I read the TOS. SBF is deliberately getting people to focus on "e-money" part rather than "digital assets" like crypto.
Y'all got tricked by focusing on the wires and fiat currency path. The TOS make it clear that's all play money. Only digital assets appear to be protected by TOS. Coffeezilla managed to lock him down on that by using the correct terminology and asset classes, but most of the interviewers did not.
Based on the TOS customers agree to, it's not clear to me there was ever any agreement Alemeda couldn't bet the farm using customer fiat as collateral. Digital Assets appear to only apply to non-fiat digital assets -- the TOS seperately defined fiat balance as 'e-money' with significantly weaker as far as I can tell protections.
That is to pin him on fraud it may be necessary to show those that delivered crypto outside of the margin / borrowing TOS had their money stolen. I think Coffeezilla got him to admit this, but even then I think he may have weasled out of it by only talking about dollars which don't appear to be protected by the contract. He is crafting a very carefully executed story where he tricks you into thinking you have a 'gotcha' but all he did was admit to stuff customers agreed to in TOS; and thus you see the real intelligence of SBF as a master of redirection shining.
Here is coffeezilla's third session with SBF, in which he seems to get SBF to admit that customer's funds were commingled in violation of the terms of service. People who did not sign up for anything risky nonetheless lost their digital assets.
That is a great interview. But it turns out Coffeezilla got tricked here by letting SBF turn back to the fiat funds.
SBF did not admit to fraud. The TOS specifically defines 'e-money' separately from digital assets. As soon as customers liquidated their digital assets to withdraw real money, they were no longer protected by the digital asset part of the TOS. The comingling of fiat / e-money is not disallowed by the TOS. Only comingling of digital assets was prohibited.
Coffeezilla was so close to pinning SBF here but by letting him wiggle out by dropping the digital assets and focus on comingling of e-money during withdrawals (which was not protected) SBF escape again. That is by liquidating the digital assets by the TOS, FTX was then allowed to commingle their e-money and the 'fungible' withdrawal process was not against TOS. Coffezilla should have pinned down SBF about digital asset withdrawals instead of fiat withdrawals. If he had forced SBF to admit BTC, ETH, etc withdrawals were comingled then he would have had a fraud admission, and actually Coffee started out with that before SBF quite quite genuise-ly redirected to fiat withdrawals.
I think this was a carefully crafted redirection by SBF to trick Coffee into thinking he got his 'gotcha' while SBF again escaped.
Y'all got tricked by focusing on the wires and fiat currency path. The TOS make it clear that's all play money. Only digital assets appear to be protected by TOS. Coffeezilla managed to lock him down on that by using the correct terminology and asset classes, but most of the interviewers did not.
Based on the TOS customers agree to, it's not clear to me there was ever any agreement Alemeda couldn't bet the farm using customer fiat as collateral. Digital Assets appear to only apply to non-fiat digital assets -- the TOS seperately defined fiat balance as 'e-money' with significantly weaker as far as I can tell protections.
That is to pin him on fraud it may be necessary to show those that delivered crypto outside of the margin / borrowing TOS had their money stolen. I think Coffeezilla got him to admit this, but even then I think he may have weasled out of it by only talking about dollars which don't appear to be protected by the contract. He is crafting a very carefully executed story where he tricks you into thinking you have a 'gotcha' but all he did was admit to stuff customers agreed to in TOS; and thus you see the real intelligence of SBF as a master of redirection shining.