NEW YORK: At least US$1 billion of customer funds have vanished from collapsed crypto exchange FTX, according to two people familiar with the matter. The exchange's founder Sam Bankma
The exchange's founder Sam Bankman-Fried secretly transferred US$10 billion of customer funds from FTX to Bankman-Fried's trading company Alameda Research, the people told Reuters.
The financial hole was revealed in records that Bankman-Fried shared with other senior executives last Sunday, according to the two sources. The records provided an up-to-date account of the situation at the time, they said. Both sources held senior FTX positions until this week and said they were briefed on the company's finances by top staff.
"We didn't secretly transfer," he said."We had confusing internal labeling and misread it," he added, without elaborating.FTX and Alameda did not respond to requests for comment. That Sunday, Bankman-Fried held a meeting with several executives in the Bahamas capital Nassau to calculate how much outside funding he needed to cover FTX's shortfall, the two people with knowledge of FTX's finances said.Bankman-Fried showed several spreadsheets to the heads of the company's regulatory and legal teams that revealed FTX had moved about US$10 billion in client funds from FTX to Alameda, the two people said.
They said the"backdoor" allowed Bankman-Fried to execute commands that could alter the company's financial records without alerting other people, including external auditors. This set-up meant that the movement of the US$10 billion in funds to Alameda did not trigger internal compliance or accounting red flags at FTX, they said.The US Securities and Exchange Commission is investigating FTX.
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