Coinbase chief Brian Armstrong says that former FTX CEO Sam Bankman-Fried was using stolen customer money to fund his trading firm Alameda Research.
While Bankman-Fried continues to deny knowingly committing any wrongdoing, Armstrong says even very gullible people shouldn’t believe it.
“I don’t care how messy your accounting is (or how rich you are) – you’re definitely going to notice if you find an extra $8 billion to spend.
Even the most gullible person should not believe Sam’s claim that this was an accounting error.
It’s stolen customer money used in his hedge fund, plain and simple.”
Last month, shortly after the collapse of FTX, Armstrong said Bankman-Fried had mostly likely committed some form of fraud, and that the debacle was not the result of an honest mistake.
“They had this solvency issue and instead of just letting it blow up, Sam basically said, ‘Hey we have a bunch of customer assets over here at FTX’ or he somehow basically made a loan from FTX into Alameda trying to prop it up. I don’t know why he did that.
That’s the moment in my mind where he crossed the line into probably committing fraud. I think he probably lied to users, lied to investors and he went around and tried to bail out these different companies like Voyager and BlockFi to sort of come off of this thing and maybe he thought he could trade his way out of it.”
Bankman-Fried has maintained that he never willingly traded customer funds and is deeply sorry for the now-defunct firm’s $8.9 billion in liabilities.
“I didn’t knowingly co-mingle funds, one piece of this [is] margin trading, you have customers borrowing from each other [and] Alameda is one of those I’m quite frankly surprised by how big [its] position was, which points to another of failure of oversight on my part.”
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