In addition to missing his customers’ funds, SBF is also missing the point.
, trying to explain what happened. When I first saw these interviews, I wondered if there might be something to his story, because he really did seem to be trying to answer the reporters’ questions honestly.But the more I’ve seen SBF try to make his case, the less sympathetic I’ve gotten. Because the fundamental question is pretty simple: Did he allow Alameda to borrow billions of dollars from FTX without customer consent? At this point, almost everyone thinks the answer is “yes.
Once again, customers were required to post a certain amount of collateral to cover losses their positions might incur in the future. But in cases of extreme volatility, it might not be possible to close a position quickly enough to avoid big losses. If a customer’s losses exceeded their collateral, FTX itself would be on the hook for subsequent losses.This kind of failure is a theoretical possibility on any exchange that allows leveraged trading.
about how the London Metal Exchange almost blew up after a nickel trader couldn’t make good on a massive short position.This is basically what SBF says happened to FTX: FTX allowed Alameda to make huge, leveraged bets on the value of volatile cryptocurrencies. Then the value of those cryptocurrencies crashed. Not only did Alameda get wiped out, but FTX—and by extension, FTX’s customers—lost money as well.
While this story might be basically accurate, I don’t think it exonerates SBF the way he seems to think it does.One of FTX’s biggest selling points has always been that it has a sophisticated “liquidation engine” that was supposed to avoid these kinds of blowups by automatically closing a customer’s position before it got underwater. In a
, FTX touted its liquidation engine as more sophisticated and conservative than those on rival cryptocurrency exchanges.“We designed a system that we think will withstand huge market moves and huge volume,” FTX wrote in 2019., FTX exempted Alameda from this liquidation process. The SEC says that in May 2020, “Bankman-Fried directed that Alameda be exempted from the ‘auto-liquidation’ feature of FTX’s spot margin trading services.
Deutschland Neuesten Nachrichten, Deutschland Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Sam Bankman-Fried says he survived on jar of peanut butter in Bahamas jail“I spent a while trying to see how far a jar of peanut butter could get me,” Bankman-Fried told Puck News.
Weiterlesen »
How Serious Are Sam Bankman-Fried’s Alleged Campaign-Finance Violations?There have been plenty of cases of individuals trying to illegally conceal their political donations. What makes the Sam Bankman-Fried case different is that the money allegedly wasn’t his to give.
Weiterlesen »
Unemployed and under house arrest, Sam Bankman-Fried faces enormous legal billsSam Bankman-Fried's legal defense could cost millions of dollars.
Weiterlesen »
Sam Bankman-Fried says he didn't steal FTX fundsIn a blog post published Thursday, the former FTX CEO tried to explain the collapse of his crypto empire and reiterated that he thinks the company could still be saved.
Weiterlesen »
Sam Bankman-Fried's 'secret backdoor' worth $65 billion, court hearsSam Bankman-Fried's trading firm borrowed $65 billion from FTX via a 'secret backdoor' to fund donations and a luxury lifestyle, bankruptcy court hears
Weiterlesen »