site banner
naraburns  nihil supernum  2yr ago (text post)   32549 thread views

Culture War Roundup for the week of January 9, 2023

This weekly roundup thread is intended for all culture war posts. 'Culture war' is vaguely defined, but it basically means controversial issues that fall along set tribal lines. Arguments over culture war issues generate a lot of heat and little light, and few deeply entrenched people ever change their minds. This thread is for voicing opinions and analyzing the state of the discussion while trying to optimize for light over heat.

Optimistically, we think that engaging with people you disagree with is worth your time, and so is being nice! Pessimistically, there are many dynamics that can lead discussions on Culture War topics to become unproductive. There's a human tendency to divide along tribal lines, praising your ingroup and vilifying your outgroup - and if you think you find it easy to criticize your ingroup, then it may be that your outgroup is not who you think it is. Extremists with opposing positions can feed off each other, highlighting each other's worst points to justify their own angry rhetoric, which becomes in turn a new example of bad behavior for the other side to highlight.

We would like to avoid these negative dynamics. Accordingly, we ask that you do not use this thread for waging the Culture War. Examples of waging the Culture War:

  • Shaming.

  • Attempting to 'build consensus' or enforce ideological conformity.

  • Making sweeping generalizations to vilify a group you dislike.

  • Recruiting for a cause.

  • Posting links that could be summarized as 'Boo outgroup!' Basically, if your content is 'Can you believe what Those People did this week?' then you should either refrain from posting, or do some very patient work to contextualize and/or steel-man the relevant viewpoint.

In general, you should argue to understand, not to win. This thread is not territory to be claimed by one group or another; indeed, the aim is to have many different viewpoints represented here. Thus, we also ask that you follow some guidelines:

  • Speak plainly. Avoid sarcasm and mockery. When disagreeing with someone, state your objections explicitly.

  • Be as precise and charitable as you can. Don't paraphrase unflatteringly.

  • Don't imply that someone said something they did not say, even if you think it follows from what they said.

  • Write like everyone is reading and you want them to be included in the discussion.

On an ad hoc basis, the mods will try to compile a list of the best posts/comments from the previous week, posted in Quality Contribution threads and archived at /r/TheThread. You may nominate a comment for this list by clicking on 'report' at the bottom of the post and typing 'Actually a quality contribution' as the report reason.

14
Top Bottom Old Controversial Comments
Jump in the discussion.

No email address required.

I forgot to share this tidbit from the FTX saga: now Sam Bankman-Fried has his own Substack.

The first (and only so far) article is a pippin, a peach, a doozy. He makes a distinction between FTX US (the arm which permitted Americans to invest and trade) which he claims is solvent (and that seems to be true), and FTX International (the one headquartered in the Bahamas) which.... isn't. So far, this is accurate enough.

But what happened, Sam? we not unreasonably ask. Well, it wasn't his fault, it was all bad luck (global markets crashed at the wrong time) and enemy action (coughBinancecough) and the implication is Alameda went south due to lack of sufficient coverage (your fault, Caroline?) and took FTX down with it.

He includes his example of a balance sheet. I've only very basic accounts knowledge, Sam, but that is not a balance sheet. This is a balance sheet. A list of "we have all this money, trust me", is not a balance sheet.

But never fear! FTX US has assets, and all can be made right very quickly! In fact, he is surprised that hasn't been done yet (implied blame of Mr. Ray and the bankruptcy team?)

I forget which new set of lawyers he is on now - looking it up, it seems to be Mark Cohen, who also represented Ghislaine Maxwell - but surely they must be advising him to shut up, stop giving interviews, and don't publish anything on social media?

He's putting blame on everyone and everything else, and mostly that it was Alameda being exposed to an unprecedented market crash that took it all down, but if he hadn't been strong-armed into Chapter 11, he could have made it all okay.

But some at least of what he is saying is being contradicted by what Caroline Ellison is saying, which is going to make for an interesting day in court when she and Gary Wang testify against Bankman-Fried:

Ellison said she was aware from 2019 through 2022 that Alameda was given access to a borrowing facility at FTX.com that allowed Alameda to maintain negative balances in various currencies.

