The CEO of Alameda Research and senior FTX officials knew that the company had lent its customers’ money to Alameda to help it meet its obligations, according to people familiar with the matter in the report published in the Wall Street Journal.
Alameda’s problems, founded by Sam Bankman-Fried cryptocurrency exchange led to the bankruptcy of FTX. Alameda is also a trading firm founded and owned by Sam Bankman-Fried.
FTX and Alameda Executives Know That Client Funds Are Used
Alameda CEO Caroline Ellison said in a video meeting with Alameda employees late Wednesday in Hong Kong, that she, Bankman-Fried, and two other company executives, Nishad Singh and Gary Wang, were aware of the decision to send client funds to Alameda. .
Singh was FTX’s engineering director and a former Facebook employee. Wang, who had previously worked at Google, was the company’s chief technology officer and co-founded the exchange with Mr. Bankman-Fried.
Alameda, the June collapse of crypto hedge fund Three Arrows Capital and Voyager Digital Ltd. It faced a barrage of requests from lenders after it suffered losses for crypto brokers such as
The sources quoted Ellison as saying in the phone call that FTX is using customer money to help Alameda meet its obligations.
On Friday, FTX, Alameda, FTX US and other FTX companies filed for bankruptcy protection.
Bankruptcy means it may take a long time before individual investors and others who will receive their funds can potentially get them back, if any.
*Not investment advice.
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