There is economic damage, but not necessarily equal to the headline number. It is reduced by netting against the gains to the thief, but increased by things like stress, required investments in security, disruption to plans, degraded incentives, and so on. In this case I would guess the economic damage is very large but still less than $8bn. In the case of a personal mugging I would guess the economic damage far exceeds the value of the contents of your wallet.
You might also reasonably object that the gains to the thief shouldn’t count because they are illegitimate. However, in the FTX case many of the gains seem to have gone to other traders who profited without being guilty.
I feel pretty confused by this and would love better estimates of the actual amount of money that was “lost” in the FTX situation. It seems plausible to me (though not likely) that it’s above $8B, since a lot of people made plans conditional on FTX being legitimate in a way that now wiped out a lot of economic gains, and the long-term trust that was lost in the markets was worth more than $8B.
My best guess number for this is something in the $3-4B range, but that’s really very much an ass-number.
There is economic damage, but not necessarily equal to the headline number. It is reduced by netting against the gains to the thief, but increased by things like stress, required investments in security, disruption to plans, degraded incentives, and so on. In this case I would guess the economic damage is very large but still less than $8bn. In the case of a personal mugging I would guess the economic damage far exceeds the value of the contents of your wallet.
You might also reasonably object that the gains to the thief shouldn’t count because they are illegitimate. However, in the FTX case many of the gains seem to have gone to other traders who profited without being guilty.
I feel pretty confused by this and would love better estimates of the actual amount of money that was “lost” in the FTX situation. It seems plausible to me (though not likely) that it’s above $8B, since a lot of people made plans conditional on FTX being legitimate in a way that now wiped out a lot of economic gains, and the long-term trust that was lost in the markets was worth more than $8B.
My best guess number for this is something in the $3-4B range, but that’s really very much an ass-number.