I have no respect for Duffy’s story. He criticizes VCs for being naive, cheerleading SBF and staying silent. Now what does it mean that the CME CEO was not naive, (purportedly) roasted SBF in private, and then stayed silent?
This is not bravery. Its cowardice in the form of ex-post bluster.
He also says it is important for marketstakeholders and the CFTC to investigate the clear conflict of interest (between FTX and Alameda).
And he ends saying that even though he is for innovation, he says that innovation which is found to increase risk unacceptably or fails to protect consumer is against the law.
Many of the TradFi HFT firms were in support of FTX's proposal. The people that ran FTX were generally reasonably competent at finance (ex Jane Street), but extremely cavalier about risk with other people's money, and extremely poor at operational management.
This is not a defense of them in any sense, other than to say that they were perfectly capable of being scumbags while also producing a good alternative to CME's futures products.
You can read about all of the people that thought FTX's proposal was good here:
> Many of the TradFi HFT firms were in support of FTX's proposal.
I read all the quotes. None appear to be Tradfi HFT firms. They instead appear to be a variety of VCs and individuals FTX paid money to or who had a crypto interest.
For example the Fidelity quote is not “Fidelity, the firm”. It is from “ Fidelity Digital Assets President Tom Jessop”
> Several letters noted the fact that the derivatives market had become concentrated in a dwindling number of players, and argued that it would be safer to trust middleman-free operations such as Bankman-Fried’s. “In the traditional intermediated model, a dependence on a limited number of clearing organizations creates a systematic concentration of risk,” Richard J. McDonald, chief regulatory counsel for Susquehanna International Group, wrote “The CFTC has an opportunity to minimize market risk by enabling platforms, such as FTX, to provide direct access to trading on margin without required intermediation.”
Susquehana is a very well respected tradfi quant firm: https://sig.com/
> FTX’s plan would “protect and empower” US investors, permitting retail investors access to products “previously available only to the small subset of well-resourced and powerful investors able to connect to the complex, traditional market infrastructure,” Peter L. Briger, CEO of investment manager Fortress Investment Group, wrote to the CFTC
Fortress Investment Group is a very well respected tradfi firm.
They're all right there. And this isn't even a complete list. If you search around, plenty of other traditional quant/HFT firms strongly supported the move. Basically the only two entities that opposed it were CME and Binance.
Was it? The author claims that it had previously been explored and found not to be worth it.
That could be puffery of course. But I have worked in several fields. A big advantage I bring is that I have an outsider's perspective and experience from a different domain ("Hey, why don't we try it this way?"). But a very big disadvantage is that when exploring something I find out that people often have thought of it and don't do things that way for good reason. For me that means I look before I speak.
A lot of the bomb-throwing suggestions of crypto revolutionaries is similar, and I have no reason to believe SBF was any different. In fact there's good reason to believe that SBF and his colleagues lacked adequate perspective, from their statements, their actions in retrospect, and frankly because of his MIT background. I'm also an MIT grad and was also an arrogant know-it-all into my late 20s (at least!) and am simply lucky that I got a few things right along the way so people were still talking to me by the time I grew up.
> The author claims that it had previously been explored and found not to be worth it.
The author isn't an unbiased observer here.
> That could be puffery of course. But I have worked in several fields. A big advantage I bring is that I have an outsider's perspective and experience from a different domain ("Hey, why don't we try it this way?"). But a very big disadvantage is that when exploring something I find out that people often have thought of it and don't do things that way for good reason. For me that means I look before I speak.
For all their fault's the principals at FTX were not pure outsiders here. They were all ex Jane Street employees (traditional finance HFT firm) who ran a futures exchange in crypto. And if you don't accept those credentials, have a look at who else signed off on their proposal in the above article.
The reason CME didn't like their proposal is that it would have forced them to innovate and stop lazily rent seeking off their past efforts.
> A lot of the bomb-throwing suggestions of crypto revolutionaries is similar, and I have no reason to believe SBF was any different. In fact there's good reason to believe that SBF and his colleagues lacked adequate perspective, from their statements, their actions in retrospect, and frankly because of his MIT background. I'm also an MIT grad and was also an arrogant know-it-all into my late 20s (at least!) and am simply lucky that I got a few things right along the way so people were still talking to me by the time I grew up.
Somewhat ironically given your argument, everything you've said here is an "outside view" perspective on why they might be wrong. Look at the content of their proposal, and I think you'll change your mind pretty quick. Or just trust the dozens of traditional finance firms that supported them against CME.
If you want a similarly "outside view" argument in favor of their proposal, basically everyone in finance supported it except the incumbent commodity futures exchange, which should tell you everything you need to know.
It's not slander[1] if it's true. Moreover, calling someone a "fraud" is likely to be viewed by a court as a statement of opinion, not of fact, and so it's likely non-actionable under U.S. common law.
You're right that a court might find you to be expressing an opinion if you call someone a fraud, but you'll spend a lot of money on your legal defense to find this out. Calling a deep-pocketed person a fraud is buying an expensive lawsuit.
Also, the more memorable mnemonic (at least IMO) is "slander is spoken, libel is not".
You seem to be quoting Spider-Man (if my quick google search is on point); I was quoting my law school professor.
Is Spider-Man well-known as the source of this mnemonic? I’m pretty sure lawyers were saying it for decades before the books/movies came out, but I could be wrong.
Well, memes tend to plant in our collective heads, so I guess yes?
Chances are that more people have seen spider man than met your law professor, but yes I'm not arguing that your law professor is a more authoritative source of law related stuff, just saying that I did remember the quote I quoted, for what is worth.
Dude he meant that the net worth was all a mirage, and that anyone had more money in their pocket than SBF pretended he had in his entire net worth (because he stole it). He called him a fraud right there and all you can say is that he should have shown more respect to poor little guy SBF, him the meanie "tradfi"?
He criticized her too: look at the tweet embedded in his post of her with SBF and some other guy I don't know, garlanded with a bunch of crypto keyword hashtags.
This is not bravery. Its cowardice in the form of ex-post bluster.