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Everyone Got Duped By Sam Bankman-Fried’s Big Gamble

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Sam Bankman-Fried was found guilty of stealing billions of dollars from his Bitcoin exchange FTX customers. It’s a dramatic setback for Silicon Valley’s disheveled wunderkind, who has met celebs such as Gisele Bündchen and Tom Brady.

Bankman-Fried did what he always did on November 7, 2022, when his enterprise began its dizzying, irreversible collapse: he evaluated the odds.

Earlier that day, a rival executive had aired concerns about Bankman-Fried’s crypto exchange’s finances on social media, scaring clients into a multi-billion dollar bank run.

Bankman-Fried conferred with two of his top deputies via online chat. “To be clear, you think the tweet is net bad?” he inquired.

They deliberated about their alternatives. Was it feasible that his opponent would retract his criticism? Could this stop the bleeding? “Fairly unlikely,” wrote Bankman-Fried.

After a guilty verdict, Bankman-Fried risks decades in prison.

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It was the kind of calculation Bankman-Fried had been doing for years, the fast computations colleagues said he employed in almost every situation – weighing a break-up, evaluating a dangerous trade.

That strategy worked for a while. Bankman-Fried amassed an estimated $26 billion in personal wealth, multiple magazine covers, and broad political influence as the cryptocurrency’s boy wonder. The flameout was significantly more rapid.

As previously said, the tweet was a flop. In less than five days, billions of dollars poured out of the site. When it was all said and done, more than $8 billion in customer funds had gone missing, and the corporation had gone bankrupt. Five weeks later, prosecutors in Manhattan charged Bankman-Fried, who had already resigned, with wire fraud, securities fraud, commodities fraud, and money laundering.

Two contradicting stories emerged during the four weeks of trial. In one, the erstwhile mogul was a brilliant but clueless genius whose faults as CEO enabled tremendous fraud to take place right under his nose. On the other, with the help of former members of his inner circle, Bankman-Fried stole billions of dollars from customers, betting he’d never be found.

Both accounts show how closely FTX’s fortunes were related to the image of its creator, whose eccentric charisma pulled previous presidents, celebrities, and corporate giants into his sphere and his multibillion-dollar bet.

Bankman-Fried was open about his desire to get wealthy. According to him, he wanted to make all those billions solely to give them away.

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After a guilty verdict, Bankman-Fried risks decades in prison.

Bankman-Fried and his younger brother were taught at a young age about utilitarianism, which holds that the most ethical choice is the one that does the most good for the greatest Number of people.

Bankman-Fried attended a seminar by Will MacAskill, a 25-year-old doctorate student at Oxford and the originator of effective altruism, a utilitarian-tinged ideology that uses mathematics to determine how individuals might maximize their philanthropic influence.

Mr. MacAskill advised that to achieve the best, Bankman-Fried should take his enormous brain to profitable Wall Street and contribute most of his pay to worthy organizations.

Bankman-Fried was purchased. In 2014, he applied his degree to Jane Street, a high-frequency trading firm, and reportedly donated around half of his earnings to charitable organizations.

Three years later, Bankman-Fried discovered an industry that may make him wealthy than traditional trading: cryptocurrency.

He launched Alameda Research, a crypto investment firm, at 25 after finding that Bitcoin values fluctuated significantly across countries. Alameda reportedly gained $20 million from arbitrage trading in just three weeks.

In 2019, he established FTX, a Hong Kong-based cryptocurrency exchange for international investors. Like Elizabeth Holmes, another Silicon Valley entrepreneur whose star fell, he got big-name investors to contribute to the company not only money but also credibility.

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After a guilty verdict, Bankman-Fried risks decades in prison.

Within months, the daily trading volume on FTX had surpassed $300 million. With a fortune of $22.5 billion, he appeared on the Forbes 400, the magazine’s annual ranking of the wealthiest Americans, in 2021.

Some credit his extraordinary achievement to an exceptionally high-risk tolerance, a willingness to risk severe consequences for a large gain.

“He would be happy to flip a coin if it came up tails and the world was destroyed,” his ex-girlfriend and former CEO of Alameda Research, Caroline Ellison, testified at trial. “As long as if it came up heads the world would be more than twice as good.”

According to internal sources, life at FTX may be likened to a grown-up maths camp, populated by a diverse group of smart misfits and headed by the constantly rumpled Bankman-Fried.

