Home » “The b**** did it!” says Bankman-Fried

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“The b**** did it!” says Bankman-Fried — 66 Comments

  1. Tucker’s monologue last night on this scandal was excellent, but the coverage in the MSM is likely to be misleading and evasive about the most important elements in the story, such as his massive contributions to the Democrats, his relationships with powerful figures in DC’s swamp (Gensler at SEC), as well as the connection to Ukraine, run by a mendacious scoundrel who was agitating days ago for WW3 by lying about the incident of the so-called “missile attack on Poland”. Mini-Madoff was hailed by the entire political, financial and cultural establishment (Cramer on MSNBC, the cover of Fortune, fawning interviews, ads in glossy magazines), with seemingly no-one questioning how such an odd, unimpressive and “woke” young SJW, living eccentrically and conveniently in an offshore tax-haven, could have legitimately amassed such vast wealth.

  2. Massive D donors and co-conspirators don’t do time and they certainly don’t kill themselves.

  3. FTX was bankrolling media outlets such as Vox, and those outlets reported positively on FTX. (That conversation Neo quoted was with a Vox reporter.)

    Reminds me of how the media treated Theranos right up until it was exposed.

    The wrong lesson to draw from this is “crypto is evil”. The right lesson to draw from this is “media coverage is literally bought and sold”. This is just one of the times where they are getting caught.

    Many news pieces are literally written by some big corporation’s PR team and appear under a journalist’s byline. This is how media makes money today.

    We need to be very careful about believing what we read.

  4. One of my sons works for a hedge fund. He sent me this link to the legal filing.

    https://pacer-documents.s3.amazonaws.com/33/188450/042020648197.pdf

    Paragraphs 4 & 5 spell it out, worse than Enron!

    4. I have over 40 years of legal and restructuring experience. I have been the Chief Restructuring Officer or Chief Executive Officer in several of the largest corporate failures in history. I have supervised situations involving allegations of criminal activity and malfeasance (Enron). I have supervised situations involving novel financial structures (Enron and Residential Capital) and cross-border asset recovery and maximization (Nortel and Overseas Shipholding). Nearly every situation in which I have been involved has been characterized by defects of some sort in internal controls, regulatory compliance, human resources and systems integrity.
    5. 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. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.

  5. Paul in Boston:

    I don’t know whether you’re familiar with “Forbidden Planet,” but the company reminds me of the animals Dr. Morbius created. They looked and acted like animals, but when autopsied they had no innards.

  6. This appears to have been a group of financially irresponsible “woke” children playing with billions of dollars of other people’s money. Incredible that nobody blew the whistle sooner. Also incredible that so many people invested in this to begin with.

  7. (Just a) typo/kibbles alert:
    It’s “Bankman-Fried” (i.e., not Freid)— as in “Rice” or… the “This is your brains on woke altruism” ad.

    – – – – – – –
    “…his relationships with powerful figures in DC’s swamp (Gensler at SEC)…”

    THI is what should be setting off all kinds of red lights, bells, whistles, gongs and blaring sirens…

    But hey…(see any of Neo’s Emily Nutella’s celebrations…)

  8. Regarding “children”, it’s not accurate and it helps no one to call them that.
    The malefactor-in-chief—yeah, the guy with all the excuses—was in his early 30s.

    (I’m pretty certain we’ll soon be hearing creative defensive gambits such as: “It’s not MY fault. It’s YOU who gave me all of this money to play with…”
    We’re already hearing things along the lines of, “Well, gee, it was a mistake; I made a mistake. OK, OK, it was an eight million dollar mistake…but I DIDN’T MEAN to do it…)

  9. Seems like this is different in degree, but not in type, from what John Corzine did ten years ago. And as I recall, he got off by saying it was just an unfortunate mistake with some paperwork. Not saying that will happen here, but I doubt anyone will pay a price that matches the crime.

  10. It is disappointing to see Sequoia…a legendary venture capital fund…involved in this. Over the years, they have contributed to launching many great companies. While this was a fairly small investment as a % of the funds Sequoia manages, and even as a % of the specific fund, one would have hoped that the broadly-experienced partners who made the investment decision would have picked up on the signs.

