I think the main thrust of the article is the speculation about “Customer C”, in this case, Alameda. That speculation being that FTX lended Alameda customer funds for its own token.
However, this also offers a way out, on the condition that Alameda didn’t lose whatever it got. In Matt Levine’s analogy, the funds are lost because “Customer C” ran away for selfish reasons, to the detriment of the bank. In this case, Alameda and FTX are both closely associated with Bankman-Fried.
If Alameda still has the assets gotten from FTX customers, it would then be possible to move that back to FTX customers. FTX and Alameda would still be finished in a business sense, but the damage to customers would be minimized.
Of course this is all just blind speculation on my part, and it doesn’t look good because Alameda probably already spent all the assets it got from FTX to pay off previous loans. If that is the case then we’re still in the same situation with customer funds lost.
I think the main thrust of the article is the speculation about “Customer C”, in this case, Alameda. That speculation being that FTX lended Alameda customer funds for its own token.
However, this also offers a way out, on the condition that Alameda didn’t lose whatever it got. In Matt Levine’s analogy, the funds are lost because “Customer C” ran away for selfish reasons, to the detriment of the bank. In this case, Alameda and FTX are both closely associated with Bankman-Fried.
If Alameda still has the assets gotten from FTX customers, it would then be possible to move that back to FTX customers. FTX and Alameda would still be finished in a business sense, but the damage to customers would be minimized.
Of course this is all just blind speculation on my part, and it doesn’t look good because Alameda probably already spent all the assets it got from FTX to pay off previous loans. If that is the case then we’re still in the same situation with customer funds lost.