She said the practical effect of the arrangement was that Alameda had access to an unlimited line of credit without being required to post collateral and without owing interest on negative balances or being subject to margin calls or liquidation protocols.

Ellison said she knew that if Alameda’s FTX accounts had significant negative balances in any currency, it meant that Alameda was borrowing funds that FTX’s customers had deposited into the exchange.

“While I was co-CEO and then CEO, I understood that Alameda had made numerous large illiquid venture investments and had lent money to Mr. Bankman-Fried and other FTX executives,” she said.

Ellison said she understood that Alameda had financed the investments with short-term and open-term loans worth several billion dollars from external lenders in the cryptocurrency industry.

When many of those loans were recalled by lenders in June, she agreed with others to borrow several billion dollars from FTX to repay them.

Wang is also admitting to naughtiness, though he is getting much less coverage than Ellison:

During his plea earlier Monday, Wang said that he made changes to computer code to enable the transactions with Alameda.

“I knew what I was doing was wrong,” he said.

Links to Ellison and Wang's guilty pleas in this article:

Wang pleaded guilty to conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud and conspiracy to commit securities fraud. Ellison pleaded guilty to two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to commit money laundering.

I'm not surprised they're co-operating as hard as they can, there's several bodies (the SDNY, the SEC, the CFTC and the Bahamian government) all wanting a piece of the action so they're all facing multiple charges on multiple counts, thus Bankman-Fried's denial of fraud won't cut much ice:

Simultaneously, both the Commodity Futures Trading Commission and Securities and Exchange Commission released civil complaints against Wang and Ellison.

The SEC alleged that they were involved “in a multiyear scheme to defraud equity investors in FTX, the crypto trading platform co-founded by Samuel Bankman-Fried and Wang.”

The CFTC’s expanded complaint charges “Ellison with fraud and material misrepresentations in connection with the sale of digital asset commodities in interstate commerce, and charges Wang with fraud in connection with the sale of digital asset commodities in interstate commerce.”

Wang and Ellison accepted the claims made against them, the CFTC statement said. Ellison was singled out in the SEC complaint for engaging in artificial manipulation of FTT, FTX’s self-issued token, as part of a broader effort to boost Alameda Research’s available collateral for lending.

In a statement, the SEC said that Wang and Ellison had also accepted “bifurcated settlements” in connection with the complaints and are cooperating.

...Williams did not offer specific details on charges against Ellison or Wang. The SEC alleges that both Ellison and Wang, in their respective roles at Alameda and FTX, abetted Bankman-Fried in allegedly defrauding FTX customers.

The SEC alleges that Wang created a software backdoor in FTX’s platform which allowed Alameda to divert customer funds for its own trades. Alameda was led by Bankman-Fried until 2021, when Ellison assumed control alongside Sam Trabucco, who departed from Alameda in August 2022.

Look on the bright side, at the least the cardiologists treating his lawyers will make bank.

And their therapists. "Hello, Mr. Smith, what is troubling you today?" "Doctor, it's my client. Despite all I've said and advised him and begged him, he - he - " "Ah. He gave another interview?" "Worse! Now he's got a Substack!" "I see. Tell me all about it" makes a note to set up appointments for the next six weeks

I'm trying to imagine the scenarios of his lawyers talking to him after the Substack gambit and none of them don't involve extreme amounts of screaming. Anytime this dude opens his mouth, he dramatically increases and complicates their workload. I at least assume they were cognizant enough to price that into their retainer agreement.

Martin Shkreli also has a highly successful Substack too. I wonder if this can be scaled up to a business model or hustle.

Commit a stupid federal-level crime that gets a lot of media attention but it not so serious that you are sent away too long

Work out deal with prosecutor to avoid jail time or only a very little

In between the first two steps, create a Substack blog

Get tons of subs from all the media coverage. Even 1000 subs at $80/year is still way more than most jobs, just for making a blog post every week. Like perfect dream job. who cares if having a conviction makes it hard to get a regular job when you have taken the short cut to automated riches .

