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FTX Crypto Collapse Leads to $1 Billion Client Fund Loss




FTX Crypto Collapse Leads to $1 Billion Client Fund Loss

Cryptocurrency has managed to make headlines in recent times. But, the FTX Crypto collapse has left people in utter shock.

Close to $1 billion of client funds has gone missing following the sudden collapse of the FTX crypto funds. Reports suggest that the fund’s owner, Sam Bankman-Fried reportedly transferred around $10 billion of customer funds from FTX to Bankman-Fried’s trading company Alameda Research. 

Two people who are close to the matter disclosed the case, further suggesting that a large part of that customer fund is already missing. Out of that, reports suggest that the valuation of the lost fun is around $1.7 billion. 

There has been confirmation that FTX has moved customer funds to Alameda Research. But, this is the first time that there has been confirmed news about the same.

The financial hole reportedly came up in a report that was shared by Bankman-Fried with some of the senior executives. According to rumors, these reports contain an updated rundown of all the misplaced funds and an up-to-date account of what’s going around.

FTX recently filed for bankruptcy, following customers pulling out their investments from the company. The company’s rescue deal with Binance was a complete loss as well, which was the last straw leading to the drastic collapse in the crypto market.

Further refuting the claims, Bankman-Fried said in a recent statement that they didn’t secretly transfer the funds. According to him, there is a “confused internal labeling”, which led to the misinterpretation of the situation and the fund transfer.

Both FTX and Alameda Research refused to make any further statements regarding the missing client fund that came into the foreground. 

Following the chaos that resulted from the crypto collapse, Bankman-Fried attended a meeting with certain company executives in Nassau to check how much money and funding was needed to make up for the sudden downfall that FTX was facing.

There were a lot of spreadsheets involved during the meetings, but there were no mentions regarding the missing customer funds that accounted for Alameda’s assets. 

Upon further investigation, FTX legal and finance teams found that Bankman-Fried did something that’s termed a “backdoor” in the standard book-keeping and audit system. According to reports, this authority allowed Bankman-Fried to make independent commands that led to substantial changes to the company’s financial processing.

Whether or not these client funds will be restored or further investigation will take place is something we’d have to wait to find out.

James is the SEO Manager here at Patty360. He has worked as a content writer for various local and national news sites covering entertainment and tech.

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