And all that are things, in retrospect, I should have expected might happen in an extreme scenario, because that's how markets work. And so even correlated hedges had limited use there, and a run on the bank at the same time. And, you know, I can tell you, in my head, I was looking at a 30% down move over a few-day period as a sort of, like, extreme tail-case event that, you know, we had seen once before, and, and then, you know, what happened here was, I mean, a 95% down move over the course of a year, and a, you know, 60% down move over a few-day period with very little liquidity and all happening at once in all of these coins in a correlated fashion in which hedges didn't mean as much also because this was a specific crash on assets associated with Alameda Research, rather than all assets. But clearly, I was, I was not nearly cautious enough from a downside perspective – from the extreme downside perspective. And, you know, I think that I don't have any strong statements to make about, you know, what value they're assigned from sort of, like, an upside perspective or even a median case perspective. And I want to sort of differentiate your, like, expected value or, or sort of, like, worth or something like that from security. SBF: In Alameda's case, I don't think I was marking them the way I wish I had from a risk perspective. 7, I was feeling quite uneasy about that. And, and, and the core metric that I'm thinking of there is will we be able to make sure all customers are whole. And I'm starting to think about, like, emergency scenarios and I'm starting to think about, like, things might, things might end quite badly here. 7 and 8, I start to become nervous that FTX is not going to be able to fulfill customer withdrawals. 6 – then and, and especially as we bleed into Nov. I was thinking of this as more like Alameda is gonna to be really tight on funds and that, you know, maybe it would end up having some small impact on FTX, but not, not a significant one, not one that hurt customers at all. I didn't think it was going to lead to a massive loss for FTX's customers. I didn't think it was existential for FTX. And when I started to think a bit more about this, you know, I was nervous that that would lead to substantial losses for Alameda and that, you know, it would be a bit messy. 2 or so when there was the leak of the Alameda balance sheet through CoinDesk. SBF: So, I think, before then what I was nervous about was that basically – and this started, I would say Nov.
You know, if you rewind even a few days, I was, I was a little bit nervous, but not on nearly the same scale and I, I was thinking about, you know, risks that were substantially less. At that point, you know, we started calling prospective, you know, sources of financing, because I was, I was nervous about what was going to happen there. And we're seeing a run on the bank start and that was leading to $4 billion a day of client withdrawals. It had taken hits over the course of the year, but that was a particularly large one and very abrupt. And, you know, Alameda's position was big on FTX. And I, you know, when we looked at that, there was a potential serious problem there. 6, we were putting together all of the data, putting together all the information that obviously should have put together way earlier – that obviously should have been part of the dashboards I was always looking at. 6 was – that was the date that the tweet about FTT came out. SBF: So, the time that I really knew there was a problem was Nov.
But I – that, that did make that position size substantially larger than, than I thought and I think than what you would have gotten from, from most normal avenues. And I'm still looking into exactly how that, how that worked mechanically.
It created a discrepancy between the display of the account and what was really going on there. And I think that the FTX's internal accounting did correctly, effectively try to debit Alameda for those funds, but it didn't happen in the primary account and so it didn't happen. And so I think in the meantime, some of them were wiring money to Alameda Research to get credited on FTX, and I think that was a substantial sum. It took us a while, it took us a few years, and, you know, there are customers who wanted to wire money to FTX. It didn't have any bank accounts globally. But I do think that in addition to what I had seen as sort of lot of the standard borrows here, that we scroll back to 2018 or to 2019, I guess, FTX didn't have bank accounts.
SBF: So, I'm still looking into the details of some pieces of this.
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