Up to $3 billion in client money missing in crypto giant FTX collapse: reports

Up to $3 billion of customers’ coin has reportedly vanished from collapsed crypto giant FTX after the founder funnelled $15bn from the firm’s coffers.

At least $1.5 billion of customer funds — and possibly as much as $3 billion — have gone missing in the shocking implosion of the crypto currency exchange FTX, according to reports.

FTX’s flamboyant founder, Sam Bankman-Fried, known in the industry as “SBF,” secretly funnelled $15 billion (US$10bn) of customer funds into his trading company, Alameda Research, sources told two media outlets.

Alameda Research is run by Bankman-Fried’s girlfriend, Caroline Ellison, reported the New York Post.

Mr Bankman-Fried has said the transfers occurred due to “confusing internal labelling” that had been “misread”.

FTX has failed spectacularly. (Photo by OLIVIER DOULIERY / AFP)

Two senior FTX officials claimed they saw the evidence that the money was missing in copies of financial records Mr Bankman-Fried shared with company executives last week, according to Reuters.

On Friday, Mr Bankman-Fried stepped down from his CEO position as the Bahamas-based FTX filed for Chapter 11 bankruptcy, after scrambling to shore up an $12 billion (US$8 bn) liquidity crisis that has left investors unable to claim their funds.

At the same time, Miami-Dade County and the NBA’s Miami Heat team abruptly announced Friday they are renaming the FTX Arena and ending their relationship with the ruined company and disgraced founder.

Sam Bankman-Fried, co-founder and chief executive officer of FTXPhotographer: Lam Yik/Bloomberg.

“Miami-Dade County and the Miami Heat are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena,” the county and team wrote in a joint statement.

A bid to save FTX via a rescue deal with rival exchange Binance didn’t work out, leading to crypto’s highest-profile collapse in recent years.

In text messages to Reuters, Mr Bankman-Fried, one of the largest donors to the Democratic Party, said he “disagreed with the characterisation” of the $15 billion transfer.

“We didn’t secretly transfer,” he said. “We had confusing internal labelling and misread it,” he added, without elaborating.

“???” was Mr Bankman-Fried’s response, when asked about the missing cash.

This story first appeared in The New York Post and is reproduced with permission.