Sam Bankman-Fried can only speculate about what happened where wired Alameda funds ended up

Sam Bankman-Fried, the founder and former CEO of FTX, said in an interview with the Wall Street Journal that he “can only surmise” what happened to billions of dollars that FTX clients wired to its sibling trading company Alameda Research.

“One phrasing of it…would be to say that Alameda effectively sent those dollars from its FTX account to the user, but that’s a ledger transfer of course,” Bankman-Fried said. “Outside of that, the answer is, they were wired to Alameda — I can only speculate about what happened after that.”

SBF says he ‘can only speculate’ about where wired Alameda funds ended up: WSJ

Due to its handling of client cash and its financial relationships to organizations like Alameda, FTX is being closely watched. Reuters reported that at least $1 billion in customer funds had “vanished” from the cryptocurrency exchange just two days after FTX and more than 100 affiliated entities filed for Chapter 11 bankruptcy protection on November 11. FTX transferred billions in customer funds to Alameda, according to the report.

Reporter Alexander Osipovich of the Wall Street Journal questioned Bankman-Fried about the origins of these accounting problems, and she responded that in 2019 or 2020, the cryptocurrency exchange only supported cryptocurrency wallets, not bank accounts, which would have allowed for the onboarding of fiat currency.

“So some of them would wire money to Alameda and then ask to be credited on their FTX account,” Bankman-Fried said. He estimates more than half of Alameda’s total position came through these wired customer funds to its bank accounts — and thinks this would be more than $5 billion.

“I can now go back and take a guess at…where they were ultimately spent, or used, or something,” Bankman-Fried said when asked to clarify that he did not know what happened to that $5 billion. “But dollars are fungible with each other, so it’s not like this one dollar bill over here that you can trace through from start to finish. What you get is more just omnibus pots of assets at various forms.”

Bankman-Fried said that he was preoccupied with FTX and didn’t want to become overly involved with Alameda owing to worries about potential conflicts of interest when Osipovich questioned how he could own 90% of Alameda and be unaware of what was going on there.

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