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OK sure so the FDIC can just insure FTX then.

Other brokerages lend out their spare cash without your consent, too.

It's not really any different other than that law has (rather arbitrarily) decided to protect one and not the other.



Insure what, exactly? Insure peoples imaginary crypto coins? Insure deposits into a brokerage account? Did FTX sweep brokerage accounts into a valid, insurable class? You're missing a ton here, buddy


Proper brokerages will pay you to lend your securities, transparently disclose their programs, and require consent. For example:

- https://www.interactivebrokers.com/en/pricing/stock-yield-en...

- https://www.fidelity.com/trading/fully-paid-lending

Some brokerages lend out spare cash (and pay a transparent interest rate, and are subject to strict reserve requirements) but the majority of assets controlled by a typical brokerage are securities. FTX assets were all subject to their leverage strategies, with no specific reserve.


The fdic is not a law, its a self sufficient insurance company that banks pay premiums to.




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