A financial hole with at least $1 billion missing from customer accounts has opened after cryptocurrency exchange FTX filed for bankruptcy on Friday, Reuters reported.
The funds disappeared after the exchange’s 30-year-old founder Sam Bankman-Fried secretly transferred $10 billion in client funds from FTX to his hedge fund Alameda Research. Reuters sources estimate the loss at between $1 and $2 billion.
FTX, one of the largest cryptocurrency exchanges in the world, filed for bankruptcy on Friday. Its troubles began after an investigative article on CoinDesk claimed that 40% of Alameda Research’s assets were FTT tokens issued by its own FTX exchange.
Customers began withdrawing money en masse, and within four days, $430 million worth of bitcoins were withdrawn from the bitcoin exchange, according to Bloomberg data. The week-long saga, marked by mass withdrawals from the platform and the rejection of a planned takeover deal by another cryptocurrency exchange, Binance, has hit already troubled bitcoin and other crypto tokens. The owner of Binance is Fried’s former partner and financial rival.
“So sorry it ended like this,” Bankman-Fried wrote on Twitter. “I hope we can find a way to recover.” 3 hours ago she reported that she was now in the Bahamas.
Currently, the price of Bitcoin has fallen below $16,000, a 2-year low.
