Sam Bankman-Fried (SBF) debacle with FTX (1 Viewer)

[FairWarning]

So it looks like SBF didn't even have to post the 250 mil. As I asked yesterday, where was he going to get it? He was saying in interviews that he only has 100k in the bank, if that. So, it turns out his bail is secured by the equity in his parents 4 million dollar house. So, at most he's putting up 4 million but not really. And that is the difference between the haves and the have nots in this country.

Exactly

 

[bigbottom]

So it looks like SBF didn't even have to post the 250 mil. As I asked yesterday, where was he going to get it? He was saying in interviews that he only has 100k in the bank, if that. So, it turns out his bail is secured by the equity in his parents 4 million dollar house. So, at most he's putting up 4 million but not really. And that is the difference between the haves and the have nots in this country.

Yes indeed.

 

[rockaction]

This is another reach-across-the-sociopolitical-divide issue where people of all stripes can probably agree that this guy is a scumbag and that he shouldn't be treated lightly, yet the influence of his status pre-scandal is determining a lot of what is going on here.

As John123 so astutely points out, if this were a have-not, his family's estate (by estate I mean what they own) would probably have already been seized by the authorities, never mind being equity for bail or bond.

 

[Sand]

This is another reach-across-the-sociopolitical-divide issue where people of all stripes can probably agree that this guy is a scumbag

The Alameda girl Ellison has now said that on her side they had a software setting at FTX that allowed Alameda to have a negative cash balance in multiple currencies. So Alameda, knowingly using customer funds, had an infinite, vigorish free margin account.

Such elementary fraud.

And what gets me about this is that they could have easily had a ridiculously profitable legal business. They had it and decided to do the dumbest of ****.

 

[culdeus]

This is another reach-across-the-sociopolitical-divide issue where people of all stripes can probably agree that this guy is a scumbag

The Alameda girl Ellison has now said that on her side they had a software setting at FTX that allowed Alameda to have a negative cash balance in multiple currencies. So Alameda, knowingly using customer funds, had an infinite, vigorish free margin account.

Such elementary fraud.

And what gets me about this is that they could have easily had a ridiculously profitable legal business. They had it and decided to do the dumbest of ****.

It's more complex than this. In simple terms they would get margin called by big banks and pay out from ftx customer funds.

 

[fantasycurse42]

SBF should get at least 30 years and the two cooperating need at least a decade.

Sadly, SBF is the fall guy and the other two will walk away with slaps on the wrist and some hidden cold wallets as their punishments.

Justice prevails!

 

[Sand]

SBF should get at least 30 years and the two cooperating need at least a decade.

Sadly, SBF is the fall guy and the other two will walk away with slaps on the wrist and some hidden cold wallets as their punishments.

Justice prevails!

Reports are coming out that he is getting a plea deal. I wonder what he could possibly have in his pocket to lever that. You usually don't plea to 30 years for a white collar crime, so one would think it would be for much less than that if it happens.

 

[John123]

SBF should get at least 30 years and the two cooperating need at least a decade.

Sadly, SBF is the fall guy and the other two will walk away with slaps on the wrist and some hidden cold wallets as their punishments.

Justice prevails!

Reports are coming out that he is getting a plea deal. I wonder what he could possibly have in his pocket to lever that. You usually don't plea to 30 years for a white collar crime, so one would think it would be for much less than that if it happens.

Do you have a link for this? I see a crypto news site saying that, but they seem to have misinterpreted a Reuters article that states he is going to enter a plea next week. The relevant articles:

FTX Sam Bankman Fried Will Enter Plea Over Fraud Case

Per a Reuters report, the founder and former CEO of FTX, Sam Bankman Fried (SBF), reached a deal with U.S. authorities.

bitcoinist.com

Sam Bankman-Fried to enter plea in FTX fraud case

Sam Bankman-Fried is expected to enter a plea next week to criminal charges he defrauded investors and looted billions of dollars in customer funds at his failed FTX cryptocurrency exchange.

www.reuters.com

 

[Sand]

SBF should get at least 30 years and the two cooperating need at least a decade.

