The liquidity crisis facing FTX could have emanated from Sam Bankman-Fried, the CEO of the cryptocurrency exchange, who secretly transferred at least $4 billion to boost Alameda, with some of the funds being customer deposits, according to Reuters. .

According to the report:

“Seeking to prop up Alameda, which had nearly $15 billion in assets, Bankman-Fried transferred at least $4 billion in FTX funds, secured by assets that include FTTs and stocks on trading platform Robinhood Markets Inc. Bankman-Fried did not told other FTX executives about the move to shore up Alameda.

Lucas Nuzzi, head of research and development at CoinMetrics, shared similar sentiments, stating:

“I found evidence that FTX could have provided a massive bailout for Alameda in Q2 which is now back to haunt them. 40 days ago, 173 million FTT tokens worth over $4 billion went live on chain. A rabbit hole appeared.”

Source: Lucas Nuzzi

The FTX crash was also triggered by Bankman-Fried’s decision to bail out struggling crypto firms as the bear market continued to bite. The report noted:

“Some of those deals involving Bankman-Fried’s trading firm, Alameda Research, led to a series of losses that eventually became their downfall.”

Part of the losses Alameda Research suffered involved a $500 million loan deal with the crypto lender that collapsed Voyager Digital.

FTX’s future is in jeopardy after Binance halted takeover plans, citing misappropriation of customer funds, Blockchain.News reported.

Binance revealed that this decision was made based on corporate due diligence and reports of alleged US agency investigations and mishandling of customer funds.

Based on a deficit of up to $8 billion, Bankman-Fried acknowledged that FTX needed $4 billion to remain solvent if it was to avoid the bankruptcy route.

The rain began to hit FTX after experiencing a “giant withdrawal surge” of $6 billion in CRYPTOCURRENCIES in just 72 hours. The cryptocurrency exchange was used to daily withdrawals amounting to tens of millions of dollars.

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