The statement is misleading. People are making 18% interest on the value of Bitcoin et al. at the value of 2022, which is less than $20k. Now that is $60k, back to the value levels of 2021. Thus, the only reason there is interest is that the cryptocurrencies found gained back their value, and the bankruptcy court gets to consider the values when the bankruptcy started in 2022, not current/before 2022 values.
You are correct. As phrased, this headline and large parts of the article are fake news. The first sentence about "profiting from the money they put into the exchange" is particularly egregious. Nobody was putting money into the exchange when withdrawals were frozen, which is when these marks are from.
The reference amount that's being "repaid" is a low quote from near the bottom of the crash. Nobody signed up for this correlation between (1) crypto price crash and (2) the exchange halting withdrawals. It was a straight-up theft of optionality.
That said, the repayments do exceed expectations. That is newsworthy. I just wish they could report that news factually.
I'm seeing a pattern of misleading headlines wrt this. My guess is that it is PR at work to convince public that FTX was a victimless crime - this is to help SBF avoid his full sentence.
There's definitely a pattern, but I don't want to assume motive. I doubt SBF will get his retrial, but still, it's good PR for a lot of people -- for Effective Altruism, for Stanford, for Sequoia -- whose reputations took a hit here. It's even good PR for the bankruptcy team to say that they got full restitution. And for the journalists, of course, it's a headline that really pops.
But sitting here, we can't really know why we're being lied to. All we can do is take note of the lies, and of who's repeating them.
> guess is that it is PR at work to convince public that FTX was a victimless crime
There is a lot of money going back into crypto that would prefer to martyr an SBF who never was. This reporter has crypto connections [1]. (Not implying she's compromised. Just that her sources may tend to be biased.)
I struggle to see the issue with the headline, this is how bankruptcy works, it's how they would usually report in relation to creditors.
I don't know how bankruptcy documents work, but this is not a filling, it's a general-audience article.
The truth is if you had one Bitcoin in FTX, that was worth 20k. You might have bought for more or less than that. Now it's worth 60k. You didn't get the 20k back immediately (in which case you could have repurchased the Bitcoin immediately and not lose anything).
- If you bought Bitcoin above 20k, you lost money, whereas you wouldn't have otherwise. - If you would have kept your Bitcoin, you would have 60k now. You didn't get a choice in the matter.
The problem if of course "what is money" — the thing you owned was a Bitcoin, and now you're getting back its value from back then in dollar terms. This value changed meanwhile, shocking! But quite clearly, most people would have had more money now if that hadn't happened.
So while it's possible that some people would have sold lower than 24k (it didn't stay that low very long), most people wouldn't have, and so they lost money, in the commonly accepted undertanding.
Imagine the government seized your house 10 years ago, then paid you back today its price from 10 years ago +20%. Did you not lose money?
> truth is if you had one Bitcoin in FTX, that was worth 20k. You might have bought for more or less than that. Now it's worth 60k
You never had one Bitcoin in FTX. You had a claim against FTX in the amount of one Bitcoin. Had FTX continued to exist, that claim would have been worth, today, $60k. FTX didn't, so the claim is worth something else.
It's correct to say you "lost" that upside--opportunity costs are real. It's also correct to say that on a cash-in cash-out basis, you "made" money. One may also observe that not having that cash in the interim could have caused financial distress, and that a ~19% return over the last few years is less than what someone would have paid in credit-card interest.
Does it not also have to do with the increased value of some of the other assets FTX bought? I believe SBF invested a large amount in some AI companies.
FTX invested $500M in Anthropic for 8% (at the time) and the bankruptcy estate sold 2/3rds of that for $884M, while it is tidy sum, it doesn't move the needle much in the overall money owed to creditors of $11.2B .
The estate has recovered around $16B of the money, or basically close to half of the assets at the time, the bulk of the money is coming from bitcoin tripling in value, to put it another way if Bitcoin was same prices as 2022, then they would have only recovered ~ $5B or FTX continued operating without being frozen by the courts, they would need come with $33B to make their depositors whole in Bitcoin.
