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CRYPTO - SBF has been Arrested in the Bahamas
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Started by VKurtB,

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VKurtB

VKurtB

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On 12/12/2022 at 6:26 PM, World Colonial said:

He made the mistake of not fleeing to a jurisdiction without an extradition treaty.

Hubris. The guy is 100% pure unadulterated hubris. 

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mlovmo

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I wonder if the "large political donations" this dingdong doled out will be recovered?

Oh, and isn't this rich?

"Bankman-Fried’s arrest came just a day before he was due to testify in front of the House Financial Services Committee. Rep. Maxine Waters, D-Calif., chairwoman of the committee, said she was “disappointed” "

Fi-5cV6WAAA5ukn.jpg

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Zebo

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On 12/13/2022 at 8:20 AM, mlovmo said:

I wonder if the "large political donations" this dingdong doled out will be recovered?

Oh, and isn't this rich?

"Bankman-Fried’s arrest came just a day before he was due to testify in front of the House Financial Services Committee. Rep. Maxine Waters, D-Calif., chairwoman of the committee, said she was “disappointed” "

Fi-5cV6WAAA5ukn.jpg

Disappointed that he didn’t give her more money before his arrest.

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World Colonial

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Just read an SEC statement on CNBC.com.  The charges include violation of securities laws.

Once again, regulators waited to close the barn door after the horses are out of the barn. 

I'm going to make the wild guess that the customer funds are gone and little if anything will ever be recovered.

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VKurtB

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On 12/13/2022 at 9:15 AM, GoldFinger1969 said:

The House hearing with the FTX bankruptcy trustee/CEO is on CNBC and other cable TV channels right now........

I have LITERALLY never watched ANYTHING on CNBC in over two years. I refuse to as a matter of principle. It was force fed to us when I worked at the PA Capitol. Vile lies are their stock in trade. 

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GoldFinger1969

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On 12/13/2022 at 10:16 AM, World Colonial said:

Just read an SEC statement on CNBC.com.  The charges include violation of securities laws.  Once again, regulators waited to close the barn door after the horses are out of the barn.   I'm going to make the wild guess that the customer funds are gone and little if anything will ever be recovered.

It's tough to judge before the fact.  I do wonder though why a Primary Directive like no touching of customer assets is allowed to be possible at ANY firm.

Again....if JP Morgan Chase loses $40 billion with their capital account on bad bond trades....Jamie Dimon cannot BORROW money from millions of Chase customer checking accounts like mine and my parents for a few days at quarter-end to fool the regulators and Fed oversight people.  He can't just push a button and do that.

It appears that was the case at FTX.  Does anybody know who their custodian was ?  Custodians need to be separate from the trading firm or asset manager.

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GoldFinger1969

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On 12/13/2022 at 10:48 AM, VKurtB said:

I have LITERALLY never watched ANYTHING on CNBC in over two years. I refuse to as a matter of principle. It was force fed to us when I worked at the PA Capitol. Vile lies are their stock in trade. 

Sorry, they are one of the best news sources out there and I am no fan of NBC or MSNBC.  Their markets coverage is excellent.  When they have some news people squat over, yeah, you can detect the agenda bias.

You can also watch Fox Business Channel and/or Bloomberg TV if you don't like CNBC.  I'm watching all of them this morning.

Business/financial channels are the least-biased and most-objective news channels around.  They have to be -- their viewers keep score on them EVERY day with their accounts and P/L statements.  (thumbsu

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World Colonial

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On 12/13/2022 at 11:29 AM, GoldFinger1969 said:

It's tough to judge before the fact.  I do wonder though why a Primary Directive like no touching of customer assets is allowed to be possible at ANY firm.

Again....if JP Morgan Chase loses $40 billion with their capital account on bad bond trades....Jamie Dimon cannot BORROW money from millions of Chase customer checking accounts like mine and my parents for a few days at quarter-end to fool the regulators and Fed oversight people.  He can't just push a button and do that.

Designating funds as "customer" versus "firm" in an accounting ledger in and of itself doesn't mean anything.  This appears to be all that FTX did.

If I read correctly, FTX had no (real) board of directors, no audit function, and I'm not clear on their risk management practices either.  This is all "101" for any financial firm or for that matter, pretty much any large or public company.

