For contrast, one of the anticoin redditors is brilliantly comparing the Madoff “fraud” with the Bankman-Fried fraud. He found an old government press release from the task force assigned to undo Madoff’s mess.

The government managed to refund 88% of the losses.

This means that Madoff and his partners OWNED most of the money needed to pay the investors.  They had a lot more reserves than a real bank is required to hold.  They simply chose not to pay some of the customers after a while. This was definitely dishonest but not exactly a Ponzi.

Ponzis are always a gray area. Charles Ponzi himself didn’t start out to commit fraud; he got tangled up and decided to cheat, hoping to return into honest territory later.

Madoff continued running a straightforward investment bank while part of his operation stopped paying.

Bankman-Fried is not a gray area. He pulled in money from suckers and “paid” their returns in fake tokens, not in real money. Most didn’t try to withdraw, because the SBF-controlled media pushed them to HODL.