When the year began, cryptocurrency seemed like it was on the up-and-up. There were even multiple ads with celebrities imploring plebeians to invest. Over the summer, crypto crashed. But that was only the beginning. Earlier this month, FTX, the crypto exchange based in the Bahamas and promoted by Larry David and Tom Brady, collapsed, with customers withdrawing their funds en masse. The company declared bankruptcy on Friday, but before that happened there was some financial scrambling by the company’s top brass. And in the process, a chunk of that money appears to have gone AWOL.
As per Reuters, FTX founder Sam Bankman-Fried — or “SBF,” as the young, schlubby, shorts-llving entrepreneur likes to be called — secretly transferred $10 billion of customer funds to his trading firm Alameda Research. SBF showed spreadsheets of the transfers to regulatory and legal teams, who then noticed something: Somewhere between $1 billion and $2 billion was no longer accounted for. What’s more, they discovered what some called “backdoor” shenanigans:
They said the “backdoor” allowed Bankman-Fried to execute commands that could alter the company’s financial records without alerting other people, including external auditors. This set-up meant that the movement of the $10 billion in funds to Alameda did not trigger internal compliance or accounting red flags at FTX, they said.
SBF has denied any underhandedness, and even claimed ignorance of the secret transfers:
In text messages to Reuters, Bankman-Fried said he “disagreed with the characterization” of the $10 billion transfer.
“We didn’t secretly transfer,” he said. “We had confusing internal labeling and misread it,” he added, without elaborating.
Asked about the missing funds, Bankman-Fried responded: “???”
It’s not known where those missing funds went, but there has been some wild speculation. Some believe the money was taken by SBF himself.
SBF literally just hacked the remaining assets at FTX. Guarantee it’s him. He’s done this before (see my previous tweet).
— Ben Armstrong (@Bitboy_Crypto) November 12, 2022
One rumor, reported by finance industry news site Benzinga, is that SBF is heading for Argentina.
According to @flightradar24:
— Benzinga (@Benzinga) November 12, 2022
Why Argentina? Perhaps because they have a decentralized exchange system where one can swap crypto for cash, including USD.
I'm from Argentina. It's easy to know why anyone in SBF position would come to this country. Argentina has the biggest number of "Cuevas" in the world by a large margin. It's an illegal decentralized exchange system to swap crypto (or any currency) for cash, mainly USD.
— Hastings. (@SterlingsMarket) November 12, 2022
The mess at FTX caught the attention of another enterprising tycoon whose own empire is also crumbling: new Twitter honcho Elon Musk.
this is like if the Hindenburg flew over the Titanic and the pilot told everyone to look out the window to see it sinking https://t.co/eRY3Twl5qR
— nobody (@petbugs13) November 12, 2022