A report shows that disgraced FTX founder Sam Bankman-Fried (SBF) once misplaced 20 million XRP ($4 million) for several weeks while trading out of the Alameda Research account.
It’s been nearly one year since FTX’s infamous collapse, from being one of the world’s largest crypto ecosystems to a bankrupt entity struggling to repay creditors. A large portion of the blame has been laid on how the exchange mishandled customer funds, a reasoning that continues to be bolstered as new evidence emerges.
In one such newly disclosed evidence, a Wall Street Journal report shows that FTX’s former CEO recklessly managed funds while handling the trading account for the company’s sister firm, Alameda Research.
SBF, through his company, had borrowed $170 million from other individuals who shared his idea of making money with the sole purpose of giving all of it away (so-called altruists), only to lose all of it to poor trading.
In another reckless development, the FTX CEO lost 20 million XRP (worth $4 million at the time). The money “just vanished from Alameda’s accounts,” with SBF unable to account for its movement.
When confronted by employees, the former FTX CEO downplayed the significance of the lost amount, nonchalantly noting that the money may have been moved from a US-based exchange that Alameda uses to another one in South Korea used by the platform.
He claimed that the South Korean exchange was merely delaying credit of the amount, even though he did not know which platform.
FTX employees reportedly had to force the former CEO to quit trading for two weeks to enable proper tracing of the missing funds, a condition SBF grudgingly accepted. Notably, SBF sought to convince employees to lie that the company still had 80% of the XRP assets, even when its whereabouts were clearly unknown.
“Missing Ripple Was the Final Straw”
According to the WSJ report, the missing XRP tokens were the final straw for employees who had grown weary of Sam’s reckless approach to managing Alameda accounts. Even during the period when the funds were missing, the company was still making over 250,000 trades per day, and the system could not account for most of them.
It is noteworthy that after several months, Alameda found the missing XRP. Hey had been transferred from Kraken to the South Korean-based crypto exchange Bithumb.
Bithumb received the 20 million XRP coins without any hint from the sender on who they belonged to. Yet, Alameda Research did not get in touch to retrieve the funds until after a lengthy period.
Upon discovering where the funds had gone, Bankman-Fried called Bithumb. A Bithumb employee asked Bankman-Fried over a call, “Are you the f—er who sent us like 20 million Ripple tokens? How the f— are you only calling us now?”
Following the Ripple incident, the WSJ report noted that the already-odd company had become even more odd.
The case involving the missing XRP is just one of the many shocking revelations about the former FTX CEO in recent times.
In the past week, it was disclosed that the CEO used profits from its Alameda Research to buy Solana (SOL) at $0.20 per coin. SBF also believed it was legal for the company to use FTX customer funds to invest in a sister company, Alameda Research.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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