I ended up losing a significant amount of money on the FTX debacle, and I want to demonstrate that even risk-aware people who tried to act relatively prudently can still end up losing money. I also want to argue that while most parties involved (myself included) made wrong decisions one way or the other throughout this -- and as a result are greatly suffering from the consequences -- that we should focus less on blaming the victims, and more on prosecuting the actual villains, while figuring out a clever way of preventing such large-scale fraud from happening again.

Here is my story:

- I put $50k into FTX last year. The reason for putting the money into FTX was because it was the only large-scale platform that allowed me to trade the specific token that I wanted to trade. - My investment proved to be more successful than I had anticipated, and I turned the initial investment into $600k by the end of last year. - By the spring of this year, I had sold my entire position and was now sitting with $400k USD on FTX (as I didn't sell everything at the top). - At that time, I attempted to withdraw the entire amount into my bank account, but immediately ran into issues with my bank. - For background, I'm a dual citizen, originally from South America but now living in the US. As you may be aware, US citizens were not allowed to use FTX.com; hence I used my South American citizenship to get verified by FTX, with the condition that I could only withdraw to a South American bank in my name. - I spent about 10-20 hours this spring attempting to make the withdrawal, which included dozens of phone calls and emails with my bank as well as the FTX support team, in order to execute the transaction. But the process turned out to be more complicated than I had expected. - Full details are not necessary here as I wish to somewhat protect my identity, but it became clear to me that this process would be very difficult to complete unless I was physically present at the bank in South America. - While I considered that keeping the money on FTX for a few more months was not risk-free, I deemed the risk relatively low. A part of that judgement was the fact that FTX was an exchange, and not a bank nor a prop-trading house, and thus I viewed the risk of a run on the bank scenario, or FTX speculating away my money in trading, as low. - What instead worried me was that FTX could get hacked, or that the founders could take my money and run, but given the high-profile nature of the company and its founders, I made the call that keeping the money on FTX for a few more months was not an overwhelming risk factor. - I also considered converting my money into BTC and transferring them to cold storage, but ended up not doing that as I worried about a crypto meltdown, and I reasoned that my money was safer sitting in USD at FTX (despite the aforementioned risks). I further reasoned, that given that the amount was already quite large, that it would be even harder to explain to a local bank where the money had come from once it had gone off an exchange and then come back on again. - For all of these reasons, I decided to wait, and was planning to do the transfer in less than 2 months from today, once back in South America.

We obviously know what happened next, and we know that pretty much any other solution would have been better for me. But with the information available to me at the time, it wasn't obvious that what happened would happen. I believed I had reasoned appropriately about the risks and made the correct decisions at the time when I made them, with the information available at the time.

My point is that we don't know the stories behind why so many people kept their money on FTX. Perhaps some were more reckless than others, and perhaps someone reading this thinks that I was reckless too. But even so, in my view, none of us "deserved" to have this happen to us. So instead of vilifying the victims, the focus should be on holding the perpetrators responsible, while thinking of a better way forward so that this doesn't happen again. Thanks for reading.

I have heard unsubstantiated rumor that she may be trying to make it to Dubai, take that with a dash of salt.

I heard she went to hong kong shortly after the collapse started. She then went to Dubai to avoid extradition.

I don’t have a source. I heard it in an interview with someone following the case.

>ok, this one's sarcasm

> If your strategy makes a lot of money for years, but then loses more than anything you've ever earned, it's a crappy strategy.

Depends who's money you're playing with. If you profit on the way up and only your customers lose on the way down. Then high-risk strategies are (unfortunately) always better.

My trading strategy has never made me billions nor lost billions. Yet I kinda feel like there's a solid possibility many of these fools will end up waaay better off than me. Assuming they can stay out of jail.

Yeah but sometimes you don’t know they are serial killers until they go out and do it the second time.

Fraud on that scale definitely deserves a stronger penalty.

I was more talking about cases like this where prosecutors sought 10 years for a protester getting excessively confrontational with police officers and now she is serving 4 years in prison: https://www.nbcnews.com/news/nbcblk/pregnant-black-activist-...

The jury acquitted Martin of inciting a riot and reached no verdict on whether she threatened officers’ lives. Her legal team was “elated” when jurors found her guilty only of breaching the peace, punishable by no more than a $500 fine and 30 days in jail, investigator Tony Kennedy recalled.

State law defines breachers of the peace as any disturbers, “dangerous and disorderly persons” or people who utter “menaces or threatening speeches.” But prosecutors presented the charge as a “high and aggravated” crime, which carries up to 10 years imprisonment. Rosado said Judge Kirk Griffin did not allow her to explain the distinction, and the possibility of a much stiffer penalty, to the jury.

I am not saying she does or doesn’t deserve to go to prison, I am more commenting on how the options go from 30 days to multiple years between the seemingly similar crimes.

There is some rehabilitation, but obviously not what we'd like to see. I work with formerly incarcerated individuals that have ended up going on to do quite well.

There's also a phenomenon where gang bangers and the like "age out" — they just seem to stop. Unfortunately for many, this realization often occurs in the middle of a very lengthy sentence (they typically drop out, debrief, and enter protective custody).

Sadly, for many rehab isn't just a matter of wanting to do better. Very large numbers of the incarcerated can't do something as seemingly trivial as parse a bus schedule. Aside from undereducation, a fair amount are objectively unintelligent. When all you know is crime and you have a massive uphill battle just to be what many would consider a functional adult, recidivism seems inevitable for some. What makes it worse is that cultural reasons prevent many from reaching out for help while they're behind the wire. It's frankly sad to see, but we're getting better —the investments being made in tablets and the like will hopefully bear fruit in the coming years.

Since you say "almost everybody", I assumed you have been behind bars yourself and know how easy it is to survive not being raped, stabbed to death, pushed to wolves by other gang or being killed by that gang for not going against another one, being forced to snitch by guards, or being snitch out to other inmates in retribution for not snitching out to the guards, and much much more.

No I don't think you spent a day behind. If you were to, you wouldn't be merely pricing your life at $24k per day.