  11. baltimoron,

    You beat me to it. One of the keys to this thing is that there is supposed to be an account that holds client’s cash used as collateral for the thing being traded. That account needs to sacrosanct and never ever used for anything but compensating for gains or losses in those trades.

    What Jon Corzine at MF Global (or someone he claims as a patsy) did is to violate that and rob the cash. Same thing with FTX. Think about it though. MF Global was operating in a well regulated market on US soil (I think) and clients still got robbed. FTX was operating in an unregulated market in the Bahamas. What’s not to hate about that arrangement?

    The other item that may be key, are these FTT tokens. I’m not 100% sure what they are, but they are only a representation of a crypto “coin” and if unregulated probably should be considered junk.

  12. Sam’s ex seems like a real piece of work herself: “Disgraced Alameda Research CEO Caroline Ellison penned graphic blog posts about polyamory and masochism before the implosion of her FTX-linked cryptocurrency hedge fund. . . . ‘When I first started my foray into poly, I thought of it as a radical break from my trad past,’ Ellison allegedly wrote in the Tumblr entry. ‘But tbh I’ve come to decide the only acceptable style of poly is best characterized as something like “imperial Chinese harem.” . . . None of this non-hierarchical bulls–t; everyone should have a ranking of their partners, people should know where they fall on the ranking, and there should be vicious power struggles for the higher ranks.’ . . . Meanwhile, on her Tumblr, Ellison also purportedly penned several other entries about her sexual desires. ‘I’m less hedonistic and more masochistic. I get a lot of pleasure from doing things that are hard, unpleasant, physically taxing, or emotionally painful,’ the kinky CEO allegedly wrote in one post. In a separate entry, she is said to have declared that growing up in the 21st century was not a good time for sex, quipping: ‘Born too late to have ten kids, born too soon to have four-dimensional upload orgies.'”

    https://nypost.com/2022/11/17/ftx-linked-caroline-ellison-was-into-chinese-harem-polyamory/

    No wonder FTX had its own corporate live-in shrink.

  13. run by a mendacious scoundrel who was agitating days ago for WW3 by lying about the incident of the so-called “missile attack on Poland”

    Another salvo from the Putin Press Agency.

  14. They say things come in threes.

    FTX is the third instance of a weird sex cult in the news after NXIVM (motivational cult with sex trafficking at the top) and the Jeffrey “Lolita Express” Epstein (under-age sex trafficking with celebrities and a weird island temple used for who knows what).

    It seems we keep getting hints that our globalist overlords have strange appetites and few compunctions.

  15. Perhaps the rarest quality to be found in the criminal minded is accepting responsibility for their actions.

  16. Well, they may be legal adults, but their handling of all this money was irresponsible, and that’s putting it mildly.

  17. I would say knaves, this has become too obvious a pattern with epstein, who had shadowy lineage, you look at the bahamas, which has been a nexus of organized crime and intelligence operations for a long time, and this may just be the tip of the iceberg see castle bank, resorts international, for some hints,

  18. SBF went to work for Jane Street in 2013, so he’d never seen a complete business cycle, the same for the b****h that lost all the money.

    It’s easy to make money when the market is on fire. It’s harder when the market tanks.

    “Crypto Short Sellers Up 90% in 2022”

    https://www.msn.com/en-us/money/savingandinvesting/crypto-short-sellers-up-90percent-in-2022/ar-AA14d03B

    By the way, David Stockman, yea that guy, is call this a monetary bubble. I know, he’s only been calling for it for 3 decades, but it’s gonna happen.

  19. Neo,

    Forbidden Planet is one of the greatest SciFi movies of all time.

    The enormous Krell computer the makes up the interior of Altair IV allows the wearer of the control room head set to conjure up monsters from the ID, the apparently empty animals, that can go anywhere and destroy anything on the planet. The Krell were eventually killed by their own invention because they thought they were gods.

  20. Given the amount of downstream harm to people done by organizations like this, perhaps it is time to have capital punishment for these crimes.

    Execute some of the more egregious ones, pour encourager les autres.

  21. Madoff began by trying to keep his investors from losing money in a downturn and feeling like he was doing the right thing. Then just trying to stay ahead of the regulators became a habit and a way of life. Maybe it was the same with SBF and FTX. They thought they were doing good, and their thinking of themselves as loveable misfits, goofballs, and screw-ups who meant well and couldn’t hurt anyone shielded them from having to face the consequences of their acts.

