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SBF had a weird double-or-nothing gambling philosophy vaguely informed by EA stuff, sure. The weird thing seems to be that he didn't think there would be another severe crypto crash when it had happened like 5 times before in the last 10 years before FTX collapsed.
As @Gillitrut suggests, the SEC (and US taxation regime under the IRS too, if you're talking about personal risk) is essentially the epitome of anarcho-tyranny in the modern age. It has unlimited global jurisdiction to ruin your life; anyone with any money or indeed any business can be fucked for something; the only "defense" is that you (a) help them enough to get other people (or in some other way) so that they let you off, (b) that they show mercy for some other reason (like political connections) or (c) that you have something that makes them look bad. I don't know that all quants operate in this area, the issue for them is that as the LME situation last year showed (where quants made hundreds of millions in losses after the LME reversed $7bn in trades to prevent the whole sector from imploding because pursuing the Chinese metals guy for his assets in China would have been legally impossible; JS etc are now suing), they're not the biggest fish and regulators and exchanges have very little sympathy for them.
Billionaires don't really have a lot of power in the West, or at least most of them don't. If you make it to billionaire status in any way that isn't the most boring, legitimate tech business where your sole pre-IPO investors are legitimate domestic VCs, diligently file everything, pay everything, and operate exclusively domestically in a way that satisfies everyone (and even then...), you can get got for something. The only reason Elon Musk is fine is because the government relies on him for the Ukraine War and for NASA, which means he has leverage. But that leverage isn't because he's 'rich', it's because he controls technology that the state has deemed useful.
That was the biggest BS ever. Trading strategies very rarely just buy and hold, they hedge their exposures. If your trades get cancelled you suddenly have exposure that you didn't account for, and it's likely going to be quite toxic too if everyone else has been handed exposure in the same direction and they all try to get rid of it at the same time.
I agree that it was toxic, but they didn’t really have a choice. Metals is a very small world and if he’d been called and the banks had to try to seize $10bn in Chinese assets (majority located in mainland China and Indonesia via networks of holding companies) they knew they’d be completely screwed. The Bloomberg article said the bankers knew everyone was losing their job and never working in the business again if they fucked it up. As it is there are likely obscure provisions in some ancient administrative bylaw of the LME that mean they can win the lawsuits against the angry traders, but we’ll see. I don’t envy them, but quants also need to know when they’re playing in markets that are a lot less fair than their historical favorites.
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