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🧵1/Ω
It’s that time again. Gather round, children, for a thread about the closing arguments in the trial of Sam Bankman-Fried. #FTXTrial #FTXScam
Ω👇Ω
It’s that time again. Gather round, children, for a thread about the closing arguments in the trial of Sam Bankman-Fried. #FTXTrial #FTXScam
Ω👇Ω
🧵2/Ω
The govt’s case revolves around a few things but fundamentally it’s about risks that were not disclosed to customers/investors.
According to the govt not only were these risks not disclosed SBF took steps to conceal them. Which is, you know, a crime
Text from my 📌 twt 👇
The govt’s case revolves around a few things but fundamentally it’s about risks that were not disclosed to customers/investors.
According to the govt not only were these risks not disclosed SBF took steps to conceal them. Which is, you know, a crime
Text from my 📌 twt 👇
🧵3/Ω
It’s conceded by everyone including SBF himself that there were undisclosed risks so the question becomes one of intent. The govt’s argument is that the many steps taken to conceal the risks reveal ill intent. SBF's argument is basically "being irresponsible is not illegal"
It’s conceded by everyone including SBF himself that there were undisclosed risks so the question becomes one of intent. The govt’s argument is that the many steps taken to conceal the risks reveal ill intent. SBF's argument is basically "being irresponsible is not illegal"
🧵4/Ω
Which is often true in life and business… but when it comes to handling other people’s money the rules are different, and for very good reasons mostly having to do with people like SBF setting everyone's money on fire and then going “whoops!"
Which is often true in life and business… but when it comes to handling other people’s money the rules are different, and for very good reasons mostly having to do with people like SBF setting everyone's money on fire and then going “whoops!"
🧵5/Ω
“Whoops!” Is a great defense when you accidentally throw a baseball through someone’s car window. As a society however, people got kind of tired of hearing it coming out of the mouth of some guy who was recently flying around on private jets with their money.
“Whoops!” Is a great defense when you accidentally throw a baseball through someone’s car window. As a society however, people got kind of tired of hearing it coming out of the mouth of some guy who was recently flying around on private jets with their money.
🧵6/Ω
Unfortunately for SBF there are a lot of things the govt has him dead to rights on.
1. Alameda's “allow negative” privilege
2. Viewing/creating spreadsheets w/large negative numbers
2. Saying things publicly that were not true
I give you the govt's favorite tweet:
Unfortunately for SBF there are a lot of things the govt has him dead to rights on.
1. Alameda's “allow negative” privilege
2. Viewing/creating spreadsheets w/large negative numbers
2. Saying things publicly that were not true
I give you the govt's favorite tweet:
🧵7/Ω
That tweet has made a whole lot of appearances at the trial. You can almost feel the glee in the AUSA side whenever they get to put that tweet on the screen, which they do often.
This is arguably a complicated financial crime but every juror can understand that tweet.
That tweet has made a whole lot of appearances at the trial. You can almost feel the glee in the AUSA side whenever they get to put that tweet on the screen, which they do often.
This is arguably a complicated financial crime but every juror can understand that tweet.
🧵8/Ω
As an aside I would like to say that there is something majestic about the idea of a jury trial. The govt buildings are made of solid stone with latin inscriptions and towering bronze sculptures of Blind Lady Justice. Everyone's in suits or robes (even wigs, in the UK).
As an aside I would like to say that there is something majestic about the idea of a jury trial. The govt buildings are made of solid stone with latin inscriptions and towering bronze sculptures of Blind Lady Justice. Everyone's in suits or robes (even wigs, in the UK).
🧵9/Ω
But who is really in charge here? Who is it that walks about the hallowed halls of justice like gods among men, skipping lines with the all access pass/VIP entrance?
But who is really in charge here? Who is it that walks about the hallowed halls of justice like gods among men, skipping lines with the all access pass/VIP entrance?
🧵11/Ω
A bunch of average NYers of every shape / size / race / age, dressed however the fuck they want.
I am told to take my hat off when entering the courtroom but I have to stand at attention and pay respects when the schlubby juror in the backwards yankees hat rolls through.
A bunch of average NYers of every shape / size / race / age, dressed however the fuck they want.
I am told to take my hat off when entering the courtroom but I have to stand at attention and pay respects when the schlubby juror in the backwards yankees hat rolls through.
🧵12/Ω
But I digress. Back to the AUSA's closer (who, sadly, was not the new CT starlet Danielle Sassoon, but was, thankfully, someone who was also incredibly competent).
The point they drove home was that when SBF had a chance to come clean or double down, he doubled down.
But I digress. Back to the AUSA's closer (who, sadly, was not the new CT starlet Danielle Sassoon, but was, thankfully, someone who was also incredibly competent).
The point they drove home was that when SBF had a chance to come clean or double down, he doubled down.
