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Comment by rippercushions | Hacker News Reader

This testimony is truly remarkable in its level of petulant whinging. Perhaps the single most astonishing thing in it, though, are screenshots of what appears to be a private group chat with Binance CEO CZ, called "Exchange coordination":

https://imageio.forbes.com/specials-images/imageserve/63981b...

So not only is he admitting to conspiracy, he's just entered it in the Congressional record!

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Interesting. It's odd that b) and c) are the same screenshot. I wonder if he intended to post a different one.

It was extremely weird for CZ to accuse SBF of trying to depeg Tether with a $250k short. I don't know what to make of that.

Also strange is how CZ asked for group admin permission from another person at FTX and then went right away to asking if anyone objected to removing SBF from the group. I guess the group was managed by FTX and CZ was attempting to take control of it as FTX was collapsing.

Zane worked at Bitfinex and Okex prior to FTX so he could credibly have been admin of this group prior to FTX existing.

I think it's pretty obvious what's happening.

CZ, not yet fully aware that he is dealing with an unsophisticated bumbler (and thus the risk that this chat would someday be part of congressional testimony), is talking candidly but at cross purposes with Sammy.

CZ knows (and presumes SBF also knows) how incredibly thin this market's liquidity really is, and thus the potential destabilization that a mere 250k signal could ignite. while Sammy apparently believes something closer to version of the numbers meant for public FOMO consumption.

This little screenshot, (if not eventually proven fabricated, which is almost certainly going to be the counter signal message by CZ, parroted across the crypto community) likely is the biggest bombshell tell in this testimony so far.

There's zero chance $250k can affect Tether's liquidity. If you were talking $250 million, I'd still highly doubt it, but then you'd be reaching well past what I can dispute. The idea that $250k can budge this market is laughable.

The CEO of binance was upset about it enough to privately message his competitor. Who should we believe, his supposedly private actions, or you.

Just for clarification, from the messages:

SBF: "Are you claiming that 250k of USDT would depeg it?"

CZ: "no, I don't think 100x that size will succeed. It just cause small issues here and there"

Not sure what small issues CZ is referring to, but he's the expert here

The point isn't the size of the trade; the point is that smart money might follow Alameda, and so news that Alameda is "shorting" Tether might, on its own, be enough for CZ to ask that Sam stop.

What's not being pointed out here is that to CZ, and actually even to Sam, there really is no distinction here between Alameda and FTX. CZ is calling him on a position taken by Alameda, via their "Exchange chat," to coordinate between FTX and Binance.

Tether daily trading volume is ~$30 billion. Good luck depegging it with your $0.25 million short.

Two things - not only do we have centralized exchanges, but they're also coordinating with each other... what was that about decentralization of power again?

Oh, and using seven of your 18 page testimony to basically distract from the issue at hand - seems more like a petulant child throwing a tantrum than a serious person running a multi-billion dollar business. Good lord.

> Two things - not only do we have centralized exchanges, but they're also coordinating with each other... what was that about decentralization of power again?

That's the beauty of merkle trees-- you just go into your own local copy (or merely paste one from a friend's copy), check your hashes are correct, then upload it to whatever other centralized discovery service of your choice and keep doing business. Even if colluding centralized bad actors tried to append some junk, it only takes one honest friend (or honest you) to get you back to the correct level of nesting dolls. And as long as you can find one honest centralized discovery service to wrap it in, you're back to your original level of convenience.

Oh wait, that's git I'm thinking of. Yeah, these customers are absolutely fucked.

I still can't reconcile how verbose he is about pretty much anything that goes through his mind with the fact that both his parents are lawyers.

I've noticed this pattern with other high IQ, well-written people. It's almost a defense mechanism, retreating back to the medium through which they're usually most successful. "If I can put things eloquently enough, perhaps they'll understand why I did what I did."

It's not dissimilar to some of the ripped athletic types I'm friends with that try and use their size to an advantage even when the situation definitely doesn't call for it. If a tongue-lashing or an ass-kicking is the immediate gut response, it's probably not the most pragmatic, I've found.

It can also be a case of "If I can put things eloquently enough, perhaps they won't understand and give up.". Sometimes it's a defence mechanism to think "if I can't explain myself it's because I'm so much more clever than the others. "

The ol' if you can't convince them then confuse them lol

And if you can’t blind them with your brilliance, baffle them with your bullshit

He's talking to politicians, and a golden rule is: never try to bullshit a bullshitter.

