FTX will probably be sold at a steep discount. What we know and some forecasts on what will happen next

Our sympathy lies with SBF and the team

I'm not generally following the news as-it-happens (even this), but someone I know told me that Sam seems to have straightforwardly lied on Monday. The twitter thread is down now but the quote was:

FTX has enough to cover all client holdings.

We don't invest client assets (even in treasuries).

We have been processing all withdrawals, and will continue to be.

I reckon it has probably been a hellish few days on the inside there, but I'll mention that if someone openly lies to lots of people whose money they control, I wouldn't straightforwardly give them all of my sympathies for their problems, even if I believe they've otherwise done a great deal of good in the world.

Edit on Nov 24th: As I said downthread, I'll update this comment with new info. It now seems to me that Sam lied, that he did invest client assets, (though it's possible to me he just monkeyed around and didn't know what he was doing with them). For a full account I recommend Zvi's writeup [LW · GW].

FTX.com comprises ~39% of SBF's assets and will likely be worthless, affecting the value of FTX US and Alameda

How is this only 39% of his assets?  Was Alameda really worth more than FTX.com, or is this 39% after the massive devaluation?  Was he already a multi-billionaire before founding FTX?

Should people who got funding from immoral activity pay it back?

Been staying hard away from crypto all year, with the general trend of about one seismic project failure every 3 months, and this might be the true Lehman moment on top of the shitcoin sundae. Passing no assumptions on intent or possible criminal actions until more info is revealed, but it certainly looks like SBF mismanaged a lot of other people's money and was overconfident in his own, being largely pegged to illiquid altcoins and FTT. The most shocking thing to me is how CZ took a look at their balance sheets for all of like 3 hours after announcing intent to acquire, and just noped right outta there. Clearly this situation is more FUBAR than we ever imagined, and it all feels like SBF had to have known all along that his castle was built on a foundation of sand, at the very least. By all appearances, for him not to have seen that would require an immense amount of living in denial.

In string theory in the mid-1980s, there was a moment when they thought, not just that they had found the theory of everything, but that they might be able to prove it. Only one "realistic" string vacuum was known, so all they had to do was calculate the particle masses, and they'd be done... Forty years and a googolplex possible worlds later, attitudes are rather more cautious now. 

I would be interested to know what the high point of optimism associated with FTX was. Bankman-Fried was discussed as a future trillionaire, he was hanging out with regulators and bailing out other crypto enterprises... Were there, say, people who combined crypto maximalism and Democrat progressivism to dream that FTX might catalyze the transformation of the USA into the heart of an EA-centered global civilization, which in turn could become the nucleus of a hedon-maximizing galactic civilization?