r/technology Dec 01 '22

Broke and down to one credit card: Former FTX CEO Sam Bankman-Fried claims he committed no fraud Crypto

https://www.cnbc.com/2022/11/30/former-ftx-ceo-sam-bankman-fried-says-i-didnt-ever-try-to-commit-fraud.html
1.7k Upvotes

327 comments sorted by

1.0k

u/st6374 Dec 01 '22

Does anyone really believe this mofo doesn't have some hidden wallet with shit ton of $$$?

600

u/menelaus_ Dec 01 '22

Relocates company to the Bahamas for offshore obfuscation and tax shielding, but booooohooo down to one cc…..

Hope they put him in Madoff’s old cell.

103

u/Ok_Programmer_2315 Dec 01 '22

He's already booked his flight to Gran Cayman. Now if he can only get out of the house.

36

u/SpecificAstronaut69 Dec 01 '22

"Hello- yes, is this Carlos? Um, I was just wondering if you could give the number of that band who played your house on your last night in Tokyo."

20

u/weaponizedtoddlers Dec 01 '22

That one is already reserved for Elizabeth Holmes.

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u/pine1501 Dec 01 '22

even the Hanoi Hilton with all the freebies administered by the VC would be too good for him. 😬😄☠️

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u/DTFlash Dec 01 '22

He had like $200m before he started FTX. No way he doesn't have money hidden somewhere. You don't invest your money in the Ponzi scheme you're running.

123

u/passivelyrepressed Dec 01 '22

This.

You spend other people’s money. Never your own. Literally and legitimately, that’s how you start businesses.

15

u/Freezerpill Dec 01 '22

Investment and horse races

12

u/[deleted] Dec 01 '22

200 million in Bahamas real estate across 20 properties… in his parents names

3

u/DFWPunk Dec 01 '22

There's reason to believe he has a massive gambling problem, so who knows how much he lost.

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u/herewego199209 Dec 01 '22

They all park their money in offshore banks. All rich people do this. This dude knew there was a chance this shit was going to blow up in his face. I doubt he didn't park away 10s or hundreds of millions of dollars elsewhere.

36

u/throwaway4206983 Dec 01 '22

I agree I'm sure the ethicality of offshore banks was the least of his worries

3

u/hightechsolution Dec 01 '22

Well getting clipped or falling from a window will be the next thing to worry about

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u/badpeaches Dec 01 '22

They all park their money in offshore banks.

Hold up, you must first register your company in Delaware.

25

u/pkjohnson Dec 01 '22

That has nothing to do with offshore bank accounts lol

8

u/playswing Dec 01 '22

Not if they open an entity in the caymans, then they can open the account no problem. I work for a treasury ops group, so this is seen often

6

u/ferwarnerschlump Dec 01 '22

Airbnb the motherfuckin' lease, I'm never there

I'm out in Cali, why the fuck my company in Delaware?

Happy hour takin' out the chicken, I don't even care

And that applies to both dating and wings

1

u/sheetmettler85 Dec 01 '22

Save that money

-16

u/Tots2Hots Dec 01 '22

Being downvoted by uncultured swine. My apologies.

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u/aaOzymandias Dec 01 '22

No, he is guilty as all hell. Not sure why the media is trying to spin it differently.

2

u/MoMan501 Dec 01 '22

Because he bribed them

10

u/lazy-but-talented Dec 01 '22

he has another robinhood account on an old ipod touch

6

u/terriblystupidjoke Dec 01 '22

“Please believe me, please believe, please, puhLEEEEEEEEEase.…”

32

u/FriarNurgle Dec 01 '22

There’s always money in the banana stand

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2

u/Itdidnt_trickle_down Dec 01 '22

Probably but what you see on the surface could be him all the way to his shallow depths.

8

u/Morningnewsandcoffee Dec 01 '22

I think he was smart enough to cash out to enough real money so he can live anywhere without a care. He might still have that wallet but once’s it’s found it’s going to be able to be tracked. I don’t know this dude even believed in crypto. It was merely a vehicle to conduct fraud.

5

u/[deleted] Dec 01 '22

[deleted]

10

u/Morningnewsandcoffee Dec 01 '22 edited Dec 01 '22

If you look at the legal structure surrounding FTX here and then compare it to the lack of lack of business controls. I go with it being fraud. The new CEO overseeing the bankruptcy has this to say:

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Ray, who noted that he has more than 40 years of legal and restructuring experience including overseeing Enron when it declared bankruptcy, wrote in the filing.

He oversaw the largest fraud in US history with Enron. I don’t think he chose his words without thinking about their implications.

Edit. A word.

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4

u/LavenderAutist Dec 01 '22

FTX tokens are hard to sell right now

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271

u/Uberslaughter Dec 01 '22

Broke aside from the $100,000 he claims to have.

And the billions in crypto he stole of course.

76

u/medievalmachine Dec 01 '22

Even if he's as dumb and disorganized as he's claiming, it's still criminal negligence in any nation. It was a bank not tracking their depositors' funds while spending their depositor's funds. There's no way out. He's just trying to save his image for a decade later when he gets out of jail.

20

u/Thunder_Bastard Dec 01 '22

Except they are not a bank and people got exactly what they were asking for... decentralized untraceable funds.

