I haven’t seen any evidence that FTX promised to never invest customer deposits.
Here is a screenshot of the (now deleted) Tweet where SBF claims FTX does not invest customer deposits:
Here is the relevant section of the FTX ToS:
(A) Title to your Digital Assets shall at all times remain with you and shall not transfer to FTX Trading. As the owner of Digital Assets in your Account, you shall bear all risk of loss of such Digital Assets. FTX Trading shall have no liability for fluctuations in the fiat currency value of Digital Assets held in your Account.
(B) None of the Digital Assets in your Account are the property of, or shall or may be loaned to, FTX Trading; FTX Trading does not represent or treat Digital Assets in User’s Accounts as belonging to FTX Trading.
I think what Sam is saying here is true, if customer deposits are being used as leverage and not as investments.
It’s arguably a bit misleading, if Alameda was a customer with a seemingly unlimited line of credit. Bu t what Sam is saying is still true.
I respond to the TOS points above. But to me—and I could be wrong on this, as I have not been in securities litigation for many years—the terms of service aren’t really dispositive.
Here is a screenshot of the (now deleted) Tweet where SBF claims FTX does not invest customer deposits:
Here is the relevant section of the FTX ToS:
I think what Sam is saying here is true, if customer deposits are being used as leverage and not as investments.
It’s arguably a bit misleading, if Alameda was a customer with a seemingly unlimited line of credit. Bu t what Sam is saying is still true.
I respond to the TOS points above. But to me—and I could be wrong on this, as I have not been in securities litigation for many years—the terms of service aren’t really dispositive.