I have never bought any crypto but admittedly I bought into a lot of the mythology. I had assumed he was making money by being a large exchange and front running trades.
> by being a large exchange and front running trades.
That's what many of madoff's victims believed about madoff!
One way that conmen pull off their stunts is by convincing the marks that they're doing something shady.
A con always has to answer the questions: Where is the windfall coming from? Why isn't someone else taking it first, and Why would the conman share it?
"The money really comes from front-running trades, other people can't take the windfall because I run the trade routing, to make the profit I need to have a huge fund to hide the activity in."
All the better if the explanation is spread among the marks via rumor-- then the con never has to answer an tough questions.
Similar patterns exist in other scams. E.g. early bitcoin ponzi operator pirate40 had some people thinking that he was laundering money for dark web drug markets.
I'd be interested in knowing if there were similar explanatory rumors about FTX/SBF.
Based on this https://youtu.be/C6nAxiym9oc it wasn't even anywhere near that well thought out with SBF. He behaves like a child when asked simple questions about crypto, trying to use double speak to weasel his way out but not even the way a typical CEO or politician might do it.
I think SBF's trick was to just demonize regular finance and to treat all criticism as simply FUD. IIRC they also paid influencers a pretty penny to promote them. It's an extremely common tactic in crypto, basically every crypto scam covered on that channel involves a similar cult of personality being setup as a cover for the scam.
> I have never bought any crypto but admittedly I bought into a lot of the mythology.
Why? As a person who is been this space for over a decade, I don't think you need to have bought any token in your Life to realize this guy was a nobody with media hype, money, and political connections and little else. His MIT degree and his career in finance aren't exactly exemplary or even unique in this space either.
> I had assumed he was making money by being a large exchange and front running trades.
They did, as in all of his business associates at FTX and Alameda had built the core business around that, but that is neither novel nor is it hype worthy, considering the myriad of amazing things that are happening in this ecosystem. His downfall was getting caught running a Ponzi scheme in an economic downmarket after having taken all of his customer's deposits. We've had countless exchanges exit scam over the years and some just fall due to blatant mediocrity and incompetence that this also nothing new.
Do you realize how absurd it is to sit hear and see countless SBF threads on a prominent tech based forum in the back drop of the all the calamity caused by fossil fuels, that spans from Russia's war on Ukraine funded by EU's dependence on it's energy, to all the refugees flooding into the UK and treaty (with tons of money behind it) signed by France and the UK to help with this, and with much Europe being on fire and seeing record temp this summer and ultimately with COP27 ending with everyone feeling left defeated as little to nothing was actually achieved?
While at the same time not realizing that Bitcoin is mainly operating on renewable energy, and that a prototype mining farm to recapture the Methane (the most damaging of GHGs) is being built [0] and tested as we speak? If there was any real utility in people's attention you'd think it would be to focus on those aspects, not another useless click-bait headline about SBF's absurd lifestyle and love life with all of his co-workers or what ever.
Moreover, it should be noted that when this raised funds for it's prototype in a frothy bull market that is to be built in CA (that is constantly on fire due to climate change) it only got $4 million as opposed to the $200+ million SBF got from Sequoia alone, and people still think this crook is worth tanking the entire ecosystem due to bad press.
I'm taking a previous commenters suggestion and reading 'Trust me I'm lying' after having read Hate Inc twice last year and the Rupert Murdoch documentary series as it underscores the mechanics of what it was back then to how it is still used now.
You should too, because gullibility is at the core of all of this just as much as greed is; no one promising something for nothing should be taken serious, and yet we see it item and again ending with an ultimate rug-pull.