But it does get into the banking side from their investments and how they used their coin stash to pretend they were worth more than they were.... but at the same time this is on the investor, not the law. If someone thinks a car's litter box is worth 2.5 billion and invests based on that, it is no one's fault but their own.

The width needs to be opened on this. Real banks were using customer's real funds to invest into crypto companies.

-4

u/sean_g Dec 01 '22

If ftx was regulated like a bank, 💯still trying to figure out what laws, applicable to FTX, that were actually broken. Might have a fraud case but 🤷‍♂️. Even then it might be civil and not criminal. He’ll get sued into oblivion but I don’t see the roadmap to prison.

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65

u/PsychoticBananaSplit Dec 01 '22

They mysteriously disappeared when shit hit the fan why won't you believe him!

9

u/Shoresy69Chirps Dec 01 '22

The only problem: it’s in doge…

7

u/Uberslaughter Dec 01 '22

Aaaaand it’s doge

2

u/Shoresy69Chirps Dec 01 '22

Well, yes, that too…

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39

u/HenKai2905 Dec 01 '22

If he's innocent, Everyone needs to give me money.

9

u/Butthole_seizure Dec 01 '22

Yes let me just get into this man’s crypto wallet first

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38

u/fshenassa Dec 01 '22

Yeh right, all an act to keep people from coming after him... they had two different companies in the Bahamas buying up millions in real estate.. all shielded from bankruptcy... he's still fooling everybody.

14

u/Shoresy69Chirps Dec 01 '22

He’s fooling exactly no one.

228

u/Tacowant Dec 01 '22

Why is he still walking free!? I don’t get how he’s not been charged with a slue of financial crimes?

20

u/BirdBucket Dec 01 '22

I believe it’s a slew

5

u/Tacowant Dec 01 '22

Well heck, thanks for that. I legit got that wrong but now I’m a little smarter.

2

u/BirdBucket Dec 01 '22

No problem, I’d never seen slue before and it honestly made me doubt slew so I figured if I threw it out on the internet one of us would figure it out

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191

u/scraz Dec 01 '22

Created a corporate structure that gave him a shit ton of wiggle room to blame others and portrayed himself as a aloof genius. Now when he goes to court his defense will probably be its the fault of the investors for giving 100 of millions of dollars to a bunch of 30 somethings in T-shirts playing league of legends, which is kind of true to be honest.

57

u/bobber18 Dec 01 '22 edited Dec 01 '22

As Elizabeth Holmes of the Theranos case found out, it’s still fraud even if your victims should have known better. In pre-trial motions, it was ruled by her judge that the defense could not introduce evidence about the failure of her investors to do due diligence.

-1

u/sihkdeath Dec 01 '22

Idk Pepsi seemed to get away with it a lot.

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-16

u/chickybabe332 Dec 01 '22

With his man tits hanging out

59

u/femaleviper Dec 01 '22

Eh, let’s stay away from insulting someone for the way they look. Lots of cool people with man tits around :)

11

u/therealinspgdet Dec 01 '22

I like you, great comment!

12

u/YuanBaoTW Dec 01 '22

Lots of cool people with man tits around :)

None of the cool big tittied men I know lost billions of dollars in client funds.

27

u/junafish Dec 01 '22

Great, so let’s focus on the behavior.

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38

u/Apocrisiary Dec 01 '22

Because shit like this takes time. A lot of time.

They have to try and track and make a "map" of all the money. It might even take years, but he will not see the light of day in a LOOOONG time when the sentance finally comes.

41

u/walkonstilts Dec 01 '22 edited Dec 01 '22

How about he gets treated like regular people of victimless crimes who get “held” in custody during investigation til their court date.

Set the bail at the value lost by FTX. Hold him for 2-3 years while they prepare.

8

u/confoundedjoe Dec 01 '22

They still need to charge him with something. They don't yet know what to charge him with exactly. Different when it is something simple like murder, theft, etc.

2

u/Successful-Gene2572 Dec 01 '22

Wasn't Madoff in cuffs the day after his sons turned him in?

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u/PuzzleMeDo Dec 01 '22

There's a lot about this that makes it legally complicated. FTX is registered in the Bahamas, can he be tried under US law? Do cryptocurrencies count as 'Securities' for laws that refer to them? Should they charge him with wire fraud, which requires proof that he intentionally tried to defraud people?

22

u/YuanBaoTW Dec 01 '22

FTX is registered in the Bahamas, can he be tried under US law?

Of course. He defrauded US citizens. There are Nigerians who never set foot in the US sitting in federal prison for scams targeting Americans. There's nothing complicated about this.

Do cryptocurrencies count as 'Securities' for laws that refer to them?

Probably not even relevant. Even before you get to securities-specific statutes, there is enough to send SBF to prison for a long time.

Should they charge him with wire fraud, which requires proof that he intentionally tried to defraud people?

If law enforcement is serious about looking, how long do you think it's going to take to find the proof?

9

u/hotpuck6 Dec 01 '22

Probably not even relevant. Even before you get to securities-specific statutes, there is enough to send SBF to prison for a long time.

See but the thing is the justice department doesn’t like to keep digging up more charges down the road but instead to complete their investigation and hold trial for everything at once. Jurisdiction over whether crypto and their “banks” is an SEC or commodities market issue makes unwinding that whole clusterfuck a prerequisite to figure out what he needs to be charged with beyond just the plain old obvious vanilla “fraud”.

