@jimmysong I'm confused by this in your latest newsletter. I'm not a trader and haven't followed the Gamestop thing closely, but isn't it possible to innocently lend more than 100%? E.g., Alice owns $FOO, lends $FOO to Bob, who sells it to Carol, who lends it to Dan, who sells it to Edith, etc.

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@jimmysong Also, this bit is not quite right. Green used presigned transactions with nLockTime, not CLTV. In fact, they started using nLockTime before BIP65 CLTV was even added to the network.

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Yes. It happens sometimes and considered as "technical" risk, I suppose during active trading.

@harding @jimmysong I think the borrow shares then sell is accurate, the only disagreement is whether that's reasonably called "innocent" by the time you've done it for over 100% of issued shares (or ever, for people who don't like short selling)

@harding With bearer instruments your analysis would be correct. When it's centralized, there are a lot of shenanigans that can take place like this:

They're really fractional reserve lending shares they have custody of, which isn't too far off from what used to happen with gold.

@harding @jimmysong What I understood was that in this case it was a single hedge fund that borrowed 140% of floated GameStop shares.
I don't think one can argue that they weren't aware of the total float.
So they just knew that the would at some point have to buy back 1.4 x the total float to pay them back to their owner.

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