The SEC alleges that Wang created a software backdoor in FTX’s platform which allowed Alameda to divert customer funds for its own trades. Alameda was led by Bankman-Fried until 2021, when Ellison assumed control alongside Sam Trabucco, who departed from Alameda in August 2022.

I don't think this is as big of a deal as it sounds. When you entrust your money with any private entity they can do what they want with it. You assume they are being careful and following the law, but you have no way or knowing nor any control of the situation, beyond what is printed or shown on the account statement, which is effectively an IOU. Even when you deposit money at a bank, that money is lent out (fractional reserve banking). The 'backdoor' is simply entrusting someone else with your money. If SBF and his friends wanted to blow your money on hookers and booze, they would not have needed a specially coded backdoor to do that. It's like people are learning that when you give your money to someone else, it stops becoming your money.

When you entrust your money with any private entity they can do what they want with it.

The legal point, so far as I can make out, is that the customer has to give formal permission to the firm to use their funds to invest. FTX didn't get that, so shovelling money over to Alameda so that it could pay out all the loans that were coming due, thanks to the creditors all going bust, was a big no-no. Customers thought their money was being used for the purpose they intended (buying crypto), but in reality it went to paying off loans to keep Alameda afloat, as well as general "buy luxury houses, give donations, sponsor sports arenas" and so on.

I have money in my bank account, I know and accept that it will be lent out to borrowers who are also customers of the bank and so on. I don't accept that the bank manager or the board of directors can take it and jaunt off on luxury Caribbean holidays with attractive young women to 'escort' them.

And I think the point of the "backdoor" is that it enabled Alameda to secretly divert FTX funds so that no record was being publicly kept of who was taking the money and where it was going. Instead of having to formally apply to borrow the money off FTX and commit to repaying, if the two companies were indeed separate as claimed, Alameda could just tap into FTX funds as though it were a joint account.

But I have to leave all this up to the lawyers and accountants to explain. The trial looks set to be fascinating!

SBF's insistence that FTX US is solvent is very interesting given one of the allegations by the CFTC:

On or about November 7, FTX executives were also asked to evaluate the solvency of FTX US. They were readily able to carry out this request because FTX personnel had access to and oversight of the FTX US (but not FTX US Derivatives) code, database, and ledgers in the ordinary course of their duties. The FTX executives ultimately identified a shortfall they did not understand and were unable to quantify on FTX US.

Bankman-Fried quickly indicated that he would fill the hole at FTX US from liquidation of Alameda assets. On November 8, Bankman-Fried directed Alameda traders to prioritize meeting FTX US capital requirements and to send excess capital to FTX US. On information and belief, Alameda sent in excess of $185 million to FTX US to fill its shortfall.

It sounds like SBF propped up the balance sheet of the bankrupt entity FTX US by using funds from the bankrupt entity Alameda Research. This is illegal. It has the effect of making whole FTX US creditors at the expense of Alameda Research creditors. We also know that he allowed Bahamian FTX customers to withdraw assets even after withdrawals were closed to everyone else. Notice anything? SBF is an American citizen who was living in The Bahamas at the time. The United States and The Bahamas were the two countries in the best position to prosecute him. He was ripping off customers to save his pants right up to the bitter end.

I wouldn't be surprised if it turned out Wang and Ellison had orchestrated this whole thing, and SBF is simply a patsy. They are both admitting guilt, and that they knew at the time what they were doing was wrong. If SBF has a shred of evidence that they misled him, he'll probably get off, while Wang and Ellison get a slap on the wrist.

I wouldn't be surprised if it turned out Wang and Ellison had orchestrated this whole thing, and SBF is simply a patsy.

