Amazing. A deadly brew of Ponzi and gambling mixed with arrogant greed.
It wasn't totally a ponzi scheme because they were fully funded, except what they were fully funded with was not actual currency, but their little FTX token coin, which had no real distribution or fungibility outside their little circle.
They were amateur hour rubes, thinking that their 'billions' was some kind of big deal, and with it and alot of cowboy swagger, the world was their oyster in which they could make anything happen. Reality is the world currency markets trade over $10T
A DAY. They also are issued by govts that can 1) pay interest on their currency via debt instruments, 2) tax, and 3) have a real physical economy to support that currency, and are fungible in the real world. Their little token was a pimple on a flea's butt.
I would put their downfall mostly at arrogance. I do not understand the fascination of this society with boy genius wunderkind prodigies with the Einstein hair and surfer dude mentality and stupid MIT degrees. Oh, yes yes yes don't you see, but they are the new tech savvy generation, they are going to do away with the old fossilized rules of ancient geezers and govts and create a whole new rainbow and unicorn world of dizzying financial utopia, because computers.
Reality is money/financial rules are fixed and do not bend and do not yield. To quote a line from a song by the late great Johnny Cash: 'You can run on for a long time, sooner or later God'll cut you down.' These guys didn't even have a clue, but they were young and cool so they didn't have to play by the rules.
