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Comment by mind-blight | Hacker News Reader

10% liquid doesn't necessarily concern me when considering a bank. But, they have many more routes to liquidity than FTX (Liam from the fed, loans from other banks, etc.). And even still, 10% isn't legal for a bank if their liquid assets are too volatile.

450 mil was in SBFs Robinhood investment, and FTX clearly didn't have any other avenues towards liquidity. 10% without an out was a predictably bad idea

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FTX isn’t a bank. They aren’t supposed to operate as a fractional reserve. Coinbase would be crucified by the SEC if they did this.

FTX US wasn't doing it either. They did it outside of SEC jurisdiction.

Animats disagrees. https://news.ycombinator.com/item?id=33556651

SBF being a US citizen was an angle I hadn’t considered. The US does have jurisdiction over its own citizens, even if they’re operating in other countries. So the question becomes to what extent has SBF defrauded US investors.

There’s plenty of jurisdiction here. Assuming that there’s an indictable offense here, all SBF has to do is connect through the wrong airport one time at some point during the rest of his life, and he’ll find himself back in the US.

Any transaction that involves dollars involves American banks due to correspondent banking. That means there's jurisdiction in the EDNY or SDNY because that's where all the banks are. America also has jurisdiction over its citizens conduct. It may not be the SEC or even a securities fraud prosecution but if the government can find emails or logs that show intent or show that he was sending money to Alameda and trying to evade internal compliance controls he can be found guilty of wire fraud. The fact that he owns most of Alameda doesn't help him either.

Seems like they were offering leverage, which plenty financial businesses besides banks do (such as brokers) and has the same effect.

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