[albntomat0]

To what degree was the money lost by SBF/etc going to be put towards saving lives, versus the dreams of the average crypto person?

[nytesky]

Well, a LOT of crypto investor are limited means and the least likely to be able to afford to lose it. Sure they shouldn’t have risked their life savings, but they aren’t getting ahead in normal ways so they hooked onto this rocket, and FTX was considered safe and above board for a long time.

There are real mental and physical impact to loss of majority of your wealth, which can lead to homelessness, exhaustion from working more to cover shortfalls, marital strife, abuse, suicide.

Considering this wasn’t just insiders like high net worth investors angel investing, but everyday people, yeah it hurts a lot of people in real ways. Probably a lot more than the Madoff crowd for example.

[albntomat0]

My view is that folks lost their life savings on crypto on FTX is only a more extreme version of those who lost their live savings on crypto on some other exchange. The fraud is terrible, but only exasperates the problems of those gambling with limited resources to absorb loses.

[maxbond]

It's more that, if you take a meaningful amount of money from N people, the likelihood of financial hardship putting someone in mortal danger (eg, by causing them to lose access to housing or medication, or causing them to be suicidally despondent because they've lost their ability to retire) approaches 1 as N increases. When N is high enough that there are multiple people in mortal danger - it becomes pretty likely that some of them succumb.

This is even discussed in the film version of The Big Short.

[CPLX]

Do you routinely evaluate the contents of a wallet stolen by a mugger or of a car stolen by a carjacker in this way?

[albntomat0]

I do not. My comment was in response to the parent comment saying that financial crime “absolutely causes people to die” and “create far more misery than your average mugger”.