Timing works out wrong. He set up Alameda himself first, talked Ellison away from Jane Street, and it looks like Wang and Singh were the other co-founders with him. Sam Trabucco was Alameda CEO first, then co-CEO with Ellison, then furled his sails and left and so she took over as sole CEO. (The Sequoia article continues to toast, butter and put jam on the bread for the background of all this):

About six months after SBF dropped out, Jane Street sent Ellison on a recruiting trip to California, so she decided to call on her old friend. They’d been office buddies at Jane, but they’d also occasionally socialized outside of work, too, being fellow EA acolytes.

[Bankman-Fried tells her the story of what he's been doing, mainly making a fortune off the 'kimchi premium']

As a Japanese citizen, he was able to open an account with the one (obscure, rural) Japanese bank that was willing, for a fee, to process the transactions that SBF—newly incorporated as Alameda Research—wanted to make.

...With a goosed-up capital account, the money started piling up so fast that SBF placed what he refers to as “a market order for employees” to tend to the Rube Goldberg operation that kept the capital spinning. There were constant blowups with banks, which are wary of anything crypto. Crypto was so new that regulators in South Korea and elsewhere were constantly changing their mind about regulations — then making those changes retroactive. It was a swirling mess. Pulled into the vortex was Nishad Singh, a friend of SBF’s brother Gabe, and a fellow EA member. ...After just one conversation with SBF, Singh decided to leave Facebook to take on the more meaningful work of building FTX. Caroline Ellison came, too, quitting Jane Street and moving to California only weeks after SBF described the operation to her over tea.

There's also Ryan Salame, who was making donations to the Republicans as Bankman-Fried and Singh were making donations to the Democrats (and for much the same reasons; butter 'em up to look favourably on FTX when it came to regulations and crypto structuring).

I don't know about Trabucco's reasons for leaving, he got out long before any revelations of something rotten in the state of Denmark so it's hard to know if he knew it was dodgy and left before he could be implicated, but Salame seems to have done some whistle-blowing:

The two new suspects’ guilty pleas provided some clarity as to the mindset of Bankman-Fried’s inner circle, which comprised not only Ellison and Wang, but also former FTX Director of Engineering Nishad Singh, former co-CEO of FTX Digital Markets Ryan Salame, and former co-CEO of Alameda Research Sam Trabucco. Court filings recently revealed that Salame blew the whistle on FTX’s activity to Bahamian regulators.

Regrettably, the Commission was informed today by Mr. Ryan Salame (“Mr. Salame”) who is the Chairman of FTX Digital that clients’ assets which may have been held with FTX Digital were transferred to Alameda Research (“Alameda”). Alameda and FTX Digital are related companies, specifically, Mr. Samuel Bankman-Fried is a founder of both FTX Digital and Alameda.

The Commission understood Mr. Salame as advising that the transfer of clients’ assets in this manner was contrary to the normal corporate governance and operations of FTX Digital. Put simply, that such transfers were not allowed and therefore may constitute misappropriation, theft, fraud or some other crime.

Mr. Salame further advised the Commission that there were only three (3) persons who had the necessary codes (or passwords) to transfer clients’ assets to Alameda in this manner, that is, the founders of FTX Digital who are: (i) Mr. Samuel Bankman-Fried; (ii) Mr. Nishad Singh and (iii) Mr. Zixiao (Gary) Wang.

Plus, the way it was all structured (John Jay's 'four silos' in the bankruptcy filing), Bankman-Fried was majority owner of the entities and was getting a billion dollar personal loan from Alameda (the others got smaller but still substantial loans):

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.

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.

So he isn't a simple patsy who was manipulated by a scheming math weasel as the fall guy.

I'm still blown away by all the very soft media coverage of SBF in the New York Times and elsewhere.

He stole nearly as much money as Bernie Madoff. How is it that Madoff is described in "worse than Hitler" level terms while SBF gets the kid gloves? Is it because Madoff stole from the rich where SBF stole mostly from nobodies? Seriously puzzled.

If I can annnoy everyone by tying this into another recent bugbear. When Maddoff happened, there was a lot ot harsh condemnation on my Jewish ex-wife's social media expressing outrage that he had done this "to his own people". I was subject to numerous outraged tirades with the theme "Oh, you're mad because he stole from other Jews, but robbing everyone else is apparently fine?!"