    They remind me a bit of characters in a 60s-70s movie who assume they’re cool and justified and righteous because they’re taking on The Man and The System. The feeling that one is smarter than the rubes can be intoxicating. In Madoff, the satisfaction of doing good morphed into the joy of successfully pulling off the grift. Maybe these kids reached that point or maybe they were just on their way.

  22. Barry @ 4:16pm,

    I don’t think that is really an “alt” take. It seems FTX was rather open that is what they were doing; sucking up liquidity in part by using their token, FTX. That’s kind-of the point of most crypto coins, isn’t it? Create a coin. Hype the coin to get people investing real $$ (or Bitcoin or Etherium) to pump up the created coins price and try to get out as close to the peak as possible, before the game of musical chairs ends and you get stuck holding a now worthless coin in a market with no more buyers.

  23. Re: SBF, Caroline Ellison and shrink

    SBF was literally born on the Stanford campus and his parents were both professors at Stanford Law School. SBF graduated from MIT with a degree in physics and a minor in math.

    Caroline Ellison was one of SBF’s polyamory squeezes apparently, and CEO of Almeda Research, which accidentally borrowed billions from FTX to speculate in crypto. Her parents are both professors of economics at MIT. She graduated from Stanford with a degree in math.

    Ellison also had a taste for amphetamines, as well polyamory sex and masochism.
    ___________________________

    “Nothing like regular amphetamine use to make you appreciate how dumb a lot of normal, non-medicated human experience is,” Ellison said in the tweet dated April 5, 2021.

    https://nypost.com/2022/11/15/crypto-ceo-caroline-ellison-tweeted-about-regular-amphetamine-use/
    ___________________________

    Their shink, Dr. George Lerner, admits he may have given some prescriptions for ADHD, i.e. amphetamines, to the FTX crew, but is pretty evasive about everything. He knew nothing!

    https://www.nytimes.com/2022/11/15/technology/ftx-sam-bankman-fried-psychiatrist.html

    Shows to go you, our elites come from the top schools and are in charge for good reasons. We should be grateful.

    The country is in the very best of hands!

  24. Am I the only one getting the feeling that we’re probably not going to find out what was really going on at FTX until we hear the opinions of a seasoned Mob Accountant?

  25. Paul in Boston:

    Around the time the movie was made, it was also turned into a book. I read the book when I was 8 or 9 years old and was fascinated by it (see this). It was decades later that I saw the film. It’s the book that made the deeper impression on me.

  26. This appears to have been a group of financially irresponsible “woke” children playing with billions of dollars of other people’s money. Incredible that nobody blew the whistle sooner. Also incredible that so many people invested in this to begin with.

    –Kate

    They were more than woke children. They came straight out of the Ivy League/Stanford/MIT complex. While working in hi-tech, I ran into my share of such grads.

    They were bright and hard-working, granted, but they also had this “I’m from a fabulously selective school” confidence about them that they believed and other people tended to believe.

    Sure, they could be eccentric, but who could say they weren’t the next Larry Page (Stanford/Google), Jeff Bezos (Princeton/Amazon) or Mark Zuckerberg (Harvard/Facebook)? That gave them a lot of leeway.

    The downside was their arrogance could be quite destructive of the over-promise/under-deliver sort. I saw smaller examples of that. Or the FTX dumpster fire.

  27. Ah. I’ve seen Forbidden Planet 2 or 3 times but don’t recall the empty dissected animals. I suspect it is only in the novel.

    Tucker covered FTX tonight. The new wrinkle for me was the competition between FTX and Binance. It was claimed that FTX and SBF were courting and buying regulators and politicians specifically to hurt Bianance’s business and aid FTX’s. Binance countered the threat by calling FTX’s bluff on FTT tokens and their collateral and they were the ones that spurred the “run on the bank” leading to the collapse.

    If Ellison had properly collateralized the operation they probably would not have had to declare bankruptcy. Binance probably strongly suspected that it wasn’t properly collateralized. Or they knew. Possibly Ellison was just following orders. It certainly smells of fraud at the top to me.

    huxley at 9:31 pm
    Wow. The whole country is beginning to feel like the fall of the Roman empire with the elites at the colliseum engaging in a modern version of bloodlust.