1

u/YuanBaoTW Dec 01 '22

See but the thing is the justice department doesn’t like to keep digging up more charges down the road but instead to complete their investigation and hold trial for everything at once.

I'm not sure the degree to which this is true, but given the extent of the illegality of this clusterfuck, with this approach SBF could remain a free man until the day he dies. You could probably spend a lifetime putting together a case that covers just half the lawlessness here.

4

u/TheLordB Dec 01 '22

The justice department is slow, they aren’t that slow.

My guess is it will be 1-2 years before he is charged for the majority of things with the strong possibility he is charged for something (but not everything) sooner/initially to trigger various laws on extradition and fleeing should it look like he may have the capability to get somewhere with no extradition treaty with the USA.

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u/TheRealDonCarlo Dec 01 '22

Because he was the biggest Democratic Party donor in the 2020 presidential elections and the second biggest during the mid-terms. Crypto billionaires are dying like flies right now, only reason he didnt is he because he and his parents were Democrat favourites. Obvious to anybody with a brain so you probably wouldn't see this on reddit.

15

u/MrPootie Dec 01 '22 edited Dec 01 '22

He said that he donated a near equal amount to republicans but it was in dark money.

https://duckduckgo.com/?q=ftx+republican+dark+money&t=fpas&iar=news&ia=news

You can hear him say it himself at 1:17 in this video

https://youtu.be/0rL35_WV3lE

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u/Lucifer1177 Dec 01 '22

Becaue despite all the wrong and downright dishonest acts committed by him, it was most likely legal. His parents are some of the best legal experts and helped him scam people as legally as possible without crossing any lines ( legally speaking )

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u/Stock_Complaint4723 Dec 01 '22

Maybe he should use the Liz Holmes defense and get pregnant?

14

u/BakingMadman Dec 01 '22

Yeah, sure, except that $300 milion in real estate you pick up using pilfered money. The real estate needs to be disgorged from SBF

27

u/Cardioth Dec 01 '22

Oh sweet, he didn't commit fraud? I guess I can just log onto my FTX account and withdraw my funds then, yay!

27

u/disgruntledvet Dec 01 '22

Yes! Because you are protected by block chain technology! The ownership of your now worthless digital money/tokens/unicorns can indisputably be proven as yours! That's a relief right? Hey, could I interest you in investing in this new concept called NFTs? Gonna make a lot of people super rich if you get in now...

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u/egospiers Dec 01 '22

He says he never knowingly tried to commit fraud…. This is a world away from not actually committing fraud, lol.

4

u/FTR_1077 Dec 01 '22

That's incredible.. from "I'm a Genius" to "I don't know what I'm doing" in a span of days.

6

u/Dry_Guarantee6395 Dec 01 '22

TLDR: The liar lied.

102

u/Ben_aid Dec 01 '22

If SBF does not end up in jail, I will have lost what remaining respect I have for our institutions.

74

u/longtimeyisland Dec 01 '22

"crypto is awesome because it's not regulated guys. The government can't interfere."

"If the government doesn't step in and regulate and punish bad actors in the crypto space I'll have lost respect for them."

Hmmmm

30

u/tinytooraph Dec 01 '22

When did the person you replied to ever say the first thing? Many people always knew crypto is shit.

40

u/longtimeyisland Dec 01 '22

I was commenting on the idea that the starting point for crypto is that it is unregulated and therefore immune from when "countries collapse " or whatever. But that also means if you get scammed.... It's a problem.

A lot of people who believed and bought into crypto are now unironically begging for the government to stand in and regulate. It's just kinda funny. It was fine to be unregulated and a tax shelter when it was making people money even if in the process it deprived resources away from local communities, public goods, etc. But when people lose money "oh government go stop the bad guys."

3

u/FauxShizzle Dec 01 '22

I'm not sure your point stands, though. This was a centralized financial company which had registration as an official business in many countries (including the US) and money transmitter licence for eacg jurisdiction. This is fundamentally different than crypto as a whole because they take custody of your funds.

Yes depositing funds is antithetical to self-custodial control that crypto allows, but it's no different than any other business you give your property or currency to. They broke their own TOS when they dipped into client funds, let alone the illegality of it which is clear cut.

Its different than say when something like LUNA has an algorithmic stable dollar whose algorithm breaks. That is decentralized and self custodial, but the system itself broke down. Here, some pudgy penguin high on amphetamines stole billions in people's money and gambled it away.

5

u/medievalmachine Dec 01 '22

Both FTX and Luna were runs on the bank, essentially. There's more similar here than different. LUNA also gambled the money away in an obviously problematic scheme where crypto value pegs to the dollar are supported only by highly correlated crypto values. Where the value of the 'stablecoin' was necessarily tied to the value of their own crypto coin - that was the whole point obvs.

LUNA kept better books and FTX was more likely criminal on the Bahamian side, sure.

LUNA's old CEO is literally an international fugitive hilariously continuing to tweet his innocence whenever the SK authorities point out that he's at large and they'd like help finding him. It will be SBF's turn soon, I'm sure. You can't make contractual promises and then take no steps to fulfill them, such as keeping a ledger. He knew better, there are rumors of online casinos and double dealing (promising the same asset to multiple firms) and he's being investigated. He's going to be arrested.

