I don’t think that merely lending out deposits is ‘fraudulent in spirit’.
I don’t think the bank analogy is super accurate, because fractional reserve banking is heavily regulated: you can only loan so much, you’re restricted in how risky these loans can be, and you have the FDIC backstopping deposits in the case of crises/fraud. On the other hand, it seems very likely FTX violated their own ToS to loan most of their reserves to SBF’s insolvent crypto prop shop. There’s no backstop and no accountability
I realise I have 18 hours more information at hand, but I think yes, we can conclude this with high confidence:
SBF claimed FTX had enough cash to cover all withdrawals and FTX US was totally fine (tweets deleted; see https://cointelegraph.com/news/ftx-founder-sam-bankman-fried-removes-assets-are-fine-flood-from-twitter).
Now they are both in bankruptcy proceedings, along with Alameda. Proceedings (https://storage.courtlistener.com/recap/gov.uscourts.deb.188448/gov.uscourts.deb.188448.1.0.pdf). Several executives SBF reached out to to discuss bailouts have shared that the deposit windfall is $5-10b (can’t find the link any more, but I’ve seen this claimed by several people). SBF has resigned.
$200M-1B of FTX’s reserves have been withdrawn after bankruptcy filing. FTX claims they were hacked. (https://www.coindesk.com/business/2022/11/12/ftx-crypto-wallets-see-mysterious-late-night-outflows-totalling-more-than-380m/).
I don’t think the bank analogy is super accurate, because fractional reserve banking is heavily regulated: you can only loan so much, you’re restricted in how risky these loans can be, and you have the FDIC backstopping deposits in the case of crises/fraud. On the other hand, it seems very likely FTX violated their own ToS to loan most of their reserves to SBF’s insolvent crypto prop shop. There’s no backstop and no accountability