FTX Founder Doesn’t Know Where Billions Sent To Alameda Ended Up
- Sam Bankman-Fried says that he cannot account for the billions of dollars that belong to FTX customers and were sent to Alameda.
- Clients deposited money to FTX via Alameda in the early days and this money was upwards of $5 billion.
- “I can now go back and take a guess at…where they were ultimately spent, or used, or something,” SBF said while clarifying the whereabouts of the money.
- SBF stated that he concentrated more on FTX and not of Alameda due to conflict of interests and as a result, has no knowledge of the money.
The former CEO and founder of crypto exchange FTX, Sam Bankman-Fried, popularly known as SBF in the crypto industry, says that he cannot account for the billions that were wired to the sister company of the exchange, Alameda Research, which was headed by Caroline Ellison, a former Jane Street trader and Stanford graduate.
Interestingly, this statement comes at a time when regulators are investigating the relationship between the two companies for their management and handling of client funds. In an interview with the Wall Street Journal, SBF stated that he was unable to rule out the possibility that the money deposited by FTX customers was lent to Alameda. Meanwhile the customers were promised that the money belonged to them alone.
“One phrasing of it…would be to say that Alameda effectively sent those dollars from its FTX account to the user, but that’s a ledger transfer of course,” Bankman-Fried said. “Outside of that the answer is, they were wired to Alameda — I can only speculate about what happened after that.”
The crypto exchange which was once valued at around $32 billion and its former CEO, who was once worth more than $26 billion, are currently under scrutiny and authorities are investigating how a multi-billion dollar firm went to zero in just a few days.
Interestingly, there was a lot of fund exchange between FTX and Alameda and just two days after the exchange filed for bankruptcy, Reuters reported that at least $1 billion in customer funds had “vanished” from the crypto exchange. These funds were sent to Alameda.
Wall Street Journal reporter Alexander Osipovich asked SBF about these accounting errors to which the crypto entrepreneur replied that during the 2019-2020 period, his exchange did not support bank accounts but only crypto wallets. As a result, many customers first deposited their funds with Alameda and then would ask the money to be wired to FTX. SBF estimates that this money is worth more than $5 billion.
“I can now go back and take a guess at…where they were ultimately spent, or used, or something,” Bankman-Fried said to clarify the whereabouts of the $5 billion. “But dollars are fungible with each other, so it’s not like this one dollar bill over here that you can trace through from start to finish. What you get is more just omnibus pots of assets at various forms.”
Furthermore, when asked how SBF, who owned close to 90% of Alameda, how come he did not know the whereabouts of the money, he stated that he concentrated more on FTX and not of Alameda due to conflict of interests.