It can differ somewhat for privately held firms but shouldn't much.

They obviously had poorly defined job functions, limited if any segregation of duties, and who knows if any accounting controls such as reconciliations which should have identified this problem.  This is all based upon what I have read.

On 12/13/2022 at 11:29 AM, GoldFinger1969 said:

Does anybody know who their custodian was ?  Custodians need to be separate from the trading firm or asset manager.

Is there such a thing in crypto land?  I have never heard of such a firm.

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GoldFinger1969

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On 12/13/2022 at 4:10 PM, World Colonial said:

Designating funds as "customer" versus "firm" in an accounting ledger in and of itself doesn't mean anything.  This appears to be all that FTX did. 

That is something that is Securities Law 101.  Accounts must be segregated.  Forget about "regulation of crypto" -- this is about basic custodial accounts.  ANY business which takes monies has to adhere to this principel -- you can't take my downpayment for something and put it to another make-good. 

Instead of worrying about crypto itself, they should have been worried about the actual accounts.  They weren't. :o

It's aking to worrying about if my tech stocks are too risky for my age instead of....is my account being raided by the firm ?

On 12/13/2022 at 4:10 PM, World Colonial said:

If I read correctly, FTX had no (real) board of directors, no audit function, and I'm not clear on their risk management practices either.  This is all "101" for any financial firm or for that matter, pretty much any large or public company.

Yes, but even without the right structure there had to have been (or should have been) basic custodial recordkeeping audits.

What about back-ups in case of a power failure ?  In case of a cyber attack ?  EMP attack ?  Basic stuff.

On 12/13/2022 at 4:10 PM, World Colonial said:

It can differ somewhat for privately held firms but shouldn't much. They obviously had poorly defined job functions, limied if any segregation of duties, and who knows if any accounting controls such as reconciliations which should have identified this problem.  This is all based upon what I have read.

Yup....would have helped.  You would think that the regulators -- who can regulate FIRMS if not CRYPTO -- should have been on this.  Ditto the private investors.

On 12/13/2022 at 4:10 PM, World Colonial said:

Is there such a thing in crypto land?  I have never heard of such a firm.

Fundamental principle of investing:  custodial oversight is NOT with the firm making the investments (unless you trust a Big Bulge Bracket Firm like JP Morgan Chase, Goldman Sachs, Fidelity, etc.).

Even those firms may use others to clear and verify trades, I'm not sure.  But I know that most RIAs and small asset managers use firms like JPM Chase, Goldman, etc. to verify their trades.  This way.....THEY are on the hook.

If I open up "GoldFinger Asset Management" and I steal the money and am producing MY OWN statements, I can get away with anything for a long time.  But if I clear through JPM Chase or Fidelity or Schwab.....THEY are on the hook and will insist the $$$ be held by them because the statements have their names on it and they're liable.

That is how Madoff got away with his fraud.  In fact, I am unaware of any material fraud or Ponzi Scheme where a big Wall Street firm was involved in clearing.  There, the problem is excessive trading, risky trading, high commissions, etc.  But no outright fraud. (thumbsu

Self-clearing or clearing with a firm nobody ever heard of is 10 red flags. 

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VKurtB

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This is 100% FRAUD and EMBEZZLEMENT by the two Uglo-Americans at the top. Why do people trust ANYTHING to 20-something’s? They are all criminals or m-o-r-o-n-s. If you find one who CAN think, they’re running a scam. 
 

Both of SBF’s parents are Stanford law professors and they look like co-conspirators at this point. 

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World Colonial

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On 12/13/2022 at 8:30 PM, GoldFinger1969 said:

That is something that is Securities Law 101.  Accounts must be segregated.  Forget about "regulation of crypto" -- this is about basic custodial accounts.  ANY business which takes monies has to adhere to this principel -- you can't take my downpayment for something and put it to another make-good. 

Instead of worrying about crypto itself, they should have been worried about the actual accounts.  They weren't. :o

Yes, I get it.  Point is, I don't know who the custodian is for crypto accounts.  Probably read it somewhere and missed it or worse, there isn't one.

