Saturday, November 04, 2023
Embattled former FTX CEO Sam Bankman-Fried (SBF) had misplaced 20 million Ripple (XRP) worth $4 billion at that time as he mishandled the funds while trading out of the Alameda Research account, a recent report in the Wall Street Journal revealed.
The funds worth millions “simply vanished” from Alameda Research’s accounts, the report mentioned, which raised concerns about his management of the currencies.
While he was the head of investments at Alameda, SBF had reportedly borrowed $170 million from people for trading, but he incurred losses.
The former entrepreneur, when questioned by employees and people, provided vague explanations about the missing funds.
SBF had also suggested that the $4 million funds could have been moved from the company to a South Korean platform used by Alameda.
To appease the people, the former FTX CEO told his company's staff "falsely" that around 80% of the missing funds were accounted for — although he wasn't aware of their whereabouts.
To stop this, the employees pressurised SBF to halt trading for two weeks. This break, however, highlighted the severity of the situation.
According to the report, the missing XRP tokens were “the final straw” that ended the trust connection between Alameda’s team and SBF.
The XRP funds were finally traced months later — they had been transferred from Kraken to South Korean-based crypto exchange Bithumb.
"Bithumb received the 20 million XRP coins without any hint from the sender on who they belonged to."
Bankman-Fried has been detained in Brooklyn's Metropolitan Detention Center since August 11 and faces several years in jail.