I don’t understand how it can simultaneously be true that 1) AR’s balance was easily visible, 2) AR’s balance was very negative, and 3) people believed AR’s balance to be positive. Do you understand this?
I mean...I just think 2) is probably false. Nishad messed up in his testimony and some information that undermined the prosecutors’ story slipped through. He also refers to FTX credit lines as nonwithdrawable, “Q. I’m going to ask you some more questions about line of credit in a bit, but just at a high level, what is a line of credit? A. It’s a nonwithdrawable dollar amount that’s granted to allow for easier trading without actually having to deposit as much money.” How is a credit line supposed to help them steal funds if the funds can’t be withdrawn from the exchange?
Now if we assume Gary wasn’t lying when he read out that AR’s main account on FTX was negative $2.7B in June 2022, I guess it’s still possible that when the prosecutor asked the question, they were pointing at the sub-account that was also helpfully named “info@alamedaresearch”, or at the main account’s balance in a particular coin. (It may not have even been deliberate on the government’s part—there’s a point when one of the prosectors seems to not understand that there’s a difference between AR’s net position on FTX and AR’s balances in different coins.)
“my impression is that these valuations were not done rigorously” – let me know if you think that’s still incorrect
That seems fine to say. I think we just don’t know either way, as the team handling the bankruptcy doesn’t appear to have given anyone access to the original versions, so we just have SBF’s (and Gary’s?) memory of the rough figures and John Ray’s protestations that SBF is deluded.
Customers deposited fiat into North Dimension, and through the fiat@ glitch, that fiat currency was invested in various things.
Was invested by Alameda, not FTX. FTX customers invested each other’s deposits all the time. And, if you believe the defense, FTX didn’t know what this customer was doing until it had already happened. I think FTX and Alameda are treated as effectively the same company or completely separate entities depending on the context and who’s speaking (I think both “sides” are guilty of this), when the reality is somewhere in between.
I mean...I just think 2) is probably false. Nishad messed up in his testimony and some information that undermined the prosecutors’ story slipped through. He also refers to FTX credit lines as nonwithdrawable, “Q. I’m going to ask you some more questions about line of credit in a bit, but just at a high level, what is a line of credit? A. It’s a nonwithdrawable dollar amount that’s granted to allow for easier trading without actually having to deposit as much money.” How is a credit line supposed to help them steal funds if the funds can’t be withdrawn from the exchange?
Now if we assume Gary wasn’t lying when he read out that AR’s main account on FTX was negative $2.7B in June 2022, I guess it’s still possible that when the prosecutor asked the question, they were pointing at the sub-account that was also helpfully named “info@alamedaresearch”, or at the main account’s balance in a particular coin. (It may not have even been deliberate on the government’s part—there’s a point when one of the prosectors seems to not understand that there’s a difference between AR’s net position on FTX and AR’s balances in different coins.)
That seems fine to say. I think we just don’t know either way, as the team handling the bankruptcy doesn’t appear to have given anyone access to the original versions, so we just have SBF’s (and Gary’s?) memory of the rough figures and John Ray’s protestations that SBF is deluded.
Was invested by Alameda, not FTX. FTX customers invested each other’s deposits all the time. And, if you believe the defense, FTX didn’t know what this customer was doing until it had already happened. I think FTX and Alameda are treated as effectively the same company or completely separate entities depending on the context and who’s speaking (I think both “sides” are guilty of this), when the reality is somewhere in between.