Rehypothecation is when a broker or bank uses assets that a client has posted as collateral for their own purposes.
Isn't this what FTX did?
Discussion
Yes, but they did it badly, bad than the bad ones.
Rehypothetication is part of the shit fiat world, it will be hard with a bitcoin standard.
I would argue they did it well, since bankruptcy, FTX has made a profit and is returning all money to investors, primarily due to its investment in Anthropic:
They are not, though. Aren’t they returning USD equivalent (from bear market low)? I thought they weren’t even holding any bitcoin.
I neither know nor argue either point with you as it doesn’t change my points.
1. They just did what banks are legally allowed to do (using customer assets) and yes they are not allowed to do this because they are not a bank.
2. Their profit from investments exceed their losses.
I am not arguing they didn’t break the law, or that they didn’t do anything amoral, they are guilty on both counts.
I am simply arguing that if they had a bank license, they would not have filed bankruptcy, nor would SBF be in prison.
In fact my argument is the opposite. Most banks are bankrupt and most executives of them should be criminals.
Also, your point that they held no Bitcoin.
Banks don't hold any fiat legally.
You said they are returning all money to investors. Bitcoin is money.
They were an exchange, not a bank.
Have a good day.
We agree on all your points, yet you seem to be aggrieved and dismissive.
I believe this is one of those cases where two sides agree, but don’t understand that the other side is agreeing.
Either way, I do not wish to continue this discussion with you if it causes you pain, but if you do wish to continue, I would be very eager to hear any points you have.
I genuinely wish you a good day fren.
I love the "Money as Debt" DVDs... Rehypothecation... 🤔
Not seen them, are they available online?
Yes! YouTube of course... Some Canadian cartoonist made them... I felt like a smarty-pants after watching them all the way through... After being in the know, I'd go into the bank and and drop some banker lingo 😁 to see which heads would swivel... Them's the ones working the system... 🤔
Thanks 🙏
Paul Grignon is the author's name...
Even worse, we ALL do it... We pledge the new car we don't own yet to get the loan we don't have yet... The credit score system is just there to paper over the rampant fraud...