FTX used customer funds to fund risky bets, which led to its demise
Join Our Telegram channel to stay up to date on breaking news coverage According to a person with knowledge of the situation, cryptocurrency exchange FTX used customer assets worth billions of dollars to support hazardous wagers by its connected trading firm, Alameda Research, which ultimately led to the exchange’s collapse. Sam Bankman-Fried, the chief executive of FTX, reportedly informed an investor last week that Alameda owes FTX roughly $10 billion. According to the source, FTX granted loans to Alameda using funds that consumers had deposited on the exchange for trading activities, a choice that Mr. Bankman-Fried described as being made poorly. According to the person, FTX had $16 billion in total client assets; therefore, FTX lent more than half of its customer cash to its sister business Alameda. A representative for FTX declined to comment. FTX halted customer withdrawals earlier this week after receiving withdrawal requests totaling over $5 billion on Sunday,...