from Hacker News

Phone interview with Sam Bankman-Fried [audio]

by abriosi on 11/29/22, 8:11 PM with 96 comments

• by RC_ITR on 11/29/22, 9:18 PM

  A very important nuance for everyone following this.

  SBF keeps saying there was a liquidity crisis at FTX, which is 100% not true. A liquidity crisis implies that he took deposits, flipped them into good, but illiquid investments, and ran into trouble because people asked for more cash than FTX had on hand.

  FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (many of which are now worthless, all of which were speculative nonsense) and is now revealed to have done that.

  He's using the concepts of "bank runs" and "liquidity crises" because that's sort of an "aww shucks, got caught in an unfortunate circumstance" situation when what he actually did was one of the stupidest and most malicious things anyone in "finance" has ever done.

• by SilverBirch on 11/29/22, 9:55 PM

  I think it's pretty clear now we've heard the line from Sam. He's going to claim messiness, 'liquidity' and 'mistakes were made'. A line he's only willing to hold in front of very friendly interviewers. I don't think we'll get anything more out of him unless (1) he falls into the trap of taking an interview with someone numerate, or (2) he slips up and reveals some details that are going to be important later. But it's very clear he's decided to take a line that is clearly untrue, but is unprovable for an outsider. It'll only be as the evidence from the bankruptcy unfolds that we'll get the real story.

  The thing I would push for today, would be an audit of all of his associates, including family, and yearly audits of his accounts by the IRS for the rest of his life. The risk that he has squirrelled away some crypto nest egg is too high, regulators should be vigilant to ensure not a penny of customer funds ever enrich SBF or his family.

• by memish on 11/29/22, 9:27 PM

  There's another part of the interview where SBF says he donated about the same to Democrats and Republicans, contrary to the public record. https://youtu.be/6DezodR9hNI?t=775

  His explanation and reasoning is that Democrat donations would be treated favorably by the media so those were done publicly, while "reporters would freak the fuck out" about Republican donations. So he made those in the dark.

• by lolc on 11/29/22, 9:14 PM

  Too smart by half, this guy just doesn't shut up. Sure plays into the narrative that he's a naive kid. But painful to listen to all the scheming in the pauses of speech.

• by pqdbr on 11/29/22, 9:36 PM

  I didn't lose a penny in the FTX debacle but even so it's infuriating to hear this crook giving this interview with the Bahamas waves as background noise.

• by NovemberWhiskey on 11/29/22, 9:39 PM

  From my perspective, the problem here is no-one (including SBF) appears to know what kind of an enterprise FTX was supposed to be.

  Everyone seems to agree that Alameda is a hedge fund, but looking at the facts, FTX also appears to have been operated as one as well; but without the qualification of investors or others kinds of things. There's no just a really good correlate in traditional finance for "I'm going to act as a broker-dealer but actually I'm allowed to just invest your funds however the hell I like". Which is probably a good thing.

  I'm not necessarily saying that everything in defi has to be regulated exactly like something in traditional finance, but there are some pretty deep unanswered questions on basic stuff like "did your customers know they were actually your investors?" and "what exactly was your business model?" and "what was your risk management approach?"

• by ilrwbwrkhv on 11/29/22, 8:55 PM

  Also Coffeezilla's take on the interview with more context: https://www.youtube.com/watch?v=0rL35_WV3lE

• by ipython on 11/29/22, 11:35 PM

  But the real question is unanswered: was he actively playing league of legends during the interview?

• by bluelightning2k on 11/29/22, 9:45 PM

  The crazy thing: he still has a very valuable brand.

  There's many many people like us quietly trying to bootstrap enough traction to maybe get into YC one day... But if SBF ever wants to start another company it will be another record setting a12z seed valuation.

  Irrelevant if he goes to jail ofc.

• by tibbydudeza on 11/30/22, 7:16 AM

  What an utter BS artist - hope they extradite him and put him in jail for a long time.

• by hackrnusr on 11/30/22, 7:07 AM

  https://www.themarshallproject.org/

  Would prison time be too harsh a sentence for him?

• by neonate on 11/30/22, 5:12 AM

  He sounds anxious to me. In fact he sounds terrified. I never heard him speak before so this may be an illusion but it's so uncomfortable I had to turn it off.

• by sgammon on 11/29/22, 9:00 PM

  The idea that a "bank run" caused this is just silly. FTX is not a bank.

• by dpiers on 11/29/22, 9:56 PM

  It's like he's too privileged to realize he's a criminal.

• by janmo on 11/29/22, 9:05 PM

  SBF is literally adding one year more year to his sentence in every interview he gives. He should just shut up.

  (Not legal advice)