On 12/13/2022 at 8:30 PM, GoldFinger1969 said:

Yes, but even without the right structure there had to have been (or should have been) basic custodial recordkeeping audits.

What about back-ups in case of a power failure ?  In case of a cyber attack ?  EMP attack ?  Basic stuff.

They had no internal audit function, according to what I read.  That's who normally does this type of review.

I don't remember who their external public accountant is or if they had one.  It's a colossal failure.  But then, institutional investors like Sequoia and (I think) some Canadian Teacher's pension plan apparently did (virtually) zero due diligence either.

On 12/13/2022 at 8:30 PM, GoldFinger1969 said:

Yup....would have helped.  You would think that the regulators -- who can regulate FIRMS if not CRYPTO -- should have been on this.  Ditto the private investors.

You have a lot more faith in regulation than I do.

If regulatory authority is extended to crypto (which it probably will be), the biggest "success" will be in expanding moral hazard.

There is no reason to regulate crypto.  Crypto is nothing.  Anyone who pays something for nothing should expect to lose everything.

It's stupid.

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VKurtB

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On 12/14/2022 at 4:03 PM, World Colonial said:

Yes, I get it.  Point is, I don't know who the custodian is for crypto accounts.  Probably read it somewhere and missed it or worse, there isn't one.

They had no internal audit function, according to what I read.  That's who normally does this type of review.

I don't remember who their external public accountant is or if they had one.  It's a colossal failure.  But then, institutional investors like Sequoia and (I think) some Canadian Teacher's pension plan apparently did (virtually) zero due diligence either.

You have a lot more faith in regulation than I do.

If regulatory authority is extended to crypto (which it probably will be), the biggest "success" will be in expanding moral hazard.

There is no reason to regulate crypto.  Crypto is nothing.  Anyone who pays something for nothing should expect to lose everything.

It's stupid.

100% agreed. It’s not even an asset. It’s complicated math problems, that are worth NOTHING when solved. Nobody needs the answers. There is no asset. How can there be a custodian for a non-asset? ALL OF CRYPTO is a scam, not just FTX and FTT. 

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GoldFinger1969

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On 12/14/2022 at 1:20 PM, VKurtB said:

This is 100% FRAUD and EMBEZZLEMENT by the two Uglo-Americans at the top. Why do people trust ANYTHING to 20-something’s? They are all criminals or m-o-r-o-n-s. If you find one who CAN think, they’re running a scam. 

I don't know about the age-thing, but yes it is fraud and embezzlement.  Charlie Gasparino of FBC and The NY Post nailed it by saying SBF is trying to deflect blame with his "I f***** up" admissions.

On 12/14/2022 at 1:20 PM, VKurtB said:

Both of SBF’s parents are Stanford law professors and they look like co-conspirators at this point. 

No evidence of that, I would be surprised if they had any inkling of the illlegal activities.

This was a LEGIT COMPANY doing ILLEGITIMATE THINGS...it APPEARED to be on the up-and-up as with that hillarious FTX Super Bowl commercial with Larry David. xD

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VKurtB

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On 12/14/2022 at 4:55 PM, GoldFinger1969 said:

I don't know about the age-thing, but yes it is fraud and embezzlement.  Charlie Gasparino of FBC and The NY Post nailed it by saying SBF is trying to deflect blame with his "I f***** up" admissions.

No evidence of that, I would be surprised if they had any inkling of the illlegal activities.

This was a LEGIT COMPANY doing ILLEGITIMATE THINGS...it APPEARED to be on the up-and-up as with that hillarious FTX Super Bowl commercial with Larry David. xD

My sources, including the court-appointed CEO, say it was ANYTHING BUT a legit company. It had no governance. It was some kids playing business. Hide and watch. I tell you SBF’s parents were active participants in the scam. They will be indicted too. They RAN the political contribution scam. There are conspiracy to commit campaign finance violations charges here, and it’s not just the ugly broad. 

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VKurtB

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You can do anything as long as you buy off the right flavor of politician. Heck, the “gentle lady” from South Central Los Angeles even blew SBF a kiss at the end of a previous hearing. Nobody cares about receiving dirty money until they get caught. 

Edited by VKurtB
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