  28. As it happens, I’ve been looping on the “Rocky Horror Picture Show” soundtrack:
    ______________________

    Science fiction (ooh ooh ooh) double feature
    Doctor X (ooh ooh ooh) will build a creature
    See androids fighting (ooh ooh ooh) Brad and Janet
    Anne Francis stars in (ooh ooh ooh) Forbidden Planet
    Wo oh oh oh oh oh
    At the late night, double feature, picture show
    I wanna go – Oh oh oh oh

    –“The Rocky Horror Picture Show”, “Science Fiction Double Feature”
    https://www.youtube.com/watch?v=GKhPVHoodrU

    ______________________

    I love those old sci-fi films. I was watching “The Day of the Triffids” last night — also mentioned in “Rocky Horror” and “Triffids” was better than I remembered.

    I’ll have to dig out “Forbidden Planet” again. Like TommyJay I don’t recall the animals without innards, but a great idea whatever its origin.

  29. I’m grateful to FTX for an answer to the question:
    __________________________

    Wouldn’t it be cool if all the really, really smart people became professors at super-elite universities, then coupled off, had children, then educated those children by the most super-elite methods, and then those children grew up, went to super-elite universities and became leaders of the cutting-edge, super-cool financial companies?
    __________________________

    That would be so cool!

  30. JJ:

    Indeed!

    OK, I’m obsessing on the point, but what do Profs Bankman-Fried and Profs Ellison take away from their offsprings’ current exploits in the news?

    Do they consider the possibility that perhaps they failed their children somehow? Or do they rationalize?

    What do they say to themselves?

  31. @ Aggie > “Am I the only one getting the feeling that we’re probably not going to find out what was really going on at FTX until we hear the opinions of a seasoned Mob Accountant?”

    I wouldn’t have thought to put it that way but …

    @ David Foster > “It is disappointing to see Sequoia…a legendary venture capital fund…involved in this. Over the years, they have contributed to launching many great companies. While this was a fairly small investment as a % of the funds Sequoia manages, and even as a % of the specific fund, one would have hoped that the broadly-experienced partners who made the investment decision would have picked up on the signs.

    I may have misunderstood the speculations at Barry’s link “An Alt-Take On FTX – What If It Was Built For This?”— which is Zerohedge reprinting this original post by Dexter White at Gold Goats ‘n Guns: (and check out the comments as well)
    https://tomluongo.me/2022/11/17/cryptofanfic-thoughts-on-ftx/

    It looks to me like White is saying FTX was intended as a Ponzi scam from day one, with its purpose being to drive crypto out of the markets and terminally liquidate its proponents, but was busted before it could achieve its goal, fold its tents and fade away.

    His article lacked only the names of the real creators behind SBF and his buddies (is anyone seriously arguing Sam thought it up and carried it through by himself?).

    Inside crypto, there has been no shortage of projects in urgent need of liquidity. Crypto liquidity needs can be satisfied by worthless tokens leveraged to infinity.

    In the real world, the powers that be have decided the contagion effect from crypto is too much to bear.

    All the exogenous liquidity is preserved in the real financial world. It’s a zero sum game. The crypto table can be knocked over with very little long term risk to the traditional system, as long as that happens before any real fusion occurs.

    SBF could even be a patsy, while still possibly being a criminal fraudster in this story. A patsy who believed in crypto being controlled by those who believe in fiat.

    After considering all of the above, imagine those powerful and connected handlers and how they would achieve their goals.

    If the suits at Sequoia are among those who want to tank crypto for the alleged reason, as White speculated, then it sounds like they only had to throw some chump change into the scheme, as did possibly some other fund managers: they were not “burned” but were arsonists.

    I’m only speculating, because I know next to nothing about crypto and the even less about the more cryptic normal financial wheeling and dealing.

    What I do know is that there is no limit to the cupidity of some human beings, and few brakes on what they will do when their own gravy train is threatened.

  32. A small point supporting White’s scenario is in the article Neo linked at the top of her post.
    https://www.dailymail.co.uk/news/article-11437361/Sam-Bankman-Fried-admits-lied-ethical.html

    The scandal has triggered a crisis of confidence in cryptocurrency as a whole and caused the value of assets including Bitcoin to plunge.

