I think it's still an open question about how many customer deposits there were (obviously not zero). People keep thinking of FTX as though it were a classic B

I think it's still an open question about how many customer deposits there were (obviously not zero). People keep thinking of FTX as though it were a classic Bitcoin exchange. It wasn't. In a classic bitcoin exchange, Alice deposits Bitcoin, Bob deposits dollars. They trade on the market. The amount of assets (dollars+bitcoin) in customer balances stays constant, minus a small amount of each that go to the exchange as fees with each trade. So the only way that the exchange can fail to cover withdraws is if they lose them to embezzlement, gambling, data loss, or getting "hacked". FTX was primarily a shitcoin casino, a bucket shop, offering high leveraged 'futures' products. From what I've seen: On FTX Bob could deposit dollars, purchase "bitcoin" with 100x leverage, and end up with a positive bitcoin balance all without anyone ever having deposited bitcoin remotely similar in value to Bob's deposits, potentially without anyone ever having deposited any Bitcoin at all. These sorts of nutty results are all the more possible with crazy volatile and illiquid rando-tokens, especially when some traders weren't subject to automated risk management. So when its claimed that FTX has 8 billion in liabilities to customers this doesn't necessarily mean that a full 8 billion in dollars of actual assets were ever in their possession and had vanished. It could be that customers deposited a billion in assets made trades where they received paper assets, and eventually after embezzling only a modest billion dollars FTX is left insolvent and with records reflecting 8 billion in liabilities.