I will put these into two categories, first are the easily verifiable and second is the more speculative. My take on all of this is that a company setup like this and an individual with an unproven track record should never have been considered a sound investment. Especially at the scale it was invested into.
Verifiable
FTX and all the related companies were not part of a holding company.
FTX did not have a board.
FTX did not have a CFO.
More speculative
FTX’s crash is estimated to be twice the size of Enron. $25 billion vs $50 billion.
FTX executives used a messaging service where their messages were automatically deleted after a short period of time.
FTX did not have to “transfer” user funds to Alameda. When user’s deposited funds, they went directly to an Alameda bank account.
How did this happen? One interesting opinion is that there is a problem with an investment culture that regularly turns individuals into a “tech geniuses”. Investors were lured into investing billions into a very young and unproven entrepreneur. On top of that, there is an unspoken rule that a VC firm will not speak ill of a startup they consider investing into and then find red flags. You can understand their situation by imagining a startup deciding which firms to pitch too and avoiding a firm that is known to share red flags with other VCs.
Refs: various episodes from Shows - Your Top Crypto Resource - Unchained Podcast
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