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naraburns  nihil supernum  1yr ago (text post)   30444 thread views

Culture War Roundup for the week of November 21, 2022

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The Bankman-Fried/FTX Saga just gets better and better. A "why oh why" article in the Wall Street Journal has plums to be plucked out, such as these.

(And if Will MacAskill wants to repair his reputation, he better make some moves sharpish because the media are painting him as Sam's guru who encouraged and indeed enabled him).

Mr. Bankman-Fried has said his law-professor parents instilled in him an interest in utilitarianism, the philosophy of trying to do the greatest good for the greatest number of people. He said he started putting those ideals into practice while majoring in physics at MIT. Concerned with the suffering of animals on factory farms, he said, he stopped eating meat.

Will MacAskill, then a philosophy graduate student, pitched Mr. Bankman-Fried on the idea of effective altruism, a way of applying some utilitarian ideas to charitable giving.

...Mr. Bankman-Fried had considered different career paths, he said in the “80,000 Hours” interview, but Mr. MacAskill suggested he could do the most good by making a lot of money and giving it away, a popular idea in the community.

Yeah, does anyone think that someone who doesn't know the first thing about EA or any of the people here, when reading this, is going to come away with a good view of all concerned? Personally I'm very amused that veganism has been dragged into this: "guy who swindled billions is against meat eating" 🤣 So let's count 'em up: that's utilitarianism, Effective Altruism, cryptocurrency, and veganism all tainted by association!

As for MacAskill, it sounds like he was in contact with Bankman-Fried up until quite recently:

The FTX Foundation’s favored causes included pandemic prevention and protecting humanity from the potential downsides of artificial intelligence. At a July meeting of the foundation, Mr. Bankman-Fried became deeply engaged in a discussion on how lightbulbs equipped with a particular frequency of ultraviolet light could eradicate airborne pathogens, Mr. MacAskill told the Journal this summer.

He has distanced himself now, but unfortunately that may be too little, too late:

[Future Fund’s] two largest public grants, of $15 million and $13.9 million, were awarded to effective altruism groups where Mr. MacAskill held roles. Mr. MacAskill, now a professor at Oxford University, wasn’t paid for his involvement in those organizations “other than expenses,” a spokeswoman for one of them said.

...Mr. MacAskill distanced himself from FTX as it was crumbling. In a string of tweets, he accused Mr. Bankman-Fried of personal betrayal and abandoning the principles of effective altruism. He was also one of the Future Fund staffers who quit.

But wait, that isn't the best bit:

Mr. MacAskill at times advised Mr. Bankman-Fried on more than just philanthropic matters. When Elon Musk started his campaign to buy Twitter, Mr. MacAskill sent the Tesla chief executive a text message, according to documents made public in the litigation over his purchase of the social-media firm. “My collaborator Sam Bankman-Fried has for a while been potentially interested in purchasing it and then making it better for the world,” he wrote.

Oh yes. Just imagine it. Instead of Musk buying Twitter, it could have been Bankman-Fried. If people are getting het-up about Twitter potentially collapsing, what would they think if Twitter was caught up in the undertow of the FTX collapse? 😈

The Bankman-Fried/FTX Saga just gets better and better. A "why oh why" article in the Wall Street Journal has plums to be plucked out, such as these.

It is just getting started too. Eventually there will be some of indictment and likely a legal battle to get him back to the US. If successful, the actual criminal trial. I think he will be deported successfully. Given that SBF worked alone and had no co-conspirators like we see with organized crime, likely there will be no plea deal, so we can expect a lengthy trial and sentencing.

He definitely has co-conspirstors. His gf and a few of the other top people at FTX. Potentially his parents.

But not people who are higher up. His girlfriend could rat on him though

Was specifically replying to this

“Given that SBF worked alone and had no co-conspirators like we see with organized crime,”

That’s factually untrue. While it would be weird to make a deal with the number 1 so you arrest everyone else it’s also untrue that he had no co-conspirators. If he’s looking at life with no parole he could probably make a deal and give up a half dozen or more other people for 30 years.

I feel like I missed something when Sam Trabucco quit, that should have been a sign something was wrong.

It's hard to know. A lot of the articles are pointing out that Bankman-Fried kept tight control, only a few people had access to things, and he was the ultimate guy who knew where the money was coming in and going out. So co-founders, Ellison, etc. have a case about "We believed Sam when he told us it was all kosher". They may end up sounding like fools ("so you are saying you had no idea what was going on with all these billions even though you were technically in charge?") but better to be judged a fool than a knave.

