FTX used customer funds to finance risky Alameda bets – WSJ By Investing.com
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FTX used customer funds to finance risky Alameda bets – WSJBy Sam Boughedda
FTX lent billions of dollars of customer assets to finance risky bets by Alameda Research, its affiliated trading firm, according to a report by The Wall Street Journal.
The crypto exchange has imploded over the last few days, with Binance pulling out of a rescue deal. The WSJ stated that a person familiar with the matter said FTX Chief Executive Sam Bankman-Fried told an investor that Alameda owes FTX around $10 billion.
In addition, FTX is said to have provided loans to Alameda using customer deposits, with Bankman-Fried said to have described the decision as a poor judgment call.
The WSJ states that FTX had $16 billion in customer assets, meaning it lent more than half of its customer funds to Alameda.
The company was plunged into chaos this week after it paused customer withdrawals following roughly $5 billion worth of withdrawal requests on Sunday, forcing FTX to look for emergency investment. Binance said FTX’s problems were “beyond our control or ability to help.”
The news has seen cryptocurrencies across the board tumble, with falling to $15,512 on Wednesday.
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FTX used customer funds to finance risky Alameda bets – WSJBy Sam Boughedda
FTX lent billions of dollars of customer assets to finance risky bets by Alameda Research, its affiliated trading firm, according to a report by The Wall Street Journal.
The crypto exchange has imploded over the last few days, with Binance pulling out of a rescue deal. The WSJ stated that a person familiar with the matter said FTX Chief Executive Sam Bankman-Fried told an investor that Alameda owes FTX around $10 billion.
In addition, FTX is said to have provided loans to Alameda using customer deposits, with Bankman-Fried said to have described the decision as a poor judgment call.
The WSJ states that FTX had $16 billion in customer assets, meaning it lent more than half of its customer funds to Alameda.
The company was plunged into chaos this week after it paused customer withdrawals following roughly $5 billion worth of withdrawal requests on Sunday, forcing FTX to look for emergency investment. Binance said FTX’s problems were “beyond our control or ability to help.”
The news has seen cryptocurrencies across the board tumble, with falling to $15,512 on Wednesday.
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