Missing Funds Belonging to FTX’s Customers
Individuals closely linked with FTX’s trauma have noted customers’ funds (aggregating up to US$ 1 Billion) gone missing from the collapsed exchange.
Founder of FTX, Sam Bankman-Fried, was reported to have transferred crypto funds amounting to US$ 10 Billion into Alameda Research. The receiving company too was founded by Bankman-Fried as a trading company.
Lost Funds Roughly In Between $1 to 2 Billion
Regarding the missing funds, there are two rumors. According to one rumor the lost funds are to the tune of US$ 1.7 Billion. As per other rumor, the lost funds ranges between 1 to 2 Billion Dollars.
It is true that FTX had made a transfer of huge funds into Alameda, however, the news of missing funds has surfaced only now.
According to individuals, deficiency in the funds surfaced in FTX’s records which FTX’s founder had shared with a key official in the collapsed firm.
The records revealed up-to-date information pertaining to accounts which information got leaked from individual sources. The two individuals are part of FTX and hold critical portfolios in FTX.
In the meantime, it is also confirmed that on 11th November 2022, FTX had moved an application for ‘bankruptcy’. The application was filed after FTX took note that its customers were actively withdrawing funds from FTX.
As a last resort, FTX went to Binance to explore the possibility of saving it from an inevitable fall. In its attempt, FTX offered Binance to take over FTX, however, the offer was refused after due deliberation by Binance.
The collapse of FTX is going to be the biggest collapse that the crypto industry has seen since its inception.
When the media tried to get an insight into the missing funds from Bankman-Fried, the founder chose not to give any comments.
Similarly, the response could not be sought either from FTX or Alameda because both entities refused to give their comments.
Issue under Scrutiny
Later that day, however, Bank-Fried posted a tweet in which he claimed that he is looking at the issue of $1 Billion missing funds. He then commented that he will be posting a follow-up tweet after collecting information.
More problems emerged for FTX when up-to-date records revealed that Alameda had accrued losses that were not within the executives’ knowledge.
When Binance’s CFO, Changpeng Zhao, said on Sunday that his exchange will liquidate the entire holding in FTX, FTX’s customer withdrawals were boosted.
Reportedly, Binance held in possession US$ 580 Million worth of native coins of FTX.
Possibility of Outsourcing for Making up The Shortfall
Recently, Bankman-Fried concluded a meeting with FTX’s executives in which the shortfall that could be made good through outsourcing was examined.
During the meeting, Bankman-Fried discussed with key officials and legal attorneys the company’s spreadsheets. The spreadsheets showed that at least $10 Billion was taken out of FTX and moved into Alameda.
Spreadsheets further revealed how much money from FTX was borrowed by Alameda and its purpose. However, what was alarming was that the spreadsheets did not account for $1 Billion belonging to FTX’s customers.
The lost funds, according to individual resources, were to be accounted for from the assets belonging to Alameda Research, which apparently never happened.