Binance triggered the collapse, but the stage was set by FTX/Alameda by "creating its own token" (per "The FTX-Alameda nexus") and "loaning" $10bn to Alameda using their "own created token" as the backing collateral.
Of course, there's a risk that the hedge fund could lose some or all of the customers' funds. And the exchange promises that customers can have their assets back on demand, which could be a trifle problematic if they are locked up in leveraged positions held by the hedge fund. But this is crypto. There's an easy solution.
The exchange can issue its own token to replace the customer assets transferred to the hedge fund.
The exchange will report customer balances in terms of the assets they have deposited,
but what it will actually hold will be its own token.
If customers request to withdraw their balances, the exchange will sell its own tokens to obtain the necessary assets - after all, crypto assets, like dollars, are fungible.
["The FTX-Alameda nexus" - emphasis mine]
Of course, there's a risk that the hedge fund could lose some or all of the customers' funds. And the exchange promises that customers can have their assets back on demand, which could be a trifle problematic if they are locked up in leveraged positions held by the hedge fund. But this is crypto. There's an easy solution. The exchange can issue its own token to replace the customer assets transferred to the hedge fund. The exchange will report customer balances in terms of the assets they have deposited, but what it will actually hold will be its own token. If customers request to withdraw their balances, the exchange will sell its own tokens to obtain the necessary assets - after all, crypto assets, like dollars, are fungible. ["The FTX-Alameda nexus" - emphasis mine]