crypto billionaire Sam Bankman-Fried Photo FTX
FTX, the cryptocurrency exchange belonging to entrepreneur Sam Blankman-Fried, crashed and burned last week, losing more than $13 billion in value on paper. But now Reuters is reporting that a very real $1 billion is missing from the company.
According to the report, FTZ founder Sam Bankman-Fried secretly moved $10 billion in funds to trading firm Alameda. And Reuters sited sources as saying that anywhere from $1 billion to $2 billion of those funds belonging to FTX clients is unaccounted for.
Alameda research was founded by Sam Bankman-Fried and thought of as a sister company to FTX. It was the loses by this company – loses that were covered up – that are being cited as a cause of FTX’s downfall. But was this due to incompetence, attempted fraud or just out right embezzlement? This is what people will now be asking.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at office@jewishbusinessnews.com.
Thank you.
Based in the Bahamas, FTX is a cryptocurrency exchange that says it was built by traders, for traders. FTX offers industry-first derivatives, options, volatility products and leveraged tokens. FTX has more than one million traders using its services.
When FTZ crashed, Sam Bankman-Fried himself lost 94% of his total wealth, or about $14.6 billion and he must now sell whatever is left of FTX to chief rival Binance. That is if all things work out. FTX, it seems, was nothing more than a house of cards built upon its own assets. The company’s net worth was based on ownership of its own tokens. This means that FTX claimed to be wealthy because it owned the same crypto tokens the company issued. And these tokens had no tangible net worth. Last week the house came down.
In response to queries by Reuters about the alleged missing finds, Sam Bankman-Fried said he “disagreed with the characterization” of the $10 billion transfer. In other words, he is saying that FTX did not transfer that much money.
“We didn’t secretly transfer,” he added. “We had confusing internal labeling and misread it.”
Asked about the missing funds, Bankman-Fried responded: “???”
But could this be the beginning of another Bernie Madoff scandal? Are we soon to find out that FTX was nothing but a Ponzi scheme all along, using its investors’ money to show profits where none existed?