> bulk of the money is coming from bitcoin tripling in value
Source? I thought FTX's estate barely held any crypto.
The FTX stake in Anthropic was liquidated at a very high return back in ~May.
The article mentions a stake in Anthropic that was sold for $900m, while it owes creditors $11.2b, so nah it wasn't enough to make a dent unless there were MANY other smaller investments that collectively added up to $3b on top of that.
Not to be pedantic but I think 8% of something can be considered a dent.
As big of a piece of shit SBF is, he was technically not lying about FTX having the money. It's just that those tweets by CZ triggered a run on the assets at the worst time, which combined with mismanagement/fraud on SFB's part, did not help.
> he was technically not lying about FTX having the money
They didn't have the money. These gains are due to appreciation.
as early as Jan 2023, before bitcoin had appreciated, $5 billion had already been recovered
https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-f...
Anthropic was another $1 billion
$6bn out of twelve is very much not having the money.
a far cry from zero, and the CZ tweets triggered a run. How many other exchanges have enough assets on hand to cover every depositor at once instantaneously? Even mainstream banks cannot cover everyone (this is what a bank run is and is why central banks exist to provide a backstop in such an event).
> far cry from zero
Straw man. You said SBF "was technically not lying about FTX having the money." He was. If you ask me to hang on to your $12 and I spend half of it, I don't have the money.
> How many other exchanges have enough assets on hand to cover every depositor at once instantaneously?
All of them. Exchanges and clearinghouses in a proper financial system are fully collateralised.
> this is what a bank run is and is why central banks exist
Banks are leveraged. FTX was not supposed to be levered. It should have been able to survive a "run," because it wasn't supposed to have asset-liability mismatches.
All of them. Exchanges and clearinghouses in a proper financial system are fully collateralised.
According to coinmarketcap and coingecko, there are 200+ exchanges. you're saying all of them are fully collateralized? doubt it.
> there are 200+ exchanges. you're saying all of them are fully collateralized?
In crypto? No. Because it's a marketing term there for brokers. FTX was, at the end of the day, a broker. (As is Coinbase and the other "exchanges" for how most people use them.)
In finance? Yes. Most exchanges (all in the U.S.) don't handle settlement; that's done by a clearinghouse, where the counterparty risk lives. They're fully collateralised [1].
[1] https://dtcclearning.com/products-and-services/settlement/ri...
I am not sure. I don't think so but I haven't had time to read how the equities will get liquidated.
It literally says they made 900M off Anthropic in the article
Let me rephrase my answer:
FTX made a good number in the double digits of investments and acquisitions. (https://www.crunchbase.com/organization/ftx-exchange/recent_...)
I believe Anthropic was the most acclaimed/highest current value, and they still have about 1/3 of the original 8% investment.
a) I am curious at what discount they sell Anthropic shares right now;
b) I am not sure what is the prognosis for the other shares FTX owns;
[ c) which creditors have preference to which money pot; usually there is a pyramid. Here it talks about consumers. (Specifically those owed less than $50k.) And there is a separate matter for shareholders who are looking at getting some of the seized by DoJ proceeds. (https://www.reuters.com/legal/crypto-exchange-ftxs-liquidati....)
]
Best way in general is to read the actual pleadings: news is not the best at giving a good idea what the court is actually ordering.
What if Bitcoin had fallen to $4k or something. then converting to cash would in hindsight seemed brilliant and creditors would be happy.
In yet another “crypto is just speed-running regular finance” moment, they ran the same crock about _Nick Leeson_.
And that was a far from victimless crime as well.
I keep seeing this "headline" and it is the very definition of fake news. If you held SOL on FTX they will pay you at the Nov 2022 prices which was under 9 per SOL. It is trading at ~150 now.
Bitcoin was trading at 17k, it is now 62k.
