Substack SBF shows it will always be in our faces

I can see the future. Odds are very high that SBF will still be in it.

It was logical to think that now that the SBF was being charged with federal crimes that could carry a sentence of over 150 years, it would start listening to lawyers and dragging its lips.

No. Much to his Twitter, SBF launched Substack to experiment with variations of his already tired theme “Nothing Bad Happened and It Was Everyone’s Fault”. Ground for the SBF: Richard Nixon’s “I’m No Crook” and Bill Clinton’s “I Didn’t Have Sex With That Woman” didn’t work out well for them either.

It’s not just impossible to take any of this seriously, especially since the former FTX/Alameda officials are all cooperating prosecutors, Caroline Ellison, Gary Wang and Dan Friedberg. But maybe we can do a little bit of crap science, so you can rest assured that the SBF hasn’t miraculously become more credible or more interested in faking concern about the damage it has done to literally millions of investors.

Some bad guys insulting intelligence1:

SBF defends the virtue of FTX International as if that is all it needs to discuss.

SBF continues to act as if it has nothing to do with Alameda When this dog is not hunting. New FTX CEO Roy said that the FTX/Alameda empire operates as one business. Co-founder and CTO Wang has allegedly confirmed that he created a software backdoor at SBF’s request for Alameda to move, um, borrow money from FTX. From Business Insider yesterday:

Sam Bankman-Fried instructed FTX co-founder Gary Wang to create a “secret” backdoor to enable his trading firm Alameda to borrow $65 billion in client funds from the exchange without their permission, a Delaware bankruptcy court was told Wednesday.

Wang was asked to create a “backdoor, covert way for Alameda to borrow from clients on the exchange without permission,” according to FTX attorney Andrew Dietrich…

He added, “Mr. Wang created this backdoor by inserting a single number into the millions of lines of code to the exchange, and establishing a line of credit from FTX to Alameda, which was not approved by customers.” And we know the size of that line of credit. It was $65 billion.

SBF continues to claim that only US customers are on FTX.US. It seems like this can be easily circumvented by using a VPN, and the kind drawn to crypto for money laundering purposes would likely work.

SBF expectedly overlooked North Dimension customers, who sneered by completely bypassing FTX and sending money supposedly destined for FTX via a bogus electronics retailer that sent the money to Alameda. As summed up a different story from Business Insider:

In the sprawling drama of Sam Bankman-Fried’s collapsing crypto empire, the mysterious and low-profile Northern Dimension played a key role in putting FTX clients’ money into the hands of Alameda Research and other SBF ventures.

And according to NBC News, North Dimension operated a counterfeit electronics retail store online, which is now defunct and archived. The site did not disclose any connection to Bankman Fried or its companies.

The SEC complaint against former Alameda CEO Caroline Ellison and FTX co-founder Gary Wang — who have both admitted wrongdoing — alleges that FTX required customers to transfer funds to North Dimension if they wanted to trade on the cryptocurrency exchange. But then it was used to fund Alameda’s business activities.

SBF says again that FTX.US was solvent. So what if some largely unimportant schemes in a total of 130 legal entities are acceptable? This does not excuse the huge amount of customer money that went to be stolen elsewhere.

This argument also betrays the SBF’s loss of whatever legal conspiracy it may have. The “All American Agents” sounded like an attempt to assert that the US authorities had no jurisdiction because nothing bad had happened to the US agents. As an aside, this conveniently ignores defrauding of US investors, as in the case of Sequoia and all other betting FTX entities. This is a large part of the SEC v. SBF filing. It was this type of securities fraud that landed Elizabeth Holmes in prison. But “American investors are safe” seems to be the bulk of the anti-extradition case… which is no longer relevant.

SBF is acting as if what it says about FTX and Alameda’s financial statements can be believed. SBF provides several thin lines in the Excel template, like this:

First, the SBF claims it has not been involved in Alameda in recent years, yet presents itself as being able to present an accurate and reasonable balance sheet of a high standard at various points in time. This had him complaining over and over that he couldn’t access any FTX or Alameda information.

Second, FTX’s new CEO, John Ray, talked about how the FTX empire delivered the worst record disaster it had ever seen, and that he and his team will have to reconstruct much, if not all of what happened in forensics. , from the bottom up. So even if the SBF suddenly developed a Putin-level memory, anything the SBF could shovel from those days was the rubbish inside, the rubbish, because the books were no good.