    That sentence embeds this link, which has a delightful headline.
    https://www.dailymail.co.uk/news/article-11432303/CALLAHAN-FTXs-collapse-vindication-regular-folk-didnt-crypto.html

    MAUREEN CALLAHAN: I never could work out what the hell crypto is. Now a weird outfit run by an insufferable kid in a hoodie has lost billions… and it’s proof ‘smart people’ didn’t have a clue either

    Note: Sequoia’s “fairly small investment” was $200 million !!

  33. Per Tucker, Bankman-Fried is an arch practitioner of effective altruism. Leading beneficiaries of that movement are climate change initiatives and, of course, Democrats. Consequently, FTX had an extremely high ESG rating, greatly enhancing its appeal to progressive elites.

    Have they learned anything from their misadventure, or are they just unlucky?

    Is the rapid decline of America under Biden due to mismanagement, or are we just unlucky?

  34. huxely @ 11:47 pm – I think you’ve nailed it once again.

    When you think about it, though, what is is that causes us to finally stop thinking like a child and begin thinking like an adult? I would say getting a (demanding) job with a regular schedule, getting married, having children, in other words settling into a life of responsibility where others depend on you.

    I wonder if these 30-something “kids” have ever had those experiences. Many Silicon Valley work places are basically adult playgrounds. The hours are bizzare. There are certainly people there who work very hard, but the whole environment is more like a college dorm than any sort of traditional office setting. Also, per SBF’s tale, a lot of the participants don’t buy into marriage and family.

    So people like SBF act like overgrown children because, in a lot of ways, they are overgrown children. They’ve never experienced the normal gateways to adulthood. The lower class version of SBF-style man-child would be stoned playing video games in his mother’s basement. The upper class version, as we know, is high on adderal and losing billions of dollars of other people’s money.

    What a mess we’ve made of this country.

  35. What do they say to themselves?

    They’ll utter sophistries. It’s what faculty members do.

  36. FTX seems designed as a roll up.

    The common m&a idea of a company buying up all the smaller players to become the dominant player, with the end result being only a couple giants left. And the larger company will be more efficient, which gives them a competitive advantage. Including more money for advertising.

    Tom Luongo’s partner analysis:
    https://www.zerohedge.com/crypto/alt-take-ftx-what-if-it-was-built

    The top sociopathy / degeneracy, the way the press was bought, the Democratic donations, probably money laundering for Ukraine, and elites status (elite parents, top school graduates) is eye opening.

    And What a coincidence!

    FTX Funded Fake Studies on Anti-Virals for COVID

    https://www.independentsentinel.com/ftx-funded-fake-studies-on-anti-virals-for-covid/

    The entire anti Ivermectin campaign I consider crime/murder that resulted in lots of preventable deaths.

  37. This FTX story aside for a moment;

    when I can go to the grocery store, Home Depot, pay my mortgage, pay my taxes, pay my off credit card bill, pay for gasoline, pay for utilities, etc..etc, with Bitcoin-type “money,” then I will believe this sort of “money” will be real.

    If “money” has no real purchasing power, (that is, to buy goods and services) is it money???
    If “money” can ONLY buy ‘money”, then shouldn’t poker chips be considered real money?? Why can’t I buy groceries with poker chips?

  38. }}} Where were the agencies that are supposed to oversee something like this?

    Whose job is it to oversee cryptocurrencies?

  39. }}} when I can go to the grocery store, Home Depot, pay my mortgage, pay my taxes, pay my off credit card bill, pay for gasoline, pay for utilities, etc..etc, with Bitcoin-type “money,” then I will believe this sort of “money” will be real.

    Ummm…
    https://www.turbofinance.com/can-you-pay-bills-with-bitcoin/

    Yes, that basically “turns it into a more negotiable digital format”, but it’s still pretty much doing what you say.

    Your claim is basically that, since you can’t pay bills using your Certs of Deposit, it’s not really money. Yeah, that is what it effectively translates to. CDs are of limited negotiability, just like Bitcoin.

    Ditto your Schwab account, your 401k, etc., all “real money”, even though they are not directly negotiable as-is, and have to be converted into a more useful format before spending.

  40. “Kids”. Ridiculous. Grown men and women may pretend to be kids, or act like kids, but they are not kids. If they appear to be kids that should inspire disgust, not sympathy.

