Creating out of thin air is step 1. Step 2 is for Alameda to deposit on FTX, and then withdraw 95% of its notional value in USD or say BTC/ETH. Then on FTX the

Creating out of thin air is step 1. Step 2 is for Alameda to deposit on FTX, and then withdraw 95% of its notional value in USD or say BTC/ETH. Then on FTX they have a negative balance on this matched by a positive balance in FTT or other Sam coins. The USD or BTC/ETH withdrawn comes from someone on platform who has clicked "lend" on their positive balance of same in exchange of some yield. To be fair, any user could do that, deposit shitcoin, withdraw non-shit, up to 100% of the funds where people had clicked "lend" and that without any fraud. If the value of the shitcoin collapsed their account just got zeroed and FTX took the corresponding loss on their books. The list of shitcoins allowed in this genius scheme is still up: https://help.ftx.com/hc/en-us/articles/360031149632-Non-USD-Collateral https://help.ftx.com/hc/en-us/articles/360031149632-Non-USD-...