Seems like a plausible hypothesis for why NYC media types would be more upset about one than the other.

I don't know if he's getting soft coverage. All the financial media and computer/tech ones are pretty harsh about what he did and how he's responsible. The techie people don't like the bad name this is giving crypto, and the financial ones don't like 'yet another paper billionaire who made his money off scams'. There may be some soft-soap opinion pieces on him like the "I spent a day with SBF in his parents' house" one, but again there may be legal implications there - until the trial is held, they can't flat-out call him a scammer and fraud and crook as that would be influencing potential jurors and prejudicial.

Also, since he apparently can't keep his mouth shut and will give interviews to whoever asks, the soft-soap approach means he'll talk to you and all you have to do is give him enough rope and he'll hang himself.

He stole money from crypto bros . Not charities and celebrities. Also, no one knows how much he stole for sure. The circulating number is likely exaggerated, similar to Madoff.

Seems obvious enough to me. He was DNC's third largest individual donor behind George Soros and Michael Bloomberg. Presumably he's paid up with the right people, and the majority of journalists being democrats are naturally loath to throw him under the bus.

We will see how well this theory holds up when he is sentenced and how much time he gets. His connections evidently didn't prevent him from being arrested and sent to the US.

I think he was expecting the Bahamian government to protect him, after he authorised payments to them, rather than arrest him and throw him into such a horrible jail that he'd be better off extradited to the US. There was yet another sub-entity, FTX-DM (FTX Digital Markets), licensed in the Bahamas. Ryan Salame was CEO of this and seems to have blown the whistle (after getting gone) as per the Securities Commission of the Bahamas request for police investigation:

FTX Digital is a company duly incorporated under the laws of The Bahamas and is registered as a digital asset business under the Digital Assets and Registered Exchanges Act, 2020 (“the DARE Act”). The Commission is the regulator of FTX Digital.

…Regrettably, the Commission was informed today by Mr. Ryan Salame (“Mr. Salame”) who is the Chairman of FTX Digital that clients’ assets which may have been held with FTX Digital were transferred to Alameda Research (“Alameda”). Alameda and FTX Digital are related companies, specifically, Mr. Samuel Bankman-Fried is a founder of both FTX Digital and Alameda.

…Based on the Commission’s knowledge, Mr. Bankman-Fried, Mr. Nishad Singh and Mr. Zixiao (Gary) Wang are presently on the Island of New Providence and all normally reside at Albany. Mr. Salame is not in the jurisdiction and is reportedly in Washington, DC at present.

The others involved seem to have been smarter and scattered as soon as things turned sour (Trabucco had resigned a couple of years previously, Salame as above scarpered to Washington before dropping the dime, and Singh and Nishad and Ellison headed back to the US or wherever), while he remained behind. It does seem he thought he could continue to live in Albany (the rich people's enclave on the island) while the government of the Bahamas and the US duelled it out over extraditing him, and by some magic intervention, he would get back control of FTX and make it all right again.

He wasn't given soft media coverage in general "elsewhere", as argued here. Even from the NYT, from the dealbook summit

SORKIN: there are two ways to view what has happened at FTX. ... the generous view is that you are a young man who made a series of terrible, terrible, very, very bad decisions. The less generous view is that you have committed a massive fraud. That this is a Ponzi scheme, a manipulation of the system.

SORKIN: One of the letters I got, I want to read to you, Sam ... The subject line is “Sam Bankman-Fried stole $2 million from me.” He says: “Andrew, can you please ask S.B.F. why he decided to steal my life savings and the $10 billion more from customers to give to his hedge fund, Alameda? Can you ask him why his hedge fund was leveraging long all of these S coins?” ... “Please ask him if he thinks what happened was fraud.” ... What do you tell this — this man?

And the interviewer asked many pointed questions, letting him talk a lot, incriminating himself even more.

SORKIN: What are your lawyers telling you right now? Are they suggesting this is a good idea for you to be speaking? BANKMAN-FRIED: No. They are very much not.

