How $8 Billion fraud was hidden in the source code | FTX

You've heard about the collapse of FTX and its eccentric founder Sam Bankman-Fried. But did you know that the actual fraud was found hidden in FTX's source code....

Timestamps:
00:00 Introduction
00:39 How FTX came about
02:35 How they frauded customers
05:34 The fraud was in the code
06:35 Alameda had special treatment
14:11 Even the fund balance was a lie

Transcript:

A blog worth reading:

[codingwithdee]

Hi everyone. Apologies about the incorrect pronouncing of “Fried”. Hopefully SBF doesn’t mind. Thanks for watching!

[andersondamasceno]

"If you are commiting fraud, maybe don't name your variables based on the illegal acts you're doing"
We have to draw a line here. They may break the law, but break good code practices? That's too much, ma'am. 🤭

[smanqele]

On the other hand, the code is great example how to write good self-documenting code that even a politician can read and understand. As coders we all need to read it

[capnkirk]

I lost a job because the SVP asked me to make backend changes (direct edits) to a database and I refused. There was only one witness, and HE was the one who had the idea. There was also only one person internally with the knowledge, skill and privilege level to make the change (and only one or two people on the vendor's team, and the chances of anyone ever noticing were miniscule).
Best thing that ever happened to me though; my next job was a big career improvement.
If someone asks you to code something you KNOW is (or should be ) illegal, it's time to move on.

[januslast]

And don't forget, many people on Wall St thought SBF was a genius. They're still there, and making millions.

[asogundaniel]

This is the first time i am actually understanding the whole alameda, FTX and sam bank fried saga. To think i would finally understand by listening to an explanation about code😂😂😂... Thanks so much. This was a beautiful video...

[comatose]

The fact he himself couldn't code kind of blew my mind. The moment you said that I knew I was going to see the most pre-school approach to this.

[RydarkVoyager]

I once worked as a lead developer on a DoD ballistic missile defense program back in the late eighties. Much of the code used FORTRAN, with a sprinkling of a newly invented language called "C" that nobody heard of (and called it a fad). Despite "C" code already looking incomprehensible at that time, and FORTRAN being naturally ridiculous, the USAF Program Office wanted to obfuscate the code (different from encryption) because they were worried about security. We were working on rocket science level code, and trying to make it comprehensible was not on the priority list. The project was cancelled after the election.

[doobybrother]

He may be fried but I think it's pronounced freed.

[jieuryli]

This is why you need to write your fraud code in x86 assembly.

[kmac]

Seriously Great explanation, and next week Crowdstrike...😂😂😂

[ManuelBasiri]

Can I correct you on one point. It's not that FTT is a made up token and has no real value. EVERY cryptocurrency is basically a made up string of text that has no actual value.

[kurtarbuckle]

That was a great job. I am an old retired lawyer and I could not have explained better

[jbird]

So wait... not only did they blatantly hardcode the fraud, but they hosted that code on Github?

[AB-nuwe]

'If you want to commit fraud, don't use Python.' Assembly FTW!

[mcndr]

As a coder it's unnerving to see nested IF blocks instead of higher quality AND expressions. But low quality code is unfortunately par for the course at billion dollar companies.

[spikeydood]

Really great description and summary of what should have been a much more complex problem to solve, as you say obfuscation was not high on their agenda...almost unbelievable!

[theronwolf]

Thanks for this overview, this was a train wreck. Perversely entertaining for me ( I recently retired from decades of database coding and administration) but not for the people who lost so much money. Fortunately the company I worked for (30 years) was very strict about legal issues, we had regular mandatory training sessions on law and ethics, and were encouraged to submit an anonymous tip if we felt something was wrong.

[alexeystolpovskiy]

you are so awesome, Dee. Dunno, how exactly I found your channel, but the content and your narrative are really great.

[EyespenNoFear]

Thank you for adding subtitles!

YouTube's subtitles are just bad enough to cause confusion, so I have great respect for every content creator who takes the time to add them ❤