4 ms·

I think you are not distinguishing between what a bankruptcy vs. theft means. I worked over a decade in investment banking including on large bankruptcy proceed

by kwar13 2y ago

I think you are not distinguishing between what a bankruptcy vs. theft means. I worked over a decade in investment banking including on large bankruptcy proceedings. A bank can go bankrupt and your deposits might be in jeopardy, because there is fractional reserve banking and by law they are allowed to hold far less (in the US it would actually be 0%) of your deposits and can deny your request to redeem your assets in full in cash. That is to prevent bank runs. FTX was an exchange, and while the holding company can go bankrupt the customer assets should be always fully funded in segregated accounts. FTX stole from customers and used the fund to front run their own customer via Alameda research. Most of FTX customers were outside US and are not US residents. US Dollars in this context holds no significance. For the record, FTX.us was a registered broker. https://brokercheck.finra.org/firm/summary/158816 https://brokercheck.finra.org/firm/summary/158816 And with SEC as an exempt broker. https://www.sec.gov/Archives/edgar/data/1876386/000187638621000002/xslFormDX01/primary_doc.xml https://www.sec.gov/Archives/edgar/data/1876386/000187638621...

JumpCrisscross 2y ago
> FTX was an exchange, and while the holding company can go bankrupt the customer assets should be always fully funded in segregated accounts FTX marketed itself as an exchange. That didn't make it one. Giving it money was legally akin to handing any small business in your town money. > Most of FTX customers were outside US and are not US residents. US Dollars in this context holds no significance. FTX was a U.S. company. Even the Bahamas outfit had U.S. dollar bank accounts. FTX's customers were obviously subject to U.S. jurisdiction. > FTX.us was a registered broker They owned a FINRA-member broker-dealer. Most FTX customers weren't doing business with its b-d. > with SEC as an exempt broker Not what Form D means. ("Exempt broker" isn't a thing under U.S. securities law.) Also, side note, banks can refuse withdrawals but specifically not to prevent a bank run [1]. A bank restricting withdrawals due to illiquidity is going under FDIC conservatorship. [1] https://activitycovered.com/can-a-bank-refuse-withdrawal/ https://activitycovered.com/can-a-bank-refuse-withdrawal/

by kwar13 2y ago

JumpCrisscross 2y ago

> FTX was an exchange, and while the holding company can go bankrupt the customer assets should be always fully funded in segregated accounts FTX marketed itself as an exchange. That didn't make it one. Giving it money was legally akin to handing any small business in your town money. > Most of FTX customers were outside US and are not US residents. US Dollars in this context holds no significance. FTX was a U.S. company. Even the Bahamas outfit had U.S. dollar bank accounts. FTX's customers were obviously subject to U.S. jurisdiction. > FTX.us was a registered broker They owned a FINRA-member broker-dealer. Most FTX customers weren't doing business with its b-d. > with SEC as an exempt broker Not what Form D means. ("Exempt broker" isn't a thing under U.S. securities law.) Also, side note, banks can refuse withdrawals but specifically not to prevent a bank run [1]. A bank restricting withdrawals due to illiquidity is going under FDIC conservatorship. [1] https://activitycovered.com/can-a-bank-refuse-withdrawal/ https://activitycovered.com/can-a-bank-refuse-withdrawal/