What Have We Learned About FTX?

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A lot of customer funds that were deposited into FTX were being transferred to Alameda for them to be using in their trading activities. That is like the cardinal sin of an exchange, especially if your customers are just holding balances on the exchange and they're not involved in those sort of risky bets. And there was this basically unlimited line of credit open to Alameda and there were billions of dollars being sent over to Alameda for them to use in their hedge fund. They lost a lot of money on those trades.

Paris Marx is joined by Molly White to discuss the ongoing collapse of the crypto industry, what to make of the implosion of FTX and Alameda Research, and what happens next with Sam Bankman-Fried.

Molly White is the creator of Web3 Is Going Just Great and a fellow at the Harvard Library Innovation Lab. You can follow her on Twitter at @molly0xFFF.

Tech Won’t Save Us offers a critical perspective on tech, its worldview, and wider society with the goal of inspiring people to demand better tech and a better world. Follow the podcast (@techwontsaveus) and host Paris Marx (@parismarx) on Twitter, and support the show on Patreon.

The podcast is produced by Eric Wickham and part of the Harbinger Media Network.

Also mentioned in this episode:

Since recording, Sam Bankman-Fried has been extradited from the Bahamas to the United States, and it’s been revealed that Caroline Ellison and FTX co-founder have plead guilty and are cooperating with authorities against Bankman-Fried.
Molly has been analyzing the collapse of FTX on her newsletter.
Paris wrote about effective altruism and longtermism for the New Statesman.
Journalists at Forbes wrote about Caroline Ellison and her history.
After Sam Bankman-Fried was arrested, effective altruist Kelsey Piper published a series of direct messages she exchanged with her supposed friend.
The Southern District of New York’s attorney’s office, the Securities and Exchange Commission, and the Commodity Futures Trading Commission have all filed charges against Sam Bankman-Fried.
There are rumors that Caroline Ellison is working with authorities against Sam Bankman-Fried.
US Justice Department is split on when to charge Binance executives. There are also growing questions about Binance’s books.