How Sam Bankman-Fried swindled $8 billion in customer money, according to federal prosecutors

In August 2019, the SEC alleges, Bankman-Fried directed his team at FTX to program an exception into the exchange's code, allowing Alameda to "maintain a negative balance in its account, untethered from any collateral requirements." "No other customer account at FTX was permitted to maintain a negative balance," the SEC filing continues. The negative balance meant that Alameda was allegedly effectively backstopped by customer assets while making trades. Former Alameda CEO Caroline Ellison once alluded to this in a widely disseminated interview. "We tend not to have things like stop losses," Ellison said.