[HN Gopher] Caroline Ellison, CEO of Alameda Research, pleads gu...
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Caroline Ellison, CEO of Alameda Research, pleads guilty to seven
offences
Author : Animatronio
Score : 79 points
Date : 2022-12-23 21:45 UTC (1 hours ago)
(HTM) web link (www.theguardian.com)
(TXT) w3m dump (www.theguardian.com)
| jmyeet wrote:
| It's interesting to see this play out because much of it was
| predictable. Personally, I was amused at the people complaining
| that the SBF case was taking too long. If however you know
| something about how Federal prosecutions work, you'd know (and I
| made many comments about this) that the case was moving
| incredibly quickly.
|
| As soon as SBF was indicted, it confirmed that the Feds had 1 or
| more cooperating witnesses and many correctly theorized Caroline
| Ellison was one of them. The other is less well-known but this
| basically maps out the prosecution's case. Ellison will testify
| to SBF's knowledge of the scheme. The other will testify to SBF
| instructing him to build the backdoor. Case closed.
|
| This is an open and shut case. SBF getting out on bail was a
| surprise and it shows the double standard to how the US uses its
| civil asset forfeiture power. Specifically, that doesn't seem to
| be used against SBF, his parents and his associates in a way that
| it has with far less wealthy people. I want people to realize
| that. For the record, I consider civil asset forfeiture to be
| unconstitutional and a travesty of justice but it is the law of
| the land.
|
| I'm going to be really interested to see what kind of deal the
| Feds cut for two witnesses. Could it be as light as no jail time?
| I have doubts but it's not impossible. It'll probably be a much
| lighter sentence, probably less than 10 years, maybe less than 5.
| 1vuio0pswjnm7 wrote:
| Strange. By today's 24-hour news cycle standard, this is arguably
| "old news". These documents have been available for at least 24h.
| I know because I submitted them to HN yesterday.
|
| Ellison's Plea Agreement
|
| https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r478tCuj...
|
| CTFC v SBF, Ellison and Wang Amended Complaint
|
| https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rRCRC2hQ...
|
| Wang's Plea Agreement
|
| https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rWKaiz60...
| MarcelOlsz wrote:
| [flagged]
| ttoinou wrote:
| Why did you trust them in the first place ?
| MarcelOlsz wrote:
| I never trusted any of these cunts. I didn't give them my
| money because I'm not a fucking idiot. How dare you try to
| assume I wrote my post out of personal anger. How dare you
| victim blame me in the face of a robber barons. You are an
| awful person.
| Nicksil wrote:
| >I never trusted any of these cunts. I didn't give them my
| money because I'm not a fucking idiot. How dare you try to
| assume I wrote my post out of personal anger. How dare you
| victim blame me in the face of a robber barons. You are an
| awful person.
|
| You're trying way too hard.
| danrocks wrote:
| How could he _not_ trust them in the first place? C-level
| executives are on the record, before Congress, with the
| biggest and brightest politicians around, saying everything
| should be regulated, including themselves. They 're actively
| projecting that they acknowledge the general sleaze
| surrounding the crypto industry and they are not a part of
| it.
|
| Hindsight is 20/20, but can you look at Binance, crypto.com,
| and other 'trusted' crypto exchanges _now_ and say "how can
| you trust them"?
|
| SBF was hanging out with people who lent him their
| credibility and actively asking to be regulated - it doesn't
| get much better than that for the average person.
| serf wrote:
| >Hindsight is 20/20, but can you look at Binance,
| crypto.com, and other 'trusted' crypto exchanges now and
| say "how can you trust them"?
|
| after this history of crypto exchanges thus-far?
| absolutely.
| danrocks wrote:
| Well, when this particular exchange is operating legally
| in the US and its CEO is respected enough to have a sit
| at the table with Maxine Waters, the hardest-ass
| congressperson when it comes to the financial sector,
| it's much harder than some guy yelling about his exchange
| on TikTok or Instagram?
| MarcelOlsz wrote:
| She is the opposite of "hardest-ass" as she is sitting
| down with these robbers and they're all greasing each
| others palms. This shit doesn't magically happen.
| braingenious wrote:
| Considering the fact that we now know that Maxine Waters
| got bamboozled by a 20something crypto bro, has your
| opinion of her being a competent regulator of the finance
| industry changed at all?
|
| It's fascinating when people think of politicians like
| sports teams and not public employees with a mandate of
| competence.
| braingenious wrote:
| > How could he not trust them in the first place?
|
| Because they were running a crypto exchange, a sort of
| business that very frequently ends rapidly and in a way
| that is not good for regular users.
