logo

Here is how SBF and Gary Wang secretly stole $65 billion from FTX users

SBF

The scandal surrounding the SBF has taken yet another turn for the worse. According to reports, the counsel representing FTX, Andrew Dietderich, said in the Delaware bankruptcy court that the notorious Sam Bankman-Fried, the former CEO of the failed cryptocurrency exchange FTX, urged Gary Wang, the co-founder of FTX, to construct a “secret backdoor” to allow Alameda Research to borrow $65 billion client money from FTX.

Mr. Wang created this backdoor by inserting a single number into millions of lines of code for the exchange, creating a line of credit from FTX to Alameda, to which customers did not consent. And we know the size of that line of credit. It was $65 billion.

Andrew Dietderich

When it presented charges against Wang in December, the Commodity Futures Trading Commission (CFTC) made claims that were quite similar to these.

However, the amount of that line of credit has not been brought up to this point in time. Following that, the CFTC referred to it as essentially unrestricted.

The Commodity Futures Trading Commission (CFTC) filed charges against Wang and the CEO of Alameda Research, Caroline Ellison, in December 2022. Ellison was also SBF’s lover.

According to sources quoted by Reuters in November 2022, Bankman-Fried had transferred $10 billion between the two corporations, with an additional $2 billion that could not be accounted for at the time.

There have been an increasing number of disclosures just like this one since SBF was accused of amassing illegal money and sentenced to jail for the crime.

Both Wang and Ellison have entered guilty pleas in connection with federal allegations ranging from fraud to conspiracy. They are providing helpful information to the investigators.

SBF pleaded not guilty and is now blogging

SBF, on the other hand, has just entered a not-guilty plea, and he has only a few days ago produced a blog that outlines what he alleges occurred with FTX and Alameda.

However, he has neatly excluded any reference to the billions of dollars in customer money that he is supposedly accused of wasting. SBF said on his blog that no funds were taken and blamed Alameda’s failure to effectively hedge against a market meltdown for the company’s bankruptcy.

I didn’t steal funds, and I certainly didn’t stash billions away. Nearly all of my assets were and still are utilizable to backstop FTX customers.

Sam Bankman-Fried “SBF”

In addition, he provided three explanations for why the collapse occurred. He said that Alameda had $100 billion in assets, which were affected by both a market crash and an intense, rapid, and targeted crash that was caused by the CEO of Binance Changpeng Zhao “CZ”.

This is not the first time that CZ has been the focus of SBF’s aggression. As reported by Cryptopolitan, his buddy Kevin O’Leary, who too suffered a loss of millions of dollars owing to the collapse of FTX, also placed the finger of blame on CZ and Binance as the primary reason for FTX’s downfall.

Jai Hamid

Jai Hamid

Jai Hamid is an enthusiastic writer whose current area of interest is the blockchain sector. Whenever she is not reading or writing, you can find her tending to her plants in the garden. She strongly believes that crypto is going to transform the world for the better.

Related News

Hot Stories

Charles Hoskinson reassures community after Cardano glitch
Chinese firm launches stablecoin and CBDC payments system
VC firm Pantera sums up 2023 forecast; says DeFi is poised to take over the crypto market
Uniswap price analysis: UNI drops below $6.61 as bearish market sentiment persists.
Ethereum price analysis: Selling pressure mounts as ETH price steps down to $1,616

Follow Us

Industry News

Chinese firm launches stablecoin and CBDC payments system
VC firm Pantera sums up 2023 forecast; says DeFi is poised to take over the crypto market
UK regulators deliberate investment products ban
EU lawmakers impose stringent measures for banks holding cryptocurrencies
Genesis creditors drag DCG to court

Add Your Heading Text Here