- $10 billion in client assets had been inappropriately moved to Alameda Research.
- New CEO Jhas labeled FTX as a corporation with inadequate corporate governance.
On Saturday, Brian Armstrong, CEO of Coinbase, criticized Sam Bankman-Fried’s story of how FTX lost $8 billion. According to Armstrong, FTX’s prior CEO, a physicist with a degree from MIT, would not allow billions of dollars to go without a trace.
The CEO of Coinbase then explained how he thought FTX’s accounting discrepancy came to be. In Armstrong’s words, “it’s stolen customer money used in his hedge fund, plain and simple.”
According to Reuters’s reporting, after the collapse of FTX. Allegations surfaced that $10 billion in client assets had been inappropriately moved to Alameda Research. A hedge fund co-founded by Bankman-Fried.
Sloppy Bookkeeping For $8B Deficit?
Although “SBF,” aka Bankman-Fried, has claimed he did not “knowingly commingle funds” between FTX and Alameda. In a recent interview with Bloomberg, he blamed sloppy bookkeeping for the $8 billion deficit.
Since some financial institutions prefer to deal with a hedge fund to a cryptocurrency exchange, he said, FTX customers’ deposits were being transferred to Alameda. He believes this caused some users’ accounts to be credited twice for the same assets.
New CEO John Jay Ray III has labeled FTX as a corporation with inadequate corporate governance as the company filed for bankruptcy. A famous attorney, probably best known for his work in the Enron disaster, called the FTX situation “unprecedented,” and records from the case showed that the exchange did not have an accounting department.
The fall of SBF’s empire throws a cloud over the whole sector and its potential future. Coinbase has pounced on the demise of FTX to portray itself as a reputable brand in crypto.
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