What does it mean for “losses” to have “come” (or not) at a specific point in time in this context?
I can accept that depositor losses had not “come” if FTX would have been able to pay depositors the fiat or crypto in their accounts in a matter of a few days. I specify that time period because depositors should have understood that a few days’ delay might be necessary for non-fraud reasons like technical failure.
Beyond that, I’d probably say the loss had come but that there were prospects for mitigation. If a thief takes my car, I’d normally say the loss occurred when I was deprived of my right (here, of possession). That I might get the car back from the person to whom the thief sold, or cash compensation from the thief’s bank account, does not negate the timing of that loss.
I believe the theory is that Alamada had accepted money on behalf of FTX and FTX thought that they’d transferred it but they hadn’t. And in the summer Alameda lost it. Honestly even writing that it looks like fraud, since they should have transferred it immediately.
Even Alameda accepting money for FTX at all was probably bank fraud, even if they had transferred it immediately, because they told the banks that the accounts would not be used for that (there’s a section in the OP about this).
See also this AML / KYC explainer, which I admit I have not read all of but seems pretty good. In particular:
Many, many crimes involve lies, but most lies told are not crimes and most lies told are not recorded for forever. We did, however, make a special rule for lies told to banks: they’re potentially very serious crimes and they will be recorded with exacting precision, for years, by one of the institutions in society most capable of keeping accurate records and most findable by agents of the state.
This means that if your crime touches money, and much crime is financially motivated, and you get beyond the threshold of crime which can be done purely offline and in cash, you will at some point attempt to interface with the banking system. And you will lie to the banks, because you need bank accounts, and you could not get accounts if you told the whole truth.
The government wants you to do this. Their first choice would be you not committing crimes, but contingent on you choosing to break the law, they prefer you also lie to a bank.
(I found out about this explainer because Matt Levine at Bloomberg linked to it; a lot of what I know about financial crime in the US I learned from his Money Stuff column)
What does it mean for “losses” to have “come” (or not) at a specific point in time in this context?
I can accept that depositor losses had not “come” if FTX would have been able to pay depositors the fiat or crypto in their accounts in a matter of a few days. I specify that time period because depositors should have understood that a few days’ delay might be necessary for non-fraud reasons like technical failure.
Beyond that, I’d probably say the loss had come but that there were prospects for mitigation. If a thief takes my car, I’d normally say the loss occurred when I was deprived of my right (here, of possession). That I might get the car back from the person to whom the thief sold, or cash compensation from the thief’s bank account, does not negate the timing of that loss.
I believe the theory is that Alamada had accepted money on behalf of FTX and FTX thought that they’d transferred it but they hadn’t. And in the summer Alameda lost it. Honestly even writing that it looks like fraud, since they should have transferred it immediately.
Even Alameda accepting money for FTX at all was probably bank fraud, even if they had transferred it immediately, because they told the banks that the accounts would not be used for that (there’s a section in the OP about this).
See also this AML / KYC explainer, which I admit I have not read all of but seems pretty good. In particular:
(I found out about this explainer because Matt Levine at Bloomberg linked to it; a lot of what I know about financial crime in the US I learned from his Money Stuff column)