“The full story here is one I’m still fleshing out every detail of, but as a very high level, I fucked up twice,” he tweeted. “The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users’ margin. I thought it was way lower.”
Bankman-Fried basically chalked this catastrophic error up to a mistake, and said it was a learning experience “which tells me a lot of things, both specifically and generally, that I was shit at.” He went on to explain that this situation “sucks, and that’s on me. I’m sorry.”
That’s possible, of course it is. I tend to think we’ll find out it was more than that though.
Ah, yes, here we are:
FTX Chief Executive Sam Bankman-Fried told an investor this week that Alameda owes FTX about $10 billion, the person said. FTX extended loans to Alameda using money that customers had deposited on the exchange for trading purposes, a decision that Mr. Bankman-Fried described as a poor judgment call, according to the person.
Lending client money to yourself to gamble is more than that.
As questions were brewing about FTX’s health on Monday, Mr. Bankman-Fried tweeted: “FTX has enough to cover all client holdings. We don’t invest client assets (even in treasuries).” He later deleted the tweet.
Well, yes, quite.
All in all, FTX had $16 billion in customer assets, according to the person, so FTX lent more than half of its customer funds to its sister company Alameda.