FTX Head Wasn’t ‘Surprised At All’ After Finding Out About Missing $8B
- FTX founder SBF asked former general counsel Can Sun to “come up” with some legal reason for the $8B hole.
- Sun was brought in from Japan as a part of his non-prosecution agreement with the United States DoJ.
- Sun claimed that he learned of the $8B hole on November 7 when FTX was seeking to raise funds.
- Sun said that he came up with a few legal explanations, including dormancy fees and collateral liquidations.
According to testimony provided by Can Sun, the former general counsel for the bankrupt crypto exchange FTX, Sam Bankman-Fried, also known as SBF in the digital asset space, “was not surprised at all” that billions of dollars were missing from the crypto exchange. The money belonged to the exchange’s users, and SBF asked Sun to “come up” with some legal explanation for the hole.
As per the Inner City Press, Can Sun was brought in from Japan as a part of his non-prosecution agreement with the United States Department of Justice (DoJ). Wearing $1,000 sunglasses, Sun stated that he was tasked with explaining the $8 billion hole in the balance sheet of Alameda Research, the sister trading firm of FTX, which had access to unlimited money that was deposited by customers on the platform.
Sun told the court that he learned of the huge debt between the two companies on November 7 after receiving a spreadsheet wherein the transaction details were mentioned. “I was shocked,” he told the jurors. Additionally, asset management firm Apollo Capital was supposed to receive the spreadsheet as FTX was in the process of raising new capital during the “liquidity crunch” of early November.
When Apollo Capital asked SBF about the $8 billion hole, the former FTX CEO asked Sun to “come up with a legal justification.” Sun agreed that he came up with a few legal explanations, including dormancy fees and collateral liquidations during the market downturn. However, the former general counsel testified that the amount was too huge to be explained by any other means.
Meanwhile, the terms of service of the FTX exchange explicitly stated that the funds deposited by customers were solely theirs and that the trading platform had illegally used them.
“None of the Digital Assets in your account are the property of, or shall or may be loaned to, FTX Trading; FTX Trading does not represent or treat Digital Assets un user’s accounts as belonging to FTX Trading,” Sun said.
Sun confirmed that former engineering director Nishad Singh “was gray, like his soul was taken from him,” while SBF “was not surprised at all” by the circumstances.
As reported earlier by Bitnation, former executives including Gary Wang, Caroline Ellison, and Nishad Singh have testified against Bankman-Fried in court, while the disgraced entrepreneur claims to be not guilty.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
