FTX Founder Bankman-Fried Denies Fleeing to South America Amid Crypto Crash

FTX Founder Bankman-Fried Denies Fleeing to South America Amid Crypto Crash

FTX founder Sam Bankman-Fried has denied speculation on Twitter that he flew to South America after the cryptocurrency exchange filed for bankruptcy.

When asked if he had been to Argentina, amid rumors circulating on social media, the former chief executive told Reuters via text message that he was in the Bahamas, where the company has its headquarters.

Bankman-Fried, 30, served as CEO until Friday.

He also denied “secretly” transferring $10 billion in client funds from FTX to his trading company Alameda Research and denied setting up a “backdoor” into FTX’s accounting system.

INSIDE THE CRYPTO EXCHANGE FTX COLLAPSE: EVERYTHING YOU NEED TO KNOW

Sam Bankman Fried

Sam Bankman-Fried, Founder and Managing Director of FTX Cryptocurrency Derivatives Exchange, speaks at the Institute of International Finance (IIF) Annual Members Meeting in Washington, DC, U.S., Thursday, October 13, 2022.

“We had confusing internal labeling and we misinterpreted it,” he said of the $10 billion transfer.

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Reuters reported, citing two people familiar with the matter, that at least $1 billion in client funds had gone missing, with records revealing the financial hole.

Asked about the missing funds, Bankman-Fried replied: “???”

In a statement, FTX said John J. Ray III had been named CEO in its place.

Also on Saturday, FTX said it was moving funds to offline storage after reporting “unauthorized transactions”.

Analysts said millions of dollars in assets have been pulled from the platform.

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FTX

This photo illustration shows a smart phone screen displaying the logo of FTX, the crypto exchange platform, with a screen showing the FTX website in the background in Arlington, Virginia on February 10, 2022 .

“Following Chapter 11 Bankruptcy Filings – FTX US and FTX [dot] com has taken precautionary measures to move all digital assets to cold storage. The process was expedited tonight – to mitigate damages by observing unauthorized transactions,” tweeted FTX US General Counsel Ryne Miller.

Cold storage refers to crypto wallets that are not connected to the internet to protect against hackers.

Miller previously wrote that FTX was “investigating anomalies with portfolio movements related to the consolidation of FTX balances on exchanges”, while noting that the facts were unclear “because other movements [were] not clear.”

Founder of FTX

Sam Bankman-Fried, Founder and Managing Director of FTX Cryptocurrency Derivatives Exchange, speaks during a Senate Agriculture, Nutrition and Forestry Committee hearing in Washington, DC on February 9, 2022.

This all comes after Bahamas-based FTX – formerly the third-largest crypto exchange in the world – filed for Chapter 11 bankruptcy protection.

A bailout deal with rival exchange Binance, which had briefly agreed to step in, fell through.

Binance cited red flags that showed up during the due diligence process.

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“I screwed up and should have done better,” Bankman-Fried tweeted in a lengthy thread on Thursday.

In 2019, FTX had over one million users.

Fox Business Digital’s requests for comment to Bankman-Fried and FTX were not immediately returned.

Megan Henney of FOX Business and Reuters contributed to this report.

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