>FTX took customer deposits (which were supposed to be held in custody and untouched, according to their TOS)

Can you provide the exact wording? At least when it comes traditional finance, if there's margin involved (FTX most definitely has margin), your deposits/holdings are fair game for your broker to use as they please.

https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_ma...

>Some margin accounts allow the brokerage firm to lend out securities in the account to a third-party, at any time without notice or compensation to the account holder, if the investor has any outstanding margin loan in the account

"You control the Digital Assets held in your Account," says Section 8.2 of the terms. "Title to your Digital Assets shall at all times remain with you and shall not transfer to FTX Trading." The terms continue: "None of the Digital Assets in your Account are the property of, or shall or may be loaned to, FTX Trading; FTX Trading does not represent or treat Digital Assets in User’s Accounts as belonging to FTX Trading."

https://www.axios.com/2022/11/12/ftx-terms-service-trading-c...

> FTX took customer deposits (which were supposed to be held in custody and untouched, according to their TOS) and loaned them out to Alameda to gamble with

This is what I initially suspected. But we can see FTX's balance sheet [1]. There is no loan to Alameda. "FTX shot its customer money into some still-unexplained reaches of the astral plane" is the best explanation we have for billions of missing dollars [2].

[1] https://www.ft.com/content/0c2a55b6-d34c-4685-8a8d-3c9628f1f...

[2] https://www.bloomberg.com/opinion/articles/2022-11-14/ftx-s-...

I have a hunch that:

>negative $8bn entry described as “hidden, poorly internally labled ‘fiat@’ account”

probably had something to do with the loan as that seems to be roughly the amount and the description literally makes no sense.

It's also possible that the one hastily thrown together excel spreadsheet the CEO himself chose to release doesn't include the full accounting. Maybe Sam decided to leave off an illegal off-book loan?

> doesn't include the full accounting

I think the running bet is there is no full accounting.

> we can see FTX's balance sheet [1]. There is no loan

The problem with this is that the customer funds are also not present on their balance sheet. Levine opined about this yesterday; Like 3 of the biggest assets are coins ftx didn't pay for - so where did the money go?

That's why the Alameda explanation is likely, in one way or another. Money had to go somewhere.

That balance sheet is a total joke and of course it doesn't include an extremely illegal loan explicitly written on it

The information about a loan from was taken from the NYT interview [0]:

> Meanwhile, at a meeting with Alameda employees on Wednesday, Ms. Ellison explained what had caused the collapse, according to a person familiar with the matter. Her voice shaking, she apologized, saying she had let the group down. Over recent months, she said, Alameda had taken out loans and used the money to make venture capital investments, among other expenditures.

> Around the time the crypto market crashed this spring, Ms. Ellison explained, lenders moved to recall those loans, the person familiar with the meeting said. But the funds that Alameda had spent were no longer easily available, so the company used FTX customer funds to make the payments. Besides her and Mr. Bankman-Fried, she said, two other people knew about the arrangement: Mr. Singh and Mr. Wang.

[0] https://www.nytimes.com/2022/11/14/technology/ftx-sam-bankma...

"Alameda had taken out loans and used the money to make venture capital investments." - translation: We took all the money and gambled it all away. Again.

Aaaand it’s gone: https://m.youtube.com/watch?v=-DT7bX-B1Mg

I think the "gambling" you referred to was their point, not the accounting games they subsequently played to try and get back into the black.

My point is that the real problem isn't that Alameda was over-leveraged or gambling, it's that SBF stole user funds from FTX to try to rescue Alameda. This is not what (some of) those other companies did.

from SBF perspective Alameda & FTX are the same. Yeah yeah they are separate legal entities, but in actual practise, one market-made for the other, and he treated them like one is left hand, the other is right hand So yeah Alameda gambled, overleverated and lost money just like nearly every other financial crises in history, SBF then fraudulently moved money from FTX to cover Alameda's gambling losses. I won't be shocked if FTX has alway been the source of funding for Alameda's gambling, just that Alameda was winning when everything was rosy. then the crypto market turned