How about we just trust that they don’t use client deposits for prop trading. The check is big enough after all.
I mean, I think you should have a strong prior that anyone who’s capable of making good money without fraud (which Sam certainly is – he was a successful trader prior to starting Alameda) wouldn’t do something blatantly criminal out of the blue. So you have to say a bit more than just “there are many frauds in crypto” for people to have legitimate reason to become concerned/suspicious. (As I said elsewhere, I think there were indeed some orange flags around the situation, but IMO “they used customer funds to gamble” really isn’t something anyone should readily have thought of before seeing other signs of things being off.)
I mean, I think you should have a strong prior that anyone who’s capable of making good money without fraud (which Sam certainly is – he was a successful trader prior to starting Alameda) wouldn’t do something blatantly criminal out of the blue. So you have to say a bit more than just “there are many frauds in crypto” for people to have legitimate reason to become concerned/suspicious. (As I said elsewhere, I think there were indeed some orange flags around the situation, but IMO “they used customer funds to gamble” really isn’t something anyone should readily have thought of before seeing other signs of things being off.)