However, I think it is starting to look increasingly likely that, even if FTX’s handling of its customer’s money was not technically legally fraudulent, it seems likely to have been fraudulent in spirit.
Are you basing this accusation of fraud on that tweet (and related) from CZ?
If this was a mystery and I was the investigator, I’d focus on “follow the money” and ask “who has the most to gain?”, and then notice that:
FTX was pursuing a risky leveraged growth strategy and gaining on their main competitor: Binance/CZ
FTX then became suddenly vulnerable during the crypto market crash due to said leverage
CZ then sparked a rumor panic concerning FTX’s liquidity/solvency
CZ/Binance then came in as the white knight with an offer to save FTX (through a firesale)
CZ/Binance then pulled out due to brief “corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations”, conveniently fulfilling the insolvency prophecy and destroying their main competitor
Check out this Twitter thread if you’re not sure that FTX did something seriously illegal and/or unethical.
ETA: It was written by “former Head of Institutional Sales at @ftx_official” who still had access to FTX internal Slack until very recently. And you can check out his followers to verify that it’s not an impersonation.
Yeah I’m definitely not sure, but I’m also doubting much anything I read on twitter will make me as sure about any of this as many others seem to be (although that thread is interesting). I have no stake in this saga; for all I know SBF is guilty of all those claims and more, but I just don’t think the public info is very reliable in general and especially right at this moment.
Also, I suggest applying some Bayesianism: if FTX had not touched customer funds, wouldn’t you expect to see FTX people defending against such accusations on Twitter and other media, e.g., replying to the tweet I linked and responding to journalists’ requests for comments? I’m not seeing anything like that.
FTX might be at a point where the general strategy is “Don’t say anything for legal reasons” even if there are arguments worth to be made in its defense.
Are you basing this accusation of fraud on that tweet (and related) from CZ?
If this was a mystery and I was the investigator, I’d focus on “follow the money” and ask “who has the most to gain?”, and then notice that:
FTX was pursuing a risky leveraged growth strategy and gaining on their main competitor: Binance/CZ
FTX then became suddenly vulnerable during the crypto market crash due to said leverage
CZ then sparked a rumor panic concerning FTX’s liquidity/solvency
CZ/Binance then came in as the white knight with an offer to save FTX (through a firesale)
CZ/Binance then pulled out due to brief “corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations”, conveniently fulfilling the insolvency prophecy and destroying their main competitor
Check out this Twitter thread if you’re not sure that FTX did something seriously illegal and/or unethical.
ETA: It was written by “former Head of Institutional Sales at @ftx_official” who still had access to FTX internal Slack until very recently. And you can check out his followers to verify that it’s not an impersonation.
Yeah I’m definitely not sure, but I’m also doubting much anything I read on twitter will make me as sure about any of this as many others seem to be (although that thread is interesting). I have no stake in this saga; for all I know SBF is guilty of all those claims and more, but I just don’t think the public info is very reliable in general and especially right at this moment.
What about this WSJ story?
Also, I suggest applying some Bayesianism: if FTX had not touched customer funds, wouldn’t you expect to see FTX people defending against such accusations on Twitter and other media, e.g., replying to the tweet I linked and responding to journalists’ requests for comments? I’m not seeing anything like that.
FTX might be at a point where the general strategy is “Don’t say anything for legal reasons” even if there are arguments worth to be made in its defense.