Sadly, SBF is the fall guy and the other two will walk away with slaps on the wrist and some hidden cold wallets as their punishments.

Justice prevails!

Reports are coming out that he is getting a plea deal. I wonder what he could possibly have in his pocket to lever that. You usually don't plea to 30 years for a white collar crime, so one would think it would be for much less than that if it happens.

Do you have a link for this? I see a crypto news site saying that, but they seem to have misinterpreted a Reuters article that states he is going to enter a plea next week. The relevant articles:

FTX Sam Bankman Fried Will Enter Plea Over Fraud Case

Per a Reuters report, the founder and former CEO of FTX, Sam Bankman Fried (SBF), reached a deal with U.S. authorities.

bitcoinist.com

Sam Bankman-Fried to enter plea in FTX fraud case

Sam Bankman-Fried is expected to enter a plea next week to criminal charges he defrauded investors and looted billions of dollars in customer funds at his failed FTX cryptocurrency exchange.

www.reuters.com

It was the Reuters report I saw along with a bunch of others that probably used that as the source.

 

[the moops]

Martin Shkreli with some prison advice

Shave your head. Listen to rap music.

https://twitter.com/EnronChairman/status/1607417958283841537?s=20&t=F_A6vytiNe2rlOBWjzEHow

 

[John123]

SBF should get at least 30 years and the two cooperating need at least a decade.

Sadly, SBF is the fall guy and the other two will walk away with slaps on the wrist and some hidden cold wallets as their punishments.

Justice prevails!

Reports are coming out that he is getting a plea deal. I wonder what he could possibly have in his pocket to lever that. You usually don't plea to 30 years for a white collar crime, so one would think it would be for much less than that if it happens.

Do you have a link for this? I see a crypto news site saying that, but they seem to have misinterpreted a Reuters article that states he is going to enter a plea next week. The relevant articles:

FTX Sam Bankman Fried Will Enter Plea Over Fraud Case

Per a Reuters report, the founder and former CEO of FTX, Sam Bankman Fried (SBF), reached a deal with U.S. authorities.

bitcoinist.com

Sam Bankman-Fried to enter plea in FTX fraud case

Sam Bankman-Fried is expected to enter a plea next week to criminal charges he defrauded investors and looted billions of dollars in customer funds at his failed FTX cryptocurrency exchange.

www.reuters.com

It was the Reuters report I saw along with a bunch of others that probably used that as the source.

Right, but the Reuters report doesn't say he's made a plea deal, just that he is entering a plea next week. He hasn't entered a guilty/not guilty plea yet.

 

[fruity pebbles]

Can you imagine the uproar if he gets less than 10 years and gets out with half served

 

[John123]

Can you imagine the uproar if he gets less than 10 years and gets out with half served

I could see the government trying to do this, but I hope the judge would reject such a deal as not in the interest of justice.

 

[IvanKaramazov]

Can you imagine the uproar if he gets less than 10 years and gets out with half served

I could see the government trying to do this, but I hope the judge would reject such a deal as not in the interest of justice.

I can't. My understanding is federal prosecutors are massive #######s when it comes to stuff like this, and nobody advances their career by cutting this type of person a friendly deal.

 

[Judge Smails]

30 years sounds about right.

 

[fantasycurse42]

His coconspirators should get 30 years, he should get life. They’re just as guilty as he is.

If I was one of those two, I’d be praying he doesn’t commit suicide.

 

[CletiusMaximus]

Can you imagine the uproar if he gets less than 10 years and gets out with half served

I could see the government trying to do this, but I hope the judge would reject such a deal as not in the interest of justice.

I can't. My understanding is federal prosecutors are massive #######s when it comes to stuff like this, and nobody advances their career by cutting this type of person a friendly deal.

For what its worth, Bernie Madoff pleaded guilty to 10+ federal felony counts relating to fraud, perjury, money laundering, etc. and was sentenced to 150 years in prison. He didn't have a plea bargain and didn't cooperate, just pleaded guilty and took his sentence, so it could be a somewhat different situation for purposes of sentencing if SBF cuts some form of plea deal.

