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FTX collapsed due to accounting mistakes and using illiquid tokens as collateral. What sources show that SBF stole customer deposits?

deleted 4y ago
[deleted]
zeven7 4y ago
See my reply to the similar comment in this thread and https://www.vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy https://www.vox.com/future-perfect/23462333/sam-bankman-frie... Customers deposited funds for FTX to hold. FTX said "We're holding your funds; they're safe." FTX no longer has the customer funds. Why? They gave them to Alameda and Alameda traded with them and lost them (or maybe stashed some of it somewhere). That's theft, not accounting mistakes.
- tremarley 4y ago
  From the moment they launched, their terms claimed that FTT will be used as collateral to borrow money from their FTX platform. FTX wasn't and isn't the only protocol CEX that does this. When Facebook sells our data to advertisers, their not stealing it. It's in their terms. It doesn't make it a fair or great thing though.
  - votepaunchy 4y ago
    Would it be stealing if $1 of crypto was “borrowed” for $0.02 of FTT? Digital copying is not theft, but since crypto cannot be copied I am fine with calling FTX’s actions stealing.
  - zeven7 4y ago
    I would be very interested to see a citation and also to know what other large exchanges do this.
  - siftrics 4y ago
    Source? Why would SBF delete his tweet claiming funds are "never invested, not even in bonds"? Lending money and buying bonds are functionally the same thing, albeit there is legal nuance. What is a "protocol CEX"? I'm assuming that's a typo.
    - frupert52 4y ago
      I believe CEX is Centralised EXchange as opposed to DEX the Decentralised equivalent. This is just my best guess based on what I’ve learned from following this scandal so could be wrong. TLDR: FTX is not the only centralised exchange behaving in the manner being discussed (according to parent) Edited for clarity
      - siftrics 4y ago
        I know what a CEX is and what a DEX is. The phrase "protocol CEX" is an oxymoron. "protocol" implies a set smart contracts, i.e., some semblance of decentralization. A CEX could be fully off-chain.
BLKNSLVR 4y ago
All of them.
bmitc 4y ago
What source do you have that it was accounting mistakes? The only source that says that is Sam Bankman-Fried. There's a reason for that, and it's because it's lie. For one, there was no accounting, and Sam Bankman-Fried effectively had control of all the funds across both companies. First-party sources have already mentioned that funds were transferred from FTX to Alameda.

deleted 4y ago

[deleted]

zeven7 4y ago

See my reply to the similar comment in this thread and https://www.vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy https://www.vox.com/future-perfect/23462333/sam-bankman-frie... Customers deposited funds for FTX to hold. FTX said "We're holding your funds; they're safe." FTX no longer has the customer funds. Why? They gave them to Alameda and Alameda traded with them and lost them (or maybe stashed some of it somewhere). That's theft, not accounting mistakes.

tremarley 4y ago
From the moment they launched, their terms claimed that FTT will be used as collateral to borrow money from their FTX platform. FTX wasn't and isn't the only protocol CEX that does this. When Facebook sells our data to advertisers, their not stealing it. It's in their terms. It doesn't make it a fair or great thing though.
- votepaunchy 4y ago
  Would it be stealing if $1 of crypto was “borrowed” for $0.02 of FTT? Digital copying is not theft, but since crypto cannot be copied I am fine with calling FTX’s actions stealing.
- zeven7 4y ago
  I would be very interested to see a citation and also to know what other large exchanges do this.
- siftrics 4y ago
  Source? Why would SBF delete his tweet claiming funds are "never invested, not even in bonds"? Lending money and buying bonds are functionally the same thing, albeit there is legal nuance. What is a "protocol CEX"? I'm assuming that's a typo.
  - frupert52 4y ago
    I believe CEX is Centralised EXchange as opposed to DEX the Decentralised equivalent. This is just my best guess based on what I’ve learned from following this scandal so could be wrong. TLDR: FTX is not the only centralised exchange behaving in the manner being discussed (according to parent) Edited for clarity
    - siftrics 4y ago
      I know what a CEX is and what a DEX is. The phrase "protocol CEX" is an oxymoron. "protocol" implies a set smart contracts, i.e., some semblance of decentralization. A CEX could be fully off-chain.

BLKNSLVR 4y ago

All of them.

bmitc 4y ago

What source do you have that it was accounting mistakes? The only source that says that is Sam Bankman-Fried. There's a reason for that, and it's because it's lie. For one, there was no accounting, and Sam Bankman-Fried effectively had control of all the funds across both companies. First-party sources have already mentioned that funds were transferred from FTX to Alameda.