Depending on state law, if you put down a deposit for e.g. flowers, the florist is free to spend the cash however they see fit, including loaning it out to someone. Lending customer funds per se does not prove fraud. Bankman-Fried lying about it does.
No, they were accepting customers' cash in exchange for something undefined. Crypto being unregulated, we can conclusively say that something was not "purchasing and holding assets on their customers' behalf."
FTX is, in many respects, more like a florist than a financial firm. Certainly for purposes of this case. (My florist's books are better organized.)
One, it's unclear if that's criminal commingling versus breach of contract by FTX.
Two, that's what I mean--absent additional representations, the lending out of customer deposits on its own does not constitute fraud or even anything illegal. That's the point of the comparison to a florist. In terms of consumer protections, my deposit with my florist is about (albeit not precisely) on par with customers' at FTX's. This is what you get when you stick your finger to the regulated system and put your money outside it.
Which I understand as, it's gota be determined the extent of the lying to determine the extent of the fraud ; some you-didnt-read-the-contract-well-enough responsability may incumb on the customer(s).
holding assets on their customers' behalf
Who said he was, him?
Of course Im playing devil's advocate here to illustrate the logic of the law as presented by our friend here.