> Meanwhile, at a meeting with Alameda employees on Wednesday, Ms. [Caroline] Ellison [CEO of Alameda] 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.
Alameda borrowed short-term to make long-term illiquid VC investments. Sort of what a bank does, but without FDIC insurance, or a central bank lender of last resort guaranteeing their liquidity.
The short-term loans were (not unpredictably) called back, but Alameda (not unpredictably) had insufficient liquidity to pay them back, so (extraordinarily) FTX commingled their exchange customers' funds with Alameda to pay back the loans.
More discussion: https://twitter.com/WClementeIII/status/1592289824542949376
Unbelievable that 1) they did this, and 2) they admitted it. Someone needs to tell these kids to stop talking publicly and hire lawyers.
Can't wait for the movie.
Offtopic but 28 and 30 years old are considered kids? English is not my first language so maybe I'm missing something.
I wonder if their characteristics were different, if the popularity of calling them kids would change. If they looked different, if they were working blue collar jobs, etc.
Skipping over the likely FTX fraud which is the real cause of the downfall:
https://markets.businessinsider.com/news/currencies/big-shor...
> Shortly before the interview, Mr. Bankman-Fried had posted a cryptic tweet: the word “What.” Then he had tweeted the letter H. Asked to explain, Mr. Bankman-Fried said he planned to post the letter A and then the letter P. “It’s going to be more than one word,” he said. “I’m making it up as I go.”
> So he was planning a series of cryptic tweets? “Something like that.”
> But why? “I don’t know,” he said. “I’m improvising. I think it’s time.”
I’m in disbelief that he not only gave an interview but that he told the interviewer this.
FTX owns Storybook Brawl. So: SBF managed to plant an ad in an NYT story supposedly covering his massive fraud. I’m impressed. This is next level.
https://www.coindesk.com/business/2022/03/22/ftx-us-acquires...
The responses to the journalist online are exceptional:
Ah, the Dulles's old firm, nothing spooky going on here at all.
