99 Second Summary of FTX

Cryptocurrency exchange FTX may have misused customer funds in violation of its own terms of service. Although, there is legalize needed to use uncertainty in the statement that crimes might have been committed.

It is very apparent that financial crimes and theft and misuse of client funds did happen.

FTX placed billions of dollars worth of customer funds on risky bets, with some suspecting customer funds were used to help bolster Alameda. AKA they gambled with client money and took client money for use in their other company.

FTX was a digital boiler room scam that pumped a ponzi scheme. The ponzi scheme also went into straight up theft and fraud.

7 thoughts on “99 Second Summary of FTX”

  1. FTX operated as a fractional reserve bank. Fractional reserve banking began with gold and silver smiths hundreds of years ago. The track record shows that banks need 20% reserves or they go bankrupt in a bank run. FTX kept a 10% reserve. Most American banks keep a 5% reserve but they can rely on the Federal Reserve to bail them out. Why Bernanke did not bail out Lehman Brothers is a mystery.

  2. The five second summary is indeed that it was a Ponzi scam. It might be intellectually interesting to know if it started out that way, or whether he just realized the potential/got trapped part way through.

    The pressing question is where the part of the money that was real WENT. We know at least tens of millions were spent on buying elections in the US. I suspect that’s only the surface of it.

  3. I’m wondering if some Russian mafia types may have put their money into FTX and may, as consequence, prefer to take a more direct action with SBF and other FTX principles.

  4. If I was that kid I would avoid stairs, elevators, windows, rope, plane trips, etc. “Accidents” happen and it strikes me as even odds that he will live long enough to set foot on US soil.

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