FTX's founder Sam Bankman-Fried is a genius. He has mentioned that for the billions of dollars being transferred from customer accounts at FTX to his own trading firm Alameda Research, is actually a "margin loan". Hence indirectly saying that it is not an illegal fund transfer. It is really amazing how FTX financial controls and internal governance actually allows a margin loan to single party to grow till so large. Even more puzzling is the fact that stakeholders such as customers, investors, employees and auditors themselves were not aware that the deposits in custody at FTX were being used for trading at Alameda Research. Who dare wins indeed!
Maybe Bankman-Fried is now busy preparing a lot of documents to backdate them to cover his backside. We can probably employ the same tactic as Bankman-Fried in the real commercial workplace to make up story to cover up screw ups (this will make us similarly deplorable).
The FTX crypto implosion is unfortunate and reflects the dark side of the promise of "decentralization" governance away from central authorities. I feel sorry for investors who were caught under the latest FTX collapse and I say this without any trace of schadenfreude. The inherent peril in investing in any assets is always there. It is just not possible to easily predict and prevent such collapse. Even Temasek Holdings poured US$200Mil of investments into funding FTX along with Blackrock.
(Note: I lament at the complete loss of US$200Mil- imagine if the government had given out this to all Singaporeans instead and we can have $40 to S$50 per person to spend on an awesome meal at Din Tai Fung).
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