Customers’ Funds Stolen: Expert Testimony Reveals
The trial of former FTX CEO, Sam Bankman-Fried (SBF), continued with the testimony of Peter Easton, an Accounting Professor from the University of Notre Dame. Easton revealed that $9 billion in customers’ funds had gone missing since June 2022, prior to FTX’s bankruptcy filing. He specifically pointed out that these funds were deposited into Alameda Research’s bank accounts.
Establishing the Theft of Funds
Having established that Bankman-Fried stole customers’ funds through Alameda, the prosecution aimed to prove that these funds were indeed stolen. Easton, with his expertise in financial statements, played a crucial role in this regard. He stated that although customers’ deposits indicated that Alameda should have held $11.3 billion, only $2.3 billion was found in FTX’s bank accounts. He further explained that these missing funds were used for various purposes, including investments in Modulo Capital and repayment of lenders like Celsius and Abra.
Misuse of Funds: Political Contributions and Real Estate
Easton revealed that some of the missing funds were also used for political contributions, charity foundations, and real estate purchases. Notably, FTX’s Director of Engineering Nishad Singh had donated $1 million to Mind The Gap (MTG), a PAC co-founded by SBF’s mother. Additionally, $96 million was spent on real estate, including properties owned by SBF’s parents. Easton gathered this information through analysis of Alameda’s statements, FTX’s database, lender documents, and on-chain data.
Hot Take: Implications for Bankman-Fried
The expert testimony provided by Peter Easton paints a damning picture of Sam Bankman-Fried. The evidence suggests that $9 billion of customers’ funds went missing, and Bankman-Fried played a key role in their misappropriation. The funds were used for investments, loan repayments, political contributions, and real estate purchases. These revelations strengthen the prosecution’s case against Bankman-Fried and further expose the extent of his alleged wrongdoing. As the trial continues, it remains to be seen how this testimony will impact the final verdict and potential consequences for Bankman-Fried.
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