Sam Bankman-Fried's Secret 'Backdoor' Discovered, FTX Lawyer Says 46
Sam Bankman-Fried instructed his FTX cofounder Gary Wang to create a "secret" backdoor to enable his trading firm Alameda to borrow $65 billion of clients' money from the exchange without their permission, the Delaware bankruptcy court was told Wednesday. Insider reports: Wang was told to create a "backdoor, a secret way for Alameda to borrow from customers on the exchange without permission," said FTX lawyer Andrew Dietderich. "Mr. Wang created this back door by inserting a single number into millions of lines of code for the exchange, creating a line of credit from FTX to Alameda, to which customers did not consent," he added. "And we know the size of that line of credit. It was $65 billion."
The Commodity Futures Trading Commission (CFTC) made similar allegations when it brought charges against Wang in December. But the value of that line of credit hasn't been discussed before now. The CFTC then described it as "virtually unlimited." [...] Dietderich told the court that with the $65 billion back door, Alameda "bought planes, houses, threw parties, made political donations." Dietderich said the rest of the money went towards personal loans, sponsorships, and investments. "We know that all this has left a shortfall, in value to repay customers and creditors," he added. That amount "will depend on the size of the claims pool and our recovery efforts."
The Commodity Futures Trading Commission (CFTC) made similar allegations when it brought charges against Wang in December. But the value of that line of credit hasn't been discussed before now. The CFTC then described it as "virtually unlimited." [...] Dietderich told the court that with the $65 billion back door, Alameda "bought planes, houses, threw parties, made political donations." Dietderich said the rest of the money went towards personal loans, sponsorships, and investments. "We know that all this has left a shortfall, in value to repay customers and creditors," he added. That amount "will depend on the size of the claims pool and our recovery efforts."
Sunshine and disinfectant (Score:2)
Hopefully, there is enough sunshine on this already that all the money SBF distributed to politicians won't matter and he'll get to spend a good portion of his remaining days behind bars.
Re: Sunshine and disinfectant (Score:1, Funny)
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Not that he can really be trusted, but apparently the money was equally divided between parties.
Re:Sunshine and disinfectant (Score:5, Informative)
No.
His claim that he donated billions to democrats "in the clear" (publicly) yet donated an approximately equal amount to republicans privately in ways that can't be traced/confirmed is, on it's face, preposterous, and coupled with his previous statements makes it an almost certainly that he's lying. He may be telling the truth, but that seems very, very unlikely.
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I would like someone knowledgable of the US political system to explain why we hear so much about people in US giving large amounts to political parties, while the practice seems to be heavily regulated in most US states with prohibitions from corporates and relatively low limits https://web.archive.org/web/20... [archive.org] What loophole are they exploiting to give millions to a party?
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Check into "Super Pacs" - basically a way you can establish a separate, independent legal entity to take donations for you and act on your behalf as long as you don't actually directly tell them what to do. Obviously this is hugely stupid because they can guess very well what to do just by watching your political statements on TV or knowing your plans prior to the establishment of the Pac, even if it weren't super easy to just cheat by talking to them in secret using a string of middlemen or secret internet
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There are some regulations but they are easily circumvented (and routinely circumvented). US politicians are fully bought and paid for by corporate and wealthy interests. No hope of changing the system since the politicians benefit and they are the ones who benefit.
The US Supreme Court put the nail in the coffin with its "Citizens United" decision.
"January 21, 2020 will mark a decade since the Supreme Court’s ruling in Citizens United v. Federal Election Commission, a controversial decision that reve
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Hopefully, there is enough sunshine on this already that all the money SBF distributed to politicians won't matter and he'll get to spend a good portion of his remaining days behind bars.
Last time I checked the missing amount was about $10B, I'm pretty sure not even SBF believes that a few $M to PAC's and politicians will buy him a get out of jail free card at this point.
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It depends on the proportion of the "lost" money that found its way into political groups, candidates pockets...
