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Comment by hn_throwaway_99 | Hacker News Reader

> FTX lent the money to someone else (even if Alameda Research is also owned by SBF), and that other group lost the money

One minor clarification: "lent" should be "stole". If I can't pay my mortgage, I'm not allowed to go break in to my neighbor's house to steal some cash that I'll "borrow" in the hopes of paying back later.

FTX's Ts&Cs we're very clear - customer deposits were not FTX's to lend.

This is a simple, straightforward case of fraud and theft. No additional "crypto-specific regulations" are needed to reach that conclusion.

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> One minor clarification: "lent" should be "stole"

Not a lawyer, but I think the correct term is "embezzled".

> The crime of embezzlement is defined as the fraudulent appropriation of property of another by someone who has been entrusted with its possession. Unlike theft where the property is taken unlawfully, in embezzlement the property comes lawfully into the possession of the embezzler who then fraudulently or unlawfully appropriates it. The key aspect of embezzlement is the fiduciary relationship that exists between the embezzler and the victim of the embezzlement as embezzlement requires that the property be appropriated by a person who was entrusted with its possession. A senior executive who uses company funds to pay for his personal yacht is guilty of embezzlement even if he intended to return the funds or had the means to do so.

Source: https://www.bayarea-attorney.com/CM/Articles/Theft-Offenses-...

Agreed that this is embezzlement, but in all the definitions I've seen (including plain old Webster's), embezzlement is a form of theft, e.g. https://ryanbeasleylaw.com/2019/07/theft-embezzlement-and-fr...

True. That's fair

Not to mention, he literally tweeted a week ago that "We don't invest client assets (even in Treasuries)." FTX is not bank. It's not supposed to be susceptible to a bank run.

This entire line of tweets makes no sense. SBF is a lying fraud that deserves prison.

How do you think margin works ?

Margin doesn't include theft of other people's assets.

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