EDIT: Should preface all of this by being very, very, clear that we don’t know what the liabilities are so can’t judge too much. It’s fun to assume their liabi

EDIT: Should preface all of this by being very, very, clear that we don’t know what the liabilities are so can’t judge too much. It’s fun to assume their liabilities are cash, but if they’ve borrowed 2.5bn of “unspecified crypto” as in the report and still have the same “unspecified crypto” borrow is healthy whether or not the price changes. I this it’s extremely unlikely all their liabilities are cash. Surprise surprise, who would have guessed that the trading firm running an exchange might have some special relationship? It’s possible that the FTT is also a liability, loaned from FTX. The book still isn’t great but is much healthier in that case. It’s also possible that many of the unspecified crypto collateral is directly borrowed, instead of bought with borrowed cash. It still leaves a few questions: * Are they taking delta risks with borrowing funds or not? Borrowing to send into defi/basis has a very different risk profile than taking bets on price. * is tether cash, or “unspecified crypto held”? Is USDC/BUSD crypto held? Is DAI? * What lender would bother with the whole FTT song-and-dance instead of just admitting they’re giving out effectively uncollateralized loans * Are lenders in a situation where they know the collateral is no good, but they also know that calling the loans/selling will force the worst case, so they hold on hoping for a way out? * I doubt any lenders are taking significant maps/oxy/fida collateral. Mega shitcoins from day1 * Is this an arrangement that “made more sense” back in the bull market and now lenders want to call loans and avoid pissing off sbf? * is sbf so interested in rescuing underwater lenders since he doesn’t want them to potentially liquidate giant ftt holdings? It’s hard to come to any serious conclusions here without knowing the nature of their liabilities and the assets backing those (if any). But then again what’s the risk? If you made the coin and basically get to chose the price, why not transmute that into cash? Lending to someone is an implicit OTC bid, and alameda surely gets a better deal in the lending markets than they would selling on exchange. You don’t even get the price impact unless the lenders try to liquidate.