Reuters claims that when Alameda Research had a string of losses due to its activities, FTX utilized client funds to continue financing the company. One of the losses was a loan agreement for $500 million with the now-defunct bitcoin lender Voyager Digital. The American branch of FTX spent $1.4 billion at an auction in September to acquire Voyager’s assets.
It has been revealed that FTX CEO Sam Bankman-Fried (SBF) moved $4 billion in FTX funds collateralized by assets, including FTT and Robinhood Markets Inc. shares. Two persons with knowledge of the situation told Reuters that some of the funds were indeed deposits from customers.
JUST IN: Sam Bankman-Fried previously transferred at least $4 billion in FTX funds to support Alameda, including user deposits, Reuters reports.
— Watcher.Guru (@WatcherGuru) November 10, 2022
The two sources claim that SBF was worried that information about the plan to help Alameda would get out, so it kept the other FTX officials in the dark about it.
Contrary to popular belief, a considerable majority of Alameda’s $14.6 billion in assets are held in FTT, according to an article published by media source CoinDesk based on a purportedly leaked balance sheet.
Chief Executive Officer of Alameda Caroline Ellison stated that the financial statements only reflect a portion of the company’s operations. She indicated that assets worth more than $10 billion were excluded.
Nonetheless, concerns about Alameda’s financials persisted, and Binance’s decision to sell its FTT holdings came as a devastating blow. As a result of this collapse, $6 billion worth of cryptocurrency was removed from FTX in only 72 hours.