Up to $2 billion in client money missing in crypto giant FTX collapse: reports

At least $1 billion of customer funds — and possibly as much as $2 billion — have gone missing in the shocking implosion of the crypto currency exchange FTX, according to reports.

FTX’s flamboyant founder, Sam Bankman-Fried, known in the industry as “SBF,” secretly funneled $10 billion of customer funds into his trading company, Alameda Research, sources told two media outlets.

Alameda Research is run by Bankman-Fried’s girlfriend, Caroline Ellison.

Two senior FTX officials claimed they saw the evidence that the money was missing in copies of financial records Bankman-Fried shared with company executives last week, according to Reuters.

At least $473 million of the missing money might have been hacked or stolen, FTX claimed early Saturday.

“There are initial indications that $473 million in cryptoassets were stolen from FTX late last night,” the crypto research firm Elliptic said in a blog post.

Ryne Miller, an FTX attorney, backed that assertion up on Twitter, asserting that there had been “unauthorized transactions.” The company was looking into “abnormalities,” he added.

 “Investigating abnormalities with wallet movements related to consolidation of ftx balances across exchanges – unclear facts as other movements not clear. Will share more info as soon as we have it,” Miller tweeted.

He followed up with another tweet meant to reassure horrified FTX customers.

 “Following the Chapter 11 bankruptcy filings – FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage,” Miller tweeted. “Process was expedited this evening – to mitigate damage upon observing unauthorized transactions.”

“Sure pal,” one Twitter user, with the handle Zcashmoney, tweeted in response, one of the many online who were skeptical about Miller’s claim that the funds were partly hacked.

On Friday, Bankman-Fried stepped down from his CEO position as the Bahamas-based FTX filed for Chapter 11 bankruptcy, after scrambling to shore up an $8 billion liquidity crisis that has left investors unable to claim their funds.

At the same time, Miami-Dade County and the NBA’s Miami Heat abruptly announced Friday they are re-naming the FTX Arena and ending their relationship with the ruined company and disgraced founder.

“Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena,” the county and team wrote in a joint statement.

A bid to save FTX via a rescue deal with rival exchange Binance didn’t work out, leading to crypto’s highest-profile collapse in recent years.

In text messages to Reuters, Bankman-Fried, one of the largest donors to the Democratic Party, 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.

“???” was Bankman-Fried’s response, when asked about the missing cash.