> “People on Twitter now are like “he admitted that FTX is a Ponzi!” but of course that’s not true. He conceded a certain validity to my claim that some crypto businesses — not his — are Ponzis. He is just in the business of trading their tokens.
“In fact, I came away from that conversation bullish on FTX and Bankman-Fried. My view was, and is, that if you talk to a crypto exchange operator and he is like “crypto is changing the world, your old-fashioned economics are just FUD, HODL,” then that’s bad. A wild-eyed crypto true believer is not the person to operate an exchange. The person you want operating an exchange is a clear-eyed trader. You want someone whose basic attitude to financial assets is, like, “if someone wants to buy and someone wants to sell, I will put them together and collect a fee.” You want someone whose perspective is driven by markets, not ideology, who cares about risk, not futurism. A certain cynicism about the products he is trading is probably healthy.”
I'm not arguing on the basis of what Levine thought of the conversation.
At the very least, it's apparent that SBF sees crypto as being heavily based on speculation that's disconnected from any actual value proposition, but he's choosing to exploit and profit from those systems. And it's now apparent that he also was engaging in speculation with user funds himself via Alameda.
A wild-eyed crypto believer might lose anywhere from a few thousand to a few million of their own money in poorly placed speculation.
A sophisticated market-maker will facilitate the loss of billions (about $10 billion in this case) from numerous people.
Which is more dangerous? A HODL who loses their savings on some speculative crypto purchase, or the next Bernie Madoff?
That is not the comparison at all, and while I have to assume you are commenting in good faith, it is really hard to do so here.
The difference Levine is pointing out is between the type of person operating the exchange. It is not the comparison between janitor and CEO at a fortune 500 company.
A "true believer" will cause just as much (or per Levine's assertion: more) damage as a "sophesticated crypto cynicist", but one will at least understand financial fundamentals while the other brings none of the learnings from running any kind of investment or banking firm.
A "true believer" isn't able to carry out their work without a marketplace. Nobody lost money in crypto on the scale we're seeing 5 years ago.
The largely unregulated, uninsured, and opaque marketplace of crypto, facilitated by people like SBF, has been the conduit for the true believers.
If somebody says "I know you're a sucker and I'm going to take your money", (as SBF did in Levine interview) they just told you everything you need to know. You can rest assured that their other dealings are dirty, as is now coming to light for SBF.
I'm not sure why "good faith" is being brought into question, and I certainly haven't challenged the good faith of those who disagree with me. So I'm not going to address that aspect of the conversation.
>I'm not sure why "good faith" is being brought into question, and I certainly haven't challenged the good faith of those who disagree with me. So I'm not going to address that aspect of the conversation.
Per the commenting guidelines, we are expected to believe people are commenting in good faith even when they say:
>A wild-eyed crypto believer might lose anywhere from a few thousand to a few million of their own money in poorly placed speculation.
>A sophisticated market-maker will facilitate the loss of billions (about $10 billion in this case) from numerous people.
Which is either a deliberately bad comparison (akin to janitor vs CEO), or completely irrelevant in the context of what SBF was saying / what Levine thought.
A wild-eyed crypto believer would make all the same mistakes as the sophisticated trader and run the exchange into the ground while breaking laws. The sophisticated trader will typically run their business within the legal framework, while taking as much profit as possible.
A wild eyed Luna type can lose a lot of people’s money and is probably more likely to do so than a skeptical trader making deals. The issue with this wasn’t that general heuristic which is still true (imo), it was SBF’s decisions despite that (which were bad and extremely high risk, but different than it being a ponzi).
Pair that with an intelligent enemy looking for ways to destroy you and this is where it ends up.
But the exchange it seems was but only one constituent of a wider more complex (necessarily complicated?) web of cross funding that in no way represents the expected business practice of an exchange. Matt it seems failed to account for the bare faced lying of a deluded ideologue. Or at least someone who hid behind an ideology to excuse absurd business practices
In some circles resigning from a failed tech venture is not seen as a failure. WeWork CEO resigned and is now promoting a new fully funded company in the same space.
FTX CEO has been openly lying about the impact for a long time now, and has mismanaged billions of dollars (of other people's money). Resigning doesn't seem like a reasonable punishment.
Not to get too far off-topic, but WeWork was commercial real estate, Flow is residential:
Andreessen [of Andreessen Horowitz, investors of 350M in a company that's single asset is currently a landing page] positioned the new company as a long-awaited solution to the nation’s “housing crisis.” ...
“community-driven, experience-centric service” — to explain how the new startup would “create a system where renters receive the benefits of owners.”
This sounds completely different than WeWork, which had the simple goal of changing the world, one beer-Friday at a time.
The sad part is the AZ money isn't the dumb money in this deal; that will flow in latter.
I'm not trolling. So far this is just a business failure, not a crime.
I don't know much about this whole thing. It sounds likely there will be investigations, and they may prove "large scale theft" at that time. But right now resigning is the only way for him to "take responsibility".
When everything was going down he tweeted something on the line that everything was fine, he later deleted that but for sure there's an archive somewhere (and I'm sure Elon would be GLAD to provide that data). That's fraud, and I'm sure there's a lot more like that once the DOJ/SEC start looking around.
I like SBF, honestly, I like his personality, I don't believe he's a bad person, I could even believe (with a truckload of salt) that all of this happened without him being fully aware of what was going on. But, real is real, and I'm quite sure he will do jail time.
