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FTX Crypto Exchange Founder ‘Secretly Transferred’ $10BN To GF’s Company As Clients Demand Their Missing $2BN

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FTX Crypto Exchange Founder ‘Secretly Transferred’ $10BN To GF’s Company As Clients Demand Their Missing $2BN

“We had confusing internal labeling and misread it.”

Founder and CEO Sam Bankman-Fried has been accused of transferring $10 billion of customers’ funds from FTX to a trading company owned by his girlfriend Caroline Ellison, Alameda Research, according to Reuters. And with that, around $2 billion of customer funds have gone missing from the crypto exchange platform.

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FTX Crypto Exchange Founder 'Secretly Transferred' $10BN To GF's Company As Clients Demand Their Missing $2BN 17

One of the sources gave the exact number at $1.7 billion and the other gave a range of between $1-2 billion.

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Reuters

The sources were able to grasp the amount after they received the financial records shared by the former CEO last week. Executives joined the meeting where Bankman-Fried showed several spreadsheets that explain where the funds are being allocated after they were transferred to Alameda.

It was just days after CoinDesk reported that a majority of Alameda’s assets were held in the token.

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LinkedIn

FTX’s financial freefall added to the list of major high-profile collapses and was the fourth biggest in volume exchanged.

After Reuters’ report, the ex-CEO denied having done a secret transfer of the fund. His message read, “We didn’t secretly transfer. We had confusing internal labeling and misread it.”

When asked about the missing fund, he did not comment and simply replied with “???”.

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Getty Images

Bankman-Fried tweeted on Friday that he was still “piecing together” what had happened, from the fall of their deal with the giant crypto exchange Binance, who shared that their decisions were “as a result of corporate due diligence” and the reports of mishandled funds.

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SBF_FTX

FTX legal and finance teams have also revealed that Bankman-Fried had employed a “backdoor” system in the FTX book-keeping with complicated software. And it gives him the ability to change the financial records without alerting the executives and auditors. He had also denied ever implementing them.

SEC Chairman Gary Gensler has also been criticized for not investigating FTX founder Sam Bankman-Fried before the exchange collapse.

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Getty Images

The collapse had sent alongside it the value of cryptocurrencies, with Bitcoin and Ethereum reaching an all-time low for years. He also filed for Chapter 11 a few days ago and gave the steering wheel over to John J. Ray III, the restructuring specialist who handled the biggest bankruptcy filing in US history at $74 billion.

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SBF_FTX

Cryptocurrency lender BlockFi has also announced a temporary pause in client withdrawals since the collapse and future updates “will be less frequent than what our clients and other stakeholders are used to.”

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FTX Crypto Exchange Founder 'Secretly Transferred' $10BN To GF's Company As Clients Demand Their Missing $2BN 18

Bitcoin also plummeted from $20,000 to a temporary $15,500 and is now stabilizing at $17,000. It reached a new low in two years.

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