That didn’t happen.

And if it did, it wasn’t that bad.

And if it was, that’s not a big deal.

And if it is, that’s not my fault.

And if it was, I didn’t mean it.

And if I did, you deserved it.

I think even more so than “If I can put things eloquently enough, perhaps they'll understand why I did what I did.", it can be motivated as “I don’t think I’m a bad person and I didn’t intend to cause harm; if people are still mad at me, it must be because they don’t understand and I should explain harder.”

Probably Adderall.

> not only is he admitting to conspiracy

This might nail Binance on antitrust charges [1]. If we lack jurisdiction, then on market manipulation of a U.S.-dollar linked asset.

[1] https://en.m.wikipedia.org/wiki/Sherman_Antitrust_Act

Interesting how the chat is put to delete replies older than 4 weeks.

They know it's not smart to leave a trace :)

Isn't there regulation that requires retention of data like this? That's why it's common to see messages along the lines of "we should meet in person to discuss this further".

In fact, how does data retention rules specifically apply to apps that don't have large data retention or specifically have no data retention. Besides just making it harder to operate, are there penalties for companies using things like free version of Slack with short windows, or Snapchat/Telegram/Signal with self destructing messages?

I can't speak for the others, but the free version of Slack keeps all of your chat data indefinitely. Paying customers can view it, free users can't.

Presumably the authorities would get the data from Slack directly.

that's a screenshot of signal, so the only way the any of the old stuff can be retrieved is if one of the participants saved it outside of signal.

Doesn't the fact that one of them has screen shots speak volumes in and of itself? Just not sure what it is saying.

In the bank I work in, we were fined $200M along with many competitors, because we didnt keep whatsapp records for 10 years, which impedes transparency during timeline reconstruction for investigations.

I think SBF is crucified on this alone.

Yes there is. Hence the attorney client privileged header for sensitive matters. and. General sense that sensitive topics should be discussed over a non recorded medium. Mostly because they could be taken out of context at a future date

That’s a recently introduced feature in Signal and 4 weeks is a proposed default option.

I find his constant reference to "putting things in the congressional record" quite interesting, as it's normally the congress members who say that, not the witnesses and even less those accused of fraud, who are here to answer questions, not commandeer the record keepers.

Has he? I know he was scheduled to testify but he didn’t get the chance since he was arrested. Was this written testimony still entered into the record?

Yes, I believe committee members referred to it yesterday during the hearing and asked for (and received) unanimous consent for SBF's statement to be put in the record.

They also commented at the utter disrespect for Congress by starting off written testimony with the phrase “I fucked up”. There’s no need for language like that and including it in written testimony is beyond stupid.

I wish more people would say "I fucked up" in Congressional testimony.

It's a lot better than 500 "I don't recall"s.

Depends on if it was genuine or not. "I fucked up" conveys something different to me than "I made a mistake". If it were written by a lawyer, "I knowingly committed a fraud for which I am deeply ashamed and accept full responsibility for my actions" just comes across as being insincere. Maybe it's the time we live in, and also knowing the individual's manners. The lawyerly phrasing always comes across to me as someone saying the things that they think people want to hear. Someone telling me they realized they fucked up comes across as much more sincere. It could just be me though?

Also, in today's world, I hold people in contempt that hold congress in respect. So what makes them feel disrespected isn't that high of an "ooooh, burn" kind of moment to see they felt slighted.

> in today's world, I hold people in contempt that hold congress in respect

Is that because you don't believe that most congressional representatives act according to the will of their constituents? Or because you don't believe that the will of most constituents is worthy of respect?

That's a decent question. Mainly, I feel like most congress critters should be required to wear patches of their corporate sponsors like NASCAR drivers. That's who I feel they represent much more than their constituents. In that sense, I feel they get no respect from me.

Don't get me started on the respect for the constituents themselves. That's such a non-HN friendly conversation.

Fair enough, thanks for responding. For the record, my belief is that you don't need to be so pessimistic - democracy is always messy, and I think the perception of corruption in the U.S. way exceeds the reality, and most reps are really trying to do what their constituents want... we just have constituencies that really want to bicker with each other. But, maybe that's just wishful thinking on my part. Good luck out there!