| [deleted]
| jazzyjackson wrote:
| I don't see an implication that this person is personally
| fucked by FTX/Alameda, just mad that fraudsters are rolling
| in dough (til they get caught anyway, as they say, high risk
| high reward)
| MarcelOlsz wrote:
| Yes. Exactly. Every day I wake up and I have to hear about
| some next cunt I've never heard of before. "Richest before
| 30!". Some other trillionaire. Some other little kid son of
| ivy's who ran away with another billion. It's always some
| fucking scam. Every fucking day. What is the point anymore?
| I'm a regular cunt who wants to do regular cunt things but
| I have to wake up to news that Google is planning a 30B
| "tech park" local to me.
|
| Just kill me please.
| neilv wrote:
| That one word doesn't translate well across countries.
| And in the US will come across as misogyny, which will
| affect how people interpret everything else you said.
| baeaz wrote:
| That's not a problem as long as people exist outside the
| US.
| neilv wrote:
| "Two peoples, divided by a common language."
| owlglass wrote:
| While watching these people use their privilege to steal
| so much money is frustrating, I don't see how some Ivey
| League twenty-something's wrongdoing prevents you from
| doing regular things.
| klipt wrote:
| I wonder if something similar will eventually happen to the
| Tether people? To my understanding they're printing money (USDT)
| which they claim is backed 1:1 by USD but really isn't. These
| USDTs can then be spent to pump up various other crypto assets.
| Seems a very shady business.
| ummonk wrote:
| My conspiracy theory is that USDT is actually well backed, but
| the Tether people intentionally make it look shady so they can
| buy the dip and arbitrage against panic selling. Some
| volatility would actually increase their ability to profit.
| roland35 wrote:
| That's crazy. I'm thinking Hanlon's razor applies here, there
| is absolutely no evidence that tether is legit.
| 323 wrote:
| Where are all the Tether holders complaining that they
| can't convert it into dollars?
| potatototoo99 wrote:
| They don't claim it's backed 1:1 by USD. They claim it's backed
| by more or less liquid alternatives:
| https://tether.to/en/transparency/#reports
| rcxdude wrote:
| Now they do (previously they claimed 1:1 with actual dollars
| in a bank account, but failed to demonstrate that). But that
| 80% "Commercial paper" is suspicious as hell, considering it
| would make up more than half the total market for said paper
| (so 'liquid' is already questionable), and no-one else in the
| market has heard of them.
| richbell wrote:
| > They don't claim it's backed 1:1 by USD. They claim it's
| backed by more or less liquid alternatives
|
| They used to, for several years, until they were pressured to
| prove it and could not (27:05).
|
| https://youtu.be/-whuXHSL1Pg
|
| They were also investigated and found guilty by the New York
| Attorney General, and were subsequently banned from activity
| in New York and fined 18.5M.
|
| > Bitfinex and Tether recklessly and unlawfully covered-up
| massive financial losses to keep their scheme going and
| protect their bottom lines," said Attorney General James.
| "Tether's claims that its virtual currency was fully backed
| by U.S. dollars at all times was a lie.
|
| https://ag.ny.gov/press-release/2021/attorney-general-
| james-...
| 323 wrote:
| > _These USDTs can then be spent to pump up various other
| crypto assets_
|
| So why don't they do that now? Why are the crypto prices at two
| years low?
|
| This is the age old ZeroHedge conspiracy recycled - if the
| stock market goes up, it's because of WOPRs (their name for HFT
| algos) and the Fed plunge-protection-team, but if it goes down
| it's because of healthy market forces which are calling the
| Feds bluff.
| pearjuice wrote:
| If anything, the pressure on Sam might result in him turning on
| Tether/Binance/other-frauds with key insider evidence for
| reduced sentencing. The guy's a pvp gamer at heart so probably
| min-maxing with his lawyers what he can do as a criminal
| informant.
| quanticle wrote:
| He's a PVP gamer who can't even get out of the bottom-most
| tier of League of Legends. [1] I very much doubt he's trying
| to game plan anything of this kind of sophistication.
|
| [1]: https://www.ft.com/content/23ab2258-ce03-4fbb-a9b2-7d9ec
| 6e3d...
| danrocks wrote:
| Didn't Tether get ordered the other day to disclaim all of its
| reserves? What happened to that? I find it incredible they keep
| surviving attempts to reveal exactly how the sausage is made in
| their reserves.
|
| https://www.yahoo.com/video/stablecoin-issuer-tether-ordered...
| maria2 wrote:
| It seems like they were ordered to give the plaintiffs the
| documents, but they weren't ordered to publicly release them.
| NYAG also looked into them last year. They were fined but it
| doesn't seem like anything else came of it.
|
| > The New York Attorney General's probe into Tether's
| reserves concluded in February 2021 with an $18.5 million
| settlement.
|
| I don't hold any tether, and I wouldn't recommend it to
| others. But the common opinion that Tether is insolvent might
| be wrong. Tether, as a stable business, is a money printing
| machine. I'm not sure it'd be worth risking the business and
| jail time to pump shitcoins.