1. In 2021 he used customer money to buy back FTX equity from Binance
2. Later in 2021 he YOLOed customer money onto investments¹ like a billion dollar Kazakh bitcoin mining operation
3. June 2022 he tried to become "the crypto JP Morgan"
¹ i use that word loosely
2. Later in 2021 he YOLOed customer money onto investments¹ like a billion dollar Kazakh bitcoin mining operation
3. June 2022 he tried to become "the crypto JP Morgan"
¹ i use that word loosely
🧵13/Ω
May/June 2022 was a big one for the prosecution. At a time when even cretins like Alex Mashinsky, Do Kwon, & Zack “King Bro” Prince were felled by massive losses SBF somehow had unlimited funds to “backstop customer assets” as he told everyone who'd listen.
May/June 2022 was a big one for the prosecution. At a time when even cretins like Alex Mashinsky, Do Kwon, & Zack “King Bro” Prince were felled by massive losses SBF somehow had unlimited funds to “backstop customer assets” as he told everyone who'd listen.
🧵14/Ω
By summer 2022 that SBF was setting his customers money on fire in an attempt to backstop the crypto industry. Unfortunately he continued bailing out / “investing” customer money well beyond this time on into September/October & against the wishes of his co-conspirators.
By summer 2022 that SBF was setting his customers money on fire in an attempt to backstop the crypto industry. Unfortunately he continued bailing out / “investing” customer money well beyond this time on into September/October & against the wishes of his co-conspirators.
🧵15/Ω
As you go through the day to day of a long trial like this yr never sure how exactly the govt will make its case. But seeing it all laid out on the timeline, w/SBF overruling Caroline's judgment to YOLO the funds into Kazakhstan and so on, was, IMHO, incredibly damning.
As you go through the day to day of a long trial like this yr never sure how exactly the govt will make its case. But seeing it all laid out on the timeline, w/SBF overruling Caroline's judgment to YOLO the funds into Kazakhstan and so on, was, IMHO, incredibly damning.
🧵16/Ω
Leaning into the statutory definitions, AUSA pointed out that 𝘢𝘯𝘺 false or fraudulent statement to obtain or 𝘰𝘳 𝘦𝘷𝘦𝘯 𝘬𝘦𝘦𝘱 𝘱𝘰𝘴𝘴𝘦𝘴𝘴𝘪𝘰𝘯 𝘰𝘧 assets that were legitimately obtained is a felony.
You can guess which Tweet came out again.
Leaning into the statutory definitions, AUSA pointed out that 𝘢𝘯𝘺 false or fraudulent statement to obtain or 𝘰𝘳 𝘦𝘷𝘦𝘯 𝘬𝘦𝘦𝘱 𝘱𝘰𝘴𝘴𝘦𝘴𝘴𝘪𝘰𝘯 𝘰𝘧 assets that were legitimately obtained is a felony.
You can guess which Tweet came out again.
🧵17/Ω
Moving onto the defense, it could be asked “what defense could there even possibly be? I mean that ‘assets are fine’ tweet seems pretty inarguable.”
The defense leaned into the two most destructive words in American jurisprudence:
“Good faith”
Moving onto the defense, it could be asked “what defense could there even possibly be? I mean that ‘assets are fine’ tweet seems pretty inarguable.”
The defense leaned into the two most destructive words in American jurisprudence:
“Good faith”
🧵18/Ω
If you accept, the defense argued, that SBF acted in “good faith” then the glove does not fit and you must acquit.
Now, first of all, I’m not sure that’s true. And second of all I have long been dumbfounded by American law’s reliance on this concept.
If you accept, the defense argued, that SBF acted in “good faith” then the glove does not fit and you must acquit.
Now, first of all, I’m not sure that’s true. And second of all I have long been dumbfounded by American law’s reliance on this concept.
🧵19/Ω
People do incredibly evil shit all the time but inarguably with good faith. Genocide, for instance, is the kind of high conviction crime you usually only get up to when you are "in good faith" convinced that a group of people needs to be exterminated.
People do incredibly evil shit all the time but inarguably with good faith. Genocide, for instance, is the kind of high conviction crime you usually only get up to when you are "in good faith" convinced that a group of people needs to be exterminated.
🧵20/Ω
I am at least somewhat convinced that SBF was, in a way, acting in good faith. My thoughts on this are complicated & will appear in a post on The Blogging Site That Shall Not Be Named (link in my bio).
For now I just kind of want to piss on the idea that it matters.
I am at least somewhat convinced that SBF was, in a way, acting in good faith. My thoughts on this are complicated & will appear in a post on The Blogging Site That Shall Not Be Named (link in my bio).
For now I just kind of want to piss on the idea that it matters.
🧵21/Ω
People, as a species, are absolute masters of rationalization. Given the right circumstances the vast majority of the population - "good" people - can rationalize literally anything up to and including lining up 100s of Jews and putting bullets in the back of their heads.
