The more we discover about FTX crypto exchange founder and CEO Sam Bankman-Fried, the more we learn about what a criminal he really is.
According to reports, Bankman-Fried's trading firm, Alameda Research, allegedly used billions of dollars worth of customer funds while using the exchange's native token as collateral.
"The quant trading firm Sam Bankman-Fried founded was able to quietly use customer funds from his exchange FTX in a way that flew under the radar of investors, employees and auditors in the process, according to a source," CNBC reported on Tuesday following previous reports noting that Bankman-Fried's billions in alleged assets have vanished:
The crypto exchange drastically underestimated the amount FTX needed to keep on hand if someone wanted to cash out, according to the source. Trading platforms are required by their regulators to hold enough money to match what customers deposit. They need the same cushion, if not more, in the event that a user borrows money to make a trade. According to the source, FTX did not have nearly enough on hand.
Its biggest customer, according to a source, was the hedge fund Alameda. The fund was partially able to cover up this activity because the assets it was trading never touched its own balance sheet. Instead of holding any money, it was borrowing billions from FTX users, then trading it, the source said.
According to the outlet, none of that information was divulged to customers. Generally, mixing in customer funds with counterparties and then using them for trades without getting explicit consent from those customers is against U.S. securities law. In addition, doing so violates FTX's terms of service.
While he declined to comment on the development, he said in his recent bankruptcy filing that it came as a result of major problems stemming from what appears to be a dramatically over-leveraged financial trading position.
“A margin position took a huge hit,” Bankman-Fried told CNBC, the outlet said.
Added Breitbart News: "Some of the leveraged trades that the quant fund made were secured using FTT, a cryptocurrency issued by the exchange as collateral. When a lending agreement is established, collateral is usually the borrower’s pledge to secure repayment. In this situation, Alameda allegedly borrowed from FTX, which then used its own cryptocurrency, the FTT token, as collateral. On the day the token price crashed 75 percent, the collateral was insufficient to cover the trade."
Over the course of one week, the company tanked from being a cryptocurrency powerhouse worth $32 billion to now being worth nothing. "The blurred lines between FTX and Alameda Research resulted in a massive liquidity crisis for both companies," Breitbart News reported. Bankman-Fried is no longer CEO of FTX and Alameda Research is closing its doors.
Earlier, Natural News founder and editor Mike Adams, the Health Ranger, reported that Bankman-Fried “donated nearly $40 million to political candidates in the 2022 mid-term elections. Only $235,200 went to Republicans, with the rest going to Democrats. FTX, in other words, was a Democrat slush fund money laundering operation that helped Democrats win mid-term elections (on top of their obvious cheating, ballot stuffing and ballot harvesting operations)."
We also reported that he managed to amass so much wealth so quickly thanks to financial "influencers" on social media, all of whom raked in their own small fortunes in the process by recommending their followers obtain their cryptocurrency through the FTX exchange, according to this video.
“These people had a responsibility to their fans, and they blew it,” said the Coffeezilla podcast in criticizing the influencers for leading their followers astray.
As for the political connection, the Daily Caller added:
Cryptocurrency CEO and Democratic donor Sam Bankman-Fried funded the campaigns of key lawmakers overseeing the Commodity Futures Trading Commission (CFTC), the agency tasked with regulating the crypto industry, as he was lobbying the CFTC for greater oversight over the digital asset marketplace.
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