The extent of Madoff's fraud is not really known as it depends substantially on how you define it, but estimates are typically between $10bln - $20bln. They've recovered over $14bln.

One of the interesting side-notes that came out of Madoff's sentencing is that the federal sentencing guidelines for fraud only went up to $400mil at the time, so the sentencing analysis was completely unprecedented. Maybe they've addressed that in the meantime.

 

[The Big Donkey]

https://www.cnn.com/2022/12/28/business/robinhood-sam-bankman-fried-alameda/index.html

"When Sam Bankman-Fried bought a nearly 7.6% stake in Robinhood, the popular stock-trading app, earlier this year, he financed the deal with more than half a billion dollars borrowed from his own hedge fund — the entity that prosecutors say was illegally funneling customer funds from its affiliated platform, FTX....."

 

[massraider]

https://www.cnn.com/2022/12/28/business/robinhood-sam-bankman-fried-alameda/index.html

"When Sam Bankman-Fried bought a nearly 7.6% stake in Robinhood, the popular stock-trading app, earlier this year, he financed the deal with more than half a billion dollars borrowed from his own hedge fund — the entity that prosecutors say was illegally funneling customer funds from its affiliated platform, FTX....."

Can anyone think of any reason why those robbed shouldn't be partial owners of Robin Hood now?

 

[The Z Machine]

https://www.cnn.com/2022/12/28/business/robinhood-sam-bankman-fried-alameda/index.html

"When Sam Bankman-Fried bought a nearly 7.6% stake in Robinhood, the popular stock-trading app, earlier this year, he financed the deal with more than half a billion dollars borrowed from his own hedge fund — the entity that prosecutors say was illegally funneling customer funds from its affiliated platform, FTX....."

Can anyone think of any reason why those robbed shouldn't be partial owners of Robin Hood now?

Because they aren't mega rich, politically connected, or have high powered lawyers on retainer. The Joe Schmoes of the world go to the back of the line for creditors. The banks that lent to FTX/Alameda will become partial owners in Robinhood.

 

[Sand]

https://www.cnn.com/2022/12/28/business/robinhood-sam-bankman-fried-alameda/index.html

"When Sam Bankman-Fried bought a nearly 7.6% stake in Robinhood, the popular stock-trading app, earlier this year, he financed the deal with more than half a billion dollars borrowed from his own hedge fund — the entity that prosecutors say was illegally funneling customer funds from its affiliated platform, FTX....."

Can anyone think of any reason why those robbed shouldn't be partial owners of Robin Hood now?

Yes, because that's not the way these things work or at least should work. Those shares should be liquidated to add to the bankruptcy corpus.

 

[KGB]

I put the over under on 5 years and out in 3 or less

 

[Sand]

I put the over under on 5 years and out in 3 or less

I'm pessimistic, but not that pessimistic. Bernie got 150 years and this is in the same ballpark. I'd guess 25 on a plea at the least.

 

[Sand]

In other news - looks like someone with the keys at Alameda is stealing coins and running them through coin mixing services.

Alameda Wallets Funnel Over $1.7 Million Via Crypto-Mixers Overnight | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

 

[KGB]

I put the over under on 5 years and out in 3 or less

The $70 million he gave to politicians and his mother's instrumental role in the 2020 and 2022 elections (Mind the Gap) can't be underestimated. He may get sentenced to more than 5 years for appearances but there is zero chance he gets 20-30+ years.

exactly, although I bet someone sues for the politician $$$

 

[Sand]

I put the over under on 5 years and out in 3 or less

The $70 million he gave to politicians and his mother's instrumental role in the 2020 and 2022 elections (Mind the Gap) can't be underestimated. He may get sentenced to more than 5 years for appearances but there is zero chance he gets 20-30+ years.

exactly, although I bet someone sues for the politician $$$

Bankruptcy lawyers will. I have seen a few that got small amounts donate them (good on them). Those orgs that got big bucks, though, should expect to get a legal summons to return said money if they haven't.

