Re:FTX Tapped into Customer Accounts to Fund Risky Bets, Set...
by jazzyjackson on Thursday November 10, 2022 @02:28PM
(#33551750)
> fund the interest promised.
IMO this is key, the interest being paid out to account holders was not profits from any underlying business, it was just paid out from new "customer" deposits.
If a corporation is in debt and paying back interest, it's sustainable as long as the business actually has a plan to grow. If your business is acquiring new users to pay out obscene interest rates to your early adopters, that's a ponzi
(mr ponzi himself didn't mean to scam anyone either way by the way, until he realized his postage-arbitrage plans were going south and he scrambled not to break his promises)
IMO this is key, the interest being paid out to account holders was not profits from any underlying business, it was just paid out from new "customer" deposits.
If a corporation is in debt and paying back interest, it's sustainable as long as the business actually has a plan to grow. If your business is acquiring new users to pay out obscene interest rates to your early adopters, that's a ponzi
(mr ponzi himself didn't mean to scam anyone either way by the way, until he realized his postage-arbitrage plans were going south and he scrambled not to break his promises)