Refreshing

John Ray, in charge of cleaning up Sammy’s bankrupt fraud, offers some welcome clarity. Most of the time we hear cautious lawyered-up buzzwords from people in Ray’s position.

= = = = = START RAY:

Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.

= = = = = END RAY.

He then goes into fine detail on all the shell corporations involved in Sammy’s intricate 5-dimensional shell game, showing how each shell moved the pea around without being seen by the suckers.

At the end of each description he writes the same paragraph:

Because these balance sheets were unaudited and produced while the Debtors were controlled by Mr. Bankman-Fried, I do not have confidence in them, and the information therein may not be correct as of the date stated.

Ray wins the Metrologist Of The Year award.

Here’s the shells:

Ray doesn’t say what purpose all of this nonsense served. The numbers lead to an obvious but unstated conclusion: The purpose was to make Sammy rich.

What purpose DIDN’T it serve? FTX didn’t make anything or sell anything or provide banking services. It only “created” a huge variety of abstract numbers that exist only as digital 1s and 0s in computers, and then moved the abstract numbers around to convince the suckers that they were going to get rich. Only one person got rich.

Older con games often involved piles of money sloshing around in confusing ways. The sucker thought he was making a guaranteed winning bet when he threw some of his own money into the cyclone, but at the end all the money got sucked into the cloud.

The new version is no different, except that people are now accustomed to seeing piles of money as 2d representations on screens, which are vastly easier to manipulate than physical stacks of greenbacks.