That's not how that works. Whatever purchasing power they were supposed to have that they were deprived of because of his actions results in damages - obviously equal at least to the crypto gains they would have.

Given that FTX is not a bank, and does not do any sort of (high regulated for a reason) fractional reserve lending ... how exactly can there be a run? All of the assets should still have been there.

This is out of date. There is no reserve requirement anymore.

Why is it interesting? SVB leaders didn't engage in fraud or money laundering.

What? No.

The “lost” money was bet on red at the roulette wheel. While the firm was in bankruptcy, the wheel stopped spinning and came up red. That was enough to make customers whole to their original deposits. But it didn’t make up for capital gains, opportunity cost or the emotional damage caused by having your funds locked away for years.

> interesting that by contrast SVB leaders didn’t face any repercussions

Totally different situations. The analogy would be PayPal freezing everyone’s accounts for 3+ years while they put all the money into Peter Thiel’s hedge fund.

Did it? The FDIC is funded by banks, not the government.

It’s not fully funded by the banks & borrows from the government when it’s short. I don’t know how to account the government borrowing from itself, but I wouldn’t think it’s necessarily “free”. Yes it does get paid back, but you’re borrowing on very preferential terms that aren’t available to the public so there is as cost to the broader economy.

While it's true that the FDIC is "backed by the full faith and credit of the US Government" it is funded by the banks and by interest from treasuries [0]. Has there ever been a case when the FDIC actually ran out of funds and had to be bailed out?

[0] https://www.fdic.gov/resources/deposit-insurance/understandi...

So yes, it ran out of funds & had to borrow. It has not yet experienced a shock bad enough to leverage the Treasury line of credit but that’s a fig leaf IMO. The 2008 crisis saw the government bailing out banks through TARP to shore up failing banks to the tune of 700B. Without that, FDIC would have failed. So from that perspective, yet it was bailed out in 2008 & the funding from members wouldn’t have been anywhere near sufficient. That’s why I don’t understand the political football around TARP - “the full faith and credit of the US government” would have been meaningless if FDIC failed as that would have sent a giant shockwave of trust loss through the broader population as everyday people would have lost huge savings.

Shkreli dealt with the "making people whole/replacing money you took": it's not okay to steal or defraud people just because you later make them whole or they don't even realize that you did.

But even moreso, to your point: Please don't conflate the rising crypto price with SBF's intent. He didn't care about that. The fact that crypto rose and may have lessened the losses is entirely orthogonal to his intent, just a "fortunate" coincidence. It could equally have cratered. The people who are being recompensed are only being recompensed in part because of something entirely outside of SBF's control and intention.

The only reason people can be made whole is because SBF was arrested for fraud, and all the funds got frozen. Given his track record, had he kept steering the firm for another year or two, he would have almost pissed away all the gains/potential gains from the crypto rally, and his customers would have found themselves in an even bigger hole.

Also, Bernie Madoff could have just taken a ten year timeout, bought and rode the S&P 500, and had made his customers whole, too, so I guess he also did nothing wrong...

LOL, yeah, no. SFB also did really well established old fashioned tradCrime. It wasn't even DeCrime.

Because Silicon Valley Bank leaders were nobodies whereas SBF became perceived as a trophy, pretty much immediately.

This is something to be mindful on. When doing self promotion some people start seeing you as an inspiration , many others as a fraud or a human trophy to be captured and paraded around.

Especially in startup communities where groupthink takes over and everybody wants to be the new cult figure of the Silicon Valley or the crypto valley or whatever. People outside that bubble (especially LE, prosecutors and judges) see right through that BS and are specifically looking with a magnifying glass everything that goes on hoping to get themselves a nice trophy on their desk, they want the heads of cult founders. Some would say rightfully so.

These people should be spending their free time reading papers and books on how Romans enforced their laws over remote German provinces of the Empire.

Instead they open all sorts of media and like hunters in the forest they pick a trophy that suits their liking and then they just use all their means to collect that trophy.

Or even worse they are not even creative in their trophy hunting quest, they all pile on Trump because by the way he looks and acts he looks like a fraud and advertises his nature thanks to his huge megaphone . So every prosecutor in the Nation piles on him because they want to be the one uncovering this big revelation to the American public...pathetic.

Their goal should be ratio of Money recovered from criminals to money spent for investigations/proceedings. No one operates this way because they are essentially predators, much like SBF and Trump are, just a different kind, but they receive a salary paid for by taxpayeyrs.