FTX creditors didn't hold US dollars. They held crypto. A good chunk didn't even buy any of the crypto WITH US dollars. Many are in countries that US dollars is not legal tender.
Guess what they're getting back for their claims?
You guessed it. US Dollars.
That's putting it a little strong. FTX went bankrupt. You might normally expect to lose a substantial portion of your assets when that happens.
To instead get back everything in dollar terms with a gain is remarkable.
If you sent crypto to FTX legally you no longer owned them. You owned a claim to $X on FTX. It just wasn't analogous to a regulated broker where the client is the legal owner of a security. Iirc the contract with FTX is the creditors sold their stake to FTX.
It is valuable to explain that these creditors underperformed simply holding crypto but calling it "fake news" really misrepresents the situation.
Not really. You owned a claim to the very specific asset you deposited in an exchange, which is how segregated accounts work.
Why US Dollars? FTX.us was domiciled in the US but FTX.com was in Bahamas. Why not some other arbitrary currency? Why not Bahamian dollar? Why not in Bitcoin?
FTX has paid close to 1 billion dollars in fees to army of lawyers, consultants, bankers etc. in what was even at the time an 8 billion dollar bankruptcy. Even if FTX froze in time and did nothing at all, its assets would've recovered completely that 8 billion gap in its funding. It's been a boon to everyone involved and they're taking full advantage.
I have no sympathy for FTX. It was a clear case of theft. However the creditors are getting robbed twice. Once by FTX, once by the bankruptcy proceedings.
>You owned a claim to the very specific asset you deposited in an exchange, which is how segregated accounts work.
The company went bankrupt. Bankrupt. They did not have the assets they purported to have.
FTX owed money to a variety of creditors including to crypto traders who deposited. They gambled on handing over their assets to a largely unregulated entity and it went bust.
If a regulated securties broker goes bankrupt you still own the securities. Brokers need to follow very strict laws to be in that position.
FTX faced no such regulation and if you sent them crypto you no longer owned it. FTX did.
And they went bust. What you're saying makes sense if FTX were a US registered securities broker for listed securities on an exchange.
But that wasn't what it was. And they went bust.
I think you are not distinguishing between what a bankruptcy vs. theft means. I worked over a decade in investment banking including on large bankruptcy proceedings.
A bank can go bankrupt and your deposits might be in jeopardy, because there is fractional reserve banking and by law they are allowed to hold far less (in the US it would actually be 0%) of your deposits and can deny your request to redeem your assets in full in cash. That is to prevent bank runs.
FTX was an exchange, and while the holding company can go bankrupt the customer assets should be always fully funded in segregated accounts. FTX stole from customers and used the fund to front run their own customer via Alameda research.
Most of FTX customers were outside US and are not US residents. US Dollars in this context holds no significance.
For the record, FTX.us was a registered broker.
https://brokercheck.finra.org/firm/summary/158816
And with SEC as an exempt broker.
https://www.sec.gov/Archives/edgar/data/1876386/000187638621...
> FTX was an exchange, and while the holding company can go bankrupt the customer assets should be always fully funded in segregated accounts
FTX marketed itself as an exchange. That didn't make it one. Giving it money was legally akin to handing any small business in your town money.
> Most of FTX customers were outside US and are not US residents. US Dollars in this context holds no significance.
FTX was a U.S. company. Even the Bahamas outfit had U.S. dollar bank accounts. FTX's customers were obviously subject to U.S. jurisdiction.
> FTX.us was a registered broker
They owned a FINRA-member broker-dealer. Most FTX customers weren't doing business with its b-d.
> with SEC as an exempt broker
Not what Form D means. ("Exempt broker" isn't a thing under U.S. securities law.)
Also, side note, banks can refuse withdrawals but specifically not to prevent a bank run [1]. A bank restricting withdrawals due to illiquidity is going under FDIC conservatorship.
[1] https://activitycovered.com/can-a-bank-refuse-withdrawal/
> FTX faced no such regulation and if you sent them crypto you no longer owned it. FTX did.
