SBF Left Its Back Door To Unload FTX! How Much Do Bitcoin Investors Lose?

According to two people close to the subject in Reuters’ exclusive report, the collapsed cryptocurrency At least $1 billion in client funds disappeared from exchange FTX.

Reuters Sources Say $1 to $2 Billion Disappeared From FTX

A large part of that total, they said, has since disappeared. One source stated that the amount lost was approximately $1.7 billion. The other said the difference was between $1 billion and $2 billion.

While it is known that FTX moved client funds to Alameda, this is the first time the lost funds are reported.

According to two sources, the fiscal deficit emerged in the recordings Bankman-Fried shared with other senior executives last Sunday.

According to two sources, the recordings provided up-to-date information about the current situation. Both sources have held senior positions at FTX until this week and said they were briefed by senior staff on the company’s finances.

Bahamas-based FTX filed for bankruptcy on Friday after customers rushed to withdraw funds earlier this week. A bailout deal with rival exchange Binance fell through, leading to the crypto industry’s highest level of collapse in years.

Sam Bankman-Fried Denies Allegations

Bankman-Fried said in text messages to Reuters that he “did not agree” with the definition of the $10 billion transfer.

“We did not transfer secretly,” the SBF said. “We had a confusing internal labeling and we misjudged it,” he added, not going into details.

Bankman-Fried responded to a question about lost funds: “???”

Two sources said Bankman-Fried showed the heads of the company’s regulatory and legal teams several spreadsheets revealing that FTX moved approximately $10 billion in client funds from FTX to Alameda.

They said the tables show how much FTX lent Alameda and what that money was used for.

Sam Bankman-Fried Allegedly Creates a “Backdoor” with In-House Custom Software

FTX legal and finance teams also learned in a later review that Bankman-Fried had embedded a system described as a “backdoor” into FTX’s bookkeeping system built using proprietary software.

Thanks to this “backdoor,” they said, Bankman-Fried was able to run commands that could alter the company’s financial records without warning others, including external auditors. They said this setup meant that the move of $10 billion in funding to Alameda did not trigger internal compliance or accounting alerts in FTX.

Bankman-Fried rejected the “backdoor” application in a text message to Reuters.

*Not investment advice.