"Every banker knows that if he has to prove he is worthy of credit, in fact his credit is gone." - Bagehot
Indeed. And in this case, it was from one day to the next.
"Exchanges"(Exchanges and brokerages in one) are not supposed to be banks. Everything can be withdrawn from brokerages without them being insolvent.
If the brokerage provides leverage to its customers, it can be subject to the same sort of bank runs that a normal bank can.
+1 That's a great book.
If I've learned anything, the moment you start seeing posts like "funds are safe", "withdrawals are flowing" from an exchange, it's game over, and time to gtfo if it's not already too late.
The assets are fine. Just the value of the assets is not sure.
I'm really glad this shyster is having light shed on his behaviour. It's always been odd to me how FTX made it so big so quickly.