> I think the perception of corruption in the U.S. way exceeds the reality

So the stacked Supreme Court issuing absurd rulings is not actually corrupt, but just appears corrupt?

Citizens United and further erosions of campaign financing laws that give corporations direct access to politicians isn't actually corruption, just legal free speech?

My belief is that you have to be beyond naive to hand-wave away the current generation of bad-faith politic

>>So the stacked Supreme Court issuing absurd rulings is not actually corrupt, but just appears corrupt?

People ruling against what you want is not corruption.

You’re right, it’s not, so why are you bringing up?

Sure, did I say what I want anywhere?

Do you think that a ruling that went 7-2 and 8-1 in the past being reviewed for a third time for some reason that happens to go 6-3 along party lines makes sense in any light besides corruption and "legislating from the bench"? Please discuss.

I said the perceived corruption is bigger than the actual corruption. I didn't say "Citizens United is a good ruling." Not sure why you leaped to that.

But, since you brought it up, can you point out any laws passed since CU that were pushed by lobbyists, but were broadly unpopular with the general public? Or laws that failed to pass due to a lobbying effort, despite being broadly popular with the general public? Anything were we can trace this supposed corrupting effect of direct corporate influence and see a result that is actually contrary to what the electorate wants?

I agree it was a bad ruling and should be overturned, but I don't think the doomsday scenarios predicted after the ruling have actually happened. I'm open to being proven wrong though, show me what you got.

Supreme court doesn't pass laws, so we're crossing the streams of two subjects in the same comment thread.

The Supreme Court has decided that corporations are people and we're dealing with the aspects of that. The Supremes then decided that civil rights were okay to no longer have protections, so we're now dealing with that. The Supremes decided that men get to decide what health care women can have.

Why would Congress need to act when the Supremes are legislating from the bench on their behalf, only they don't take the hit because it was the Supremes that did it.

It is very obviously a manipulative tactic. It is almost at the top, which is the point in time everyone is listening to him.

He wants it to be crass because it is intended to be offensive, not very offensive, but just offensive enough that it sticks in peoples minds for a bit longer. He wants it to stick because it is his only defense and every second his audience are considering how disrespectful he is, they do not think about how he is lying.

The problem with "I fucked up" is not the language, it is the fact that it is false. And if congress is commenting on the former, but not the later, it had the intended effect.

"I screwed up" might have been better.

I do not think so. The point is to create a negative impression around the phrase, so that the focus is moved from the truth value of the statement to the totally irrelevant question of it being offensive or not.

It's interesting to me - pervasive expletives are so common now that you almost can't share otherwise inoffensive stuff with your grandmother half the time. I'm becoming a middle aged person who dislikes cursing... lol.

I don't think starting off with "I fucked up" shows contempt per se. It's the fact that he's at this hearing to basically explain how he fucked up, and his testimony explains this by... blaming everybody but himself, and pleading for the opportunity to fix stuff. In that context, he's trying to show sincerity and humility and honesty with a candid expression that it was his fault only to undercut by actively avoiding demonstrating any fault. The belief that anyone, much less Congress, is going to find that credible... that's contemptuous.

"I messed up" would be one example of a less distracting way to convey the same point. Persuasive writing, which SBF presumably desires to employ in this document, should never distract the reader from its thesis and ultimately its call to action.

SBF wants to persuade the reader of his thesis, which appears to be that he was acting in good faith and continues to advocate for his customers who are being materially harmed by the obstruction of the chapter 11 team. And his call to action is for his readers to help him resolve his disputes with the chapter 11 team.

Considering these goals, not only is opening with "I fucked up" a counterproductive phrase and a wasted opportunity for a more effective opening, but the rest of his testimony is even less persuasive on its merits alone. I'm not sure he advanced his progress toward either of those goals with his testimony.

But I do think he will find sympathy from some libertarian crypto advocates (at least those who can get past their suspicions that SBF is controlled opposition from a cabal of corrupt bureaucrats intent on regulating exchanges and introducing central bank digital currencies).

That's a pretty charitable reading. There's also an argument to be made for the intro intentionally distracting from the rest.

>>They also commented at the utter disrespect for Congress by starting off written testimony with the phrase “I fucked up”. There’s no need for language like that and including it in written testimony is beyond stupid.

While I agree that he shouldn't have used those words, I certainly wouldn't in any communications, I am not sure there is anyone in congress that is actually deserving of respect; morons everywhere you look.

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