Former FTX General Counsel Reveals $7 Billion Shortage in Customer Funds
The third week of the trial against Sam Bankman-Fried, the founder of FTX, came to a close with the testimony of Can Sun, the former General Counsel at the company. During his testimony, Sun disclosed that FTX had a significant shortage of $7 billion in customer funds. He revealed that Bankman-Fried had misled regulators and investors about the treatment of customer deposits and how they were mishandled by the former CEO.
Key Highlights from Can Sun’s Testimony
- Bankman-Fried assured Sun that customer funds were separate from the company’s expenses.
- Sun denied approving any customer funds to be loaned to Alameda.
- Sun unknowingly provided false information to investors and regulators, claiming that FTX and Alameda were independent entities with no financial connection.
- Bankman-Fried took a $360 million loan from Alameda, while Sun received a $2 million loan from the company.
In addition, Sun discovered a $7 billion shortfall in FTX’s balance sheet during a call with Apollo Asset Management. Bankman-Fried asked Sun to create a fake justification for mishandling customer funds to share with Apollo. After receiving a call from Nishad Singh regarding the potential fraud, Sun resigned from his position the following day.
The session also included testimony from Robert Boroujerdi, a prospective investor who was promised by Bankman-Fried that Alameda was an independent entity.
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