This is at best only partially true, you own a claim on the underlying asset.
This is not a matter of regulation, it's a matter of your contractual agreement with FTX.
I don't know how more regulated brokers work, but I also doubt you own the asset outright, you also probably own a claim, which is why if the broker goes bankrupt because of fraud you might not recover it.
Regulation wouldn't have changed anything here: as FTX simply broke the law, which they could have done regardless of regulation & reporting requirements (e.g. WorldCom, Enron, ...).
What they did was not legal, even wrt to what regulation they were subjected to.
> you own a claim on the underlying asset
No, you're describing a secured claim. No crypto exchange I know of voluntarily gives customers a secured claim. At the moment of bankruptcy, unsecured claims are a claim on the company. Not on any asset.
> don't know how more regulated brokers work
The assets are segregated and customer claims prioritised and guaranteed by the SIPC.
> Regulation wouldn't have changed anything here: as FTX simply broke the law
None of what FTX did would have been remotely plausible if they'd been regulated as a broker-dealer. They'd have failed their FINRA audit on day one.
Not saying what they did is impossible at a regulated b-d. It would just take a lot more thought and work than the shitshow they were running [1].
[1]. https://www.bloomberg.com/opinion/articles/2022-11-14/ftx-s-...
> You owned a claim to the very specific asset you deposited in an exchange, which is how segregated accounts work
There weren't segregated. The segregation claim was made by an entity in bankruptcy. FTX's customers have unsecured claims.
> if FTX froze in time and did nothing at all, its assets would've recovered completely that 8 billion gap in its funding
The FTX estate barely held any crypto when it went under.
> You owned a claim to the very specific asset you deposited in an exchange, which is how segregated accounts work.
Maybe in a real bank you do. Not in cryptoland. "Not your keys, not your coins" as they are so fond of saying.
I held mainly dollars on the exchange at the time. I see your point regarding the crypto holders on the exchange though.
But what if bitcoin crashed even more. Then it would not seem like such a bad deal to get dollars.
I’ve been getting legal mails for the entire process since I had like 0.000000000003 cents in a wallet called blockfolio that was acquired by FTX which was pretty funny to follow
The people that sold their stakes to people like Scott Galloway must be kicking themselves. Great trade.
Galloway says he bought $1mn claim for $270k. That's a nice ~4.5x profit.
looking at individual investments is fallacious, need to look always at your entire portfolio (i.e. not just winning lottery tickets)
While that's true, if you have a good understanding of bankruptcy law, and a reasonable understanding of what assets FTX owned you could make a reasonable guess of how much money the eventual bankruptcy would pay out. Since the administrators publicly published what assets there were quite early on I think it's fair to say $270k always looked like a good deal.
Yeah, SBF was not lying about FTX having the money. It was not totally worthless as many had assumed. it shows how someone can be dishonest in some ways but honest in others. I too thought he was telling the truth. Had FTX not had money, he would have just shut up. I think such a long sentence may have been a miscarriage of justice in this regard.
> Yeah, SBF was not lying about FTX having the money.
Yes, he was.
The reason people are being made whole now is that a couple of years down the line, some of his investments and acquisitions are now worth considerably more than they were at the time of bankruptcy. But at that point t FTX was insolvent and SBF was telling lies all over the place.
as early as Jan 2023, before bitcoin had appreciated, $5 billion had already been recovered
https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-f...
Anthropic was another $1 billion
Even that article says the assets there are not enough to come close to liabilities.
FTX was insolvent at that time.
It did not help that CZ triggered a run on the assets at the worst time; otherwise it likely would have been fine. When FTX ran out of money, every depositor instantly became a creditor. I doubt this is unique to FTX. many exchanges may have some shortfall between deposits and credits.
That's not how actual regulated exchanges work. No crypto "exchange" is actually an exchange, no matter what their marketing materials tell you.
In the US, a regulated exchange is required to hold your securities in segregated accounts, and cannot play fun games with them. Crypto "exchanges" are a joke.
