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murillians

https://twitter.com/Brett_FTX/status/1560701320717369349

Brett's response

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That… does not make me think he was telling the truth.

May have been better to delete tweet and not say anything.

But that's not how you play the social media game.

True.

Volume of communication seems to be the playbook.

Given that this tweet

(https://twitter.com/Brett_FTX/status/1552339740397109248)

> brokerage accounts are SIPC-insured, cash associated with brokerage accounts is managed into FDIC-insured accounts at our partner bank

is still up, I imagine the imprecision of the statement is what the FDIC took issue with.

Because it's probably setup similarly to Voyager which is a single omnibus account and offers no protection of if the brokerage goes bankrupt.

Does it even offer any realistic protection if the "partner bank" goes under? AFAIK the limit on FDIC insurance is $200k / account. Is FTX managing hundreds/thousands of account to get around this or is only $200k of their money FDIC insured?

To get FDIC insurance in a meaningful way it would have to be per-customer accounts created in specific ways.

If they're not created in particular ways the funds in the third party bank accounts can be taken in bankruptcy actions by creditors and aren't actually protected customer funds and aren't insured at all accept with whatever level of insurance they have for the partner bank going under, but that is not the risk anybody is worried about.

They are per-customer accounts. This is how they explain it when you enable the feature: https://pifke.org/ftxdd.png

He seems very slimy here. Why would he mention the words "FDIC Insured" if he didn't want people to think their deposits were insured?

Many investors hold cash for long periods.

Knowing that it's safe before an investment is triggered is a big checkbox.

Right. But it wasn't safe because it wasn't really FDIC insured.

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