SORKIN: How concerned are you about criminal liability at this point? BANKMAN-FRIED: I don’t think that — obviously, I don’t personally think that I have — I think the real answer is it’s not — it sounds weird to say it, but I think the real answer is it’s not what I’m focusing on.

whoops!

he's playing the crowd. had he asked softballs he probably would have been booed

I think he honestly has convinced himself that he has or had A Plan to save the day, but he was rushed and coerced and bullied into agreeing to file for bankruptcy and hand over to John Jay etc. Therefore it's not his fault things went south, he would have fixed it all given enough time. So he's not a criminal, so why should he think of himself as a criminal?

Ignoring all the legal advice to shut the frick up and giving interviews to everyone who asks and starting up a Substack is him trying to justify himself to the public. If he just talks enough, he'll explain how it was all bad luck and terrible mistakes, but he can still salvage it if they just give control back to him. (That's never gonna happen, but he's living in the spacious lands of Denial).

Related to number 2, there's a sense that Madoff was stealing the life savings of a bunch of little old Jewish ladies, while SBF was stealing from crypto tech bros who are just upset they got scammed before they could finish running their own scams on TikTok. The victims' identity matters here, at least in terms of public perception and media coverage.

It sounds like he is trying to make a case to the public for a possible jury trial instead of a guilty plea. In this case, lying does not hurt him necessarily, unlike lying under oath or to police.

This is an intensely idiotic plan. Whatever randos end up on the jury are very likely to not know anything about SBF, let alone any of the exquisite exculpatory fantasies he cooked up in his substack. And besides, it's not like he'd be barred from presenting a defense at his trial.

I want to believe someone cannot be that stupid, but here we are.

I acknowledge that I misinterpreted your comment as an endorsement of this plan.

This is an intensely idiotic plan.

That's his problem, though: he thinks he knows better than everyone. Same with the "my lawyers told me to shut up, but no" - he doesn't regard himself as a criminal or as guilty of anything more than being careless - 'oops yeah in hindsight maybe we should have designated somebody to be in charge of that stuff' - and that if he can only explain it all, we'll all see that he's right:

The classic advice, right: Don’t say anything. Recede into a hole.

And that’s not who I am. It’s not who I want to be. I don’t have — I think I have a duty to talk to people. I have a duty to explain what happened. And I think I have a duty to do everything I can to try and do what’s right. If there is anything I can do to try and help customers out here. And I don’t see what good is accomplished by me just sitting locked in a room pretending the outside world doesn’t exist.

I’m in the Bahamas — I have been in the Bahamas for the last year, and I’ve been running FTX from the Bahamas. I’ve been running FTX Digital Market, our primary operating entity, down here with Bahamian regulators and others in contact. Right now, I am looking to be helpful anywhere I can with any of the global entities that would want my help.

He honestly does not seem to realise that none of the entities want him to 'help' - that is, hand back control to him - because they think he's a crook who will use the opportunity to destroy any evidence implicating him, then take any remaining money and run. He wasn't "running FTX DM with Bahamian regulators in contact", they were investigating it all, thanks to Salame's informing on him, and asking the cops to carry out a criminal investigation. That's how he ended up in a Bahamian jail cell.

I agree completely with your read, this man is hubristically delusional.

I'm still blown away by all the very soft media coverage of SBF in the New York Times and elsewhere.

He stole nearly as much money as Bernie Madoff. How is it that Madoff is described in "worse than Hitler" level terms while SBF gets the kid gloves? Is it because Madoff stole from the rich where SBF stole mostly from nobodies? Seriously puzzled.

Correction: SBF stole from crypto and techie crowd, people who are hated as a class by NYC types and, in addition, discredited cryptocurrency in the eyes of "public opinion" as hard as possible.

If you are typical NYC writer, what not to like here?

Given that crypto is also a major threat to state control and -legibility and that NYT types are very statist (as long as their tribe is running things), I'm also not very surprised.