 

[the moops]

I put the over under on 5 years and out in 3 or less

The $70 million he gave to politicians and his mother's instrumental role in the 2020 and 2022 elections (Mind the Gap) can't be underestimated. He may get sentenced to more than 5 years for appearances but there is zero chance he gets 20-30+ years.

exactly, although I bet someone sues for the politician $$$

Madoff got 150 years for his crimes. Now I don't think this dude gets that much, but 5 years seem ridiculously low

 

[Sammy3469]

I put the over under on 5 years and out in 3 or less

The $70 million he gave to politicians and his mother's instrumental role in the 2020 and 2022 elections (Mind the Gap) can't be underestimated. He may get sentenced to more than 5 years for appearances but there is zero chance he gets 20-30+ years.

exactly, although I bet someone sues for the politician $$$

Madoff got 150 years for his crimes. Now I don't think this dude gets that much, but 5 years seem ridiculously low

I don’t think there’s a world where he gets 5 and he only really gets leniency if there is a bigger fish to get (ie he knows where a rogue regime’s assets are or something like that).

In any case like Madoff the clawbacks here on anyone who took any of this money will be massive. If anyone took any money out, they’d better prepare for it to be clawed back.

 

[Dinsy Ejotuz]

I put the over under on 5 years and out in 3 or less

Ken Lay died before he was sentenced, but Skilling got 24 years and is was not eligible for parole in less than 20. The Supreme Court got involved and eventually forced a resentencing with Skilling having a little more leverage, but he still served 12. I think our friend Sam is going to do a decade+ of actual time.

 

[KGB]

I put the over under on 5 years and out in 3 or less

The $70 million he gave to politicians and his mother's instrumental role in the 2020 and 2022 elections (Mind the Gap) can't be underestimated. He may get sentenced to more than 5 years for appearances but there is zero chance he gets 20-30+ years.

exactly, although I bet someone sues for the politician $$$

Madoff got 150 years for his crimes. Now I don't think this dude gets that much, but 5 years seem ridiculously low

I don’t think there’s a world where he gets 5 and he only really gets leniency if there is a bigger fish to get (ie he knows where a rogue regime’s assets are or something like that).

In any case like Madoff the clawbacks here on anyone who took any of this money will be massive. If anyone took any money out, they’d better prepare for it to be clawed back.

The more I see, the more hes a dumbass

 

[General Malaise]

He is pleading not-guilty. Hoh boy....trial date set for Oct.

 

[The Z Machine]

He is pleading not-guilty. Hoh boy....trial date set for Oct.

Not guilty, that's how he stays filthy

 

[fruity pebbles]

He is pleading not-guilty. Hoh boy....trial date set for Oct.

Court TV is gonna be hoppin’

 

[culdeus]

I put the over under on 5 years and out in 3 or less

The $70 million he gave to politicians and his mother's instrumental role in the 2020 and 2022 elections (Mind the Gap) can't be underestimated. He may get sentenced to more than 5 years for appearances but there is zero chance he gets 20-30+ years.

exactly, although I bet someone sues for the politician $$$

Madoff got 150 years for his crimes. Now I don't think this dude gets that much, but 5 years seem ridiculously low

I don’t think there’s a world where he gets 5 and he only really gets leniency if there is a bigger fish to get (ie he knows where a rogue regime’s assets are or something like that).

In any case like Madoff the clawbacks here on anyone who took any of this money will be massive. If anyone took any money out, they’d better prepare for it to be clawed back.

The difference here is that the clawbacks were for gains. Alameda had just red ink all around and losses. If anyone is sitting on a pile of gains I'd be stunned.

 

[The Big Donkey]

Feds seize almost $700 million of FTX assets in Sam Bankman-Fried criminal case

Federal prosecutors seized nearly $700 million in cash and assets connected to Sam Bankman-Fried, primarily in the form of Robinhood shares.

www.cnbc.com

"....Federal prosecutors seized nearly $700 million in cash and assets connected to Sam Bankman-Fried, primarily in the form of Robinhood shares that were owned by the FTX founder, a court filing revealed Friday."

