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Comment by 0xbadc0de5 | Hacker News Reader

"Every politician that got money from SBF or FTX ought to cut a check and give it all back to the penny. It wasn’t SBFs to give. He stole it from his customers."

This, right here. If someone sells you a stolen car, that car is not yours as it was not the thief's to sell. The police will eventually come take it away and they will be right in doing so.

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That's the lovely thing about the oh-so-fungible thing called "money", and white-collar crime. The stolen car is a recognizable and emotive thing, with an identity all its own.

Vs. the vague and amorphous "money", which so easily flows from being bits in a computer here, to marks on a sheet of paper there, to bits in some other computer... The emotions of the neutral human observer don't stick to it nearly so tightly. And a huge number of politicians, business exec's, lawyers, and other "friends" of white collar crime are naturally quite resistant to the "you should give it back" notions of the little people...

This isn’t always the case. People who took cash out of Madoff’s ponzi scheme had to return it & take their proportionatey share of the total returned to all investors in exchange.

Cash that’s been paid out from a bankrupt company can be clawed back by the bankrupty trustee. Usually this only applies to payments made shortly before the company goes under though.

> This isn’t always the case. People who took cash out of Madoff’s ponzi scheme had to return it & [...]

Quite true. And I've not followed the details about SBF's schemes...but it sounds like he's different from Madoff in three important respects, all of which seem likely to make claw-backs less viable:

- Diverting funds to cover trading losses at an allied & now-bankrupt firm. If Madoff had (say) directly lost $1B by buying some stock which then fell in value, would there have been any possible claw-back on that $1B? I'd bet "no".

- Lots of funds were "laundered" through various sorts of crypto transactions. Anything "crypto" is probably a far greasier pig, to try to wrestle the real money back.

- Layers of corporate structure, HQ'ed in an offshore tax haven. IANAL, and certainly not a lawyer qualified in tax haven corporate securities law, but this sounds more like a gold mine for the lawyers than good news for the victims.

SBF was the second largest individual donor to the Democrats in 2022, giving about $40M this election cycle. I presume that the vast majority of that money is gone, spent. I don't realistically know how people could give it back.

The same way money is often repaid: take it from future income.

The Democratic committees raised $853M in the 2022 election cycle, compared to $805M for the Republicans. If they had to deduct $50M next cycle to account for the illegitimate funds, it wouldn’t ruin them.

This sometimes does happen.

Elizabeth Warren gave back money she got from the Sackler family (owners of Purdue Pharma and primary operators of the opioid crisis).

The Sacklers donated mostly to Republicans, but AFAIK none of them returned the money.

Or who they'd give it back to (there's a long line of creditors owed way more than $40m, and quite a few of them had far more responsibility and ability to do due diligence than the politicians)

One thing to expect political parties and nonprofits to reject donations up front from unpalatable people, another for them to bail out ripped off speculators with long since spent donations.

It wasn't even directly given to Democrats. Most of it ($27m) was spent via the Protect Our Future PAC which he founded and controlled and was supposedly being used to fund politicians who would back his longtermism goals. https://www.opensecrets.org/political-action-committees-pacs...

Also a similar magnitude donor to the GOP by the way, though about 30MM rather than 40 IIRC.

It's interesting and encouraging if $40MM is a major donation. Billions were spent on the midterm; if $40MM is "major" than most of the money came from small donations, which is how it should be.

> Also a similar magnitude donor to the GOP by the way, though about 30MM rather than 40 IIRC.

Source? opensecrets lists SBF as having donated $36M to democrats and only $240k to republicans.

https://www.opensecrets.org/elections-overview/biggest-donor...

I don't recall hearing that SBF donated large amounts to the Republicans, but I do recall that someone else at FTX did, and indeed there's ~$20m in the list if you search for FTX - as well as a third exec donating a further $8m to the democrats: https://www.opensecrets.org/elections-overview/biggest-donor...

Sorry, I meant $26MM from another FTX exec. I was thinking of FTX rather than SBF specifically and should not have written it that way.

Because of the comments I won't edit my post (still have time) but issue this correction instead.

Exactly, precisely, it's theft not fraud. You can't accuse any of the cockamamie nonsense this inflated and instrumental child concocted of being as sophisticated as fraud. For that you have to look at his sponsors and their patronage.

Fraud is theft by deception.

Even so, don’t cut a check to SBF now. Cut a check to the customers who lost their money once the bankruptcy court sets up a mechanism to do so.

Some of that has been happening -- a couple of people in congress at least.

Makes the others look worse.

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