to stay there. It didn't. SBF gave it to Alameda to gamble. Which is uh, SUPER illegal.

When the market went south they lost it all. Turns out most of what they had left was FTT tokens, their own token they just magic'd out of thin air and wash traded to get the value they needed. When people realized some of what was going on there was a run on FTX to withdraw money which required FTX to sell FTT by the truckload. FTT went to zero, and now FTX has nothing.

Don't worry though, Sam and his buddies siphoned millions directly out of FTX's accounts to buy houses and all kinds of things. Also super illegal.

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TheNotGirthyAuthor t1_iy5h1dm wrote

I have to imagine some of the assets can be seized (such as the properties they bought), but I’ve also heard a lot of the money was gambled away on other crypto. It will be interesting to see what happens going forward, and if the founders will be facing any criminal charges in the future.

One of the questions that nobody seems to be asking is why/how respected investors such as Kevin O’Leary were fooled by Sam and FTX. From what I understand, there were lots of warning signs and red flags that should have scared informed investors away. How were these seasoned investors fooled, and did any of them knowingly benefit from the FTX fiasco?

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jdmgto t1_iy5u1zy wrote

Greed. That's it, it's greed. Sequia, Kevin, all of them were just horny for money. SBF wasn't a great conman, amazing fraudster, or brilliant guru. When asked for time to look over financials their response was "Fuck off," they didn't let sequoia have seats on the board. They basically said take it or leave it and they were all so horny for money they took it, and Sam took them.

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TheNotGirthyAuthor t1_iy6ac19 wrote

I like how at least 3/5 of the sharks on Shark Tank have been involved in crypto scams and they still have the audacity to sneer at these other companies that make real products

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jdmgto t1_iy7sxpv wrote

I’m about to be really dismissive but a huge part of being wealthy is getting very lucky with timing. You only know who Mark Cuban is because he sold off broadcast.com to Yahoo right before the dot com bubble burst. If he’d held out even a few more months he’d be managing a Wendy’s right now. Once you have a stupid amount of money it is incredibly difficult to not grow that pile of money because wealth compounds. Our society loves the Just World fallacy and if you’re rich that must mean you’re super smart or talented or deserve it in some way. How we’ve seen that’s clearly not the case. Elon Musk is currently imploding Twitter, Kevin O’Leary is Kevin O’Leary, in a lot of cases some terrible people got lucky and want to act like it was all their genius. Truth is they’re as stupid and greedy as anyone else.

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