SBF recently said that both the FTX & Alameda/FTX Trading accounts were the same. People who signed up for just storage were exposed to the same risks as the trading degenerates. When everything collapsed, the trading degenerates could withdraw using the very same money that regular FTX users had put money in.
It's fraud for sure .. but it doesn't mean he intended to take the money or anything. He was just too naive to understand how dangerous mixing the funds would be during an inevitable period of pressure and (I'm guessing) felt like keeping the mondy separate is the kind of control that an overly bureaucratic bank would need, not a nimble startup like FTX :-/
The MIT educated, son of two Stanford teachers, professors of law and business, brother to a Wall Street trader, Jane Street employee, extremely well connected kid was simply too naive :(
Sorry, but you're just giving in too much in his bullshit. Especially when FTX terms of service explicitly said that your funds would never be given to FTX Trading, and that they would be kept apart. It's not an accident. Separating the funds was consciously thought of and immediately followed up by "lol no".
I think the education, Jane St, etc... is what allowed him to be naive. He never had to do the grunt work of running ops at Goldman Sachs to earn his stripes. He just skipped to the fun part of mansions and TED talks.
Anyway, it's clearly fraud and he should go to prison. And in some ways maybe the callous disregard for bureaucracy and controls (we don't need these, it's a waste) is worse than if he had malicious intent (I'm going to take all this money and run). For the person with malicious intent, there's not much to do other than build rules to constrain future people like that since they won't learn from the punishment of others. For the person with disdain for mechanistic controls and regulation however, we do need to show that it's just not acceptable to bypass that stuff and that society will punish you severely.
It's fraud, from the beginning.