People, as a species, are absolute masters of rationalization. Given the right circumstances the vast majority of the population - "good" people - can rationalize literally anything up to and including lining up 100s of Jews and putting bullets in the back of their heads.
🧵22/Ω
In that context it's not hard to see how a couple of math nerds who thought they were really, really good at making money would choose to put off telling the world that they lost everyone's money before they had a chance to make all the money back again.
In that context it's not hard to see how a couple of math nerds who thought they were really, really good at making money would choose to put off telling the world that they lost everyone's money before they had a chance to make all the money back again.
🧵23/Ω
As far as how the defense actually chose to present the “good faith” actions of SBF I must admit that in my notes I created an “eye roll” notation to remind myself to tweet about the statements I found to be especially high on the “are you kidding fucking me” meter.
As far as how the defense actually chose to present the “good faith” actions of SBF I must admit that in my notes I created an “eye roll” notation to remind myself to tweet about the statements I found to be especially high on the “are you kidding fucking me” meter.
🧵24/Ω
First up was the “If SBF had ever meant to defraud customers would he have gone on that weird apology tour and talked to all those reporters after SHTF?”
First up was the “If SBF had ever meant to defraud customers would he have gone on that weird apology tour and talked to all those reporters after SHTF?”
🧵25/Ω
Then there was the he said/she said defense:
"Caroline Ellison thought sending a billion dollars of customer money to Kazakhstan was a terrible idea and SBF thought it was awesome. Does not Hegel teach that truth, when even knowable, emerges from the dialectic?"
Then there was the he said/she said defense:
"Caroline Ellison thought sending a billion dollars of customer money to Kazakhstan was a terrible idea and SBF thought it was awesome. Does not Hegel teach that truth, when even knowable, emerges from the dialectic?"
🧵26/Ω
They also deployed the famous “Reverse Lewis Michaels” strategy: “These kids were building a great business¹.”
¹ in the form of a rigged offshore casino that financially raped the underclasses of countries less important than our own
They also deployed the famous “Reverse Lewis Michaels” strategy: “These kids were building a great business¹.”
¹ in the form of a rigged offshore casino that financially raped the underclasses of countries less important than our own
https://twitter.com/SMTuffy/status/1708634686929375282
🧵27/Ω
Eyeroll notations got bigger when SBF’s lawyer spoke of how "the codes" for Alameda’s "allow negative" privilege (that let them YOLO $3bn to Kazakhstan) was public to everyone at FTX bc GitHub.
I have no doubt this is true & even less doubt that this means anything.
Eyeroll notations got bigger when SBF’s lawyer spoke of how "the codes" for Alameda’s "allow negative" privilege (that let them YOLO $3bn to Kazakhstan) was public to everyone at FTX bc GitHub.
I have no doubt this is true & even less doubt that this means anything.
🧵28/Ω
Ain’t no one on any software project I ever worked on going around digging out commit messages in GitHub created in the time when the entire engineering team was like 3 people and their labradoodle.
Ain’t no one on any software project I ever worked on going around digging out commit messages in GitHub created in the time when the entire engineering team was like 3 people and their labradoodle.
🧵29/Ω
Then there was the “it could have been so much worse” defense. After all SBF only stole $3 billion from the "allow negative" feature¹ when he could have stolen $65 billion.
¹ The other $5 billion he just embezzled straight out of the bank accounts
Then there was the “it could have been so much worse” defense. After all SBF only stole $3 billion from the "allow negative" feature¹ when he could have stolen $65 billion.
¹ The other $5 billion he just embezzled straight out of the bank accounts
https://twitter.com/Cryptadamist/status/1719124814185501177
🧵30/Ω
The "check the charts" defense seemed kind of promising at first. "If SBF had really been taking all this money, wouldn’t the size of the line of credit gone up? But look it went down!"
Would have worked better if they hadn't added "except when it went up" at the end
The "check the charts" defense seemed kind of promising at first. "If SBF had really been taking all this money, wouldn’t the size of the line of credit gone up? But look it went down!"
Would have worked better if they hadn't added "except when it went up" at the end
🧵31/Ω
Depth & breadth of eyerolls grew when they offered the "no one even noticed for 6 months when there was a bug that made it look like they were down $16bn instead of just $8bn" defense.
"The money disappeared, yes, but it was no one's fault."
Depth & breadth of eyerolls grew when they offered the "no one even noticed for 6 months when there was a bug that made it look like they were down $16bn instead of just $8bn" defense.
"The money disappeared, yes, but it was no one's fault."
🧵32/Ω
"We should all just contemplate the fact that SBF, in a classic 'whoops!' moment, never bothered hired a Chief Risk Officer or ever prioritizing even the most basic kind of accounting, and then let him walk free."
