FTX Co-Founder Reveals Alameda’s Misuse of User Funds
Gary Wang, the co-founder of bankrupt digital asset exchange FTX, has testified that sister firm Alameda had been using billions of dollars worth of FTX customer assets for trading purposes since 2019. Wang’s testimony, revealed in court transcripts, is part of an investigation into the alleged fraud and mishandling of customer funds by FTX executives, including Sam Bankman-Fried. Wang claims that Nishad Singh, another co-founder, added a code allowing Alameda to use more money than it had in its account to support FTX Token (FTT) and for trading. According to Wang, Alameda withdrew $8 billion since July 2019 using this feature.
Criminal Charges and Testimonies
Wang and other FTX executives have decided to cooperate with authorities and testify against Bankman-Fried. They accuse him of defrauding investors and mishandling customer funds. Wang also states that customers never agreed to have their funds used in this way and that Bankman-Fried authorized Alameda to have a line credit of $65 billion. If convicted, Bankman-Fried could face several decades in prison.
Hot Take: Allegations of Misusing Customer Funds Shake FTX
The recent revelations surrounding the misuse of FTX customer assets by sister firm Alameda have sent shockwaves through the crypto industry. The allegations made by FTX co-founder Gary Wang raise serious concerns about the handling of user funds and the potential breach of trust between customers and the exchange. As investigations continue and testimonies unfold, it remains to be seen how these developments will impact the future of FTX and its reputation within the cryptocurrency community.
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