 

[massraider]

"Bankrupt Alameda demands repayment of $445.8 million in loans made to bankrupt Voyager, which previously loaned to Alameda, but was repaid after going bankrupt. Everyone owes everyone and no one has real money. "

 

[The Z Machine]

"Bankrupt Alameda demands repayment of $445.8 million in loans made to bankrupt Voyager, which previously loaned to Alameda, but was repaid after going bankrupt. Everyone owes everyone and no one has real money. "

These jerks just go around in a circle, playing each other.

 

[fatness]

Another fraud operation:
Cryptocurrency lender Celsius was “insolvent since inception,” investigation finds

Turns out the Celsius Network, a cryptocurrency lender that promised customers 17% annual yields on their deposits, was indeed too good to be true.

“Celsius Network on a stand-alone basis has been insolvent since inception,” wrote Shoba Pillay, the former federal prosecutor tasked with investigating the company, in a report (pdf) released on Jan. 31. Mashinsky, who founded Celsius in 2017, spent years slamming critics of his business for spreading “FUD” — crypto-speak meaning “fear, uncertainty, and doubt.” But the examiner’s report appears to vindicate those doubters. “Behind the scenes, Celsius conducted its business in a starkly different manner than how it marketed itself to its customers in every key respect,” Pillay wrote.

The report says that while Mashinsky promised customers their deposits were safe with Celsius, he and other executives were actually using those deposits to buy and prop up CEL, the company’s native cryptocurrency, while they sold their individual stakes in the coin for profit. The maneuver benefited Celsius’s executives while further depleting their company’s liquidity.

 

[The Z Machine]

... executives were actually using those deposits to buy and prop up CEL, the company’s native cryptocurrency, while they sold their individual stakes in the coin for profit. The maneuver benefited Celsius’s executives while further depleting their company’s liquidity.

Is that illegal? I heard all the cool kids were doing it.

 

[Hoh]

He is pleading not-guilty. Hoh boy....trial date set for Oct.

Thanks for the trial information but please don’t call me boy, Mr Leghorn.

 

[Encyclopedia Brown]

More charges

He also got caught a few weeks ago using a VPN, and the judge almost revoked his bail for it.

 

[massraider]

He also got caught a few weeks ago using a VPN, and the judge almost revoked his bail for it.

I wonder if the judge sent him a sternly worded email. The coddling of white collar criminals is a joke.

He's a flight risk. He's hiding his online activity. Revoke his bail.

Put him up at Pebble Beach minimum security prison if you like. But this much money? Lock him up, this is crazy.

 

[Encyclopedia Brown]

I wonder if the judge sent him a sternly worded email

If there is some small solace in any of this, at least this seems to be wearing on him a little bit.

This pic outside of a NYC courthouse shows that the permanent smirk has been wiped off his face.

https://pbs.twimg.com/media/FpsTz7-XEAE9hrT?format=jpg&name=medium

 

[New Binky the Doormat]

I wonder if the judge sent him a sternly worded email

If there is some small solace in any of this, at least this seems to be wearing on him a little bit.

This pic outside of a NYC courthouse shows that the permanent smirk has been wiped off his face.

https://pbs.twimg.com/media/FpsTz7-XEAE9hrT?format=jpg&name=medium

I'd prefer to see the "prison eye-liner he's someone's *****" appearance with the "please help me" expression.

 

[tymarsas]

FTX transferred $2.2B to Sam Bankman-Fried, new management says

Sam Bankman-Fried reportedly had received more than $2 billion from FTX entities according to court filings made by the new management of the cryptocurrency exchange.

www.foxbusiness.com

Just straight up theft. Doesn't even sound like they were hiding it.