    Alexander the Great conquered Persia at the age of 26.

    Octavian defeated Mark Antony and Cleopatra at the age of 33, and became sole ruler of the Roman Empire in that year.

    Henry V of England invaded France at the age of 29.

    George Washington was colonel at age 23 in the French and Indian War, and at age 24 commanded the Virginia Regiment.

    Napoleon overthrew the First French Republic at the age of 30, and was crowned Emperor at 34.

    My parents and grandparents were married and raising kids before they were thirty and this is true for most of us commenting here.

  41. }}} Massive D donors and co-conspirators don’t do time and they certainly don’t kill themselves.

    They do if they know where the bodies are buried…

  42. }}} Paul in Boston: Around the time the movie was made, it was also turned into a book. I read the book when I was 8 or 9 years old and was fascinated by it (see this). It was decades later that I saw the film. It’s the book that made the deeper impression on me

    Neo, the movie was almost indisputably THE Best SF movie** until 2001.

    =====
    ** The only other major contender would be The Day The Earth Stood Still. It’s primarily which you consider to be better — The one with more SF elements, or the one with a wider philosophical context. Neither is a slouch in either department, but how you weight those two factors is going to define which is better.

    P.S., at #3 comes in another couple options, “Them!”, or arguably “5 Million Years To Earth” (Some may assert that Dr. Strangelove is SF, but ‘Mrrrr… No.’ DS is more social commentary). The former is a remarkably good “Giant Bug” film, the latter is a version of one of the Alan Quartermass stories.

  43. JohnTyler,

    OBloodyHell beat me to it. FTX was a sham, no argument there, but there is no real difference between the U.S. dollars you use to buy groceries and pay your mortgage and Bitcoin. I’d argue that Bitcoin is actually more stable than U.S. dollars because Bitcoin is a limited resource*, like gold, and there is no central authority controlling it. There are Bitcoin ATMs, Bitcoin wallets. In a year or less you will literally be using Bitcoin directly at the grocery store.

    I’m not necessarily arguing for Bitcoin, and I’m certainly not defending FTX, but any chance I have I proselytize to Americans regarding the sham that the U.S. dollar has become. It is a complete house of cards propped up solely by mass hypnosis. We all pretend it is something, so it is something. Fiat currency indeed!

  44. The amount of U.S. currency in circulation can be expanded or contracted at the whim of government fiat, devaluing or increasing the value of the money in your piggybank instantaneously.

    And Congress’ IOUs and multiple balance sheets?!?! How is that different than FTX minting their own, virtual coin and moving it to Alameda?

    Yes, FTX is a sham financial firm run by irresponsible maniacs. But so is the Fed.
    “Inflation Reduction Act.” Sure thing. We have to devalue the currency to save the currency, or some such other political platitude.

  45. Add me to the list of those who have no memory of autopsied, organless animals in “Forbidden Planet,” but it’s been decades since I’ve seen it. Great take on Shakespeare’s, “The Tempest.” Hopefully Bill made some money off the royalties.

  46. Digital dollars coming to a bank near you.

    …”It is important to understand that the digital dollar would not be similar to cryptocurrencies like bitcoin. Cryptocurrencies operate on blockchain technology, which is decentralized by design. No group or individual can truly control cryptocurrencies once they are launched.

    Digital dollars, on the other hand, would be traceable and programmable. The Federal Reserve (or some other designated entity) would have the ability to create more digital dollars whenever it sees fit, and, depending on how the legislation is written setting up the currency, the dollars could be formulated to have various rules and restrictions built into their design.

    For example, a digital dollar could be crafted to restrict fossil-fuel use, to give bonuses to people for spending at particular businesses, to enact de facto price controls by disallowing users from spending too much on particular products, or even to redistribute wealth.

    In one report about the development of a central bank digital currency published by the Federal Reserve in January, the Fed outlined a few examples of possible “design choices” for a digital dollar, including that “a central bank might limit the amount of CBDC an end user could hold.””

    https://thehill.com/opinion/finance/599768-biden-is-planning-a-new-digital-currency-heres-why-you-should-be-very-worried/

  47. OBloodyHell;

    I was unaware of the info provided in the link you cited.
    Thanks for sharing that.

    But is seems the Bitcoin bill paying methods automatically calculate the equivalent in dollars.