If I believe what is going on, there is already a lawsuit in preparation suing the people in the ads for "invest your money with FTX". This is gonna be a juicy one, exile!

Honestly haven’t seen that he kept tight control. I thought they all lived together and had sex together and worked 24/7 together. And the other people aren’t lowly fools their are credentialed folks who would be able to notice things.

I thought they all lived together and had sex together and worked 24/7 together.

Not quite as simplistic as that. There was a luxury penthouse apartment with six bedrooms where several of them, including Bankman-Fried lived, but who was romantically involved with whom isn't clear (was Ellison still his girlfriend or his ex at the time? Unclear).

The bankruptcy filing is very informative, because it digs into the corporate structure and makes it pretty clear that Bankman-Fried had the controlling share of everything and it was he who set up how things worked/didn't work. There are a heap of companies/entities under the umbrella of the FTX group, with head offices/registrations all over the world. There was an 'inner circle' of Bankman-Fried and maybe as few as two others, Wang and Singh, or maybe/maybe not Salame, Ellison, Trabucco were included. It's hard to know who was in the know and who wasn't, but it's pretty clear Bankman-Fried owned the majority of everything, even if others thought it was some kind of communal set-up:

For purposes of managing the Debtors’ affairs, I have identified four groups of businesses, which I refer to as “Silos.” These Silos include: (a) a group composed of Debtor West Realm Shires Inc. and its Debtor and non-Debtor subsidiaries (the “WRS Silo”), which includes the businesses known as “FTX US,” “LedgerX,” “FTX US Derivatives,” “FTX US Capital Markets,” and “Embed Clearing,” among other businesses; (b) a group composed of Debtor Alameda Research LLC and its Debtor subsidiaries (the “Alameda Silo”); (c) a group composed of Debtor Clifton Bay Investments LLC, Debtor Clifton Bay Investments Ltd., Debtor Island Bay Ventures Inc. and Debtor FTX Ventures Ltd. (the “Ventures Silo”); and (d) a group composed of Debtor FTX Trading Ltd. and its Debtor and non-Debtor subsidiaries (the “Dotcom Silo”), including the exchanges doing business as “FTXcom” and similar exchanges in non-U.S. jurisdictions. These Silos together are referred to by me as the “FTX Group.”

Each of the Silos was controlled by Mr. Bankman-Fried. ( To my knowledge, Mr. Bankman-Fried owns (a) directly, approximately 53% of the equity in Debtor West Realm Shires Inc.; (b) indirectly, approximately 75% of the equity in Debtor FTX Trading Ltd.; (c) directly, approximately 90% of the equity in Debtor Alameda Research LLC; and (d) directly, approximately 67% of the equity in Clifton Bay Investments LLC). Minority equity interests in the Silos were held by Zixiao “Gary” Wang and Nishad Singh, the co-founders of the business along with Mr. Bankman-Fried. The WRS Silo and Dotcom Silo also have third party equity investors, including investment funds, endowments, sovereign wealth funds and families. To my knowledge, no single investor other than the co-founders owns more than 2% of the equity of any Silo.

The parent company and primary operating company in the Alameda Silo is Alameda Research LLC, which is organized in the State of Delaware. Before the Petition Date (as defined below), the Alameda Silo operated quantitative trading funds specializing in crypto assets. Strategies included arbitrage, market making, yield farming and trading volatility. The Alameda Silo also offered over-the-counter trading services, and made and managed other debt and equity investments. In short, the Alameda Silo was a “crypto hedge fund” with a diversified business trading and speculating in digital assets and related loans and securities for the account of its owners, Messrs. Bankman-Fried (90%) and Wang (10%).

Related Party Loans Receivable of $4.1 billion at Alameda Research (consolidated) consisted primarily of a loan by Euclid Way Ltd. to Paper Bird Inc. (a Debtor) of $2.3 billion and three loans by Alameda Research Ltd.: one to Mr. Bankman-Fried, of $1 billion; one to Mr. Singh, of $543 million; and one to Ryan Salame, of $55 million.

Mr. Bankman-Fried and Mr. Wang controlled access to digital assets of the main businesses in the FTX Group (with the exception of LedgerX, regulated by the CFTC, and certain other regulated and/or licensed subsidiaries). … the absence of independent governance as between Alameda (owned 90% by Mr. Bankman-Fried and 10% by Mr. Wang) and the Dotcom Silo (in which third parties had invested).

One of the most pervasive failures of the FTXcom business in particular is the absence of lasting records of decision-making. Mr. Bankman-Fried often communicated by using applications that were set to auto-delete after a short period of time, and encouraged employees to do the same.

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