Manipulations and the disappearance of billions of dollars .. Details of the last moments before the bankruptcy of FTX

while I entered Crypto exchange collapsed FTX In bankruptcy protection, Reuters reported that between $1 billion and $2 billion in client funds have disappeared from the cryptocurrency exchange.

According to an analysis by Reuters and the Wall Street Journal, the CEO of crypto exchange FTX, Sam Pinkman Fried, has transferred $10 billion in client funds from his cryptocurrency exchange to digital asset trading house, Alameda Research. net”.

Alameda, also founded by Fred Pinkman, is a sister company to FTX. Those relationships are now under investigation by multiple regulators, including the Department of Justice, as well as the Securities and Exchange Commission, which is investigating how FTX handles client money, according to multiple reports.

Two sources who spoke to Reuters said much of the $10 billion that was sent to Alameda “has since disappeared.”

The report revealed that both sources “held senior positions in FTX until this week” and added that they were “branded about the company’s finances by senior staff.”

One source put the gap at $1.7 billion. The other puts it in the range of $1 billion to $2 billion.

“I do not agree with the characterization of the transfer of $10 billion in client funds to my own company,” Bankman wrote in a text message to Reuters, adding that it was “not communicated in secret.”

Emergency meeting in the Bahamas

Last Sunday, Bankman Fried held a meeting with executives in Nassau to look at the books of FTX and see how much cash the company needs to cover the gap on its balance sheet.

On Sunday, Pinkman-Fried said in a tweet that FTX clients claimed about $5 billion in withdrawals, which he described as “the largest by a huge margin.” It was the day of an emergency meeting of Pinkman Fried in the capital of the Bahamas.

The heads of FTX’s regulatory and legal teams were reportedly at a meeting, where Bankmanfried revealed multiple spreadsheets showing how much cash FTX loaned to Alameda and for what purpose, according to Reuters.

These documents, apparently reflecting the company’s latest financial condition, showed the transfer of $10 billion in customer deposits from FTX to Alameda. They also revealed that some of this money – estimated at between $1 billion to $2 billion – could not be counted in Alameda’s assets.

A ‘back door’ was also revealed in the FTX records, which was created using ‘custom software’.

The two sources who spoke to Reuters described the matter as a way in which former CEO Bankman Fried can make changes to the company’s financial record without reporting the deal, either internally or externally. This mechanism could, in theory, have prevented, for example, disclosure of the $10 billion transferred to Alameda to its internal compliance team or to external auditors.

Bankman Fried denied, outright, the implementation of the so-called back door.

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