“He was super disorganised, he was always in cargo shorts, he was always sloppy,” a former FTX employee told the BBC. “He would walk around the office in bare feet.”

According to the employee, those at the top were a close-knit group who sometimes unthinkingly listened to Sam. “It could be cult-like.”

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Natalie Tien, who oversaw public relations and Bankman-Fried’s schedule at FTX for almost two years, claimed he was charismatic to the point where the company seemed “toxic” at times.

“We just trusted him 100%,” she told the BBC. “To a degree that we kind of worried [about] speaking up for ourselves.”

The company’s employees were not the only ones who were captivated.

Appearing in shorts and ill-fitting T-shirts with Bill Clinton, Tony Blair, Gisele Bundchen, and Katy Perry, he became a type of spokesperson for the crypto business as a whole just as it began to reach new heights.

Part of the mystery stemmed from the fact that Bankman-Fried seemed to forego the amount of luxury that his money could have bought. During the trial, his defense attorneys said he did not own a yacht. He drove an old Toyota Corolla. Meanwhile, he spoke before Congress, calling for greater regulation of the cryptocurrency business, distinguishing himself from many of his contemporaries.

“In a weird way, he seemed kind of like the grown-up in the crypto world,” said Zeke Faux, an investigative journalist and the author of Number Go Up: Inside Crypto’s Wild Rise and Staggering Fall.

And then there was the proclaimed final goal: Bankman-Fried would give it all away.

“It was a great story, everybody loved it,” Mr Faux remarked. “People loved it in Congress, the VCs loved it, the bankers loved it.”

“The problem with his story is that it was not true,” he told me.

Sequoia Financing, a venture financing firm, published a breathless profile on Bankman-Fried in their magazine in September 2022. FTX was worth $32 billion at the time.

Author Adam Fisher detailed Bankman-Fried’s efforts to maximize his fortune in order to maximize his impact on the world in the now-deleted essay FTX’s SBF Has a Saviour Complex, and Maybe You Should Too. Fisher wrote that it was risky. “But the maths couldn’t be clearer.”

“To do the most good for the world,” he said, “SBF needed to find a path on which he’d be a coin toss away from going totally bust.”

A month and a half later, industry news site CoinDesk released a shocking story claiming that Alameda had invested more than half of its $15 billion portfolio in FTT, the crypto coin issued by FTX. The announcement sparked concerns about the true worth of Alameda’s interests, as well as the apparent conflict of interest between Alameda and FTX, who are separate entities.

Then, on November 6, industry rival Binance CEO Changpeng Zhao, CZ, said that he would liquidate his own substantial FTT holdings.

On November 11, FTX imploded, taking the story of cryptocurrency’s prodigy.

The fall was not unexpected for some watchers of the crypto boom and Bankman-Fried’s spectacular climb to prominence.

SOURCE – (BBC)

 

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics, Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

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Google Is Close To Making Its Biggest Acquisition Ever

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Google's Latest Spam Update Met with Widespread Criticism Amidst a Year of Turbulent Changes

Alphabet, Google’s parent company, is in advanced talks to buy fast-growing cybersecurity startup Wiz for around $23 billion, a person familiar with the situation confirmed to CNN.

A takeover of Wiz, which provides cybersecurity software for cloud computing, would be Google’s largest cybersecurity acquisition to date.

According to the source, the talks between Google and Wiz began after the business raised $1 billion from venture capital investors earlier this year.

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Google | CNN

Google Is Close To Making Its Biggest Acquisition Ever

According to the source, the terms of a potential deal have not been completed, and negotiations may fail.

The Wall Street Journal was the first to report on the Wiz talks.

Neither Google nor Wiz responded to CNN’s requests for comment.

The transaction would likely beat Google’s $12.5 billion acquisition of Motorola almost a decade ago, the company’s largest buyout in history. Only two years later, Google sold Motorola for a huge loss.

Wiz’s $23 billion price tag roughly quadruples the startup’s $12 billion valuation from its most recent fundraising round.

In March 2022, Alphabet paid $5.4 billion to acquire cybersecurity firm Mandiant as part of its attempts to help businesses better confront cyber risks and grow its cloud computing business.

Cloud is critical to the company’s efforts to diversify revenue streams beyond its main search advertising business. Despite increased cloud revenues, it has yet to compete with similar services like Microsoft and Amazon.

