FTX tapped into customer accounts to fund risky bets, setting up its downfall

To summarize, the WSJ article says he took $10B of $16B in customer deposits to FTX and used that to finance his hedge fund.

Based on a claim by one anonymous source, that SBF told them that.

Might be true, but papers (especially ones like the WSJ) should not publish such pap.

> Alameda’s CEO is Caroline Ellison, a Stanford University graduate who like Mr. Bankman-Fried previously worked for quantitative trading firm Jane Street Capital. Alameda is based in Hong Kong, where FTX was headquartered before relocating to the Bahamas last year.

Are the folks at Jane Street making money because they are smart, or because they use that perception to perpetuate some scam?

I interact with a lot of Harvard kids. Some of them are from Long Island, they know dads who work at that Republican's hedge fund. They are smart kids. They have good cognitive gifts.

But not once - not from word of mouth, or directly from them, or someone, ever, anywhere - have I heard a common sense way these guys make money due to intelligence, instead of due to a scam or due to luck.

It is really frustrating. So much human potential wasted on chasing the dollar sign. They are in denial that it is scams.

It has always been scams. Why is this so hard to believe? Why in the absence of any positive evidence, like "oh here is our genius but nonetheless expired" trading strategy, which anyone could have furnished in the last two decades, they agree, oh it must be real?

The simple answer seems, because if you believe it to be real, you can be this specific kind of Harvard + New York + "X" kid - and seriously, they are all cut from the same jib, superficially and inside their character, it tarnishes the institution - and you can do this scam and pocket your change and eat dim sum with 20 people on the weekends and have a skinny girlfriend and buy a condo. You can do something pretty meaningless with your life in exchange for the burn out.

This scam life lets 20 year olds not hear from their horrible parents that burned them out and gave them no meaning. Eventually they turn 30 and hope that a decade went by without a crash, and then life decides for them to sell before the ponzi collapses. Like you have a baby with your skinny girlfriend and you buy the condo and great, you sell, and it happens to be well timed!

I fucking hate Jane Street, I have hated them since I've known the assholes who intern there, and I don't know why this Bankman-Fried guy got such a big pass for scamming literally millions of people, and why this Caroline girl isn't going to be sent to jail, and it's frustrating because you can actually tell! You can predict this from when these kids are 20!