Brett Harrison: evaluation

Transcript context

…So it seems like Fcx was a really good product compared to other crypto exchanges. I've heard a lot of traders phrase it was this competence sort of built while SBF was still doing media stuff, or was this built before he kind of went on the PR tray? And like, how was this product built while the CEO was kind of distracted? So I think the core of the product was built before my time, and my understanding was in the transition from Alameda to FTX, where there was no publicity around Alameda, there wasn't any publicity around FTX. It was very much like heads down build mode for several months. And just think, think, think about the core product having been a trader on these different exchanges around the world that also offer derivatives and knowing all their problems. Like, for example, if you had an ether futures position and also an ether spot position on this one exchange, you could get liquidated on your ether futures position even if you had enough ether spot as collateral, because you needed to have that spot crypto within the ether futures spot collateral wallet, which was different than the ether spot wallet. And so it was this game of shifting assets around to different wallets to make sure you kept meeting your collateral requirements, which was just an operational nightmare. And so Sam told and worked with Gary and the Shot to build basically a cross collateralization system where you have just one wallet with all of your assets, all, you know, haircut. It appropriately based on volatility and liquidity, but then summing up to a single collateral value that represents what you can put on in terms of margin for all of your positions. Or having an auto liquidation system that doesn't. Just the second that you're slightly below your margin fraction. Send a giant market order into the book and dislocate the order book by 10%. It would automatically start liquidating small percentages of your portfolio at a time to try to minimize market impact. And then if the position got too underwater, it would auction that position off to backstop liquidity providers, a number of them, who would then take on that position again without having to kind of rip through the book and cause dislocation. And so it was much more orderly, it was much more predictable. And that had to have come from the initial intuitions that Sam and his colleagues got from being traders on these exchanges and thinking, how should this work if it were perfect? So I do think in the beginning, they were really working on that product together. And then once the success came and Sam got drunk on the celebrity of being so out there and known and having all these newfound connections, that things are to go by the wayside. You mentioned that one of these things that he was doing was making these sort of exorbitant deals and with celebrities, with acquisitions, branding. What was your understanding at the time of where the money to do this was coming from?…

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