| rcxdude wrote:
| If Tether is solvent and above board then it's being run
| utterly incompetently. absolutely everything they do
| regarding their reserves makes them look shady as hell (the
| most likely situation where they are solvent is that they
| are solvent with dirty money, which would explain why they
| are so unwilling to demonstrate exactly where the money is
| and where it came from).
| richbell wrote:
| > I don't hold any tether, and I wouldn't recommend it to
| others. But the common opinion that Tether is insolvent
| might be wrong. Tether, as a stable business, is a money
| printing machine. I'm not sure it'd be worth risking the
| business and jail time to pump shitcoins
|
| I encourage you to watch Coffeezilla's video about Tether.
| There's lots of shady stuff going on behind the scenes,
| like them borrowing $383M from Bitfinex and showing that to
| an auditor to prove they were solvent (~20:00).
|
| https://youtu.be/-whuXHSL1Pg
| PeterisP wrote:
| Well, FTX, as a stable business, should be a money printing
| machine - but that definitely wasn't an obstacle for its
| leaders to risk the business and jail time to speculate
| with customers' funds.
| maria2 wrote:
| FTX might have been a money-printing machine, but the
| situation with Alameda is a lot less clear. Being a
| market maker is hard. If you make a mistake, you can lose
| a lot of money. It's probably easier to be a crook.
| HWR_14 wrote:
| If Tether put all its money into low-yield short term US
| treasuries, the founders could pay every employee $10MM
| USD a year and still be paying themselves $1 billion USD
| a year.
|
| That is a phenomenal amount of risk free income. That's
| putting the founders somewhere high, probably first 50
| names high, on the Forbes 400 list.
|
| That seems foolish to risk to commit crimes.
| onlyrealcuzzo wrote:
| The founder posted publicly about printing tether to pump
| Bitcoin I'm the earlier days of Tether (after previously
| being convicted of fraud) - and then tried to delete the
| posts - but couldn't because of Internet Archive...
| andersonmvd wrote:
| The 7 offences are not detailed individually in the news, or I
| couldn't find it.
| danrocks wrote:
| They are here:
| https://www.documentcloud.org/documents/23495436-crypto-coop...
| mikeyouse wrote:
| https://www.documentcloud.org/documents/23495436-crypto-coop...
| berkle4455 wrote:
| Two counts of wire fraud, two counts of conspiracy to commit
| wire fraud, conspiracy to commit commodities fraud, conspiracy
| to commit securities fraud and conspiracy to commit money
| laundering.
|
| Maximum sentence of 110 years.
| cma wrote:
| Howey test classifying some tokens as securities others as
| commodities I guess?
| baeaz wrote:
| I have always wondered why "x" and "conspiracy to commit x"
| are different counts.
| throw_m239339 wrote:
| > I have always wondered why "x" and "conspiracy to commit
| x" are different counts.
|
| Conspiracy requires at least 2 people.
| TrackerFF wrote:
| Anyone here know what the (summed) minimum sentencing is for
| all those crimes?
| listenallyall wrote:
| This outcome came about so quickly because she turned state's
| evidence, in return for what is likely to be an extreme
| reduction from that maximum (not that it was really a
| possibility, as a first offender)
| jjtheblunt wrote:
| it's an enormous first offense, though does that matter?
| Hamuko wrote:
| Did Madoff have a criminal record before he got hit with
| 150 years?
| astrange wrote:
| Seems like it might be a bad move to enter a conspiracy
| with someone obsessed with game theory.
| dclusin wrote:
| She's still probably not getting out in less than 5 years
| berkle4455 wrote:
| I dunno she's comfortable with risk and doesn't bother with
| pesky things like stop losses.
| [deleted]
| Barrin92 wrote:
| >In the absence of a comprehensive regulatory framework over
| digital assets, the CFTC will use all of its existing power and
| authority to protect all market participants, while ensuring the
| integrity of commodity markets
|
| Honestly it's good to see that the responsible American
| institutions still seem to be reasonably quick and effective when
| it comes to prosecuting the relevant people here, but can we
| finally get that comprehensive regulatory framework in question?
|
| Legislators need to stop being asleep at the wheel. Be it the US
| or the EU or someone else finally needs to take the air out of
| this entire ecosystem that enables these fraudulent schemes in
| the first place.
| neonate wrote:
| https://www.documentcloud.org/documents/23495436-crypto-coop...
| nemo44x wrote:
| What a Queen. Massively connected and after destroying the life
| of thousands of working class chumps she gets to walk free after
| getting her wrist slap.
| samwillis wrote:
| Extensive previous discussion:
| https://news.ycombinator.com/item?id=34088840
| sillysaurusx wrote:
| She's the queen of wallstreetbets. I think she'll hold the yolo
| record for a long time.
