> FTX collapsed, in part, because they were acting like banks by lending out the funds they were entrusted with and leveraging them
This had basically nothing to do with how FTX collapsed. It collapsed because they stole the money. They may have papered up the theft as a loan to Alameda. But that wasn't done consistently, and was ad hoc rationalization of plain-vanilla theft.
That's fair, the loans were a figleaf for theft. But in their minds they may have thought that they'd pay it all back and nobody would notice. People that steal are pretty weird when it comes to rationalizing what they are doing. I've had a bunch of people steal 100's of thousands from a gas station I owned. They would take it to the casino, bet heavily, lose everything and then do it again all in the hope that they would win, pocket the winnings and then put back the original amount. Still bugs me 16 years later.
This had basically nothing to do with how FTX collapsed. It collapsed because they stole the money. They may have papered up the theft as a loan to Alameda. But that wasn't done consistently, and was ad hoc rationalization of plain-vanilla theft.