The cynic in me says the press isn't going too hard on him because he's a democrat donor, maybe not to protect him but who he donated to.

He donated to both parties, and the press is aware, and has an easy narrative. I for one do not concur.

SBF claims to have donated equally to both parties but I'm skeptical. The only evidence offered in the article is SBF's own statements and I think you'd have to be an idiot to take him at his word at this stage.

Which seems more likely? That SBF was funneling something in the realm of 40 million dollars a year through various intermediaries to the GOP and was successfully able to hide this from everyone until now. or a man who has already been exposed as a liar and a fraud is continuing to lie.

He and Singh were major donors to the Democrats (Singh it seems out of conviction and separately), while Salame donated to the Republicans. Much less than to the Dems, but it was the usual "business donates to both sets of politicians so they will have an in with both sides for their own advantage" type of deal.

OpenSecrets has a breakdown of donations here, but the numbers aren't $40 million. On the other hand, his mother is involved with a PAC ("She is a co-founder of the political fundraising organization Mind the Gap, which advocates for Democratic Party candidates and funds get-out-the-vote groups") and he steered contributions towards his brother's group around pandemics, and a lot of that went on buying fancy townhouses to host parties for the lobbyists and members of both parties, so he definitely could have gone up and over $40 million in various spending.

This is another article claiming the donations totalled $71 million or more. Bankman-Fried donated personally mainly to Democrats, but he had his CEO Salame donate to Republicans - I guess Mommy wouldn't have understood why Sammy was giving his own money to the nasty GOP.

I'm not talking bout FTX.us I'm talking about Sam Bankman Fried, which open secrets lists among it's "top donors" as having donated 38.8 million to Democratic causes during the 2022 election cycle.

I agree on that, but he seems to have done his donating through FTX and not merely his own personal fortune (which he now claims he doesn't have, anyway). This is where him giving interviews is shooting himself in the foot, because he later claimed to have personally donated to the Republicans as well, and there's not much sign of it. The "I did it via dark money" can't be proven one way or the other. Openly available figures are that he/associates gave much more to the Democrats than the Republicans. He did donate to Republican candidates but not in the same amounts of money. For 2020 all the donations went to Democrats because he was fully backing the election of Joe Biden.

He did cynically/realistically donate to both parties (your opinion on this will depend on your view of both parties) and he did it to get the kind of legislation around crypto, and favourable regulating, that he wanted pushed. He claims now that he had to hide donating to Republicans because of the circles he moved in, and I don't doubt it - his parents, Stanford, MIT, Bay Area, EA, and the whole circus are signed up to "The Republicans are the Evil Party". So admitting out loud he was giving money to get certain Republican candidates elected/re-elected would have gotten him excommunicated from the circles he wanted to be in.

I don't see this as hypocrisy, because it's standard behaviour for business everywhere: you donate to both big parties because you can't afford to be on bad terms even with the 'enemy' side. People who believe Republicans are all Trump-worshippers and Trump is Literal Anti-Christ will of course see this as treasonous, as giving aid and comfort to the enemy, and all the bad things: helping the party of anti-immigration, of racism, sexism, homophobia and transphobia, of science denial and climate change denial? How could you call yourself an EA after that?

This kind of 'saying the quiet part out loud' is why his lawyers are advising him to keep his yap shut. He might have been depressed or in a bad mood the day he gave that interview, so he took the cynical line on EA etc. and told all. Bad strategy if you're trying to develop a story about how you never did nothing wrong and sticking to that story.

Phone interview where he claims to have donated 'dark' as well as other things; the line is bad so I can't make out all he says:

I donated to both parties. I donated about the same amount to both parties this year. That was not generally known because despite Citizens United being literally the highest profile Supreme Court case of the decade and the thing everyone talks about when they talk about campaign finance, for some reason in practice no-one can possibly fathom the idea that someone in practice actually gave dark. [indistinguishable phrase] So, I don’t know, all my Republican donations were dark. And the reason was not for regulatory reasons, it’s because reporters freak the fuck out if you donate to Republican, they’re all super liberal and I didn’t want to have that fight, so I made all the Republican ones dark.