    So essentially you are still paying in $$$$; which is to say that the prices of goods and services (in the USA anyway) are priced in dollars and if you use ANY other currency (e.g., euros, yen, Bitcoin, renminbi, UK pounds, swedish kroner, etc) they too must first must be “translated” into US $$$ if you wish to purchase goods/services in the USA.

    The “standard ” currencies, when used in their home countries, don’t have to be “converted ” into a different currency before you can use them.
    But Bitcoin ALWAYS (at least so far) has to be converted into a “standard” currency before you can actually purchase something.
    It does not yet appear to be a “stand alone” currency that can be used directly unless it is first converted into a “conventional” currency.

    Not to say that one day Bitcoin (or = ) will not become a stand alone currency, but so far, if I understand this correctly, it is not.

    Given the profligacy of the US govt (and probably a bunch others) I see why Bitcoin type money is attractive. After all, paper with fancy-schmancy print on it is produced by governments by the trillions and is called money, but when you think about it, it’s really just a worthless piece of paper and is not backed by anything at all other than a govt. saying it’s their legal tender.

    But because everybody agrees around the world, that a worthless piece of paper is money, it in fact becomes money and has value.

    Gold has value ONLY because pretty much everybody on earth – excepting economists – believe it has value, and would like to have lot’s of it and that demand for it , in and of itself, makes gold valuable.
    Just ask William Devane !!

    Money is sort of like Schrodinger’s cat; it’s neither dead (valueless) nor alive (valuable) until you actually observe it (everybody agrees) and only then will you know if the cat (the money) is dead or alive.
    Of course , with money, people can change their minds and formerly worthy money (German marks pre-WWI) becomes worthless (German marks 1923) .

  48. There’s a bit of important information in the linked story: “Ray…also noted that the company didn’t have appropriate corporate governance and never held board meetings.”

    One of the purposes of having a corporation is that it shields owners and stockholders from personal liability for the actions of the corporation. And you can bet that all the kids in this company have plenty socked away in their own accounts.

    But if the corporation doesn’t follow through on the basic rules of a corporation, such as having board meetings, then any competent lawyer will ask the judge to declare that the corporation doesn’t exist. The law is crystal clear. The owners now become jointly and severally liable for all financial debts. In other words, their personal fortunes are now in play.

    This is such a legal slam-dunk that there are lawyers who make a living just making sure that corporations have these basic ducks in a row. They don’t usually charge much, perhaps $1000 per year. But hey, these MIT genius kids knew better, hey?

  49. @JohnTyler:Gold has value ONLY because pretty much everybody on earth – excepting economists – believe it has value, and would like to have lot’s of it and that demand for it , in and of itself, makes gold valuable.

    All that inflation we’ve been having recently? Price of gold has been essentially flat over the last two years.

    Since the price is the same, in inflated dollars, the price of gold has dropped during this period of high inflation.

    People are not, it seems, preferring it to fiat currency decreasing in value by 8% annually…

    At any rate a) gold is no different from Bitcoin in that it is not currency anywhere; b) gold too is subject to inflation and deflation, and historically governments have monkeyed with coinage pretty much all the time.

    Gold is part of my portfolio but it’s no panacea.

  50. The problem is there are two types of gold. Physical (real) and financial (theoretically can be redeemed for physical. And financial can be used to keep the price of gold down. There seems to be manipulation of the price of precious metals. Merrill Lynch had to pay a fine.

    Financial reminds me of crypto – it’s based on a promise, and you are hoping government protection from fraud and market manipulation.

    Frederick
    All that inflation we’ve been having recently? Price of gold has been essentially flat over the last two years.

  51. @RaySoCa:And financial can be used to keep the price of gold down. There seems to be manipulation of the price of precious metals.

    I’ve heard this asserted but I have never seen the evidence–I’ve never seen a different price for “physical” gold (the only kind I have ever purchased), and I don’t see that the gold futures price is doing anything different from the gold price.

    And what shadowy cabal is doing the manipulation, and why? Because they are essentially subsidizing gold for any who cares to buy it, how does that further whatever evil scheme they are up to? If they don’t want people hedging against inflation, then keeping it cheap seems a counterintuitive way to go about it.

  52. Gordon Scott:

    Well, on the one hand, MIT isn’t a law school.

