If you actually look at the article the very first code sample shows how certain customers (Alameda) are directly exempt from auto liquidation & can carry negative balances at FTX.
> certain customers (Alameda) are directly exempt from auto liquidation
Certain customers (including Alameda) - I understang other customers had similar arrangements, and why wouldnt they? Every account was trading on margin and high leverage - the reason you auto liquidate is so they dont run off owing you money.
Is it fraud for a company to extend credit to another company? Any company that issues a invoice and allows say 14 days to settle is extending credit to the other party.
It is most certainly fraud to lie about protections in place to protect customer assets. That includes backstop insurance and auto-liquidation practices.
shapefrog|2 years ago
Certain customers (including Alameda) - I understang other customers had similar arrangements, and why wouldnt they? Every account was trading on margin and high leverage - the reason you auto liquidate is so they dont run off owing you money.
Is it fraud for a company to extend credit to another company? Any company that issues a invoice and allows say 14 days to settle is extending credit to the other party.
prettychill|2 years ago