"We should all just contemplate the fact that SBF, in a classic 'whoops!' moment, never bothered hired a Chief Risk Officer or ever prioritizing even the most basic kind of accounting, and then let him walk free."
🧵33/Ω
Conveniently not mentioned is the fact that one group of people who do not like to hire auditors and risk management professionals are those who are engaged in large scale financial fraud. Risk officers tend to crimp their style.
Conveniently not mentioned is the fact that one group of people who do not like to hire auditors and risk management professionals are those who are engaged in large scale financial fraud. Risk officers tend to crimp their style.
🧵34/Ω
There was also the “Yes, metadata shows that SBF had opened the spreadsheet with the 7 “alternative facts” ideas about how much customer money Alameda had temporarily misplaced, and yes, he did choose option 7, but actually he never saw options 1 through 6” defense.
There was also the “Yes, metadata shows that SBF had opened the spreadsheet with the 7 “alternative facts” ideas about how much customer money Alameda had temporarily misplaced, and yes, he did choose option 7, but actually he never saw options 1 through 6” defense.
🧵35/Ω
It all culminated in the "if SBF really intended to defraud anyone would he have paid back all those loans in June of 2022? After all repaying loans allowed FTX to continue¹, which actually protected customer assets" defense.
I have no words.
¹ ed. note: embezzling money
It all culminated in the "if SBF really intended to defraud anyone would he have paid back all those loans in June of 2022? After all repaying loans allowed FTX to continue¹, which actually protected customer assets" defense.
I have no words.
¹ ed. note: embezzling money
🧵37/Ω
The judge wanted to git 'r done or at least in the hands of the jury so he kept everyone around til 6:45 (after asking the jury’s permission - see my earlier tweet). Thus it was that spots opened up in the actual courtroom and I was able to bump myself up to first class.
The judge wanted to git 'r done or at least in the hands of the jury so he kept everyone around til 6:45 (after asking the jury’s permission - see my earlier tweet). Thus it was that spots opened up in the actual courtroom and I was able to bump myself up to first class.
🧵38/Ω
Walking into the actual courtroom after weeks of hanging out with the plebs in the overflow rooms was kind of like when yr friend pulls you into the VIP area at the club. "Whoah, that guy SBF I’ve been watching on TV for weeks is just sitting right there."
Walking into the actual courtroom after weeks of hanging out with the plebs in the overflow rooms was kind of like when yr friend pulls you into the VIP area at the club. "Whoah, that guy SBF I’ve been watching on TV for weeks is just sitting right there."
🧵39/Ω
The overflow room & the VIP have their advantages but I was glad to be there for the final closing of this drama.
SBF’s atty gave an impassioned plea about SBF has been through a lot on this bizarre journey he started in his dorm room with his friends 10 years ago.
The overflow room & the VIP have their advantages but I was glad to be there for the final closing of this drama.
SBF’s atty gave an impassioned plea about SBF has been through a lot on this bizarre journey he started in his dorm room with his friends 10 years ago.
🧵40/Ω
I'm reasonably certain I saw SBF fighting back tears as he said it. At the very least he started blinking furiously in the way one does when one is fighting back tears.
As much as I think he needs to burn for his crimes it was a reminder that the whole thing is a tragedy.
I'm reasonably certain I saw SBF fighting back tears as he said it. At the very least he started blinking furiously in the way one does when one is fighting back tears.
As much as I think he needs to burn for his crimes it was a reminder that the whole thing is a tragedy.
🧵Appendix I
Crypto is in general a great example of how people can rationalize their way to great evil. Most of CT is guilty of this. Not to pick on @laurashin but look at how many times she has shilled the absolute poison of #AxieInfinity to the poor.
Crypto is in general a great example of how people can rationalize their way to great evil. Most of CT is guilty of this. Not to pick on @laurashin but look at how many times she has shilled the absolute poison of #AxieInfinity to the poor.
https://twitter.com/Cryptadamist/status/1719886251526893663
🧵Appendix II
Is @laurashin hitler? Obviously not. But is she out here getting paid by organized crime to shill poison to rob poor people? That's literally her job
Again not to pick on her in particular. All the crypto media people, every single FTX investor - they're all guilty
Is @laurashin hitler? Obviously not. But is she out here getting paid by organized crime to shill poison to rob poor people? That's literally her job
Again not to pick on her in particular. All the crypto media people, every single FTX investor - they're all guilty
🧵Appendix III
Or look at Circle / @jerallaire. They have made a point of doing *absolutely nothing* to track how $USDC is used.
Evil oligarchs? Never heard of em.
Terrorists? They're people too, right?
It's "see no evil" taken to the extreme.
Or look at Circle / @jerallaire. They have made a point of doing *absolutely nothing* to track how $USDC is used.
Evil oligarchs? Never heard of em.
Terrorists? They're people too, right?
It's "see no evil" taken to the extreme.
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