Alameda Research & FTX Execs. Knew FTX Was Using Customer Funds — WSJ
A Wall Street Journal report claims that Alameda Research’s CEO and senior executives at FTX knew the crypto exchange was using customer funds to meet liabilities.
Top executives at Alameda Research and FTX were reportedly aware that FTX was using customer funds to meet its financial obligations. According to the Wall Street Journal, Alameda’s CEO, Caroline Ellison, and FTX’s senior executives knew customer funds were being moved to prop up the finances of Alameda Research, which was in financial distress.
The revelation was reportedly made during a video meeting with Alameda employees late Wednesday, where the company’s CEO said that she, Sam Bankman-Fried (SBF) and two other top FTX executives, Nishad Singh and Gary Wang, knew about sending customer funds to Alameda. Mr Wang, a former Google employee, was the Chief Technology Officer and co-founder of the FTX crypto exchange. Mr Sign worked as FTX’s director of engineering and had previously worked at Facebook.
Sam Bankman-Fried Had Built a ‘Backdoor’ to FTX’s Compliance Systems
The possibility of Alameda’s CEO and FTX’s executives, including Sam, knew of the use of customer funds to cover Alameda’s liabilities, given that it was earlier revealed that Mr Bankman-Fried had built a ‘backdoor’ to bypass FTX’s compliance and book-keeping systems.
If true, it explains how the movement of billions in customer funds could have been carried out without anyone else noticing in both Alameda and FTX.
SBF’s Apology Might Not be Enough — Bloomberg
A day before FTX filed for bankruptcy, SBF apologised on Twitter for the series of events leading to the exchange’s liquidity crisis. He regretted not communicating more as the liquidity crunch hit.
But not everyone believes his apology has any value given the magnitude of losses FTX’s customers now face. Some traders and FTX employees had their life savings on the platform, and now they have no clear way of knowing if they will get any of it back as the exchange has allegedly been hacked.
According to the team at Bloomberg, SBF’s apology might not be enough and ‘is as hollow as his empire.’
The report concluded that SBF knew how to ride the crypto craze.
It said, ‘He revelled in his image of the quant-trading wunderkind, who supposedly got his start spotting inefficiencies in Bitcoin trading across different exchanges. His charisma became adept at separating sophisticated investors, not just retail ones, from their money, attracting even pension funds to a platform that seemed to encourage dialogue with regulators and institutions. With one hand, FTX took money offshore through leveraged bets and operating its own token and with the other donated to politicians and offered regulations to make the sector healthier.’
~By John P. Njui~
