FTX CEO secretly sent $4 billion to Alameda, including from customers

As the situation unfolds, it becomes increasingly clear how crypto exchange FTX was able to fall. In a new article by Reuters According to some anonymous sources, FTX CEO Sam Bankman-Fried (SBF) even sent client money to his investment firm Alameda Research at one point. A painful revelation.

FTX CEO failed with investments

The Reuters article states that Alameda Research, a trading company founded by SBF, made several investments earlier this year. These investments later turned out to have been major failures. One of those deals was a $500 million loan to crypto lending platform Voyager. A month later, that platform filed for bankruptcy.

Later, the US arm of FTX paid $1.4 billion for the assets in the bankrupt Voyager. Reuter says it cannot estimate exactly how much loss Alameda ultimately suffered in these deals. However, two of the unnamed sources report that the company later decided to transfer assets from FTX to Alameda, presumably to fill the gap from these losses.

SBF secretly sent customer credits to FTX

It would involve as much as $4 billion in assets. Part of this consisted of customer credits, credits that customers had on the exchange to be able to trade crypto. It is not known exactly how much it is. However, SBF and FTX have received strong criticism for this method. What makes it even more serious is that SBF did not inform FTX board members about its action for fear that it would be leaked.

Anonymous sources report to the Wall Street Journal that it is even much more money. Of the $16 billion in user assets, FTX lent half to Alameda, according to the sources.

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It remains unclear what the impact will be of the collapse of FTX and Alameda. It will become clearer in the coming days which companies will suffer damage. In addition, more internal information will probably be released about how things went at FTX.

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