FTX Employees Discovered Alameda's $65 Billion Backdoor Months Before Collapse (theblock.co) 36
James Hunt reports via The Block: A group of FTX U.S.-based employees stumbled across a backdoor for its affiliated trading firm Alameda Research months before the crypto exchange collapsed in Nov. 2022, the Wall Street Journal reported, citing people familiar with the matter. The backdoor allowed Alameda to have a negative balance of up to $65 billion using customer funds, according to previous court filings revealing code buried in FTX's systems. Negative balances were not possible for other FTX users, who would be automatically liquidated if they fell into the red.
The employees reportedly alerted their division boss to the discovery, who discussed it with former FTX CEO Sam Bankman Fried's lieutenant Nishad Singh, but the issue was never resolved. Instead, the leader of the team who raised the concern was sacked, the WSJ said. [...] The backdoor forms a key part of the prosecution's case in Bankman-Fried's trial. Bankman-Fried faces multiple fraud charges and could serve decades in prison. He pleaded not guilty to all charges.
The employees reportedly alerted their division boss to the discovery, who discussed it with former FTX CEO Sam Bankman Fried's lieutenant Nishad Singh, but the issue was never resolved. Instead, the leader of the team who raised the concern was sacked, the WSJ said. [...] The backdoor forms a key part of the prosecution's case in Bankman-Fried's trial. Bankman-Fried faces multiple fraud charges and could serve decades in prison. He pleaded not guilty to all charges.
Keep pleading not guilty (Score:4, Interesting)
Re:Keep pleading not guilty (Score:4, Interesting)
The prosecution has refused to make a plea deal with SBF, actually.
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Do you see who he donated to? He's getting off. They already dropped some of the charges. He''ll be a last-day pardon for sure.
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You could be right but I can't see how yet given the info I have got. Maybe on the technicality or something, it works great in many cases.
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They already dropped some of the charges.
One out of like 8 charges were dropped and this was dropped on a technicality due to our extradition treaty with the Bahamas. When the Bahamas agreed to extradite SBF some rather minor campaign finance violation was added later, when it was pointed out this wasn't part of the extradition treaty we had with the Bahamas it was dropped .
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They're clearly libertarian. Everyone for themselves.
Re:Only one punishment is due (Score:5, Insightful)
Which libertarian causes did these "clearly libertarian" people donate to? Most of SBF's identified political donations went to the "Protect Our Future PAC", advocating for strong government (against pandemics). His mother leads "Mind the Gap", which advises rich people on how to get Democrats elected. His father helped Elizabeth Warren write a failed tax bill that was backed by other Democrats. They used assets improperly redirected (some might say stolen) from corporate coffers and FTX customers to enrich themselves, their favored politicians' campaigns, and organizations like Stanford University. That's classic corruption, not libertarianism. They didn't advocate for smaller government, increased economic liberty, or any other classic libertarian causes.
It sure looks like you're blatantly lying in order to deflect criticism from the causes and politicians the Bankman-Fried family actually supports.
Re: Only one punishment is due (Score:2)
Small government - for my industry, economic freedom - for my industry, is being hand waved away as "corruption" not libertarianism like true libertarianism is really all about looking out for others, lol.
As if you can put distance between one of the largest cryptocurrency exchanges and libertarianism. What the actual fuck is wrong with you.
Re:Only one punishment is due (Score:5, Insightful)
I don't think this is because he donated to "libertarian" causes, unless you define liberty as the ability to run a fraudulent and/or shady business without government oversight, which seems to be the point of his donations. Shower everyone with money on both sides of the aisle so they shut up and allow crypto to run wild so they can get a skim of the profits. It was working smashingly until the losses piled up and money ran out.
Re: Only one punishment is due (Score:3)
What if the Fed bailed everyone out, or do they only do that when too big to fail mainstream institutions give themselves blank checks backed by other ppl's money?
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What if the Fed bailed everyone out, or do they only do that when too big to fail mainstream institutions give themselves blank checks backed by other ppl's money?
Did you know the Fed made a profit on the money it loaned out after the 2008 bank collapse?
