Even though he owned 90% of the trading firm, FTX founder Sam Bankman says he had little insight into the workings of it. And it seems like he can’t account for billions that were sent to the firm, Alameda Research.
The Wall Street Journal reports:
NASSAU, Bahamas—FTX founder Sam Bankman-Fried said he couldn’t explain what happened to billions of dollars that customers of his failed cryptocurrency exchange sent to the bank accounts of his trading firm, Alameda Research.
And he said he couldn’t rule out the possibility that money deposited by FTX customers who were told their money was theirs alone was in fact lent to Alameda.
In an interview with The Wall Street Journal, Mr. Bankman-Fried distanced himself from Alameda, saying he had stepped back from running the firm and had little insight into its workings even though he owned 90% of it.
Some FTX customers made deposits by wiring money to Alameda-controlled bank accounts, with the intention that the money be used to fund their FTX accounts. That was a legacy of the exchange’s early days when FTX didn’t have its own bank account, Mr. Bankman-Fried said. Over time, FTX customers deposited more than $5 billion in those Alameda accounts, he said. Now those funds are gone.
“They were wired to Alameda, and…I can only speculate about what happened after that,” Mr. Bankman-Fried told the Journal.
“Dollars are fungible with each other. And so it’s not like there’s this $1 bill over here that you can trace through from start to finish. What you get is more just omnibus, you know, pots of assets of various forms,” he added.
Mr. Bankman-Fried’s remarks suggest that FTX customer funds flowing into Alameda bank accounts could have been recorded in two places—both as FTX customer funds and as part of Alameda’s trading positions. Such double-counting would have created a huge hole in FTX’s and Alameda’s balance sheets, with assets that weren’t really there. Mr. Bankman-Fried denied that double-counting affected FTX’s financials—but acknowledged that Alameda’s liabilities might not have been fully recorded.
“There are lots of ways that one could have done this in a responsible way,” he said. “Clearly what we did was not one of them.”
Considering that Biden and the party he represents benefited greatly from FTX, this should have come under tighter scrutiny, but the correct protect themselves until the righteous determine to deal with them. The People can connect the dots as to what is really going on here. The question is, at what point will they put a stop to it?
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