From yesterday's exhibits in US v. Sam Bankman-Fried: The prosecution shows that the "insurance fund" that FTX bragged about was fake, and just calculated by multiplying daily trading volume by a random number around 7500 - ThreadSky

molly.wiki • 513 days ago

From yesterday's exhibits in US v. Sam Bankman-Fried:

The prosecution shows that the "insurance fund" that FTX bragged about was fake, and just calculated by multiplying daily trading volume by a random number around 7500

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Comments

gretchenleigh.zone•513 days ago

Well that’s a new twist on “code is law.”

natanael.bsky.social•512 days ago

Code is lawless

dbeatcatdad.bsky.social•512 days ago

"accounting" code that returns a different value every time you run it - which it would even without the fuzzing! The future of finance y'all.

fasterandworse.com•513 days ago

I’ve lost sleep over dodgy CSS decisions I made during the day.

happyinspirit.bsky.social•512 days ago

———————
| |
| ME| TOO
| |
____________

hroethgar.bsky.social•513 days ago

Is you using code to implement a criminal conspiracy?

bullcityfats.bsky.social•512 days ago

At least the code isn't commented

happyinspirit.bsky.social•512 days ago

# TODO Google countries that don’t extradite to the US

johnsteiner.bsky.social•513 days ago

The actual code of the scam. Sam is so hosed.

richardroeesq.bsky.social•513 days ago

@matt-levine.bsky.social New investment strategy just dropped

fortunasaga.com•513 days ago

20 years for the fraud but death penalty for the poor documentation with the code.

fatseanlives.bsky.social•513 days ago

wouldn't have gotten caught if they used perl

vtmicah.bsky.social•512 days ago

This is like way more fraudulent than I thought. Even a juror can figure out what np.random() does

themckenziest.gay•512 days ago

OH MY FUCKING GOD

sarcasticbarbie.bsky.social•512 days ago

He committed FRAUD fraud. Like intentionally. Oh yeah he’s in trouble.
And he’s not a whiz kid he’s a grown ass middle aged man

molly.wiki•512 days ago

as someone around his age i was with you until "middle aged" 😅

anita.bsky.social•512 days ago

Don’t worry! A first grader just told me her teacher was really young.

When I asked her how young, she said ”forty four” 😉

drprunesquallor.bsky.social•512 days ago

I turned 70 yesterday, think how I feel! 🤣

blowdart.me•512 days ago

It’s time to buy slippers Molly

molly.wiki•512 days ago

do young'uns not wear slippers? up here in new england i've been wearing slippers since the womb

arkenor.bsky.social•512 days ago

I'm a big fan of slipper socks now. Really thick ones that go halfway to my knees.

adbarnhart.bsky.social•512 days ago

Even here in California, the youngs may wear slippers. There are variations in fuzziness by life stage, though.

warrenterra.bsky.social•512 days ago

Flip flops are just hairless slippers.

sarcasticbarbie.bsky.social•512 days ago

No lie my granny never wore slippers. She only had a pair of pumps she had pushed the heel down and those were her house shoes

docum3nt.bsky.social•512 days ago

Slippers in the house because cleaning the earth, mud, leaves, dogshit etc from floors and carpets is a PITA

sarcasticbarbie.bsky.social•512 days ago

We don’t wear shoes in our home. We take them off ar the door. It’s so cringe to see people wearing shoes inside

blowdart.me•512 days ago

Counter argument - the dog does that anyway, he never wipes his paws 😞

jesseberney.com•512 days ago

Your poor mother

nicolas.grumpycoder.net•512 days ago

I'm in my forties, and, well, I guess it makes me an elderly or something then.

unchi.org•512 days ago

please excuse me while I crumble entirely into dust

sarcasticbarbie.bsky.social•512 days ago

No I’m 35 I just mean they act like he is still wet behind the ears

docum3nt.bsky.social•512 days ago

Peh. A mere child 😃

thorsepus.bsky.social•512 days ago

As a middle aged man, I'm going to do some gatekeeping here. Kids like you and that scamp SBF are like a decade and a half from being middle aged.

sarcasticbarbie.bsky.social•512 days ago

Oh my goodness I’m sorry and didn’t mean to offend; if you feel I am not then I truly apologize and accept the title of just an adult with gusto.
Scamp made me laugh

thorsepus.bsky.social•512 days ago

By the powers vested in me by being a middle aged man, I hereby declare you an adult with gusto. Please accept this coffee mug with your title printed on it. ☕

sarcasticbarbie.bsky.social•512 days ago

OH my goodness I am so honored I don’t even have a speech prepared.

designbyadrian.bsky.social•512 days ago

does the trial need to continue after this discovery at all?

humanbot.bsky.social•512 days ago

The takeaways here:

1. with a nice, trustworthy looking UI you can lure people into believing (almost) anything.

