> took deposits, put them in completely inappropriate investments (many of which are now worthless, all of which were speculative nonsense)
I think it's naive to think this is the case. It's reasonable to assume he knows those tokens couldn't have been worth what he claims they're worth, before or after the FTX collapse. The tokens didn't suddenly drop in value. He has experience as a market maker and remaining delta-neutral. We must assume all of what he claims is deception and/or preparation for the court battle.
Remember that there was a pamphlet for Alameda investors that promised something like "15% return with no risk." FTX also had an "earn" product that was paid out from a marketing budget. These were deliberate actions. They knew what they were doing.
I think it's likely he initially was using other investments that were similarly worthless, but which may not have been quite so obviously worthless to him at the time. Don't forget about the Luna/Terra debacle back in May, and the fact that he was running around buying up failing firms in the crypto space. The house of cards was already crumbling, and he was sitting on top in a panic trying to prop up the base before his pinnacle fell. The results were what we'd expect in that situation.
May I point you to a chart showing the price of Solana (SBF's preferred token)? Down 80% in four months is a pretty sudden drop in value. To be clear, I think the fraud started then, but that was after the damage had been done.
>He has experience as a market maker and remaining delta-neutral
Yeah, but market makers in unexpectedly lopsided markets lose all the time. It's the risk that enables them to 'earn' a take rate.
>May I point you to a chart showing the price of Solana (SBF's preferred token)? Down 80% in four months is a pretty sudden drop in value.
FTT, SRM, and MAPS are the garbage tokens they claimed were worth more than they actually were. They each had major drawdowns more than 4 months ago. SOL even had a 60% drawdown by March. None of this was sudden. My point is they knew they were in trouble long before any of the solvency/liquidity issues.
It's thought that their trouble started in May during the Luna/Terra collapse. Alameda's loans were pulled when 3AC blew up. That's when they minted more FTT. SRM also had similar supply increases out of nowhere. They weren't investments as you said. They were tokens they could mint at any time to collateralize new loans.
Maybe they thought the same could be done with SOL? It is known to be highly centralized. There are also known issues with the Solana ecosystem where TVL for layer 2 tokens were double counted, making it seem more valuable.
I'm not sure what point you're trying to make by showing me they held $2bn of Solana in Nov-22 (itself, like all crypto, a made up and useless/worthless thing) that was worth $10bn in Nov-21.
Like sure, to make themselves feel better when they stared at Excel, they minted FTT to fill the gap, but so what?
To your point, just because I mint 1bn coins and sell one to my roommate for $1, it doesn't actually change the fact that I lost $700mn on $TSLA (the true problem).
EDIT: Maybe to make my point more clear - the one good thing about finance is that if I sell a Orange juice futures contract, I need to get the oranges from somewhere, or I can go to jail.
Crypto's innovation is eliminating the need for oranges, but turns out that's not an innovation at all
I think it's naive to think this is the case. It's reasonable to assume he knows those tokens couldn't have been worth what he claims they're worth, before or after the FTX collapse. The tokens didn't suddenly drop in value. He has experience as a market maker and remaining delta-neutral. We must assume all of what he claims is deception and/or preparation for the court battle.
Remember that there was a pamphlet for Alameda investors that promised something like "15% return with no risk." FTX also had an "earn" product that was paid out from a marketing budget. These were deliberate actions. They knew what they were doing.