Was FTX funded by Chinese capital flight?
While the media focuses on the ongoing fallout of FTX and Alameda Research, what’s still curious and murky is how the two firms actually made money. Is it possible that Chinese capital flight helped fund the American-made cryptocurrency ‘saviour?’ Rumors suggest that Sam Bankman-Fried (SBF) had taken advantage of the ‘Kimchi Arbitrage’ and the Japanese arbitrage — the discrepancy between the price of cryptocurrencies in Korea or Japan with the prices of cryptocurrencies in the US, which meant buying in whichever country presented a discount and selling in the country presenting a premium. While there absolutely was an arbitrage play during Alameda’s startup period, the idea that SBF — a twenty-something fresh off the heels of a stint at Jane Street — could make it work and sustain it, while billionaires and giant funds couldn’t, seems unlikely. Risky loans for cash-strapped startup Leading figures in the Effective Altruist movement SBF and Tara Mac Aul...