Earlier quoted context omitted.
If you actually look at the article the very first code sample shows how certain customers (Alameda) are directly exempt from auto liquidation & can carry negative balances at FTX.
> certain customers (Alameda) are directly exempt from auto liquidation Certain customers (including Alameda) - I understang other customers had similar arrangements, and why wouldnt they? Every account was trading on margin and high leverage - the reason you auto liquidate is so they dont run off owing you money. Is it fraud for a company to extend credit to another company? Any company that issues a invoice and all…
It is most certainly fraud to lie about protections in place to protect customer assets. That includes backstop insurance and auto-liquidation practices.