 

[CletiusMaximus]

Looking at the FTX BK fee applications for the month of December and see FTX lead bankruptcy counsel - Sullivan & Cromwell - billed $15,407,509.50 in fees and $134,311.31 in expenses for December alone. 2022 law grads (admission "in process") at Sullivan & Cromwell are billed at $775/hr. Associates admitted in 2017 are at $1,440/hr. It looks like partners top out at $2,165.00/hr. One partner billed 342.20 hours in December, earning $740,863.00 in fees for one month by himself. At least a dozen more lawyers at the firm billed in the $300k-$600k range for December alone. They bill at 50% for "non-working travel" so for example one guy bills $1,083.00/hr while he's on a plane or a train ride but not working. Non-lawyer paralegals are billed at $595/hr.

S&C are just one of a dozen or so law firms billing the estate for legal services, in addition to the dozens of other professional firms billing the estate - investment banks, turnaround consultants, accounting firms, auditors, forensic firms, and other professionals.

 

[TLEF316]

Looking at the FTX BK fee applications for the month of December and see FTX lead bankruptcy counsel - Sullivan & Cromwell - billed $15,407,509.50 in fees and $134,311.31 in expenses for December alone. 2022 law grads (admission "in process") at Sullivan & Cromwell are billed at $775/hr. Associates admitted in 2017 are at $1,440/hr. It looks like partners top out at $2,165.00/hr. One partner billed 342.20 hours in December, earning $740,863.00 in fees for one month by himself. At least a dozen more lawyers at the firm billed in the $300k-$600k range for December alone. They bill at 50% for "non-working travel" so for example one guy bills $1,083.00/hr while he's on a plane or a train ride but not working. Non-lawyer paralegals are billed at $595/hr.

S&C are just one of a dozen or so law firms billing the estate for legal services, in addition to the dozens of other professional firms billing the estate - investment banks, turnaround consultants, accounting firms, auditors, forensic firms, and other professionals.

S&C is a client of mine. I work on their insurance.

They're doing VERY well

 

[thecatch]

Looking at the FTX BK fee applications for the month of December and see FTX lead bankruptcy counsel - Sullivan & Cromwell - billed $15,407,509.50 in fees and $134,311.31 in expenses for December alone. 2022 law grads (admission "in process") at Sullivan & Cromwell are billed at $775/hr. Associates admitted in 2017 are at $1,440/hr. It looks like partners top out at $2,165.00/hr. One partner billed 342.20 hours in December, earning $740,863.00 in fees for one month by himself. At least a dozen more lawyers at the firm billed in the $300k-$600k range for December alone. They bill at 50% for "non-working travel" so for example one guy bills $1,083.00/hr while he's on a plane or a train ride but not working. Non-lawyer paralegals are billed at $595/hr.

S&C are just one of a dozen or so law firms billing the estate for legal services, in addition to the dozens of other professional firms billing the estate - investment banks, turnaround consultants, accounting firms, auditors, forensic firms, and other professionals.

Those billing rates are insane, even to me as a BigLaw veteran.

 

[Maurile Tremblay]

One partner billed 342.20 hours in December

Good work-life balance there.

 

[massraider]

Looking at the FTX BK fee applications for the month of December and see FTX lead bankruptcy counsel - Sullivan & Cromwell - billed $15,407,509.50 in fees and $134,311.31 in expenses for December alone. 2022 law grads (admission "in process") at Sullivan & Cromwell are billed at $775/hr. Associates admitted in 2017 are at $1,440/hr. It looks like partners top out at $2,165.00/hr. One partner billed 342.20 hours in December, earning $740,863.00 in fees for one month by himself. At least a dozen more lawyers at the firm billed in the $300k-$600k range for December alone. They bill at 50% for "non-working travel" so for example one guy bills $1,083.00/hr while he's on a plane or a train ride but not working. Non-lawyer paralegals are billed at $595/hr.

S&C are just one of a dozen or so law firms billing the estate for legal services, in addition to the dozens of other professional firms billing the estate - investment banks, turnaround consultants, accounting firms, auditors, forensic firms, and other professionals.

I haven’t seen something this offensive since that trip to Amsterdam