FTX handed money from its customers to Alameda, sources point out

Sources from The Wall Street Journal point out that FTX handed over its clients’ funds to Alameda Research, another company led by Sam Bankman-Fried, also known as SBF.

According to the information, SBF allegedly told an investor that Alameda owes approximately US$10 billion to FTX. He goes on to also note that FTX would be taking $16 billion in custody for its clients after it collapsed after honoring $5 billion in withdrawals this Sunday (6).

Bankman-Fried even apologized via his social media this Thursday (10) after even Binance showed no interest in bailing out FTX. However, nothing seems to calm the minds of its clients, who are still unable to withdraw their cryptocurrencies.

Alameda Research and the Fall of FTX

Last week, a CoinDesk article set the market on fire after pointing out that Alameda Research, a company affiliated with FTX, would be having trouble with its money. After that, rumors caused massive looting to expose FTX, showing it was insolvent.

According to information from The Wall Street Journal, Sam Bankman-Fried allegedly used money from FTX customers to fund Alameda’s operations, information that had not been disclosed until then.

Overall, the anonymous source pointed out that the the amount involved is approximately US$6 billion, equivalent to R$32 billion in direct conversion🇧🇷 It is further stated that FTX had US$16 billion (R$85 billion) in custody.

CoinMetrics’ Lucas Nuzzi believes FTX bailed out Alameda in the second quarter of this year, a period when several other giants went bankrupt, including Voyager, which was bought by FTX months later.

“I found evidence that FTX Alameda may have launched a massive bailout in the second quarter, which is now coming back to haunt them. 40 days ago, 173 million FTT tokens worth more than $4 billion became on-chain assets. ”

1/ I found evidence that FTX could have provided a massive bailout for Alameda in the second quarter, who now came back to haunt them.

40 days ago, 173 million FTT tokens worth more than USD 4 billion became active on-chain.

A rabbit hole appeared pic.twitter.com/DtCyPspME0

— Lucas Nuzzi (@LucasNuzzi) Nov 8, 2022

The text goes on to point out that Alameda may have gone bankrupt long ago, along with 3AC and so many others, and could only survive until then because of SBF’s misconduct.

Attention is focused on Binance

Another charge is that even Binance could have been aware of the situation of Alameda Research and FTX long before they publicly confirmed their situation.

“There is a chance that the folks at Binance are aware of this deal between FTX and Alameda,” CoinMetrics’ Nuzzi continued.

SBF, who asked Changpeng Zhao for help, appears to have threatened his rival as he suffered the consequences of his actions.

“Maybe at some point I’ll have more to say about a particular sparring partner, so to speak. But you know, glass houses. So for now I can only say: well played; you won.”

20) At some point, I may have more to say about a particular sparring partner, so to speak.

But you know, glass houses. So for now I just want to say:

well played; you won.

— SBF (@SBF_FTX) Nov 10, 2022

Finally, today Binance is the largest exchange in the world and should be the next target for regulators. Their haste in trying to rescue FTX and expose their cold wallets may make it concerned about the target, but it’s too early to know what it is.

Meanwhile, the market remains restless. Although US inflation figures (10) published last Thursday have relieved investors, there is still a feeling of mistrust.