|
| I wish we knew what the fateful market play was that sunk her
| ship. She mentioned she's not a fan of stop losses, so I wonder
| if she went to bed with an open market position and woke up to
| negative three billion. Also I wonder if the entity on the other
| side of that trade realized they were making someone insolvent.
|
| It'll be interesting to see how long she's sentenced for.
|
| EDIT: Actually, is it possible to see who profited from her
| trading activity? FTX is in the hands of authorities now, and all
| the trading took place on it. I wonder if they could claw back
| some of those lost billions.
| potatototoo99 wrote:
| There probably wasn't any single one trade.
| baobabKoodaa wrote:
| > She mentioned she's not a fan of stop losses
|
| At the volume they were trading, stop losses are no longer
| practical. The market is not infinitely deep.
| Lapsa wrote:
| I've never understood how stop losses are supposed to help.
| Traders read heaps of news, do God knows what technical
| analysis yet simple "moves bit too much in wrong direction"
| is supposed to be an acceptable exit strategy.
| jacquesm wrote:
| I think you are assuming way too much here. She's not the queen
| of anything, she's a fraudster that will spend a long time in
| jail and that has probably much less understanding of the
| mechanisms involved than you give her credit for. If she did
| she wouldn't be in the position she's in. The last thing we
| really need is for people to start lionizing her.
| ffssffss wrote:
| Queen of WSB and yolo record are not a good thing... that is
| a subreddit that mocks bad risk management by ironically
| celebrating it. They know exactly what she is over there.
| SpeedilyDamage wrote:
| Hah maybe at one point was that sub ironic, it's been
| unironic for years now.
| qbasic_forever wrote:
| That ship has long sailed. She's coming out of this with a
| slap on the wrist because she ratted on SBF. She's a hero of
| the alt right because her Tumblr is full of creepy eugenics
| shit. She has a pervo following for being a poly sex fiend
| (allegedly). She's going to write a book, sell her movie
| rights, etc. and live a life of luxury as the woman that took
| down SBF and FTX (who will be remembered as the real
| fraudster).
| dclusin wrote:
| Years in prison is not a slap on the wrist.
| qbasic_forever wrote:
| She hasn't been sentenced yet. We don't know what the
| terms of her deal are but they almost certainly involve
| leniency in the sentencing. Her lawyer likely tried to
| make a case that the big bad evil SBF sexually
| manipulated her into committing fraud and actually she's
| the real victim here.
| dclusin wrote:
| Leniency is a relative term. It's relative to the size of
| the harm, number of victims, her centrality to it, etc.
| If there's a for sure bet to be made here, it's that she
| will be spending many years in prison for this. Just not
| her whole life. That's what leniency here means.
| howinteresting wrote:
| I think she'll probably do 36 months or so. Not nothing
| but also not life-destroying.
| oldgradstudent wrote:
| She's not anyone's hero.
|
| She's a freak in a freak show. The praise is ironic.
| antonvs wrote:
| "Queen of wallstreetbets" is (presumably) not a compliment,
| it's a reference to the idiots on the subreddit of that name,
| notorious for their irrational support of companies like
| Gamestop, and completely disconnected from any actual
| understanding of market behavior.
| sillysaurusx wrote:
| But she's highly regarded!
|
| It's all just a little joke. Check out
| https://www.reddit.com/r/wallstreetbets. Also
| https://m.youtube.com/watch?v=jg85H26wyLk
|
| She certainly earned her sentence, and I have no sympathy for
| her. But isn't it hard not to be at least a little impressed
| with the sheer scale of her losses? Getting in the record
| books for "most money lost by a single individual" is a hard
| thing to do in general.
| jacquesm wrote:
| > It's all just a little joke.
|
| We don't share the same concept of humor then.
| santoshalper wrote:
| Don't let the killjoy bring you down. I got it and it was
| funny.
| jjulius wrote:
| >It's all just a little joke.
|
| Super funny to every single person who lost money to the
| person "getting in the record books for 'most money lost by
| a single individual'".
| pretendscholar wrote:
| Yes it is quite funny when people get surprised that a
| get rich scheme isn't real.
| Hamuko wrote:
| Well, if you're going to roll the dice with an
| unregulated securities market because you want massive
| profits, it helps to have a sense of humour about it.
| actionablefiber wrote:
| Bill Hwang has that number beat.
| lmohseni wrote:
| Masayoshi Son has entered the chat.
| pearjuice wrote:
| She's not going to get sentenced to any time whatsoever. She
| cut a deal (full co-operation, forfeiture of assets and some
| fines) and is voluntarily pleading guilty to honor the deal.
| fredgrott wrote:
| Gee I wonder if Arrow Capital thought it wise to stop hedging
| via shorting; did Alameda Research fall into the exact same
| trap?
|
| The only sure bet is yes they did!
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