Court Documents Unveil Long-Term Misappropriation of Customer Funds by FTX

Newly revealed court records paint a troubling picture of FTX, implicating the platform in a series of serious wrongdoings and the long-term misappropriation of customer funds since its inception. According to these documents, FTX founder Sam Bankman-Fried and other high-ranking executives acknowledged that an outstanding debt to customers had ballooned to over $8 billion by August 2022, and this amount remains unpaid to date. To cover up this shortfall, the company resorted to creating a fictitious account in the name of a South Korean associate on their platform. 

However, the situation may be even graver than initially thought. Private assessments conducted by Bankman-Fried and others indicate that the actual cash deficit for FTX could potentially exceed a staggering $10 billion. Furthermore, the court records reveal that former Co-CEO of Alameda Research Caroline Ellison privately estimated the cash deficit for FTX to surpass $10 billion back in March 2022.

The revelations contained within these court documents shed light on the troubling state of affairs at FTX Exchange and raise serious concerns about the security and credibility of the platform.

Author: Katie Lin

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