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”.
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.
“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.
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