The issue that I have is the correct concept and the correct argument. The proof of fraud, I think, requires forensic evidence and proof beyond reasonable doubt. Not the optics and my personal level of credulity.
And I say this as a Marxist leftist, so it's not like I'm any supporter of cryptocurrencies, etc. I might even argue that under capitalism, people's notions of 'responsibility', 'stability', 'fraud' etc. are already so distorted that they don't have a coherent theory of what things are crimes and what things are just morally bad, socially bad, and so on.
Fraud has a specific meaning [1] but you could think about it as being a negligent misrepresentation of some fact for unjust financial enrichment. So if I say to you I'm a billionaire[2] that's just a lie not a fraud. But if I say to you "I'm a billionaire, invest with me and I'll make you a billionaire" and I take your money and just go spend it or whatever, that's a fraud because you were relying on a fact I negligently misrepresented and you were harmed. The complexity comes because there are lots of seperate laws under which fraud is illegal. So if you lie on a loan application that's a different type of crime to if you tell someone they are buying shares in a potato farm and the potato farm doesn't exist and you just spend their money on blow instead. They're both fraud but they are different kinds of fraud.
If I honestly get your cash for an investment, make that investment and lose all your money because it just doesn't work out, that's not a fraud.
Hope that's clear. The meaning of the word fraud doesn't change from a capitalist vs a Marxist perspective. It's just "fancy lieing for financial gain" either way.
[1] Here's a US-specific summary https://www.law.cornell.edu/wex/fraud
[2] I'm not. As far as I know at least.
Portraying Alameda as a typical borrower, while concurrently implementing a code change that singularly permitted them to maintain a negative account balance, is outright fraud.
Further, it seems like what you’re arguing is that more people should be prosecuted for banking crises, not that SBF shouldn’t be charged. Those two things aren’t mutually exclusive.
Alameda was also allowed to borrow far more money than other borrowers, because they were deeply in debt. Also bad.
Though this arrangement might initially evoke traditional banking practices with eg mortgages, the situation becomes even more problematic as Alameda secured their loans using tokens minted by FTX.
This might be more akin to a real estate mogul using shares of the bank granting their mortgages as collateral instead of the property itself—a clear conflict of interest, wrong way risk, and a shaky foundation for financial stability.
Edit: The bank in this case could play dumb and insist it had no idea that was fiscally irresponsible, which is basically what SBF argued, but at a certain level of incredulity you stop receiving the benefit of the doubt.