> It did not help that CZ triggered a run on the assets at the worst time; otherwise it likely would have been fine
I find that unlikely. SBF was doing a bunch of risky things with FTX's assets. If he hadn't been found out, he likely would have done more and more risky things, and as Bitcoin's price recovered, he would have used that higher price to justify doing even more risky things.
I doubt there would have been many (if any) times when FTX could have paid out all its depositor obligations.
I mean, they shouldn't, that means they're also running insolvent. Not only is that generally illegal, it's been the end of a long line of crypto exchange businesses like Quadriga, and possibly even going back to MtGox (though they were doing it as a cover for theft, rather than mismanagement, IIRC).
And the FTX token that had a run triggered was something like 90% held by FTX - the value they accounted for was based on a tiny circulating pool of them. It was almost the classic "If I print 10m of these, and sell you one for a dollar, I've got tokens worth $10m now, right?"
Miami-Dade County did that: sold their $17m claim (because they owned the stadium that they sold naming rights to FTX) for probably about a third:
> “I’ve never worked on a bankruptcy case that got better. It always gets worse,” said Commissioner Raquel Regalado, a lawyer who now works as a broadcaster. “The idea of just getting out as early as possible seems like a great idea to me. “
Those were some expensive words. And in general, always somewhat expensive words because the hedge fund buyers generally don't work "lose" into their models.
https://www.miamiherald.com/news/local/community/miami-dade/...
Selling your claim is only a good deal if the hedge funds are drunkenly stupid, you have no other assets/lending sources and are going to die soon or have debt at payday loan rates.
Selling your claim, or a portion of your claim, might also make sense from a risk tolerance / declining marginal utility of money point of view, if it represented a large enough portion of your net worth.
Or put another way - if there were an investment opportunity that that had an 80% chance of 3x-4x returns in the next 2-3 years, I might consider investing 25% or even 50% of my net worth in that opportunity. But I certainly wouldn't invest 95% of my net worth.
> Those were some expensive words.
I find it weird that you condemn that decision based on perfect hindsight.
> Selling your claim is only a good deal if the hedge funds are drunkenly stupid, you have no other assets/lending sources and are going to die soon or have debt at payday loan rates.
Selling your claim reduces your exposure and eliminates the risk that you'd get even less after the bankruptcy process concludes. It also lets you book the loss now and move on. That's valuable to some people. Consider that people have different motivations and needs than you do.
I fail to see how the decision was anything less than decisive prudence.
Your cited article makes it abundantly clear that the provenance of said $17 million claim was a default clause entitling Miami-Dade County to three years worth of naming-rights fees.
They sold that speculative claim for $5 million cash---effectively recovering that year's otherwise uncollectible receivables---then immediately turned around and locked in a 17-year, $117.4 million agreement with Kaseya[1]; back-of-the-envelope says that's an implied ~$5.4 million (2023 dollars) per year with 3% annual inflation adjustment baked in.
Call me naive, but I imagine that if you're in the business of running a multi-purpose arena with real opex, you've gotta be the dumbest risk manager in South Florida to allocate expensive legal resources in chase of speculative claims when a mutual opportunity to repair a gapping hole in your balance sheet presents itself and you have a willing long-term replacement suitor lined up.
[1] https://www.miamidade.gov/global/news-item.page?Mduid_news=n...
The overarching question is: why should the County have thought the hedge funds are overpaying for the claim and to take the money and run?
Usually when you have several suitors that purely have profit in mind, you're the mark. Doubly so when their cost of capital is higher than your own.
> to allocate expensive legal resources in chase of speculative claims
On a claim this big, the bankruptcy trustee takes care of that for you. They're literally a fiduciary. The cost would be reading whatever gets mailed to you, but at the end of the day, there isn't much control you have over the ultimate outcome.
And uhhh, in terms of credit worthiness, Kaseya has an interesting history: https://en.wikipedia.org/wiki/Kaseya_VSA_ransomware_attack .