On December 19, 2014, the U.S. Treasury sold its remaining holdings of Ally Financial, essentially ending the program. Through the Treasury, the US Government actually booked $15.3 billion in profit, as it earned $441.7 billion on the $426.4 billion invested. [wikipedia.org]
I'm sure that won't stop your kooky rants.
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And as usual, I see "communist" used in the same fashion the average 12 year old uses "gay". In the sense of "something I don't like but can't really explain because I'm too dumb, so let's hope using a word that I consider bad will suffice to convince everyone".
Prison for life (Score:3)
The ironic part is (Score:1)
If you scam people by falsely promising them they'll make money relatively quickly by giving you some of the money they already have, that's quite illegal.
However, if you tell people from the moment they're old enough to understand the concept, that they'll be wealthy and successful if they work hard enough and they end up slaving their life away just to make someone else rich while never becoming wealthy themselves, well, that's just capitalism working as intended.
It all makes a lot more logical sense once
Re:The ironic part is (Score:5, Insightful)
You (and everyone else) were born without a job. If you want to live like an animal and scavenge or hunt for your survival until you die, you can do that, but no one is forcing you to opt into the trade relationship that affords you a better living than what a bear in the woods would endure. It's up to you to decide what compensation would coax you out of the woods and into that productive trade relationship. However, you cannot deny that such productive trade relationships exist among cooperating humans for their mutual benefit, despite the existence of some who take advantage.
Re:The ironic part is (Score:4, Interesting)
Or you could be like the orangutan.
"Malays had informed him the [orangutan] could talk, but preferred not to, lest he be compelled to labour"
( https://en.wikipedia.org/wiki/... [wikipedia.org] )
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"Ook." [timfoleyillustration.com]
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Yeah, the other *isms are worse, I know. My point was just that it is, again, ironic that we consider SBF to be this horrible individual for ripping off people, but the entrepreneur who uses non-employee "gig workers" with no benefits while earning a completely unlivable wage, that entrepreneur is considered a savvy corporate leader.
Re: The ironic part is (Score:2)
Where can I go be Grizzly Adams without rangers enforcing stay limits?
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Something similar happened to me (Score:5, Interesting)
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> I don't know why anyone would do that
Because it wasn't an accident.
Same way Alameda was caught stealing money, laundering it with Ukraine war funds, and then washing it back through the DNC to US politicians (who are willing to shut down the USG if funding to hide their crimes is not forthcoming from the jamokes*).
At least that's the evidentiary case - we'll see how much can be proven beyond a reasonable doubt.
* jamokes is DC-speak for hard-working American taxpayers who owe unlimited contributions to
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> I don't know why anyone would do that
Because it wasn't an accident.
Probably. Though I suppose there's a slightly less incriminating story where the discrepancy was an accident, but they wanted to cover it up anyway.
Same way Alameda was caught stealing money, laundering it with Ukraine war funds, and then washing it back through the DNC to US politicians (who are willing to shut down the USG if funding to hide their crimes is not forthcoming from the jamokes*).
At least that's the evidentiary case - we'll see how much can be proven beyond a reasonable doubt.
* jamokes is DC-speak for hard-working American taxpayers who owe unlimited contributions to smart and beautiful politicians for anything they want.
Alameda stealing money sure, laundering it with Ukrai.... WTF new dumbass conspiracy theory is this?!?
Oh, it's not that new, just really dumb [forbes.com].
Lets go through the problems:
1) Zero evidence that the Ukrainian government invested the money back into FTX.
2) Even assuming #1, which we have absolutely zero reason to believe but could make sense as a form of corruption
FTX employees stumble into office orgy (Score:2, Funny)
Why isn't there any news on hot office orgies with Caroline?
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The nail that sticks up gets hammered down. (Score:2)
Re:The nail that sticks up gets hammered down. (Score:4, Interesting)
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I don't know this for sure, but I wouldn't be surprised if has been black-balled out of the industry: Punished for not being a "Team Player". Team Player of course meaning go with the flow, don't rock the boat, and under no circumstances do anything that might reduce the boss's profit.
Re:The nail that sticks up gets hammered down. (Score:4, Insightful)
Wrongful Termination (Score:2)
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