1

u/FauxShizzle Dec 01 '22

To be clear, I'm not defending LUNA. I'm saying that according to the logic of the OP I'd say his point stands with something like LUNA because it was a native crypto asset and organically failed as a crypto project.

In this case with FTX, it's basically a bank stealing client funds. They're different. Nothing about FTX's collapse has anything to do with crypto and everything to do with a dishonest registered business.

5

u/[deleted] Dec 01 '22

[deleted]

1

u/FauxShizzle Dec 01 '22

Appreciate the attaboy.

Downvotes will never bother me anyway. If I cared about points I'd just make a pun in a comedy subreddit and make it all up in 5 minutes.

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u/Splith Dec 01 '22

Which is funny because the whole point of crypto is to circumvent our terrible institutions. If people want to throw all their money away on unregulated securities, then this is literally what they deserve.

You want accountability, go to the NYSE. You think your smarter than the system? Go invest in digital offshore nothing. Oh you lost everything? Must be the SEC's fault.

17

u/beef-o-lipso Dec 01 '22

While I agree with you position, two things "people foolishly gave them money" and "FTX committed fraud" aren't mutually exclusive.

The people that lost will never see a penny back and that's a tough lesson to learn. But, FTX could have committed fraud to get that money and they should be charged and tried not to get the money back but to punish the crime.

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u/Sorge74 Dec 01 '22

Right, if FTX lost all the money because crypto tanked and they made bad investment, well sorry y'all. But here it seems like massive fraud happened

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u/joeyb92 Dec 01 '22 Table Slap

You have some respect remaining for the institutions?

9

u/nordic-nomad Dec 01 '22

Yes. They weathered the Trump insurrective presidency surprisingly well, are kicking russias ass in Cold War 2, and were pretty active in warnings about crypto markets and have even arrested a good number already. I’m also a big fan of my municipal institutions, though my state level government leaves a lot to be desired.

16

u/PhilistineAu Dec 01 '22

Crypto is an unregulated shit show. He’s in the Bahamas- so the US jurisdiction is questionable at best Crypto might not be a “security” subject to regulation He made sure he didn’t leave evidence.

SBF is a giant fraud who should rot in a cell for life BUT cryptobros wired their money to Alameda willingly, while bragging about DeFi.

I hope he gets arrested, but I won’t lose sleep if he doesn’t.

7

u/CupformyCosta Dec 01 '22

Crypto being an unregulated shitshow doesn’t change the fact that he’s guilty of thousands of counts of bank fraud alone. FTX willingly having their customers deposit funds into Alameda’s bank account is wire fraud.

-3

u/Mattrix2 Dec 01 '22

Shall we go after the Princess of Nigeria too?

5

u/CupformyCosta Dec 01 '22

If the price is a US citizen, living in the Bahamas with an extradition treaty, who committed billions of dollars in fraud and committed thousands of counts of wire fraud, bank fraud, accounting fraud, and investor fraud, then yeah, why not?

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u/gymdog Dec 01 '22

Because sketchy schemes are literally the point of crypto. Anyone who says otherwise is trying to get you to believe the scheme is legit.

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u/medievalmachine Dec 01 '22

LOL US jurisdiction isn't questionable since Bush. Any nation that doesn't cooperate, we sanction their banks and they lose customers and cash faster than crypto crashes. If we want him, he'll be delivered overnight, faster than Prime.

He's not in Russia. Yet. lol.

2

u/PhilistineAu Dec 01 '22

Yeah. Might want to educate yourself a little. Bahamas seems to be very vocal about their jurisdiction…

https://youtu.be/ZFTJliFl5Fo

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u/mod_target_6769 Dec 01 '22

This is what’s going to make you lose respect?

2007/8 didn’t do it for ya?

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u/CupformyCosta Dec 01 '22

What about 07/08 made everybody lose faith? Was is the fact that barely anybody went to jail and those responsible actually received millions in bonuses? Or that Larry Fink; the guy who created CDOs is now CEO of Blackrock and is cozy with Janet Yellen and other high ranking members of US financial institutions?

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u/angrathias Dec 01 '22

Didn’t realise your institutions extended to the Bahamas

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u/medievalmachine Dec 01 '22

They extend pretty much everywhere except China and Russia. We brought the Swiss banks to heel a decade ago, the famously secretive and neutral Swiss! You try banking if the US sanctions you. It's nearly impossible. There's a reason Iranian oil has to go through China and now Russia.

This is the US investigating the biggest banks in the world - none of them headquartered in the US, some of the matters having nothing to do with the US directly (between Iran and China for example). They all complied.

https://www.nytimes.com/2012/08/25/business/us-said-to-investigate-money-laundering-at-hsbc.html

There's no real reason to doubt that we are the new Roman Empire.

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u/oldtobes Dec 01 '22

lol he wont see one day

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u/jjjhkvan Dec 01 '22

He’s going to jail. 100%

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u/[deleted] Dec 01 '22

[removed] — view removed comment

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u/SomethingDumbthing20 Dec 01 '22

Someone find the Boltons.

11

u/Bcatfan08 Dec 01 '22

They're all gone because one of them got greedy.

3

u/phdearthworm Dec 01 '22

The only one available is the no-talent ass clown.

2

u/TheSchlaf Dec 02 '22

Has he seen Pirates of the Caribbean?