Overpaying or underpaying was irrelevant: the dollar amount they got was what mattered, and they were satisfied with that amount.
They don't have to be overpaying. It was a win win. The way I read it the county got more money this way than if they held it.
They they sold the stake ultimately worth 17 million, but they got their rights back, which they resold for 16 million. As long as they sold their stake for 1 million or more, they are in the green.
Dumb question: why are creditors getting paid more than they are owed?
Interest. From the article:
> "We are poised to return 100% of bankruptcy claim amounts plus interest for non-governmental creditors."
For what it's worth, the article also points out that Bitcoin has gone up 260% since FTX's failure, so if FTX had not collapsed, somebody hodling their BTC there might have earned 260% instead of 19%.
Yeah, this is not creditors "making money". Anyone who had 1 bitcoin in FTX is not getting their 1 bitcoin back, which is massively more valuable.
Instead, they are getting 119% of the USD value of a bitcoin in late 2022. They are massively losing out. They are effectively getting back 33% of their assets.
aren't a lot of the FTX creditors cash creditors? they're definitely making money.
Dunno what the breakdown between bitcoin and cash creditors are, but the only way to make bitcoin creditors more whole would be to stiff the cash creditors.
And the FTX token creditors are making [DIVIDE BY ZERO]
One way to think about it, is that if FTX was whole, then it's 119% cash (since that's the where the 19% is coming from).
The creditors are only "earning" 19%. The first 100% is their own investment. The comparison you are trying to make is 260% vs 19%, not 119%.
Thank you, corrected!
FTX didn’t have their BTC though. That’s part of the problem.
But this assumes the person wouldn’t have withdrawn their funds, during that period of time.
They could also have withdrawn their funds and invested them in something else.
Thankfully for the investor, the non-cryptocurrency assets generated enough return to make them whole and even give them a profit.
If bitcoin is up 260%, the non-cryptocurrency assets must bringing the average return down, right?
From what I’ve read there wasn’t really that much bitcoin left by the time they were shuttered, and their own tokens were worthless.
That’s part of the whole issue - SBF was just doing whatever he felt like with customer assets and balances. Plus inventing assets out of thin air.
The profit that people will get has largely been driven by FTX’s investments in AI stuff, which turn out to have done great.
Think about it this way (exaggerated to make a point) - you give SBF $10k to buy Bitcoin on FTX. You expect him to have that amount of BTC locked away somewhere for you. Instead he blows your $10k on houses for himself, giving money to politicians, sponsoring sports grounds and buying stuff for his parents. He’s throws some of it into AI firms.
At the time of bankruptcy all he’s actually holding for you is $200 of BTC. That goes up in value to $460. W00t.
But wait, two years later those few million he threw at AI seemingly for shits and giggles are now worth a few billion, so you can be made whole and even get a little profit.
dunno why nobody has answered your real question, which I think is:
"Why aren't debt creditors getting made whole (as of date of bankruptcy) with the balance going to equity holders, like every other bankruptcy?"
If your ming vase is stolen should you get it back after it appreciated, or the thief gets the upside and you just get cash as if it were a forced sale at theft time?
Not an exact analogy but I think it at least shows there is a spectrum of situations to consider.
You’re asking why the creditors are getting their assets back
but they aren't
This was covered in some of the coverage much earlier about the bankruptcy proceedings. Essentially it's within the court's power to not only pay the creditors but to pay them interest on their losses if that's possible. That's obviously balanced against the rights of the equity holders to get back any value if there is any equity left. In this specific case the people with equity were: the fraudsters who ran the scam, venture capitalists. No one wants to pay off the fraudsters and the VCs would rather pretend this whole thing didn't happen (because it makes them look like drunken coked up degenerate gamblers on a weekend at Vegas) so everyone agreed the court should be generous with how they calculate the return to customers. Government entitires also have a claim for any fines or taxation or whatever, but they're relatively happy for the retail customers to be protected first too - but they care less about the equity getting wiped out.
