"FTX Executives Knew They Were Using Customer Funds to Repay Alameda Debt"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Myunghwan Lee] Major foreign media reported that the management of FTX and Alameda Research, an affiliate at the center of insolvency, were aware that FTX, the world's third-largest cryptocurrency exchange facing bankruptcy, had lent customer funds to Alameda Research.

The Wall Street Journal (WSJ) reported this on the 12th (local time), citing sources familiar with the matter.

According to the report, Alameda was overwhelmed by repayment demands from creditors after the cryptocurrency hedge fund Three Arrows Capital (3AC) went bankrupt in June. The media also reported that Alameda had previously taken out loans to raise fixed venture investment funds.

In this situation, Caroline Ellison, CEO of Alameda, reportedly revealed during a video conference with employees on the 9th (local time) that FTX helped Alameda repay its debts by lending customer funds to Alameda. In this meeting, CEO Ellison stated that she, as well as Sam Bankman-Fried, CEO and founder of both FTX and Alameda, and two other FTX executives were aware of this fact. The executives mentioned by CEO Ellison are Gary Wang, FTX Chief Technology Officer (CTO), and Nishad Singh, a technology executive.

Initially, most FTX executives were reportedly unaware that they had supported Alameda with large sums of money and suffered significant losses, but according to the WSJ report, a considerable number of top executives knew about this.

FTX, facing a liquidity crisis, filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in Delaware court on the 11th.

This content was produced with the assistance of AI translation services.