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u/BobThe6Killer Dec 01 '22

This clown should be behind the bars already.

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u/KoastPhire Dec 01 '22

Didn't see that coming

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u/ratolloko Dec 01 '22

Cryptocurrency people acting like if they didn't know this was gonna happen soon or later. No comments 🤦‍♂️

One cryptocurrency down, a few more to follow suit soon or later.

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u/Sanpaku Dec 01 '22

This didn't directly affect any of the tulips.

FTX was a tulip market which presumably didn't speculate on the valuation of any of the cultivars, which allowed hedge funds to invest while remaining neutral with respect to tulip valuation.

Only, FTX had non-existent corporate controls, and:

  • lent its clients' tulip bulbs to third parties, including the related party Alameda Research, which used these to speculate with leverage and lost everything.
  • transferred huge amounts of cash, which had paid for those tulips on the exchange, to SBF and associates.

The simple truth is that:

  • No tulip has any more intrinsic value than fiat currencies
  • Tulips can't be used as money in the general economy as their value is untethered to anything real, and so volatile they can't be used as a unit of account
  • Proof of work tulips are batshit insane from a climate crisis perspective
  • For a decade, the primary real world use of tulips is facilitating illegal drug transactions and money laundering. This attracts a certain kind of person to the whole enterprise, and contributes to its dismal reputation.

Personally, I expected this whole dumb tulipmania to die when some major terrorist attack was found to be funded via tulip transactions. But if it dies just because all sane people recognize that most who sought a quick buck from tulips are morally repugnant, I'll take that.

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u/Thorusss Dec 01 '22

For a decade, the primary real world use of tulips is facilitating illegal drug transactions and money laundering. This attracts a certain kind of person to the whole enterprise, and contributes to its dismal reputation.

Also makes the future very questionable. China banned a lot of cryptocurrencies, KYC rules restrict interaction with the real economy, and monero, which is the best for illegal money movement, is not even supported by many shady exchanges, because they fear the law.

2

u/GrecoISU Dec 01 '22

Didn’t China ban it to push its own digital currency?

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u/Thorusss Dec 01 '22

Yes. And other states could do the same.

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u/Harabeck Dec 01 '22

This didn't directly affect any of the tulips.

Would their FTT token not be a "tulip" in this metaphor?

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u/TheModeratorWrangler Dec 01 '22

Talk about a 10/10 explanation.

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u/lucastay1 Dec 01 '22

If you believe that I got some crypto to sell you!!!

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u/gumiiiiiiiii Dec 01 '22

Sucks because it’s a BitFi card.

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u/Asleep_Holiday_1640 Dec 01 '22

If he claims he committed no fraud then I claim I don't believe him.

3

u/Quartz_Cat Dec 01 '22

No no no he said he DIDN’T MEAN TO commit fraud

Lmao

3

u/wejustsaymanager Dec 01 '22

Oh, ok then sorry about the misunderstanding. Carry on then.

Tons of people lose billions of dollars of other peoples money all the time its no big deal.

3

u/182RG Dec 01 '22

Amex Black Card paid off monthly by an anonymous accountant somewhere offshore. Broke my ass. These people are never “broke”.

12

u/herewego199209 Dec 01 '22

Can someone explain to me like I'm a first grader the appeal of crypto? I just don't get how people invest in this shit or use this shit as means of transactions. It's a volatile currency.

3

u/Wrathuk Dec 01 '22

spend 5 minutes on telegram some nice Asian lady will message you to explain its benefits 🤣

7

u/FinancialDesign2 Dec 01 '22 edited Dec 01 '22

The appeal of crypto has many layers to it. The original value proposition of it is basically this:

  1. The fact that the ledgers used to track transactions are not modifiable. This means that once you commit a transaction, it is impossible for it to be altered or reverted in any way. The ledger is an unhackable system once you have a critical mass of mining computers that are computing the ledger.

  2. Crypto is decentralized and not managed by any central authority. There is no central bank that can come in and change the amount of crypto in circulation. In many cases, the amount in circulation is fixed. There is no authority that can detect fraudulent transactions and reverse them. However, this has been shown to be a lie. Crypto exchanges, as well as developers of currencies, have been known to reverse transactions in order to revert fraud.

  3. Many cryptos claim to be anonymous. This means that theoretically if you were to use crypto to buy drugs, there would be no way to trace it to your personal identification. However this is also a lie, because any crypto that you buy with real money can be traced. The pattern of crypto transactions you make can be used to identify you by cross comparing it with other information, like your bank account or real world activity.

  4. It's largely not regulated by any government, so if you want to skirt around pesky financial laws that hinder your criminal activity, crypto is a great way to get involved, at least until governments wise up.

Despite the lies and issues with those points above, crypto does confer a certain amount of anonymity, and a certain amount of irreversability. Those traits are really good if you're a criminal, as it makes it much harder for authorities to track you down. Not impossible, just harder.

So that's where we get our initial value, which is very much real. It's a value from a functional benefit. Nowadays, investors have latched onto crypto thinking they can make money off of it. Quantiative traders can make money by trading crypto just like stocks, but most people are betting that crypto will be the next big thing and that the previously skyrocketing value of bitcoin can be replicated. This is why you see huge spikes in crypto value. It's all speculative trading, and people are betting huge sums of money that they can make a profit off of other speculators. It's total madness.

