Alameda Research Use Billions Of Dollars Owned By FTX Users

Alameda Research was caught using FTX platform user funds. (Photo; Doc. Pymnts)

JAKARTA Currently, the leading crypto exchange founded by Sam Bankman-Fried, FTX and partner company Alameda Research led by Caroline Ellison, has become a public spotlight. The crypto exchange platform FTX has announced bankruptcy. CEO Sam Bankman-Fried has also resigned from his post.

Meanwhile, Alameda Research has reportedly withdrawn FTX user funds. A source familiar with the matter said that Alameda Research managed to carry out the action by operating without the knowledge of employees, investors and auditors involved in the process. The source also added that Alameda used billions of funds belonging to FTX users without their knowledge.

Launching Coinpeaker, both FTX and Alameda Research operate under the control of the same person, namely Sam Bankman-Fried (SBF). This raises serious doubts about whether the SBF is aware of this very risky fund transfer. The source also added that Alameda slowed down the funds needed by FTX if someone decided to disburse the funds.

Regulators usually demand a trading platform to have enough money to match customer deposits. In addition, the exchange should also have the same or more fund reserves, if the user borrows money to trade.

The source said that FTX failed to maintain the desired amount. In addition, FTX's biggest user is its own partner company, Alameda Research. The funds partially managed to cover liquidation. However, the funds are billions of dollars in loan money from FTX users to carry out their trading activities.

Based on a CNBC report, FTX does not disclose this activity to its customers. According to US securities law, mixing customer funds with other partners and trading them without their consent is illegal. In addition, if true, it will also violate FTX's service terms.

To date, Sam Bankman-Fried has not responded to allegations of using FTX customer funds by Alameda Research. However, SBF admits its bankruptcy filing came as a result of problems with leverage trading positions. "The margin position suffered a major blow," Bankman-Fried told CNBC.

To make trading with this leverage, Alameda uses the original FTX token, FTT, as collateral. Using cryptocurrency in-house as collateral to offer a loan is a big gamble on Alameda's side. Last week, the price of the FTX token (FTT) fell more than 75 percent in one day, making guarantees insufficient to cover trading.

At the time of writing, the price of the FTT token fell 93.1 percent in the past week. FTT is an FTX token exchange. Now the FTT is trading at Rp23,915 per token, according to Coingecko data.