Third, in an effort to ward off attempts to whitewash attempts to make claims on FTX/Alameda financials, the SBF skipped sections of a clean accounting letter. FTX International’s “unheard of” accountant Prager Metis does not claim to have a practice in financial services, and in the industries in which she says she has expertise, the entertainment and music industries, she does not list any clients. Furthermore, Coinbase has concluded that the “entertainment” appears to be on the sinister side. Keep in mind that sex industry companies have the same right to good record keeping as everyone else. But it’s generally pipsqueaks compared to FTX.

Yes, there’s more, but that’s really more effort to parse than the SBF commands. Some additional notes:

And poor Caitlin Ostrov had to do the critical job of writing a Wall Street Journal story on SBF’s Substack, which meant she had to go the “just the facts” route instead of heaping justified disdain. But she managed to get some revenge:

Alas, what the SBF’s insane persistence in trying to sell what no one buys, its realistic, unfettered version of the persecution and assassination of Sam Bankman-Fried as played out by inmates of the Asylum of Cryptoland under the supervision of the Department of Justice, tells us it will never shut up. Even if he gets to a federal prison for a very long time, he’ll do everything he can to make himself heard. substack. Twitter. Articles if anyone will have it. clatter. Rockfin. Youtube. And should the authorities decide to stifle the media and publishing, it’s not hard to imagine that the SBF would create a giant following for Pen Pal.

In fact, obsessive devotion to a task or hobby is a prison survival strategy. SBF has already staked its tired, endless denial. From the Marshall Project:

The first time I heard someone use the term “display” was on my first day in federal prison, just four days before my twenty-first birthday…

Most new guys end up lying in bed on their first day; The bed becomes a sanctuary, a safe space in which they hide from others, as well as a new reality – as if you could go to sleep and wake up one day and suddenly everything would be back to normal. After watching me lie in bed all day, I tried to offer some words of encouragement—a skinny, middle-aged guy from Detroit.

“Man, you should get a show,” he said.

“What is this?”

“You know — try. It’s how you spend your time.”

We went back and forth on the details. It seemed like an obscure term that didn’t really make sense until you lived in the system for a while. From what I have been able to gather, the word appears to derive from the noun “bit,” related to the length of a prison sentence, such as “extended” or “short period.” Something like: “This seven-year piece is a goddamn bummer.”

The “show” was something completely different, more like a purpose or raison d’être. It was all about the way you spent your time, like finding a hobby or hustle to pass your time. For many players, it was about winning, no matter the endeavor. Others just wanted to make money. Some men simply used it as a way to occupy their minds. For everyone else, it was all about escaping from the stress of captivity. Sly told me he offered a lot of stuff, but mostly it was just gambling – though he did like to dabble in some prisons from time to time. He said if I could find that thing — that sense of purpose — it would make a huge difference in my life. Without her, he said, my punishment would feel endless misery. He said, “Take the time.” “Don’t let time do you.”

Throughout the complex, there were countless ways to bid, from gambling to religion, education to gang life, sex, art, and prison jobs (the average prisoner earns about 10 to 50 cents an hour). Sports were a common way of bidding…. Weightlifting seems to be the most popular form of bidding. …

Sometimes, perhaps inevitably, some bids overlap, supported by their sub-economies. Some players gambled on the games—basketball, softball, and soccer—while others sold food to the crowd. Cooking homemade food (in other words, made from cells) is probably the most popular form of tender. To do this, cell cooks often rely on expensive commercial items, which they might use to concoct rice bowls, burritos, and even pizza, using only a microwave and simple ingredients like cured meats, ramen noodles, and seasoning salt. Even if only for a moment, these meals gave you relief and an escape from the daily misery of prison life.

So we can already guess what SBF’s offerings might be. Vegetarian Home Cooking. And he does everything he can to tell a story with him at the center. Perhaps he will continue to hit the horse “I did it wrong”. Maybe he’ll try a new stunt, like coming up with Agey’s new self-redemption formula so he can pass himself off as a star behind bars.

The only silver lining, from the perspective of an impatient and financially literate public, is that not only does SBF chatter increase the odds of a successful trial, but also the judge throwing the book at him in sentencing. He showed no willingness to admit guilt and show remorse, and was so deep in himself that it is difficult to see how he could achieve the Damascene conversion.

But he will not go quietly. And while the SBF body may end up locked up, it’s possible that the public still isn’t fully protected from it.

1 I wanted to say “Othian” but Lambert said no.

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