Buying Wiz would be a “shot across the bow” at Microsoft and Amazon, demonstrating Google’s “major bet on the cyber security space to complement its flagship offering in the cloud,” Dan Ives, managing director and senior equity research analyst at Wedbush, wrote in a note to clients on Monday.

Cloud security has grown increasingly critical recently as businesses have extensively moved data to cloud systems. Last week, AT&T disclosed that virtually all of its wireless customers’ call and text records were compromised in a huge breach caused by an “illegal download” on a third-party cloud platform.

The Wiz acquisition talks came despite intensified antitrust investigation of internet titans by the Biden administration.

However, if Trump retakes the White House, that antitrust vigilance might be turned back slightly, Ives said, making the Federal Trade Commission “much weaker” and sparking an “accelerated merger and acquisition environment to take place for Big Tech.”

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Google | Wiki Image

Google Is Close To Making Its Biggest Acquisition Ever

If the acquisition is confirmed and completed, it will be a big departure for Wiz and its founders, Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik. The four executives first met when enlisted into Unit 8200, the Israel Defense Forces’ cyber intelligence branch.

In New York City, Wiz has experienced rapid development since its inception in March 2020, during the Covid-19 pandemic. Today, the organization claims that 40% of Fortune 100 corporations are its clientele.

Notable customers include BMW, Slack, and Salesforce, and it collaborates with major cloud providers such as Amazon, Microsoft, and Google.

SOURCE | CNN

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2024 | Hacker Group Claims It Leaked Internal Disney Slack Messages Over AI Concerns

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An activist hacker group claimed to have exposed hundreds of Disney’s internal message channels, including details on unreleased projects, raw photos, computer codes, and even logins.

Nullbulge, a “hacktivist group,” claimed responsibility for the breach and stated they exposed approximately 1.2 gigabytes of data from Slack, a communications platform. In an email to CNN on Monday, the group said it got access from “a man with Slack access who had cookies.” The email further stated the group was based in Russia.

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Disney | CNN Image

Hacker Group Claims It Leaked Internal Disney Slack Messages Over AI Concerns

According to the mail, “The user was aware we had them. He tried to kick us out once but let us walk right back in before the second time.”

CNN could not independently verify the claims.

In a statement issued Monday, Disney stated it “is investigating this matter.” the entertainment empire encompasses various divisions and enterprises, from ESPN to Hulu, Disney+ to ABC News.

The group also declared that it wishes to defend artists’ rights and pay for their work, particularly in the age of artificial intelligence.

“Disney was our target due to how it handles artist contracts, its approach to AI, and its pretty blatant disregard for the consumer,” the hacking group stated via email.

Nullbulge had hinted at the massive release on social media for several weeks. For example, in June, the organization released visitation, booking, and income data from Disneyland Paris on X.

Artificial intelligence was a major stumbling block in negotiations during the Screen Actors Guild and Writers Guild of America strikes. Writers are anxious that ChatGPT can produce screenplays in their place, while performers are concerned that computer-generated imagery, or CGI, would completely replace them.

The hackers claimed they leaked the material because making demands on Disney would be pointless.

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Disney | Wired Image

Hacker Group Claims It Leaked Internal Slack Messages Over AI Concerns

“If we announced, ‘Hello, we have all your Slack data,’ they would immediately shut down and attempt to take us out. “In a duel, you better fire first,” the email read.

In 2014, a massive cyberattack at Sony Pictures attributed to North Korea sparked an international crisis by disclosing emails from corporate officials, celebrity aliases, social security information, and full movie scripts.

SOURCE | AP

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Amazon Prime Day Is A Big Event For Scammers, Experts Warn

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NEW YORK — Amazon Prime Day is approaching, and experts warn customers to be aware of scammers.

Deceptions like fraudulent emails from people mimicking internet shops like Amazon are not new. However, the Better Business Bureau reports that phishing attempts rise around major sales periods such as Black Friday and Prime Day.

“This is a huge moment on the retail calendar,” Josh Planos, vice president of communications and public relations for the Better Business Bureau, told The Associated Press. “And because of that, it represents an enormous opportunity for a scammer, con artist or even just an unethical business or organization to capitalize on the moment and separate folks from their hard-earned money.”