Stay away from crypto. It's the wild west. Everyone is now learning once more why regulation is a good thing and why currency should have central authorities. Regulations protect consumers. Disclosure laws give us accurate information. Central authorities can moderate the currency to ensure its stability. Crypto has none of that, which is why it is nothing but speculative garbage.

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u/Informal-Fig-7116 Dec 01 '22

There is none! It’s a scam. What makes it SEEM appealing is the horde of moronic losers and degenerate gamblers banging their drums and screaming ecstatically about how great it is and how everyone should covert. Sounds familiar? Yes, you guessed it! It’s a CULT!

Cults are very appealing to vulnerable, unsure, and lost people.

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u/voarex Dec 01 '22

It lets you buy stuff over the internet without a credit card company or bank backing the transaction. Which is cool. But then they made it so the value of the token goes up and down crazy amount rapidly. Which kind of ruin any value as a currency and makes it into a giant Ponzi scheme.

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u/Dimas16 Dec 01 '22

Really, who made it go up and down in the price? Didnt know it was a design feature. Whats the code for that? Or is it just how the market works with new low cap assets?

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u/trogdor1234 Dec 01 '22

So what you do is put in fake volume in your exchange which can drive price movements. They can do the same thing with the stock market though that’s against the law.

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u/playswing Dec 01 '22

No one made it up and down, crypto started being traded like stocks. And price is always based on demand - but with crypto there's no link to a company's profits like stock so it's really just price fluctuation based on popularity versus profit sharing

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u/[deleted] Dec 01 '22

It can be exchanged for goods and services, mostly the type of stuff you wouldn't want on your credit card statement but only from people who accept it...

It's basically beanie babies, a bit more complicated because you could either buy beanie babies or at first you could just make your own beanie babies identical to store baught ones. It's now become exponentially more difficult to do that because... Magic numbers/doesn't matter.

Because people know that it's getting more and more impossible to make, the supply in existence will not be getting any larger by any appreciable amount. Only people making new beanies are people with enormous amounts of other people's money and energy to throw into it. The idea was, spend tons on making new beanie babies while the market is going up, hang on to that one eyed zebra long enough that it'll be worth more than you paid to make it.

People don't want beanie babies. People want to believe that in the future, someone ELSE will want those beanie babies even more than they initially wanted them themself.

But all of the people who were going to get into beanie babies did. Everyone has the same outlook and nobody who isn't into them is ever going to be

Everyone is sitting on a stack of beanie babies they think is worth millions theoretically but if you've ever known anyone with a collection like that, ask them this question. "you'd you pay that amount of money today for that collection?"

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u/pumpsci Dec 01 '22

It’s a really easy way to launder money

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u/cannabisized Dec 01 '22

the mining part of it is what I don't get at all... their computer just runs constantly to figure out these algorithms? that contain crypto? and you get a percentage of the crypto you unlocked? or get paid hourly? all the question marks are where it becomes fuzzy

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u/herewego199209 Dec 01 '22

It's a big thing. My buddy builds PCs and that's literally all he builds are mining PCs. Literally maybe 15 percent of his clientele are even gaming enthusiasts.

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u/RabbidUnicorn Dec 01 '22

Mining: computer guesses random number, runs it through an equation, if the result has a certain number of 0s in it - one “coin” is added to the solvers account balance.

Imagine your computer and my computer are given an equation: 12+3x2 + 4x3 = Y. We keep guessing numbers until the value of Y has exactly 5 0s in the middle part (1000001 or 200000587). Once one of us finds a valid value for x, the other can easily verify. Once verified, $1 is added to your bank account. The problem is that that $1 wasn’t taken from anyone else’s account - it was created from thin air. (There are limits of how much is available and how fast money can be created). This is what it means to “mine” a token. Versus, when you spend the $1, it’s removed from your account and deposited into another account (the total available $$ hasn’t changed, just who owns it). There’s no serial number or anything attached to that dollar, just some entry in a ledger that tells us who has how much “currency”/tokens.

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u/cannabisized Dec 01 '22

I think I understand the general gist of what they're doing but I guess why they're doing it? who is creating these problems to solve and why do they need to be solved? it just seems so arbitrary and exists only because the next guy sells it to the next guy

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u/RabbidUnicorn Dec 01 '22

The problems to solve, as it were, are self-referencing. The math equation comes from encrypting a ledger of recent transactions with the token.

(Keep in mind, this is super oversimplification, not meant as a detailed explanation). When you earned the $1 token previously, we wrote this down in a file to say your account has 1 token. If someone buys the token and it’s removed from your account and credited to theirs, we add that to the ledger. That person transfers all or some of that token to someone else, another entry. Every 10 minutes or so, we have to encode these transactions into a file we can all see and agree upon. The encoding is the math. So instead of the equation I gave earlier, the equation is “take all the characters in our ledger and add the value of every character and it’s position together, with some other value to make a number with 5 zeros in the middle”. You can see then, a token is awarded for figuring this out first, which becomes a transaction in an update ledger which is part of the next problem to be solved.

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u/cannabisized Dec 01 '22

it just exists because it exists and its mere existence perpetuates the continuation of its existence

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u/medievalmachine Dec 01 '22

The Encryption as backing works precisely because it's encryption, so it's inherently difficult to falsify.

