Q: Did you co-mingle funds?
A: I did not mean to.
Q: It says in the TOS that you would not do that. How is it ok then?
A: It says elsewhere in the TOS that customers can take margin positions, so in some cases the co-mingling was to be expected.
Q: How did then such a large amount of money get co-mingled then, because it seems that a much larger amount of customer funds were affected than just the accounts trading on margin?
A: In the early days, we did not have a bank account, so when customers wanted to trade on our platform, they deposited money to alameda who then credited the money to us. I don’t know for sure, but it seems that the money that was credited wasn’t always put in the right account (ie safe money, per the TOS)
So as I’ve understood so far, it seems SBF is claiming there was just incompetence and mismanagement. A lot of regulation in finance is to prevent people from being able to do this. Anyways, to those who have said, “stealing money that I traded for magic beans is still stealing”, I think it’s a little more complicated than that.