Prime Day, a two-day discount event for Amazon Prime subscribers, begins on Tuesday and continues through Wednesday. The Better Business Bureau issued a revised caution last week, reminding customers to be wary of lookalike websites, too-good-to-be-true social media ads, and unwanted emails or calls during this month’s sales events.

Amazon Prime Day Is A Big Event For Scammers, Experts Warn

Consumers may need to be more attentive this year than any before. In June, the Better Business Bureau released a study stating that it received a record amount of phishing reports in 2023. Reports have also been rising upward this year, according to the organization.

Meanwhile, Check Point Software Technologies, an Israeli cybersecurity company, said this month that more than 1,230 new Amazon-related websites appeared in June. Check Point reported that most of them were malicious or appeared suspicious.

Scott Knapp, Amazon’s director of worldwide buyer risk prevention, notes two areas where the company has witnessed hoaxes during Prime Day in recent years: Prime membership and order confirmations.

According to Knapp’s emailed statement, more than two-thirds of scams reported by Amazon customers last year claimed to be connected to purchase or account concerns. Knapp explained that people reported receiving unsolicited calls or emails claiming there was a problem with their Prime subscription and requesting bank account or other payment details to reinstate the accounts.

He said that urging customers to confirm an order they did not place is another prevalent approach at this time of year. Scammers may use a costly item, such as a smartphone, to attract attention and request payment details or send a harmful link. They may also attempt to entice customers with promises of a gift or by employing language that generates a false feeling of urgency.

Amazon is working “to ensure scammers are not using our brand to take advantage of people who trust us,” Knapp wrote. The company’s app or website allows customers to authenticate their purchases and verify messages.

Additional scams are out there, but predicting what form they’ll take before this year’s Prime Day is difficult. However, experts observe that the same shopping frauds reemerge year after year.

“Typically, the bones remain the same,” Planos added, citing fake delivery scams, email phishing, and other common approaches. “It’s always a ploy to separate consumers from (their) personal and payment information.”

However, Planos and others caution that online hoaxes are continually changing and becoming more sophisticated. This implies that photographs appear more authentic, text messages sound more convincing, and fraudulent websites resemble reputable shopping places.

According to Amazon’s Knapp, with artificial intelligence “starting to leak in,” frauds targeting e-commerce buyers take the same strategy, but with a machine populating an email or text rather than a person.

According to Federal Trade Commission data, consumers reported losing around $10 billion to fraud in 2023, representing a 14% increase over 2022. According to the FTC, online shopping scams were the second most commonly reported type of fraud, trailing only impostor scams.

Throughout the year, the FTC and the Better Business Bureau educate customers with recommendations on how to prevent scams. The guidance includes rejecting unwanted communications, not exposing financial information to unsolicited callers, and double-checking URLs before clicking – secure websites, for example, will have “HTTPS” in the URL, not “HTTP.”

Scammers frequently encourage you to respond quickly, according to experts. It’s critical to pause and trust your instincts. Experts also encourage customers to report scams to regulators.

Aside from frauds that imitate firms or stores, be wary of counterfeit products and phony reviews on the websites of reputable retailers. Just because you are shopping on Amazon, for example, does not imply that you are purchasing from Amazon. Online shopping giants like eBay, Walmart, and others have extensive third-party markets.

Amazon Prime Day Is A Big Event For Scammers, Experts Warn

According to Planos, the quality and appearance of counterfeit products have improved dramatically in recent years, making the practice harder to control. A decent rule of thumb is to look at the price tag; if the product is sold for less than 75% of its annual market rate, “that’s a pretty big red flag,” he says.

Sketchy merchants can appear on many platforms, including sites like Amazon, “all the time,” according to Planos, who advises consumers to check out organizations on the Better Business Bureau website. Counterfeit products, like other scams, may become more prevalent during peak shopping seasons.

In recent years, Amazon has acknowledged getting rid of millions of fake products in response to mounting demand to combat counterfeit goods. The corporation also claimed to have prevented billions of fraudulent listings from appearing on its website. In 2023, Amazon stated that more than 7 million counterfeit items were “identified, seized, and appropriately disposed of.” The online shop has also launched many cases against fraudulent review brokers.

Amazon emphasizes that users can use its website to report fraudulent reviews and other scams. If a buyer purchases a counterfeit item found by the corporation, Amazon has stated that it will “proactively contact” the client and issue a refund.

SOURCE | AP

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