Anthropic raises $13B Series F

Every round Anthropic raises twists the knife deeper in SBF. If only he could have survived the downturn his Antropic investment alone probably could have papered over the other loses.

yeah, had CZ not made those tweets... He only had to weather another 2 months of the BTC bear market. BTC began to rebound in Jan 2023. Of course hindsight is 20-202

>"Every round Anthropic raises twists the knife deeper in SBF. If only he could have survived the downturn his Antropic investment alone probably could have papered over the other loses."

Things working out in the end doesn't make what he did not a crime at the time. He was a common paper hanger, albeit with billions instead.

Always makes you wonder how many companies that are successes today could’ve had their SBF moment, but market conditions kept them afloat

Probably would have made his crimes less visible, but not less criminal.

> In the early days of FedEx, Smith had to go to great lengths to keep the company afloat. In one instance, after a crucial business loan was denied, he took the company's last $5,000 to Las Vegas and won $27,000 gambling on blackjack to cover the company's $24,000 fuel bill.

Some who take on unreasonable risk will be among the most successful people alive. Most will lose eventually, long before you hear about them if they keep too many taking crazy risks.

Who is a great genius, and is who is just winning at "The Martingale entrepreneurial strategy"?

That assumes he would have stopped with the shenanigans, which is a pretty big if.

Like Martin Shkreli, who made his investors whole with his gambling, but still went to jail.

Let's not pretend there aren't multitudes out there doing similar things who never get caught. SBF was just more egregious and untimely w/ his actions.

So the difference between criminal fraud, and precient genius investor is a difference of a year or so.

We should all try to remember this the next time we vote to cut taxes on billionaires.

What if we put criminals into prison because they committed crimes, regardless of them making their victims "whole" (it would not happen anyway).

I think it's really objectionable to refer to this as an "SBF moment".

It's not just about surviving a downtown and unforseen circumstances with some luck (like the sibling talking about FedEx barely making it). Tesla, for example, was famously extremely close to bankruptcy.

But SBF got into the situation he was in due to his egregious fraud. The accounting at FTX was a criminal joke, with multiple sets of books, bypassable controls, outright fake numbers. My guess is that if SBF had survived that particular BTC downturn that his extreme hubris and willingness to commit fraud would have eventually done him in - downturns always happen at some point, and his brazenness in his criminal enterprise showed no signs of learning from mistakes.

Sure, all hugely successful companies have a ton of luck involved. But I think it's a mistake to pretend that SBF was just done in by bad timing, or that all companies do what he did. His empire collapse was pretty inevitable IMO if you look at what a clown show FTX was under the covers.

Proudly proclaiming on the Conversations With Tyler podcast that given a double or nothing bet with a 51% chance of success he'd keep playing forever.

There are not.

You know, it only just now occurs to me to wonder if the blackjack story is the public sanitized version of "how I got $24k because I'm not allowed to tell you the real version"

He went to jail because his autism wouldn't allow him to be duplicitous like a CEO doing evil things has to be and he attracted too much negative attention.

Not forever. He'd have nothing soon enough.

Great thought, that seems very likely since so many "founder stories" are heavily spun tales.

Does someone care about this alternative speculative history? Why? If there was something called the sunk death fallacy, I would invoke it.

> Things working out in the end doesn't make what he did not a crime at the time

Morally speaking, no. Practically speaking, it does. He would not have seen jail time.

Las Vegas still had deep mafia ties in the 1970s so that’s very possible.

CZ was a minor factor. Someone internal leaked the balance sheet.

Hindsight says, don't do fraud.

Correct. Companies go bust all the time, for market timing reasons that are mostly out of their control. But going bust is different from going bust and stealing billions.

Whether by negligence or intent, FTX was arranged so that they couldn't go bust without stealing.

It is probably just a coincidence, but it's darkly funny how well this lines up with the strategy described in a rather infamous LessWrong post. The title is "Solutions to the Altruist's burden: the Quantum Billionaire Trick", but you probably know it by a different name. The author is one Roko Mijic.

If you know of other SBFs, please name them so that we can call for their investigation and prosecution.

That's a pretty distorted view, and it's probably what people tell themselves right when they're about to do fraud.

