OT: Kraft lost a huge chunk of money in the FTX scam

[upstater1]

Still confused about this. Were people sitting home eating bon bons and fecking day trading this crypto crap? Or was it more of a buy low sell high for the longer term? Did people quit their day jobs and make enough cash to live? Or was/is it a side hustle?

He basically used another company he controlled to take customer cash and invest it in the stock market. It was an effective way to launder crypto into other assets. When crypto tanked and the stock market tanked, he was unable to liquidate assets to reimburse his customers.

My big question is: if your company owns tens of billions in crypto, why are you trying to convert it into other assets?

 

[Bill Lee]

When asked for a comment, Belichick replied
"Maybe we could have a bake sale, raise some money for Bob. We could do a car wash.”

When asked for a comment, Belichick replied
Errrrrrrr, kid didn't make enough good plays....

 

[PP2]

You'll find me posting in the Pub several months ago (June) that the kid was a scammer and that it was obvious. I don't know why a teacher like me could figure that out, but these Masters of the Universe cannot. I think it's because money is PR these days and filled with ego inflating celebrity culture, while the companies themselves are vapor.

I knew FTX wasn't on the up and up last year when they accepted assets from a company trying to hide them from creditors as they were going belly up (Indonesian crypto guys). People thought taking on these assets was no big deal, but if you're helping someone hide another person's assets or helping them launder money, no matter if it's to the benefit also of your company, you are an unethical schemer. I guess if you're very rich you figure, Hey, that's how the rich do it!!!! So they thought nothing of it. They shouldn't be shocked that someone with scummy ethical practices stole their money.

What you did is literally investments 101.

You'd be surprised at how many people literally just do not do basic research on what they invest in.

Especially celebrities.

 

[bresna]

Guys like Kraft go into these investements with their eyes wide open. They know the risk is high but the bet on it for the possibility of a huge reward. He bet wrong this time. I'm sure that the money he invested would not be enough to affect his portfolio in the least. When you have a billion dollars, you can take risks like this. Rich people do it all the time. That's how they get rich & stay that way.

 

[upstater1]

Guys like Kraft go into these investements with their eyes wide open. They know the risk is high but the bet on it for the possibility of a huge reward. He bet wrong this time. I'm sure that the money he invested would not be enough to affect his portfolio in the least. When you have a billion dollars, you can take risks like this. Rich people do it all the time. That's how they get rich & stay that way.

Not buying this. He could've invested in Bitcoin, there are other ways to enter into this space. He got in because of his relationship with Brady. The guy they partnered with was an obvious scammer. HQ'd in the Bahamas.

That's red alert right there.

 

[patsfan13]

But the SEC kept ignoring the potential whistleblower who told them Madoff's return was too good to be true.
Re FTX, Bankman-Fried or whatever his name is may take down his parents as well. They are Stanford Law professors and according to some reports were paid for legal advice to the company.....

His parents also worked for a political party they won't be touched. SBF's political donations will ensure he gets the kid glove treatment see why he isn't in jail.

 

[Patsfanin Philly]

Still confused about this. Were people sitting home eating bon bons and fecking day trading this crypto crap? Or was it more of a buy low sell high for the longer term? Did people quit their day jobs and make enough cash to live? Or was/is it a side hustle?

Like day traders in the late 90s who thought the market could only go up. ( See Tulip hustle from 1600s) Bulls make money, bears make money. Pigs get slaughtered. When your waiter and cabbie try to tell you the same stock to buy, you know it's time to sell......

 

[bresna]

Not buying this. He could've invested in Bitcoin, there are other ways to enter into this space. He got in because of his relationship with Brady. The guy they partnered with was an obvious scammer. HQ'd in the Bahamas.

That's red alert right there.

The ROI on Bitcoin was pretty flat when Kraft and Brady jumped in on FTX. Bitcoin was stuck around $10,000 when FTX was started in Aug 2020 at around $2.00. They were looking for a bigger hit, so they took a bigger risk on a new crypto currency.

And FWIW, I agree with you that they really should have looked more closely at this. It was a scam through & through. Hey, at least he didn't cold call them and tell them to pay him in gift cards.

 

[IndianPat]

I am not crying for BenDover Bob. He made a crap load of money buying the Patriots. He was also a very early investor in Draft Kings.

 

[bresna]

Wow... are there a lot of these cryptocurrencies or what?!? This website lists almost 9,000 cryptocurrencies - https://www.investing.com/crypto/currencies And check out the volumes on some of these things. There are a few with billions of dollars of transactions in the last 24 hours.

There are still a lot of deep-pocketed investors swimming in this pond.

 

[upstater1]

His parents also worked for a political party they won't be touched. SBF's political donations will ensure he gets the kid glove treatment see why he isn't in jail.

The public direct donations to candidates was 75%-25% Democrat.

But the dark money PAC donations were heavily to Republicans. It's roughly equal, around $37m. He says he's the 3rd biggest GOP donor.

For instance, he gave $12m to just one Dark Money PAC, American Dream Federal Action, which is GOP. He also did this for Democrats, gave $5m for instance to dark money PAC Future Forward USA.

