It’s easy to ignore enormous red flags when the check is fat enough, isn’t it? The whole crypto space is morally shady/unclear but especially the financial links between FTX and Alameda we highly suspicious (and that’s putting it lightly). How about we just trust that they don’t use client deposits for prop trading. The check is big enough after all. And SBF seems like nice chap. What’s not to like?
How about we just trust that they don’t use client deposits for prop trading. The check is big enough after all.
I mean, I think you should have a strong prior that anyone who’s capable of making good money without fraud (which Sam certainly is – he was a successful trader prior to starting Alameda) wouldn’t do something blatantly criminal out of the blue. So you have to say a bit more than just “there are many frauds in crypto” for people to have legitimate reason to become concerned/suspicious. (As I said elsewhere, I think there were indeed some orange flags around the situation, but IMO “they used customer funds to gamble” really isn’t something anyone should readily have thought of before seeing other signs of things being off.)
a) FTX hiring Dan Friedberg as chief regulator officer (a literal straight up criminal conspirator from the Ultimate Bet superusing scam , we have the tapes!)
b) the existence of Alameda Research (there’s a reason why no one lets the NYSE or Nasdaq run a hedge fund on the side!)
It’s easy to ignore enormous red flags when the check is fat enough, isn’t it? The whole crypto space is morally shady/unclear but especially the financial links between FTX and Alameda we highly suspicious (and that’s putting it lightly). How about we just trust that they don’t use client deposits for prop trading. The check is big enough after all. And SBF seems like nice chap. What’s not to like?
I mean, I think you should have a strong prior that anyone who’s capable of making good money without fraud (which Sam certainly is – he was a successful trader prior to starting Alameda) wouldn’t do something blatantly criminal out of the blue. So you have to say a bit more than just “there are many frauds in crypto” for people to have legitimate reason to become concerned/suspicious. (As I said elsewhere, I think there were indeed some orange flags around the situation, but IMO “they used customer funds to gamble” really isn’t something anyone should readily have thought of before seeing other signs of things being off.)
Can you say what specifically made you suspicious they were misusing customer money?
my personal red flags were
a) FTX hiring Dan Friedberg as chief regulator officer (a literal straight up criminal conspirator from the Ultimate Bet superusing scam , we have the tapes!)
b) the existence of Alameda Research (there’s a reason why no one lets the NYSE or Nasdaq run a hedge fund on the side!)
c) everyone involved being a utilitarian