The FTX estate (which I understand includes Alameda) did a lot of things wrong, but regarding this:
What made the lending out to Alameda fraudulent?
FTX promised many times, in many different forums, that it had sophisticated risk controls that would automatically liquidate customer accounts when limits were breached. Then it turned out that this was true for most counterparties, but Alameda was a big multi-billion dollar exception.
I think there’s an argument that if FTX had kept its promises about risk controls, there wouldn’t have been a criminal conviction, though possibly that would have negatively affected the business in other ways.
The FTX estate (which I understand includes Alameda) did a lot of things wrong, but regarding this:
FTX promised many times, in many different forums, that it had sophisticated risk controls that would automatically liquidate customer accounts when limits were breached. Then it turned out that this was true for most counterparties, but Alameda was a big multi-billion dollar exception.
I think there’s an argument that if FTX had kept its promises about risk controls, there wouldn’t have been a criminal conviction, though possibly that would have negatively affected the business in other ways.