I've been reviewing funding requests as part of Nonlinear's effort to help FTXF grantees. Many applications sound like this:
FTX Future Fund already paid me, so I have plenty of money. I can't spend any of it, since I'm worried about clawbacks. This leaves me practically destitute.
Imagine you could buy insurance against these clawbacks:
Amy has $20,000 in her bank account, but it's all from an FTX grant
Bill owns an insurance company. He believes the chance of a successful clawback is much less than 25%, and he charges Amy $5,000 for the insurance
Now Amy is comfortable spending her remaining $15,000. If a clawback happens, Bill pays her $20,000, and she's unharmed
Seems like a win-win for Amy and Bill. Is there a way to make it happen?
I disagree that we have to wait for a court ruling before making reasonable inferences. We can judge the situation on a balance of probabilities, and it seems overwhelmingly likely that yes he took user deposits and used them directly, including getting out a $1b personal loan.
It's not like he only lost his investment capital, or only lost money loaned to FTX for business purposes. You can chalk those up to bad business, even negligence.
He lost the deposits! That's not just bad business. Even his own excuse, in the Twitter DM with Piper, is that the money was deposited in an Alameda account and they just never sent that $8b to FTX. I don't think this story at all adds up, but even just that version of events is enough to say that there was no attempt to separate the user deposits from FTX's working capital.