Former FTX CEO Sam Bankman-Fried in an interview with Vox admitted to using Alameda’s banking services for FTX employee deposits.
The FTX media saga is seeing new revelations about its misdeeds every day, and new things are making the connection between the failing crypto exchange and its sister company Alameda Research from the beginning.
FTX, like many other crypto exchanges, has struggled to get a bank partner to handle fiat transactions as banks are reluctant to deal with crypto exchanges due to a lack of regulatory oversight. FTX overcomes this problem by using its sister company’s bank account to process transactions for crypto exchanges.
Former FTX CEO Sam Bankman-Fried confirmed in an interview with Vox that the exchange was using Alameda’s bank accounts to pay customers’ money. Some customers were reportedly told to transfer their money to Alameda, which has a banking partnership with fintech bank Silvergate Capital.
Clashes between Alameda and FTX over customer fees ended up being a major downfall. Bankman-Fried has said that while FTX does not gamble with employee money, it did lend them to Alameda. The former CEO said he believes Alameda has enough contracts to secure the loan, but as the report suggests, the majority is in the FTX token FTT ($1.29).
The claims of the former CEO of the failed crypto exchange about the misuse of customer funds vary from time to time. First, Bankman-Fried said that the exchange in Alameda was an independent agency and later admitted that the customer’s money was not safe, only to later delete her tweet about that statement.
Allegations of abuse of banking space emerged last week after bankruptcy proceedings revealed that FTX owned a small suburban Washington state bank through its sister company Alameda. At the time, many alleged that the investment in local banks was aimed at restricting banking rights. The scope of violations related to the use of Alameda bank accounts for FTX customer deposits is based on the agreement between the bank and Alameda. In a statement to Bloomberg, Silvergate said the bank does not comment on clients or their activities as part of a robust policy. Silvergate had not responded to Cointelegraph’s request for comment at the time of writing.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up