For many in the crypto community, Sam Bankman-Fried is the real culprit behind the FTX bankruptcy, but the former CEO keeps insisting that he himself doesn’t know what happened. As he defends himself, he makes revelations that surprise the crypto community. At the same time, we notice the full extent of the links that existed between the two crypto companies of SBF, Alameda Research and FTX.
$5 billion in accounts controlled by Alameda
The Wall Street Journal has published a report on December 3, noting that funds from FTX investors have disappeared. It appears that around 5 billion of exchange customer funds ended up in Alameda Research accounts. But Sam Bankman-Fried, who owns 90% of the crypto trading company, said he don’t know what happened with the funds.
He has Explain : “They were fired at Alameda and I can only speculate what happened next. Dollars are fungible with each other. So it’s not like there’s a dollar bill here that you can trace back and forth. What you get is more just an omnibus, you know, pots of assets in different shapes“.
The former CEO of FTX said he was not familiar with the operation of Alameda Research, of which he is the co-founder. SBF added that the cryptocurrency trading company may have received the funds as a loan from FTX.
The special privileges granted to Alameda by FTX
SBF had stated that crypto exchange FTX offered a number of special privileges to its trading business. Indeed, interviewed by the Financial Times, he explained that Alameda had the right to trade beyond the limits. Furthermore, the company could make massive loans from the FTX exchange.
In the Wall Street Journal report, we learn that SBF said that he regrets not having taken into account the privileges he granted to Alameda. Furthermore, we learned that the internal system of FTX was defective, with the total absence of an accounting department.
According to Brian Armstrong, CEO of Coinbase, relying on SBF when talking about accounting error is out of the question. Armstrong said:I don’t care how messy your accounting is […] you’re definitely going to notice if you find another $8 billion to spend“.
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