My guess would be anything above what the customers get may well go out to government fines rather than returning to the equity holders.
I bought a Solana NFT that I never took off of FTX. Anyone know if I can do anything about that?
There was an NFT section in the claim form so certainly they are aware of but I'm not sure it's still open
What’s the current fair market value of a “solana NFT”?
Imagine spending 25 years in federal prison knowing you might have avoided it if only you had not filed for bankruptcy.
blame CZ. had he not triggered the run on FTX assets by making those tweets, likely FTX had enough assets to survive until Bitcoin began its rebound.
I see a disturbing trend in your posts: you seem to want to place the blame anywhere but on SBF's shoulders, where it rightfully belongs.
Exchanges shouldn't be like banks. FTX should have had customer assets on hand to return, no matter what. That's how regulated exchanges are supposed to work. But this is crypto-land, where nobody does the right thing.
This wouldn't help because it would still not have enough Bitcoins to pay its customers.
there are hundreds of exchanges. how many of them are fully collateralized? doubt all of them are.
Then they're not exchanges. They're just places to put assets while the people who run them do whatever they want with those assets.
Now imagine if we did not put sbf in jail and he kept leveraging. By now it would have been a quadrillion dollar company.
No, SBF would have continued to take ridiculous risks with customer assets, and eventually it all still would have collapsed.
Don't look at this as validation of SBF's methods. This was luck. And there still isn't enough to make customers whole. For customers who deposited Bitcoin, for example, they're now still a lot worse off than if they'd held onto the coins themselves. Sure, they're getting back the cash value of their Bitcoin from several years ago (plus interest), but if they got the Bitcoins back, they'd have significantly more.
That's not how any of this works. If you steal money from the cash register to bet it all on black in Vegas, you're still going to jail even if you happen to hit and be able to return what you took.
> That's not how any of this works. If you steal money from the cash register to bet it all on black in Vegas, you're still going to jail.
But, if the investments hadn't hadn't gone bad and FTX hadn't run out of money, it's probable that no one would have known that he had stolen/borrowed customer money. The same probably goes for Elizabeth Holmes/Theranos and Nick Leeson/Barings Bank - its only when things go wrong that misdeeds are found.
> its only when things go wrong that misdeeds are found
Counterpoint: Shkreli.
Well if you observe me just for the moment I have on hand 1B, my net worth is 1B and JP Morgan will be willing to lend me 10B.
Worst comes to worst tax payer bails again the banks out.
Why do you think the tax payer taking a gigantic loss is a good thing?
I'd prefer that the government fund food for children rather than confidence men/women
That is, coincidentally, how we still have FedEx.
Fred Smith taking the company's last $5K to Vegas and luckily winning $27,000.
Mind you at that point, pilots were putting fuel on their personal credit cards, payroll had been bouncing for weeks.
(Funnily, some people here think he did the right thing.)
That’s the story he likes to tell and it’s repeated uncritically often enough, but I find it stupendously unlikely to be reality that he converted 5k into 27k playing blackjack of all games. And that that one week was enough to see him through to close 11m at an unspecified future date after having burned 80m getting the company up and running.
I chalk it up more to myth building and would love to see a reporter that dug into that story to know what actually happened.
> That is, coincidentally, how we still have FedEx. Fred Smith taking the company's last $5K to Vegas and luckily winning $27,000.
The difference is it was the companies money - not FedEx customers.
Do you actually believe if paychecks were bouncing, pilots would be paying for fuel with their own money? Myths are kind of cool sometimes but let's stay within the boundaries of reality. I'm sure the blackjack story is highly exaggerated, probably also the story that his professor gave his business plan a failing grade.
Yeah but what if you return 119% of what you took?
> what if you return 119% of what you took?
You go to jail. It’s not a hypothetical.
You can go to jail for stealing "nothing." Two Illinois cases I'm thinking of:
https://casetext.com/case/people-v-kotlarz
https://case-law.vlex.com/vid/people-v-haissig-2110726-88540...