True? Sorta true? Lying for some reason? Who knows? His rationale seems to be that donating to candidates has maximum effect when you do it for the primaries, because that's where you can influence what candidates get picked. So, presumably, he wanted candidates selected that would be favourable to his interests, which means Republicans interested in crypto and/or seen as moderates. Much the same strategy as that allegedly used by the Democrats in the mid-term elections where they supported extreme Republicans candidates in the primary selections, knowing they would then lose in the election itself.

and was successfully able to hide this from everyone until now.

One of the charges on the indictment was campaign finance law violations

and?

"I'm still blown away by the soft media coverage..."

Isn't it because we're dealing with crypto here, which doesn't affect the broader economy as much and doesn't impact normies.

Could be, but considering how many crypto-skeptics there must be in the media, you'd think they'd leap harder on FTX's spectacular collapse (after all, the FTX bankruptcy and one of the field's biggest players ending up in jail makes for a nice narrative endcap to the crypto craze that started with the pandemic). Maybe there's not enough overlap with the journalistic beats, so the people who would be reading SBF and everything cryptocurrency-related for filth aren't in a position to do so. Or, potentially, everyone is waiting for SBF to get his punishment, and then all the thinkpieces will issue forth with a post-mortem context.

Last I heard, SBF is alleged to have lost $9 billion of customers' money. Madoff is alleged to have lost $65 billion, in 2008 dollars, or about $90 billion in today's dollars.

Madoff's theft was around $19 billion according to the recent Netflix show.

If I run a Ponzi and I say "the $1 you deposited is worth $100", then the total theft is $1 - not $100. Maybe more depending on opportunity costs, but the $65 billion headline number was always BS.

Madoff's Ponzi was a bigger magnitude but not so much so that it explains the difference. Oh, he only stole $9 billion, that's why there are glowing articles about him in the press... Doesn't make sense.

On the other hand if FTX's malfeasance had been acknowledged earlier it's likely the crypto assets would have been worth notably less, having been propped up the whole fugazi to begin with.

But if the headline number is what is commonly believed, that explains the ostensible conundrum, does it not? If common knowledge is that Madoff stole 10x what SBF did, then doesn't that explain why Madoff is seen as the greater villain, even if the common knowledge is untrue? If no one accepts your premise ("He stole nearly as much money as Bernie Madoff") then of course they aren't going to accept your conclusion.

PS: Note that your own lower figure of $19b is almost $27b today, so your premise is wrong, regardless.

Edit: "@jeroboam has blocked you!" Classy move.

What is this place?

This website is a place for people who want to move past shady thinking and test their ideas in a court of people who don't all share the same biases. Our goal is to optimize for light, not heat; this is a group effort, and all commentators are asked to do their part.

The weekly Culture War threads host the most controversial topics and are the most visible aspect of The Motte. However, many other topics are appropriate here. We encourage people to post anything related to science, politics, or philosophy; if in doubt, post!

Check out The Vault for an archive of old quality posts. You are encouraged to crosspost these elsewhere.


Why are you called The Motte?

A motte is a stone keep on a raised earthwork common in early medieval fortifications. More pertinently, it's an element in a rhetorical move called a "Motte-and-Bailey", originally identified by philosopher Nicholas Shackel. It describes the tendency in discourse for people to move from a controversial but high value claim to a defensible but less exciting one upon any resistance to the former. He likens this to the medieval fortification, where a desirable land (the bailey) is abandoned when in danger for the more easily defended motte. In Shackel's words, "The Motte represents the defensible but undesired propositions to which one retreats when hard pressed."

On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.


New post guidelines

If you're posting something that isn't related to the culture war, we encourage you to post a thread for it. A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a submission statement. A submission statement is required for non-text sources (videos, podcasts, images).

Culture war posts go in the culture war thread; all links must either include a submission statement or significant commentary. Bare links without those will be removed.

If in doubt, please post it!


Rules


Recommended Posts And Communities

Recommended Realtime Chats