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> FTX faced no such regulation and if you sent them crypto you no longer owned it. FTX did. This is at best only partially true, you own a claim on the underly

> FTX faced no such regulation and if you sent them crypto you no longer owned it. FTX did. This is at best only partially true, you own a claim on the underlying asset. This is not a matter of regulation, it's a matter of your contractual agreement with FTX. I don't know how more regulated brokers work, but I also doubt you own the asset outright, you also probably own a claim, which is why if the broker goes bankrupt because of fraud you might not recover it. Regulation wouldn't have changed anything here: as FTX simply broke the law, which they could have done regardless of regulation & reporting requirements (e.g. WorldCom, Enron, ...). What they did was not legal, even wrt to what regulation they were subjected to.

JumpCrisscross 2y ago
> you own a claim on the underlying asset No, you're describing a secured claim. No crypto exchange I know of voluntarily gives customers a secured claim. At the moment of bankruptcy, unsecured claims are a claim on the company. Not on any asset. > don't know how more regulated brokers work The assets are segregated and customer claims prioritised and guaranteed by the SIPC. > Regulation wouldn't have changed anything here: as FTX simply broke the law None of what FTX did would have been remotely plausible if they'd been regulated as a broker-dealer. They'd have failed their FINRA audit on day one. Not saying what they did is impossible at a regulated b-d. It would just take a lot more thought and work than the shitshow they were running [1]. [1]. https://www.bloomberg.com/opinion/articles/2022-11-14/ftx-s-balance-sheet-was-bad https://www.bloomberg.com/opinion/articles/2022-11-14/ftx-s-...