At least $1 billion in client funds — and possibly as much as $2 billion — disappeared in the implosion of cryptocurrency exchange FTX, according to reports.
Flamboyant FTX founder Sam Bankman-Fried, known in the industry as “SBF”, secretly funneled $10 billion in client funds to his trading company, Alameda Research, sources told two outlets. .
Alameda Research is run by Bankman-Fried’s girlfriend, Caroline Ellison.
Two senior FTX officials said they saw evidence the money was missing in copies of financial documents Bankman-Fried shared with company executives last week, according to Reuters.
Bankman-Fried stepped down as CEO on Friday as Bahamas-based FTX filed for Chapter 11 bankruptcy after scrambling to shore up an $8 billion liquidity crunch that kept investors to claim their funds.
An attempt to save FTX via a bailout deal with rival exchange Binance did not work, leading to the crypto’s most high-profile crash in years.
In text messages to Reuters, Bankman-Fried, one of the Democratic Party’s biggest donors, said he “did not agree with the characterization” of the $10 billion transfer.
“We didn’t transfer secretly,” he said. “We had confusing internal labeling and we misread it,” he added, without giving further details.
“???” was Bankman-Fried’s response, when asked about the missing money.
With post wires