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Afaik it went to Alameda counter parties and I've also wondered who they are but I'm not aware of any politician whales in crypto trading, I find the whole idea of buying a get out of jail free card from the legislative branch a bit far fetched now that his troubles are with the judicial. It's all really oldschool stuff like wire fraud, securities fraud and money laundering not some fancy new crypto legislation they could change on a whim to help out an old pal.
Hilarious. (Score:3, Insightful)
Maybe you need to rethink your life if someone with sensible views makes you so irrationally angry.
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Grow some balls.
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It's objectively unhinged [nytimes.com] to claim that government spending on education was zeroed out during the 1990s. It's nutty to claim that's why college tuition has gone up, when any economist [newyorkfed.org] will tell you that tuition has gone up largely because of (drum roll) easily available government loans for education.
(Others will point to second-order causes, like hugely higher numbers of administrators, and seven-figure salaries for some of those, or fancy add-ons like high-end gyms or dining plans or health services, wi
Hey, rsilvergun (Score:1)
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rsilvergun has nutty, unhinged views. Yesterday, he claimed [slashdot.org] that US governments spend less on education now than in the 1990s (and more specifically that federal and state funding for higher education went to zero), then ran off when I showed how wrong that was.
So you've found one guy who was wrong on the internet, that's the excuse? Sweet Jeebus don't tell anyone but once I was wrong on the internets too, just throw the first stone.
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Look at his signature if you want another example of nutty, unhinged views. That was just one egregious example from yesterday. rsilvergun makes a habit of spewing stupid hot takes into the comments here. He's chronically wrong, not just wrong as a one-off event, and he never admits or corrects his errors.
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Look at his signature if you want another example of nutty, unhinged views. That was just one egregious example from yesterday. rsilvergun makes a habit of spewing stupid hot takes into the comments here. He's chronically wrong, not just wrong as a one-off event, and he never admits or corrects his errors.
Then he'd be his own worst problem, why would you take it upon yourself to make him yours? Right now is early Saturday in most of the world and TIL that I could make mayonnaise in my mini chopper so I'm doing shrimp and egg sandwiches which I'm going to have with a cold pilsner, try to top that for a challenge.
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Why do you make the fact that other people point out someone being wrong your own biggest problem?
Maybe you could try not to be a hypocritically patronizing, smug asshole who assumes that his alcohol- and cholesterol-laden diet is something worth emulating. (I'm going to a museum with my kids this morning while we're on a weekend trip. I plan to run four or five miles either later today or tomorrow morning, on top of whatever else we do today -- usually I run more than that on the weekend. NYC famously h
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Seem like you have a great weekend ahead, best wishes!
that's not what I call it (Score:5, Informative)
A "shortfall" you say? I think the rest of the world simply refers to it as "stolen money".
What about Caroline's secret backdoor? (Score:2)
*scary nerdy laugh*
This sound more like a bad p*rn script where the actress is more attractive than the real person.
What was the one number? (Score:2)
Enablebackdoor="1" ?
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Probably hardcoding an account number or something similar.
He's from US? (Score:2)
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What does Trump have to do with any of this?
FFS, find another boogie man to blame for all of society's ills...
Re: He's from US? (Score:2)
The power of a number (Score:2)
That's a hella powerful number. Let's be thankful that Mr. Wang didn't insert two numbers into the code!
I wonder if these people know what a backdoor is (Score:2)
> "Mr. Wang created this back door by inserting a single number into millions of lines of code for the exchange, creating a line of credit from FTX to Alameda, to which customers did not consent," he added.
This makes it sound like the "backdoor" was nothing more complicated than an increase in Alameda's credit limit. A real backdoor would be something like a special code to circumvent an access control or authorization system leading to privileged access of some kind. This is especially the case for a
Re: I wonder if these people know what a backdoor (Score:1)
Who does he think he is?? (Score:2)
A bank?? We only let them get away with this stuff!