An FTX executive flagged worries about Alameda Research's use of customer funds to Sam Bankman-Fried as early as 2020, report says
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Pete Syme
Jan 19, 2023, 20:17 IST
Sam Bankman-Fried leaves a bail hearing in New York.Michael Santiago/Getty Images
A senior FTX exec raised concerns about Alameda Research's use of customer funds as early as 2020.
That's according to a report from the New York Times, which cites government documents.
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A senior FTX executive raised concerns to Sam Bankman-Fried about trading firm Alameda misusing funds from FTX customers as early as 2020, The New York Times reported, citing documents shared between US and Bahamian governments.
According to the Times' report, the unnamed executive, who is described as being a "high-level software developer" at the firm, met with Bankman-Fried after looking through a company database and finding that Alameda had a negative balance in its FTX account of "approximately hundreds of millions of dollars."
This information, the Times reports the governments documents as saying, led the executive to believe Alameda was "inappropriately using FTX.com customer funds," and to take that information to Bankman-Fried.
Bankman-Fried dismissed the concerns, the Times report says, because the money was backed by FTX's cryptocurrency, FTT. He also dismissed worries that the potential irregularity may be picked up by auditors, the documents reportedly say.
Filings from the CFTC show that Bankman-Fried considered shutting down the trading firm in September 2022, saying circulating a document titled: "We came, we saw, we researched."
"I think it might be time for Alameda Research to shut down. Honestly, it was probably time to do that a year ago," the document read.
Around the same time as the document was circulated, another unnamed executive spoke to Bankman-Fried to express concerns about how much Alameda had borrowed from FTX, the Times reported, citing the documents, adding that he acknowledged that he was also concerned, to the extent that it made him "5-10% less productive."
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