He sold FTT, his FTX exchange token, and much of the loss was FTT going to zero. As I understand it, FTT wasn't a security. Nor was it a stablecoin, nor did it represent assets other than itself. Seems nothing is illegal there.
The problem came when the alpha male of Binance realized Almeda held all their assets in FTT. This set up a classic bank run where FTT went to zero and FTX could no longer meet USD obligations since they too depended on FTT.
IMHO the only thing propping up the price of FTT was SBF buying it, more or less from himself, with customer funds. He essentially took the money and then gave himself an IOU. Except this wasn't a security IOU, it was a market priced IOU, and many of his customers owned it too.
The brilliant thing about this scam is that he really didn't break any laws AFAICT. If he can sell you a token for $10, and that's the true market value because you can really sell it for $10, then is it so wrong for him to keep other assets such as customer deposits in that token? It's kind of like an investment bank doing stock buybacks, except more innocent since FTT doesn't represent any kind external financial interest. FTT is merely FTT, I think. Security regulators could disagree, but I don't think any of its benefits on FTX were guaranteed.
Maybe they'll get him on market manipulation or some kind of securities fraud (which would require FTT to be a security, which it doesn't seem to be). But I doubt it. They're on his team and truly this is a grey area. Of course if he wasn't on their team they'd make up a book and throw it at him.
[ + ] Fascinus
[ - ] Fascinus 0 points 2.5 yearsDec 8, 2022 11:41:00 ago (+0/-0)
[ + ] Teefinyomouf
[ - ] Teefinyomouf 0 points 2.5 yearsDec 8, 2022 10:57:09 ago (+0/-0)*
The problem came when the alpha male of Binance realized Almeda held all their assets in FTT. This set up a classic bank run where FTT went to zero and FTX could no longer meet USD obligations since they too depended on FTT.
IMHO the only thing propping up the price of FTT was SBF buying it, more or less from himself, with customer funds. He essentially took the money and then gave himself an IOU. Except this wasn't a security IOU, it was a market priced IOU, and many of his customers owned it too.
The brilliant thing about this scam is that he really didn't break any laws AFAICT. If he can sell you a token for $10, and that's the true market value because you can really sell it for $10, then is it so wrong for him to keep other assets such as customer deposits in that token? It's kind of like an investment bank doing stock buybacks, except more innocent since FTT doesn't represent any kind external financial interest. FTT is merely FTT, I think. Security regulators could disagree, but I don't think any of its benefits on FTX were guaranteed.
Maybe they'll get him on market manipulation or some kind of securities fraud (which would require FTT to be a security, which it doesn't seem to be). But I doubt it. They're on his team and truly this is a grey area. Of course if he wasn't on their team they'd make up a book and throw it at him.
[ + ] Portmanure
[ - ] Portmanure 0 points 2.5 yearsDec 8, 2022 10:22:59 ago (+0/-0)
[ + ] usedoilanalysis
[ - ] usedoilanalysis 0 points 2.5 yearsDec 8, 2022 09:02:18 ago (+0/-0)
[ + ] TheMan
[ - ] TheMan 4 points 2.5 yearsDec 8, 2022 08:33:33 ago (+4/-0)
/sarcasm