But you're correct, it's all just a self-reference handshake agreement that one peculiar activity quantifies as one coin. Which is how proof of stake came to be - where involvement in a particular cryptocoin is enough for the coin holders to be granted the value of inflation, as it were.

They could just distribute monopoly money and claim it's currency, as it were, but people could fake that easily.

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u/Eravar1 Dec 01 '22

The problems are the cryptographic hashes from transactions on the chain itself. Each “block” refers to the previous block with a hash function, like some twisted linked list, and this proof of work is then used on the same ledger

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u/Porksoda32 Dec 01 '22

Encryption technology in general is based on the notion of “one-way problems”, math problems that are hard to solve, but if someone provides a guess for a solution it is easy to verify. The classic example is to pick two huge prime numbers and multiply them (easy for a computer - tables of numbers already exist. the reverse problem - given a huge number, find what two prime numbers can be multiplied together to get that number - is very hard due to the huge number of primes and the size of the numbers involved. Crypto transactions work similarly. The idea is it’s hard (effectively impossible) to fake a transaction, but valid transactions are relatively easy to verify.

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u/cannabisized Dec 01 '22

I can most track what you're saying I just can't wrap my head around where the real value comes from. seems like it started with a single transaction and the more people that verified that transaction the more transactions were created... which also needed to be verified which then created other transactions to be verified ad infinitum. but where does the monetary value get determined?

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u/Porksoda32 Dec 01 '22 edited Dec 01 '22

Cryptocurrencies exist as a record of balances and/or transactions between users. This record is secured using a one-way problem (a “hash”, if you want to google it) that is generated from the transaction history (the ledger). The hash is published, and anyone (literally anyone) to verify that the current hash matches the ledger’s history. If someone tried to falsify the transaction history, the hash would not match and people could immediately tell that it was fraudulent. The argument is that this eliminates the need for a central banking authority, because the consensus of machines validating hashes serves that function instead.

EDIT: the value of the currency is arbitrary. The person(s) that invented the coin have some policy for how many coins a will be created/distributed and when/how, and people trade the coins using the ledger. Value is determined by what people are willing to pay for it, knowing that the hash/ledger system ensures that their digital currency is secured.

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u/beef-o-lipso Dec 01 '22

The proof of work is there to create scarcity. We're talking tokens are strings of numbers which you can create willy-nilly. Strings of nunbers have no value because you can simply create more on a whim. Each new token dilutes the remainder. Same thing happens with paper currency, BTW. Each new dollar or Euro printed dilutes the value of all others which is why currency is controlled by taking out old bills and adding new.

The proof of work algorithms are meant to control the creation of new tokens, thus creating scarcity. Due to high end math, you can create tokens willy-nilly and they are thus scarce. By altering the algorithm, you can control the speed of how many tokens are created.

It's a neat concept but then people figured out how to hype it and here we are.

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u/turbo2world Dec 01 '22

the miners authenticate transactions

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u/Ok_Programmer_2315 Dec 01 '22

But at the beginning you generated like, .001 of a penny, so when people start spending 50 bucks to buy one as an investment, it's a solid deal for that guy. Or do I not understand how any of this worked?

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u/RabbidUnicorn Dec 01 '22

Exactly right. People assume it is going to have scarcity eventually and therefore value. I can spend $0.0001 (on electricity/hardware etc) to create a coin and sell it to someone that thinks $50 is a good deal cause it will be worth $1000 next year.

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u/Talisa87 Dec 01 '22

It's all a Ponzi scam. The people pushing it want other people to be left holding the bag when they dump their digi-bucks for real money and bail. I really don't think there's been a week this year where a crypto exchange hasn't 'being hacked' or 'closed for maintenance' after people bought in.

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u/RabbidUnicorn Dec 01 '22

The appeal is no different than any other form of trade. I have something of value you want, you give me something of value in return. If we all agree seashells are valuable (cause they are hard to find) then maybe today 1 seashell trades for 12 ears of corn and tomorrow the same seashell only buys 6 ears of corn. It’s the difference between todays value and tomorrow’s perceived increase in value that makes it appealing. The is nothing special about dollars, euros or pounds that are any different from seashells or crypto, except that we have agreed collectively that these currencies have value. They also don’t exist except on paper (as data). The blockchain just makes it so no one government or entity has the ability to add/remove currency from the shared ledger the same way that the Fed Reserve can “mine” (add) dollars to the global ledger.

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u/bigmak818 Dec 01 '22

This dude has millions in Bitcoin

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u/RotisserieChicken007 Dec 01 '22

Put that scammer in jail forever

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u/zeissman Dec 01 '22

Didn’t him and his parents but properties across the Bahamas amounting to $117m?

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u/Optimal_Artichoke585 Dec 01 '22

The $400 million hack is fishy as fck.

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u/cookingvinylscone Dec 01 '22

I don’t want to see him in jail. I want to see him working at McDonalds.

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u/[deleted] Dec 01 '22

Except he did and the whole "industry" is bollocks.

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u/tenderpoettech Dec 01 '22

Don’t trust him he is a criminal.

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u/Silly-Land5168 Dec 01 '22

Sell the condo - live In your Toyota, Sam

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u/redEPICSTAXISdit Dec 01 '22

Reword this please my fat ass thought this was about fried clams 🤤😥

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u/whyrageman Dec 01 '22

Lock him up.

