[drcode]

The recent crypto downturn has been unrelenting and deep: It's totally plausible they just thought they were the kind of geniuses who could spot the bottom of the market and quickly bled through all the money

but yeah, it's also possible the money just ended up at a third unknown entity

[naijaboiler]

Thats likely what happened. They are their own margin lenders and also FTX market makers. They backstop rapidly falling tokens on their exchange. So a sudden but prolonged drop in crypto prices can wipe put huge amounts quickly

[notch656a]

His fuck buddy allegedly claims SBF's company forked over the cash to cover bad debts. I'm guessing we're talking $Bs.

"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."

https://archive.ph/HYKVo#selection-1129.0-1129.402

That's allegedly hell of a lot of money to lose over a shared woman who didn't even pop out your kid. Honestly dude probably could have made out and at least not gone to jail if he hadn't been allegedly defrauding his customers to prop up his amour's company.

[naijaboiler]

Almeda was also the market-maker backstopping FTX. They were using Alameda to provide backstop liquidity to FTX, i.e. absorb losses when prices went backwards quickly. Unfortunately, they were also loaning out huge margins, which means people on their platforms could rack up losses pretty quickly.

There he is a blog authored by SBF himself from like 2018 where he was touting their innovative market superior market-making approach, which ultimately boils down, they had automated circuit-breakers, and if the worst came to the worst, some robust 3rd-party entity will come in absorb the losses. He never explained why anyone would want to do that. (I wish I can find that article where he explained it). He probably was using Alameda as that 3rd-party entity to absorb the losses. And since they were also recklessly handing out margin loans for people to trade with, those losses can get really large really quickly if crypto prices went down and stayed down. If they rebounded, they will make a killing. Which is why hyping crypto and SBF so prices rebound is their only play.

yes, I am sure there was some frivolous spend there. But my strongest hunch is that majority of the funds Alameda lost was from backstopping FTX when prices went south. He thought he was too smart. he basically reinvented the wheel. he reinvented the entire financial system with himself and his company playing the role of the Feds, larger bank, smaller bank, and retail bank, stock market exchange all in one. The FED has the economic and political and military might backing him. Alameda has funds deposited by users, and some guy who thinks he is too smart.

[unmole]

As of August 2021, SBF owned approximately ~90% of Alameda: https://finance.yahoo.com/news/ftx-ceo-sam-bankman-fried-pro...

[jsemrau]

Trading is easy if everything goes up. The moment in time you are stomaching 90%+ losses your operating capital quickly disappears.

[dordoka]

I agree, i wouldn't be surprised either if they were just morons believing they were geniuses