A portion of the bailout package worth at least US$4 billion that FTX.com Chief Executive Officer Sam Bankman-Fried sent to Alameda Research, a sister trading company of the exchange he founded, was allegedly comprised of customer funds, according to at least two unnamed sources cited by Reuters.
See related article: Will Contagion Spread?
- The bailout was reportedly made of assets, including FTX Tokens (FTT) and shares in the trading app Robinhood Markets Inc.
- Blockchain records show that FTX sent Alameda Research 173 million FTT on Sept. 28, worth US$4.1 billion at the time.
- Bankman-Fried did not disclose the alleged bailout to other company executives, afraid of a potential leak, according to the sources cited by Reuters.
- A CoinDesk report from last Wednesday found a large chunk of Alameda’s US$14.6 billion in assets were in FTT, suggesting solvency issues.
- Rival exchange Binance’s CEO Changpeng Zhao announced on Sunday that his company would be dumping their FTT holdings soon after the report was published, as customers scrambling to get their money out of FTX caused a bank run.
See related article: Binance and FTX – Should you be worried?