[ExI] lotta splainin to do

[Gadersd]

Whether it be business or politics, people too often use charisma as the measure of competence and the results often prove disastrous. I wonder if this intrinsic human gullibility will ever diminish? Part of me wants this collective stupidity to remain as it makes for an easy payday for those with a head on their shoulders, even if only by shorting dumb business ventures/cons.

> On Nov 19, 2022, at 6:20 PM, Stuart LaForge via extropy-chat <extropy-chat at lists.extropy.org> wrote:
> 
> 
> Hi Spike for some reason the server keeps bouncing this back to me as spam. Please forward to the list. Thanks.
> 
> Quoting Spike:
> 
>> I keep hearing of this FTX digital money exchange, but I don't understand
>> it.  Some news agencies are reporting that it was looted by someone,
>> possibly an insider, but that makes no sense because the main selling point
>> of bitcoin was that ownership is maintained by blockchain, which is said to
>> be inherently secure.  So. this looter, what did she steal?  Digital
>> currency?  Or did FTX have a huge pile of paper currency, and if so, why did
>> FXT have a huge pile of cash when inflation is at 8%?
>> But if they did, was that cash in a safe, then some sneaky scoundrel with
>> the combination hauled away the loot in the back of a very sturdy
>> heavily-loaded delivery truck?  A USA bill has about 1g mass, so a million
>> bills is a ton, so even if all that moola was in the largest American bill,
>> the 100, we are still talking 4 tons of currency said to be missing and that
>> just doesn't sound like something that would be easily carted away.  It
>> would be a heeellll of a job just loading the truck.  But if it is digital
>> currency which was stolen, how can they suppose the looter somehow got away
>> with 400 megabucks?
>> This story makes no sense to me.  A puzzled rocket scientist I am.
>> Adrian or some of you other hep cats, do explain please.
> 
> 
> The reason the the FTX saga makes so little sense is that people are
> still trying to see it as some sort of failed business enterprise.
> 
> Near as I can tell based on the following bankruptcy filing by John J.
> Ray III (the guy who oversaw Enron's bankruptcy case) the company was
> never meant to be viable and was designed from the ground up to be an
> inscrutable scam meant to defraud investors, funnel money to Sam
> Bankman-Fried and his cronies, and avoid any accountability or
> transparency. It was all just an elaborate shell game using other
> people's money for personal gain.
> 
> https://s3.documentcloud.org/documents/23310507/ftx-bankruptcy-filing-john-j-ray-iii.pdf
> 
> Interesting excerpts include the following items:
> 
> 4. I have over 40 years of legal and restructuring experience. I have been the
> Chief Restructuring Officer or Chief Executive Officer in several of
> the largest corporate failures
> in history. I have supervised situations involving allegations of
> criminal activity and
> malfeasance (Enron). I have supervised situations involving novel
> financial structures (Enron
> and Residential Capital) and cross-border asset recovery and
> maximization (Nortel and Overseas
> Shipholding). Nearly every situation in which I have been involved has
> been characterized by
> defects of some sort in internal controls, regulatory compliance,
> human resources and systems
> integrity.
> 
> 5. Never in my career have I seen such a complete failure of corporate
> controls and such a complete absence of trustworthy financial
> information as occurred here.
>  From compromised systems integrity and faulty regulatory oversight
> abroad, to the concentration
> of control in the hands of a very small group of inexperienced,
> unsophisticated and potentially
> compromised individuals, this situation is unprecedented.
> 
> 46. Many of the companies in the FTX Group, especially those organized in
> Antigua and the Bahamas, did not have appropriate corporate
> governance. I understand that
> many entities, for example, never had board meetings
> 
> 50. The FTX Group did not maintain centralized control of its cash. Cash
> management procedural failures included the absence of an accurate
> list of bank accounts and
> account signatories, as well as insufficient attention to the
> creditworthiness of banking partners
> around the world. Under my direction, the Debtors are establishing a
> centralized cash
> management system with proper controls and reporting mechanisms.
> 
> 59. The FTX Group’s approach to human resources combined employees of
> various entities and outside contractors, with unclear records and
> lines of responsibility. At this time, the Debtors have been unable to
> prepare a complete list of who worked for the FTX Group as of the
> Petition Date, or the terms of their employment. Repeated attempts to
> locate certain presumed employees to confirm their status have been
> unsuccessful to date.
> 
> 62. The Debtors did not have the type of disbursement controls that I believe
> are appropriate for a business enterprise. For example, employees of
> the FTX Group submitted
> payment requests through an on-line ‘chat’ platform where a disparate
> group of supervisors
> approved disbursements by responding with personalized emojis.
> 
> 71. One of the most pervasive failures of the FTX.com business in particular
> is the absence of lasting records of decision-making. Mr.
> Bankman-Fried often communicated
> by using applications that were set to auto-delete after a short
> period of time, and encouraged
> employees to do the same.
> 
> Sam Bankman-Fried is like the Bernie Madhoff of cryptocurrency.
> 
> Stuart LaForge
> 
> 
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