FTX Bangkrut, Funds As Large As IDR 15.4 Trillion Eliminating Is Not Known Traces

The founder of the Sam Bankman-Fried (SBF) stock exchange has secretly transferred $10 billion from the FTX Exchange. (photo: Twitter @FTX_Official)

JAKARTA - At least $1 billion (Rp15.4 trillion) customer funds have reportedly disappeared from the collapsed FTX crypto exchange this week.

The founder of the Sam Bankman-Fried (SBF) stock exchange has secretly transferred 10 billion US dollars (Rp154 trillion) of customer funds from FTX to the trading company Bankman-Fried Alameda Research, sources told Reuters.

Most of the total funds have been lost, they said. One source said the amount was missing about USD 1.7 billion. Others said between USD 1 billion and USD 2 billion.

Although FTX has moved customer funds to Alameda, missing funds are reported here for the first time.

Financial holes were revealed in a note shared by Bankman-Fried with other senior executives last Sunday, according to the two sources.

The note provides the latest reports on the situation at the time, they said. Both sources held senior positions in FTX until this week and said they were briefed on company finances by top staff.

The Bahamas-based FTX filed for bankruptcy on Friday 11 November following a hasty customer withdrawal (rush) earlier this week. Rescue deals with rival companies such as the Binance exchange have also failed, triggering the collapse of the crypto-highest profile in recent years.

In a text message to Reuters, Bankman-Fried said he "disagreed with the characterization" of the $10 billion transfer.

"We are not secretly transferring," said SBF. "We have a confusing internal labeling and read it incorrectly," he added, without elaborating.

Asked about the missing funds, Bankman-Fried simply replied in a text message: "??"

Meanwhile FTX and Alameda did not respond to requests for comment from Reuters.

In a tweet on Friday, Bankman-Fried said he was "decaying" what happened at FTX. "I was surprised to see things unravel like they did earlier this week," he wrote. "I will, soon, write a more complete post about drama after the game."

1) Hi all:Today, I filed FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US.

— SBF (@SBF_FTX) November 11, 2022

According to a previous Reuters report, the core issue of FTX is a loss in Alameda that most FTX executives don't know.

The customer withdrawal jumped last Sunday after Changpeng Zhao, CEO of crypto exchange Binance, said Binance would sell all of its shares in FTX's digital tokens, worth at least US$580 million, "due to recent disclosures." Four days earlier, news outlet CoinDesk reported that most of Alameda's $14.6 billion assets were also kept in tokens.

That week, the SBF held a meeting with several executives in the Bahamas capital,

Bankman-Fried confirmed to Reuters that the meeting did take place.

Bankman-Fried showed several spreadsheets to the head of the company's regulatory and legal team revealing that FTX had transferred about $10 billion of client funds from FTX to Alameda. Spreadsheet shows how much money FTX lends to Alameda and for what the money is used for," the sources said.

The document shows that between $1 billion and $2 billion of these funds are not taken into account among Alameda's assets. Spreadsheets did not show where this money was moved, and sources said they didn't know what was going on.

In the next examination, FTX's legal and financial team also learned that the SBF implemented what the two men described as a "backdoor" in the FTX bookkeeping system, which was built using pre-ordered software.

They said the "backdoor" allowed SBFs to carry out orders that could change the company's financial records without telling anyone else, including external auditors. This arrangement means that the disbursement of US$10 billion to Alameda does not trigger internal compliance or accounting hazards at FTX.

But in a text message to Reuters, SBF denied implementing a "backdoor".

The US Securities and Exchange Commission is investigating the handling of FTX.com customer funds, as well as the Justice Department crypto lending activity and the Commodity Futures Trading Commission are also investigating the case.

The FTX bankruptcy marks a stunning reversal to the SBF. The 30-year-old founded FTX in 2019 and made him one of the world's largest crypto exchanges and raised an estimated personal fortune of nearly 17 billion US dollars. FTX was priced in January for 32 billion US dollars, by investors, including SoftBank and BlackRock.

The crisis has sent echo all over the crypto world which has made the price of the main coin plummet. The collapse of FTX drew comparisons with the previous major business crash.

On Friday, November 11, FTX said it had handed over company control to John J. Ray III, a restructuring specialist who handled Enron Corp's liquidation, one of the biggest bankruptcy lawyers in history.