    On the other hand, I assume they had some sort of a lawyer who supposedly drew up some sort of structure that would protect them, or that the lawyer said would protect them.

  53. FTX was a “cutout” that made sure that those in DC got theirs before the crash. There will be no investigation of the operation. It served its purpose.That is how the system operates. By time the theater has run its course, the Statute of Limitations will protect all the “beneficiaries”. “Chaos” is the defense screen.

    “Drugged up idiot” is a job title.

  54. @neo:I assume they had some sort of a lawyer who supposedly drew up some sort of structure that would protect them, or that the lawyer said would protect them.

    Probably they did, but given how carelessly things were run there, it’s quite possible they never adhered to the conditions. They are incorporated in the Bahamas and I have no idea what kind of rules apply there or how well enforced.

  55. Frederick:

    I never said gold was a panacea nor did i say that the price of gold was constant; it goes up and down in price .

    The only difference I can think of between legal tender (paper or coin) vs. gold is that legal tender, given the right (or should I say, really bad) circumstances , can become absolutely worthless.
    When the you know what hits the fan big time, gold will hold or increase in value. It has been doing this for thousands of years. I am not aware of any time in world history where the value of gold went to zero (unlike legal tender).

    See here:

    https://stacker.com/stories/24507/10-stories-hyperinflation-history

    where they describe 10 cases of hyperinflation; 8 of these cases occurred in the 20th century.

    Gold has a very mixed record as an inflation hedge often producing negative returns during periods of inflation. Since about 1926 the best inflation hedge has been stocks.

  56. @JohnTyler: If SHTF big time, I’m not wasting time with gold. What I’ll want is guns. If I have that, gold or anything else I want will be placed at my feet by people who don’t have guns.

    As for hyperinflation, I can hold a currency that’s not hyperinflating, gold-backed or not, and people do when they are allowed to.

    I have nothing against gold, it’s just one thing out of many things that is usually valuable but not money, and not very liquid. (Which is why in the days of metal, silver, copper, and bronze were mostly what circulated.)

  57. JohnTyler @ 1:14pm:
    “Money is sort of like Schrodinger’s cat; it’s neither dead (valueless) nor alive (valuable) until you actually observe it (everybody agrees) and only then will you know if the cat (the money) is dead or alive.”
    What a marvelous way of expressing it, via the Schrodinger’s cat idea: that money is an agreement that value exists (it is a store of value) until it doesn’t!! And people certainly do get themselves “entangled” in their respective money affairs, don’t they!?

    And again @ 4:18pm:
    “Since about 1926 the best inflation hedge has been stocks.” All money, fiat or commodity based, is reliant on faith/trust, and in our case the “full faith and credit of the US government”. Which means the resources of the US (and some foreign) taxpayers. Which means the overall economic real value wealth created and maintained by the citizens and other legal or illegal residents of the USA (and perhaps a few foreign redoubts?) And as RTF said above, sometimes we even manage to pay our taxes with money we still pretend has real value wealth behind it.

    And Frederick is right, too.

  58. JohnTyler,

    Except on the blackmarket, what country doesn’t require you to convert whatever instruments you have to their currency before using it on legal transactions? In that case Bitcoin is no different. If you want to use it to buy a Hershey bar in Ames, Iowa you have to convert it to U.S. dollars. If you want to use it to buy a Cadbury bar in Shropshire, England you have to convert it to Pounds. And a Brit in Ames, Iowa has to convert her Pounds to Dollars to buy the same Hershey bar, just as a Yank in Shropshire has to convert her Dollars to Pounds to buy that Cadbury bar.

    There are plenty of people who will take Bitcoin directly and such transactions happen frequently. A lot of crypto software developers take payment in Bitcoin, for example. A lot of Patreon donors use Bitcoin.

  59. “David Foster said:
    It is disappointing to see Sequoia…a legendary venture capital fund…involved in this.”
    Sequoia is headquartered in Menlo Park.

    “huxley said:
    SBF was literally born on the Stanford campus and his parents were both professors at Stanford Law School.”

    I’d be willing to bet that some of the principals at Sequoia and SBF’s parents were social acquaintances.

    That’s how this works. It used to be called , ” Taking care of our own.” Now, it’s disguised as networking.

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