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Former FTX chief executive officer Sam Bankman-Fried received a billion dollars worth of personal loan from one of 4 silo firms deeply involved in the collapse of the FTX digital asset exchange.
A formal declaration in ongoing Chapter 11 bankruptcy filings from FTX’s new chief executive officer, John Ray III, has divulged further misappropriation of funds by SBF.
Ray III, who was responsible for picking up the pieces after the well known collapse of Enron, was devastating in his initial filing to the U.S. Bankruptcy Court for the District of Delaware.
He mentioned,
“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”
Furthermore, the group failed to carry out daily reconciliation of virtual asset holdings and used software to hide the misuse of customer funds. This also permitted the confidential exemption of Alameda from certain aspects of FTX.com’s auto-liquidation protocol.
Conceivably, most telling is the fact that the debtors carrying out insolvency proceedings have only secured “a fraction of the digital assets” they had hoped to recover. Cold wallets containing seven hundred and forty million dollars worth of digital assets have been obtained. Nevertheless, it is not clear which silo the funds belong to.
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