What this version of the FedEx story doesn't mention is that Fred was already stiffing his pilots on their salaries. Taking the last money in the company and deciding that the best use for it was the blackjack table in Vegas and not paying his employees ... worked well, but it was a gamble, let's be clear, not a calculated decision - like you say, not the decision of a "great genius". It goes a different way, and you have "FedEx founder decides to go gambling, leaving his employees without paychecks".

He'll get a pardon next election cycle.

I'm pretty sure giving yourself a 1 billion dollar loan had something to do with his downfall. Not a failure to 'survive the downturn'.

Yes but investors being whole and profitable would almost certainly have not resulted in jail time. He probably would have even had enough unquestionably personal returns to pay back any misappropriated funds in a negotiated settlement, if they even come to light at all.

Also true.

Or hide it better?

>Morally speaking, no. Practically speaking, it does. He would not have seen jail time.

It's literally exactly what Shkreli got 7 years for, even after repaying investors. If you defraud money from someone and put it back before they find out, it's still a crime. Fraud is about intent more than anything else, and they proved it for SBF.

But that’s precisely what I mean. How many companies had similarly sketchy situations, cleaned up their act and nobody ever noticed?

That number isn’t 0

Right, but that’s because Shkreli openly admitted to it on the internet

One doesn't need to go more than 2 feet into the mire of meme coins before finding the detritus of 6000000 rug pulls. Just that these guys never get prosecuted.

Lol, tether, bitfinex are examples that came to mind. A lot of the OG crypto instutions got to where they are by "faking it till they made it" long enough to actually make it.

Does no one still remember that tether continually stalled audits FOR YEARS in the face of increasing scrutiny?

A joke for finance types I was told a while back:

"what do you call a rouge trader that makes money?"

"Managing director"

If someone makes money on time, everything is forgiven. Money blinds us.

Isn't that just the right thing to do, statistically? Vegas has been operating profitably this way for decades.

Yeah, but they're not playing with institutional money. They're not messing with people that have world-leaders on speed dial. Crypto gets away with what it does because when you enter an explicitly laissez-faire side of life, expect people to act laissez-faire. The rest is fraud/laundering/illicit activity tracking, which is why KYC requirements were passed right on schedule.

Practically speaking I think everyone involved would've had a good incentive to brush it off behind closed doors and not rock the boat. Crypto is entirely based on vibes (there are very few - if any - legitimate applications) and rocking the boat would cause losses across the entire industry.

Fraud is only called fraud if you get caught and defraud the wrong people. Corporation-on-consumer fraud is generally OK and a lot of businesses we consider "legitimate" do it as standard practice. Fraud against investors and "the rich" can still be papered over and forgotten if everyone ends up richer in the end. SBF just got unlucky.

The context was double or nothing the entire human population of the universe.

It's not the same due to the Law of Large Numbers. The risk involved in many small 51% bets is very different from the risk in a single all-or-nothing 51% bet.

If your marginal utility of money increases with more, it's a rational decision to go to a casino and gamble.

It's a slightly different context, but Apple probably would have gone out of business if Microsoft hadn't needed them so badly to exist due to antitrust. Hard to imagine how different the world would have been now if that had happened.

Rogue

The casino is an extremely rational savings model if you expected to constantly be robbed and want to convert small (and thus not worth robbing) income streams into occasionally large sums of money to be spent rapidly. I.e. say you are a north korean worker in China/Russia and you occasionally get small change to spend on cigarettes, you could gamble it every 'paycheck' and eventually buy a phone to escape with the winnings.

Filipinos have a more predictable low-loss version of this call Paluwagan.

It can also be a way to evade capital controls. You know you'll lose, but otoh you also know you'll probably not lose _everything_ and you buy in with RMB and cash out in HKD.

> The risk involved in many small 51% bets is very different from the risk in a single all-or-nothing 51% bet.

Right, but parent didn't say anything about an all-in bet, just double-or-nothing on a positive EV bet.

Frankly, I'd repeatedly bet on a positive EV bet too; it's a guaranteed win if you're allowed to go on for as long as you want to.

Probably not a total confidence; it’s EA/rationalist theory taken to ludicrous extremes in both cases.

*coincidence

Yeah, not a total coincidence of thinking style. I just don't think it's likely that SBF was literally thinking about Roko's post as he did the crimes.