FTX Offered Whistleblower $5 Million
During the trial of former FTX CEO Sam Bankman-Fried, it was revealed that FTX had offered to pay $5 million to LedgerX Chief Risk Officer Julie Schoening. Schoening’s team had discovered a backdoor that allowed Bankman-Fried to transfer funds from FTX to Alameda Research. However, the $5 million settlement never materialized due to FTX’s collapse in November. Schoening was reportedly fired after bringing up the discovery of the backdoor. The Department of Justice is not expected to charge her, but she may be called to testify despite being under a non-disclosure agreement.
Sam Bankman-Fried Trial: Fake Insurance Fund
In the trial, FTX’s co-founder and CTO Gary Wang testified that FTX’s “insurance fund” was fake. The company allegedly arrived at figures for the fund by multiplying daily trading volume by a random number. Wang confirmed that the actual amount in the fund was insufficient to cover losses experienced by the company. He also revealed that when a trader caused significant losses for FTX through a bug in the margin system, Bankman-Fried instructed Alameda Research to take on the loss rather than recording it on FTX’s balance sheet.
Hot Take: More Secrets Revealed in Sam Bankman-Fried Trial
The trial of former FTX CEO Sam Bankman-Fried has unveiled further revelations about illegal activities within FTX and Alameda Research. These include an alleged offer of $5 million to a whistleblower and the revelation that FTX’s “insurance fund” was fake. The trial continues with cross-examinations and more witnesses expected to testify. As this high-profile case unfolds, it sheds light on potential misconduct in the cryptocurrency industry and highlights the importance of transparency and accountability in exchanges and related companies.
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