My understanding (for whatever it’s worth) is that most of the reason why a full repayment looks feasible now is a combination of:
Creditors are paid back the dollar value of their assets at the time of bankruptcy. Economically it’s a bit like everyone was forced to sell all their crypto to FTX at bankruptcy date, and then the crypto FTX held appreciated a bunch in the meantime.
FTX held a stake in Anthropic, and for general AI hype reasons that’s likely to have appreciated a lot too.
I think it’s reasonable to think of both of these as luck, and certainly a company relying on them to pay their debts is not solvent.
Perhaps. But it sounds like many[1] have been treating the fact that FTX did in fact face a liquidity crisis as strong (conclusive?) evidence of SBF’s excessive risk-taking in a way that’s relevant for intent. And now they claim that the extent to which customers are made whole or FTX was insolvent is not relevant.
It feels like people in general are happy to attribute good luck to his decisions but not bad luck.
Including the prosecution: “its customers were left with billions of dollars in losses”, “the defendant talked with his inner circle about...how customers could never be repaid”, “Billions of dollars from thousands of people gone”, “there is no serious dispute that around $10 billion went missing”...
Well, regarding Anthropic at least, this particular bet may be lucky, but if you make a bunch of high-variance bets and one of them turns out in your favor, is that still just luck?
Crypto prices in general also turned out in their favour, and without having looked into it closely I’d guess both of those bets paying off were necessary for people to get paid back,
If the bankruptcy hadn’t forced dollarization all of FTX’s customer deposits, I’m guessing they still wouldn’t be able to pay everyone back today,
Customer money wasn’t supposed to be going into bets with any variance. Having a diversified portfolio reduces variance but doesn’t eliminate it (and anyway I suspect FTX’s portfolio wasn’t in reality very diversified, given that tech stocks and crypto have historically been pretty correlated)
My understanding (for whatever it’s worth) is that most of the reason why a full repayment looks feasible now is a combination of:
Creditors are paid back the dollar value of their assets at the time of bankruptcy. Economically it’s a bit like everyone was forced to sell all their crypto to FTX at bankruptcy date, and then the crypto FTX held appreciated a bunch in the meantime.
FTX held a stake in Anthropic, and for general AI hype reasons that’s likely to have appreciated a lot too.
I think it’s reasonable to think of both of these as luck, and certainly a company relying on them to pay their debts is not solvent.
Perhaps. But it sounds like many[1] have been treating the fact that FTX did in fact face a liquidity crisis as strong (conclusive?) evidence of SBF’s excessive risk-taking in a way that’s relevant for intent. And now they claim that the extent to which customers are made whole or FTX was insolvent is not relevant.
It feels like people in general are happy to attribute good luck to his decisions but not bad luck.
Including the prosecution: “its customers were left with billions of dollars in losses”, “the defendant talked with his inner circle about...how customers could never be repaid”, “Billions of dollars from thousands of people gone”, “there is no serious dispute that around $10 billion went missing”...
Well, regarding Anthropic at least, this particular bet may be lucky, but if you make a bunch of high-variance bets and one of them turns out in your favor, is that still just luck?
Crypto prices in general also turned out in their favour, and without having looked into it closely I’d guess both of those bets paying off were necessary for people to get paid back,
If the bankruptcy hadn’t forced dollarization all of FTX’s customer deposits, I’m guessing they still wouldn’t be able to pay everyone back today,
Customer money wasn’t supposed to be going into bets with any variance. Having a diversified portfolio reduces variance but doesn’t eliminate it (and anyway I suspect FTX’s portfolio wasn’t in reality very diversified, given that tech stocks and crypto have historically been pretty correlated)