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Comment by alpark3 | Hacker News Reader

You're confusing Citadel and Citadel Securities. Citadel the hedge fund runs many different strategies, including commodities trading and quantitative high frequency strategies that are generally what people think of when looking at books like yours. Citadel Securities is a broker-dealer that specializes in market making, and is popular for being one of the biggest(the biggest?) wholesale market maker for U.S. equities, options, ETFs, etc.

They're connected, but Ken Griffin is focused on Citadel and Peng Zhao runs CitSec.

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You're confusing Alameda Capital and FTX. Alameda the hedge fund runs many different strategies, including crypto trading and quantitative high frequency strategies that are generally what people think of when looking at books like yours. FTX is a broker-dealer that specializes in market making, and is popular for being one of the biggest(the biggest?) wholesale market maker for cryptocurrencies, NFTs, etc.

They're connected, but Sam Bankman-Fried is focused on FTX and Caroline Ellison runs Alameda.

Unless I missed something, wasn't FTX the exchange and Alameda the market making specialist that also had a prop book?

The general point stands, that we can't just take their word that they're rigorously separated and not sharing info (a point the HN crowd seems to be missing right now).

The difference is that traditional finance is usually riddled with regulations and legal potholes to find yourself in if you don't follow rules, whereas in crypto the rules consist of whatever validation SBF's excel sheet had.

Yes, and if you want to advance the argument that finance is too well-regulated for anyone to ever break that separation, no matter what the incentive, that would be a great contribution to the discussion!

But that's not what the original comment[1] was doing. It was just saying, the roles are nominally separate, therefore there can't be collusion, which is a hasty inference I was right to call out. I completely agree that a different argument, one not made in the comment I was replying to, might not be so bad!

[1] https://news.ycombinator.com/item?id=35956915

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