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u/stephenk291 Dec 01 '22

whatever, this dudes a POS. Does he expect anyone to care he's supposedly broke? BOOO HOOO.

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u/Neverlost99 Dec 01 '22

The interview was stunning in its stupidity

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u/captainvontage801 Dec 01 '22

Broke? No he's not. He's got two incredibly rich and well connected parents who are both lawyers that will come to save this POS ass. I love how super rich people like this pretend that they just went broke.

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u/Ronniedasaint Dec 01 '22

Does this douchebag expect us to believe he didn’t stash away a billion or two for a rainy day?! C’mon man!

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u/jbone315 Dec 01 '22

This guy is a wolf in sheep’s clothing. Do not believe the lies

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u/goodpartner520 Dec 01 '22

he got deep connections and donated $$$$ to the government. I don't even think he will go to prison. It's sad.

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u/BostonTERRORier Dec 01 '22

this bitch, and that ugly little bitch he was humping are literally the ugliest humans beings. jesus. also if you’re dumb enough to think this troll looking thing is down to “his last credit card” you’re dumb.

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u/herewego199209 Dec 01 '22

That chick legit looks like she's 14 years old. I thought people on reddit and twitter were trolling when they said she ran that other business. Holy shit.

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u/Imnogrinchard Dec 01 '22

I thought it was a "take your daughter to work day" when I first saw her picture.

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u/tom_fuckin_bombadil Dec 01 '22

“I’m broke!”

Homie, you have $100k. That’s more than the average 30 year old American’s total net worth!

And let’s not forget he probably has tons of real estate and other assets squirrelled away, not to mention anything he inherits from his wealthy parents.

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u/g78776 Dec 01 '22

They don’t need anymore evidence. Time to shut your mouth and refer everything to your lawyer. He honestly thinks he can talk his way out of this. It’s comical.

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u/[deleted] Dec 01 '22

[deleted]

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u/Shoresy69Chirps Dec 01 '22

They are both objectively a 3 on a good day, but everybody needs someone, my guy.

They are reprehensible people for defrauding gullible people out of their money, but pointing out their lack of conventional beauty is seriously shallow.

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u/mjpoe1 Dec 01 '22

This n*gga gon’ end up dead. Bet!

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u/kinglear__ Dec 01 '22

Where the fuck is his ugly ex gf Caroline Ellison is the question

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u/ctrl911 Dec 01 '22

Yea right they better not bail them out or else

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u/[deleted] Dec 01 '22

Everyone who got burned by him deserves the lesson.

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u/Shoresy69Chirps Dec 01 '22

If apple tanks tomorrow with a fair sum of my retirement savings, that’s the chance I take for playing in the market. Fuck me, because I’m a little guy. No one cares if I lose my ass.

This guy fucked over rich and powerful people along with the little guys. They are gonna make example out of him. The entire system is made to funnel money up. He actually thought he was one at the top. Hubris of the young.

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u/Bellamac007 Dec 01 '22

another reason to keep away for crypto. It’s a scam

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u/travismacmillan Dec 01 '22

Trying to imagine how he’d be treated had he invested millions into supporting republicans. Wonder if the press would be interviewing him and wishing him of his sins for the public. What a load of shit… and ppl wonder why half the world is tired of the corporate media and their bullshit.

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u/DonutChi Dec 01 '22

Just yesterday he admitted he was the 3rd or 4th highest Republican donor for the 2022 election cycle. He used dark money to donate. Bankman-Fried Republican political donations

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u/DirtWaterAir Dec 01 '22

He also was the 2nd highest donor to Democrats.

https://www.livemint.com/market/cryptocurrency/sam-bankman-fried-ftx-team-among-top-political-donors-before-bankruptcy/amp-11669031663161.html

Politicians should donate FTX money to charity. Like any other corporation they donate to both sides.

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u/[deleted] Dec 01 '22

We aren’t going to talk about the money laundering for the Democratic Party? Nah?

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u/twelveparsec Dec 01 '22

Yeah just like Hunter

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u/Beautiful-Ad-2335 Dec 01 '22

All I hear was, blah blah blah blah blah!!!

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u/Fuzzy-Bunny-- Dec 01 '22

I was expecting him to admit everything. What gives?

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u/aaaanoon Dec 01 '22

Mhmmm broke.. I'd bet at least 100mill put aside

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u/manorwomanhuman Dec 01 '22

This crypto bank man is so fried.

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u/NatoRey Dec 01 '22

Yeah bullshit, ya thieving little prick.

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u/Berova Dec 01 '22

SBF, a failed modern day robber baron.

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u/relearningsales Dec 01 '22

How is this guy not behind bars yet?

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u/aeolus811tw Dec 01 '22

we call this type of person a pathological liar

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u/jpm01609 Dec 01 '22

he burned a lot of folks,

he reminded people (who didnt listen Warren Buffet) what nonsense crypto "investing" really is

3--of COURSE< he's lying... of course!

4--because he doesnt have Hollywood looks or a serious sob story (and needs a PR agent!) he is gonna get crucified

1

u/timothypjr Dec 01 '22

Deny, obfuscate, delay. It works, too.

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u/NegAm69420 Dec 01 '22

Wen Jail!???

1

u/Tigris_Morte Dec 01 '22

Sadly he is likely correct.