2. the numbers never lie until they do.

theotherspeakman.bsky.social•512 days ago

Anytime it comes up that he said Shakespeare couldn't be the best writer numerically this should be right next to it. "Insurance was just randomly generated number"

quinnwilton.com•513 days ago

Really seems like that last line should say sess.commit_fraud()

molly.wiki•513 days ago

This insurance fund was intended to protect FTX and its customers from losses due to unprofitable liquidations. However, Gary Wang testified that at times the actual amount of money in the fund was insufficient to cover losses.

molly.wiki•513 days ago

For example, at one point in 2021 a trader was able to exploit a bug in FTX's margin system to take on a huge position in MobileCoin, which ultimately resulted in hundreds of millions of dollars in losses for FTX.

vtmicah.bsky.social•512 days ago

What’s fascinating here (to me at least) is that not only we’re they frauds, they weren’t even mediocre traders. Smart people were eating their lunch.

lawzag.bsky.social•513 days ago

This isn’t so much a bug as it was a trader being sufficiently leveraged for his Personal Risk Tolerance.

kurtismcc.bsky.social•507 days ago

This might be the funniest thing I'll read this week.

molly.wiki•513 days ago

This more than exhausted the insurance fund, so SBF allegedly told Wang to have Alameda "take on" the loss. According to Wang, SBF said this was because FTX's balance sheets were more public than Alameda's (ie, the loss might be noticed by investors with access to their records)

molly.wiki•513 days ago

The prosecutors then played a recording of SBF speaking in an interview with @matt-levine.bsky.social on Odd Lots in Aug 2021, where SBF (apparently falsely) claimed that FTX had never had a "blowout" where they were net negative compared to the money they made on trading fees.

molly.wiki•513 days ago

(This is not the now-infamous "black box" Ponzi scheme conversation between Levine and Bankman-Fried on Odd Lots, but I suspect chances are low we'll make it through this trial without that being played for jurors too.)

ohiohawkeye.bsky.social•512 days ago

I remember listening to that episode of Odd Lots and thinking “yeah man, you’re toast at some point.” It was nuts.

molly.wiki•512 days ago

Another fun snippet from this exhibit: the 5,250,000 FTT that was supposedly in the insurance fund was just hardcoded in the frontend.

(This amount of FTT was priced at ~$100 million at the time of the FTX tweet screenshotted in the OP, though FTT was not highly liquid.)

jsstevenson.bsky.social•513 days ago

Yoooo are they showing the git blame at trial???

akmonday.bsky.social•513 days ago

holy shit

dantheclamman.blog•513 days ago

No comments??

soyweiser.bsky.social•513 days ago

#Here we do the fraud

natanael.bsky.social•512 days ago

They pleaded 5th

jefg.bsky.social•512 days ago

TRWTF is Python

robinbobcat.bsky.social•513 days ago

Jeeeze... it's like this guy was taking every. single. opportunity. to commit fraud.

boshyboo.bsky.social•513 days ago

Lol

libertysevers.bsky.social•509 days ago

The levels of arrogance and stupidity here are genuinely mindblowing

fromthemorgue.bsky.social•513 days ago

Oh he’s going to *prison*.

kateviolette.com•513 days ago

holy effing shit

runtripfall.bsky.social•513 days ago

15c3po.bsky.social•513 days ago

I suppose that kind of straightforward dishonesty is the real issue, but it’s also pretty deceptive to pretend that FTT tokens (which as I understand it are effectively equity in FTX) would hold their value in a meltdown scenario where customer recoveries are in doubt

15c3po.bsky.social•513 days ago

Like if Goldman Sachs or Morgan Stanley put its own stock into an “insurance fund” I think we would all immediately see the problem

syfuhs.net•513 days ago

President Skroob: Amazing! That's how we calculate our social security numbers!

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