Then there's the scam part of this: among the money to Democrats is counted the donations to Guard Against Pandemics, which supported Fauci-affiliated institutes, but the whole thing was run by SBF's brother who took a big salary.

Grifters grift.

Finally, his 2 partners both gave to both parties: "OpenSecrets data shows that Ryan Salame, who had been co-CEO of FTX Digital Markets, donated $23 million during the 2022 midterm cycle, all of which went to Republican-affiliated groups or candidates, CNBC’s article noted."

 

[State]

Um, misleading. The few Republicans the con artist gave to were RINOs. Not the Liberty Caucus.

 

[Captain Cliche]

If I was president, the first thing I would do is eliminate white collar prisons.

 

[raduray]

As long as he limits himself to strip mall massages, he should be OK.

 

[raduray]

Unless it affects how he spends in free agency, I could care less if a billionaire lost a few million dollars in a cyber Ponzi scheme.

I don't understand that. Doesn't he have to spend to the cap plus or minus something on a yearly basis, but averaging the cap over a period of years?

 

[BTTA]

Um, misleading. The few Republicans the con artist gave to were RINOs. Not the Liberty Caucus.

Using those two categories as if that's the entire ecosystem is what's misleading.

 

[Stu Pidassle]

I don't understand that. Doesn't he have to spend to the cap plus or minus something on a yearly basis, but averaging the cap over a period of years?

Cap value = how much a player costs against the cap in a given year.

Cash = the actual dollar amount the player will receive in a given year.

Prorated bonuses and guarantees factor in. This is the factor that BB was referring to when quoting the cash spent by the team being on the low side. The Pats are always rumored to have a budget for cash to spend on a given year that is impacted by all in expenses. This amount was impacted by the building of Patriot Place.

 

[PatsFanInVa]

He basically used another company he controlled to take customer cash and invest it in the stock market. It was an effective way to launder crypto into other assets. When crypto tanked and the stock market tanked, he was unable to liquidate assets to reimburse his customers.

My big question is: if your company owns tens of billions in crypto, why are you trying to convert it into other assets?

So basically people think crypto is magic, but this is just the pigeons coming home to roost.

As I understand it, there isn't a problem if he has transaction 1, buy some crypto with customer cash, in concert with transaction 2, buy an equivalent amount of something else - stocks, bonds, or just the cash paid to you on the sidelines.

But if his supposed business didn't do that, that's the problem.... it sounds like he bought stocks INSTEAD of crypto with the money.

If your cryptocurrency is worth 20 grand a coin and you buy "1 coin" and I have a straightforward crypto account whose integrity is not in question, then your crypto tanks, that is your problem. I don't have to pay you 20 grand. I have to pay you what it's worth that day, that second actually.

So you sell when it hits 10 grand a coin. No problem if he invested where it was supposed to be. Everybody would take exactly the bath they were supposed to take, no "reimbursement" involved. It's just cashing out.

But the guy acting as the bank... let's call him the "Bankman"... has to have enough to pay you and everybody else who thought they invested in crypto through him.

As you said, he didn't have enough liquid assets to pay guys out as they ran for the exits.

It was essentially a bank that didn't follow any banking rules and had no reserves because yeeehawwww!!!! it didn't have pesky government regulators all up in its business all the time because yay crypto.

What cracks me up is that he did even WORSE in those stocks than the crypto did, if he could not liquidate from Peter and pay Paul. Either that or he got greedy and plowed it into some product that gave him a better return either in terms of downside protection or just a straight percentage bonus, for leaving his money invested in his failing stocks -- I don't understand options, but it's possible options might explain his broke-assedness... or some other longer-than-the-blink-of-an-eye-duration instrument.

Anyway everybody wanted US-government-backed paper, in its electronic form no doubt, and all he had was magical-thinking-backed promises. Turns out he lost on all the bets that were supposed to cover the investments.

It's really no different than any other misuse of the money that rendered it unavailable. If he spent it on hookers and cocaine, if I understand it correctly, it would be the same issue, from a banking perspective. He said he would do banking stuff, but he really just took people's money and when they went to cash out all at once, there was nothing to pay them with.

 

[h0c2000]

 

[patsfan13]

The public direct donations to candidates was 75%-25% Democrat.

But the dark money PAC donations were heavily to Republicans. It's roughly equal, around $37m. He says he's the 3rd biggest GOP donor.

For instance, he gave $12m to just one Dark Money PAC, American Dream Federal Action, which is GOP. He also did this for Democrats, gave $5m for instance to dark money PAC Future Forward USA.

Then there's the scam part of this: among the money to Democrats is counted the donations to Guard Against Pandemics, which supported Fauci-affiliated institutes, but the whole thing was run by SBF's brother who took a big salary.

Grifters grift.

Finally, his 2 partners both gave to both parties: "OpenSecrets data shows that Ryan Salame, who had been co-CEO of FTX Digital Markets, donated $23 million during the 2022 midterm cycle, all of which went to Republican-affiliated groups or candidates, CNBC’s article noted."

The fund donated 1 billion to dems. How much went to RINO's?