Should an institutional customer's treasury and risk committee withdraw, cap or maintain its FTX.com custody and trading exposure after the leaked Alameda balance-sheet report and the two November 6 public responses?
FTX.com custody and counterparty exposure at November 6, 2022
Decision time
November 6, 2022
Knowledge cutoff
November 6, 2022
Recommended path
Withdraw excess assets in small verified stages, stop new unsecured exposure and retain only minimum operational balances until FTX.com—not an affiliate or separate U.S. entity—provides independently reconciled custody, liabilities, liquidity, encumbrance and related-party controls. This is a risk-limit decision, not a finding of fraud or insolvency.
Confidence
Moderate
What happened
The captured public record does not establish what the hypothetical institutional customer did at the Part A decision time; FTX Trading Ltd. filed Chapter 11 five days later.
The Part A recommendation was defensible on verification and asymmetric-custody-risk grounds without predicting fraud. The public record does not reveal the hypothetical customer's actual action or execution price and later outcomes must not be smuggled into the cutoff decision.
Cap balances at operational need and withdraw excess exposure in verified stages until the custodian passes an entity-specific asset-control and liquidity reconciliation.
Contractual title does not itself prevent operational access or commingling; custody loss severity is asymmetric when verification fails.
Candidatemoderate confidence
rule.ftx.self-referential-collateral
Exclude the exposure from immediately liquid resources until independently executable depth is proven and stress price decline collateral calls and withdrawals simultaneously.
Selling to meet obligations can depress the same instrument supporting collateral and reported equity producing a reflexive liquidity spiral.
Candidatehigh confidence
rule.ftx.entity-perimeter
Attribute every protection and resource to its exact legal entity product and jurisdiction and require an enforceable transfer or guarantee before using it elsewhere.
Group branding and shared management do not make a regulated subsidiary's assets legally or operationally available to another customer perimeter.