FEATURED ARTICLE

Investors Reportedly Lose Sh230B After FTX Crypto Exchange Collapses

Share
The exchange's founder and former CEO Sam Bankman-Fried quietly transferred $10 billion of customer funds from FTX to its sister trading company and a big chunk of that total is missing. [ Photo / Washington Post ]
Share

At least $1 billion (Ksh230 billion) in FTX customers’ funds have vanished from the collapsed crypto exchange. The exchange’s founder and former CEO Sam Bankman-Fried quietly transferred $10 billion of customer funds from FTX to its sister trading company, Alameda Research, and now a big chunk of that total is missíng, a report Reuters said.

One of the sources, who Reuters said held a senior position at FTX until this week, estimated about $1.7 billion cannot be accounted for. The other, also briefed on the exchange’s finances by top staff, gave a range of $1 billion to $2 billion.

FTX users have scrambled to get their money off of FTX via alternative assets after the exchange froze withdrawals before filing for Chapter 11 bankruptcy protection on Friday. The crypto exchange collapsed after facing a liquidity crunch that saw Bankman-Fried in need of an $8 billion injection.

Rumours about FTX’s insolvency prompted a bank-run like dash by customers to withdraw funds last weekend, which saw about $6 billion pulled out of the crypto exchange in just 72 hours.

Last week, Bankman-Fried shared documents with other FTX executives that showed the missíng funds, Reuters reported. The materials revealed a “back door” into the company’s books built using bespoke software.

The sources said the “backdoor” allowed Bankman Fried to alter the company’s financial records without alerting other people. That meant the transfer of $10 billion did not set off any alarms, they said.

But Bankman-Fried told Reuters he “disagreed with the characterization” of the transfer. He said: “We didn’t secretly transfer” and “We had confusing internal labeling and misread it.”

He also responded to Reuters with “???” when he was asked about the missíng funds.

As FTX was a leading crypto exchange seen as solid, its troubles have weighed heavily on the ecosystem, and many are worried other crypto firms could suffer risks to their solvency as a crisis of confidence spreads.

Leading cryptocurrencies bitcoin and ethereum have fallen about 19% in the last seven days, according to CoinMarketCap. FTX did not immediately respond to request for comment. [ THE  INSIDER ]

Next >> Mobile Operator Pulls a Major Surprise In New Market

Written by
BUSINESS TODAY

editor [at] businesstoday.co.ke

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

PAST ARTICLES AND INSIGHTS

Related Articles
Shehryar Ali, senior vice president and country manager for East Africa and Indian Ocean Islands at Mastercard (left), and Saad Latif, Director of Commercial Operations at Flowcart, sign a strategic collaboration agreement to enable secure, seamless card payments within social and conversational commerce journeys across East Africa.
BUSINESS

Mastercard and Flowcart Partner to Power Secure Card Payments in East Africa

 Mastercard has entered a strategic collaboration with Flowcart to embed secure, seamless...

FirstRand
BUSINESS

FirstRand Seeks to Acquire a Bank in Kenya

FirstRand, a major player in South Africa’s banking business is seeking to...

NSE is in the red
FEATURED ARTICLE

NSE: Navigating the Current Market Cycle

The current correction at the Nairobi Securities Exchange(NSE) is not simply about...

1. Family Group Foundation Chair Dr. Francis Muraya and Kenya Forest Service Chief Conservator of Forests Alex Lemarkoko sign a partnership aimed at advancing Ngong Hills restoration through a one-million tree seedlings nursery project.
BUSINESS

Family Group partners with Kenya Forest Service in Tree Seedlings Nursery Project

The Family Group Foundation has partnered with the Kenya Forest Service (KFS)...