Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

Yesterday, Tiffany Fong released the first interview that Sam Bankman-Fried has done since the

FTX implosion. It came out on Coffeezilla's YouTube channel with the full conversation being

released on Tiffany's own channel. I'll put links to both videos in the comments section,

and they are worth checking out. Tiffany was kind enough to allow me to use some of her audio

for today's video, where I can hopefully add some value by explaining

how I believe FTX first began touching customer funds. We will look at how Sam explained

this issue to Tiffany, combined with some important detail from the first day declaration

from FTX's Chapter 11 bankruptcy case in Delaware.

What appears to have happened at FTX is something that would never have happened at any

properly organized financial firm. FTX, it would appear, was an improperly organized firm.

It's my opinion that customer funds were likely at risk from day one at

FTX and based on the information from the bankruptcy court declaration, the precarious

position customer funds were placed in was likely hard-coded into the way the exchange

was designed. Now obviously more information will come out over time,

but that is what it looks like to me right now. Now, I'll let you guys decide for yourselves

if you think that this was an unintentional issue and can be explained away by the lack of experience

of the team at FTX, they are quite young.

Or if you think that the exchange was specifically designed this way by people who were fully

aware of the risk they were exposing their customers to.

So Tiffany had two one-hour-long interviews with Sam Bankman-Fried, where she asked for explanations

as to what went wrong at FTX and what caused the $8 billion hole. Essentially, where did all

...