FTX Hid Alameda’s $8 Billion In Liabilities Using Software And ‘Weird Korean Account’: Report – Ethereum World News | CPT PPP Coverage

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Summary:

• Alameda’s liabilities with crypto exchange FTX were masked on the orders of Sam Bankman-Fried, CFTC officials alleged.
• Nishad Singh, a top executive in SBF’s crypto empire, supposedly developed code that redirected Alameda’s billions in liabilities to a ‘weird Korean account’.
• The CFTC, DOJ, and SEC all charged Bankman-Fried with several counts of fraud following his arrest in the Bahamas. 

FTX founder Sam Bankman-Fried allegedly colluded with other top executives to obscure billions in Alameda liability on the now bankruptcy crypto exchange. The findings made by the U.S. Commodities Futures Trading Commission (CFTC) said SBF diverted his trading firm’s liability to a “weird Korean account”.

According to the CFTC, Alameda Research blew up around May/June 2022 after the firm failed to meet margin calls and loan obligations. Crypto prices slumped around the same time due to Terra’s implosion. Celsius and Three Arrows Capital also collapsed shortly after, further crippling crypto asset prices and triggering mass liquidations.  

Sam Bankman-Fried told FTX executives to re-engineer Alameda’s assets and liabilities to “the weird Korean account” or “our Korean friend’s account”, per the CFTC’s filing. At the time, Alameda Research’s liabilities on the crypto exchange were estimated at $8 billion. 

A separate report from Bloomberg alleged that Nishad Singh oversaw this process. Singh’s Github account deployed code linked to the so-called “Korean Account”. Sources previously claimed that SBF and Singh were in charge of the code used at the crypto exchange. 

Alameda was afforded nigh-uncapped lending privileges via the Korean account, the CFTC filed. The federal regulator also alleged that an “allow negative flag” line of code allowed Alameda to trade assets without actually holding sufficient funds or balances. 

FTX Founder Under Fire From CFTC, DOJ, and SEC

Three U.S. authorities charged former FTX CEO Sam Bankman-Fried with fraud and money laundering. Following his arrest on December 13, the U.S. prosecutors from the Southern District of New York (SDNY), the Securities and Exchange Commission (SEC), and the CFTC all filed charges against SBF. 

The bankrupt crypto tycoon was remanded at the Bahamas Department of Correctional Services (BDOCS) after a judge denied him bail. SBF will appear before a judge on February 8, 2023, as part of the prosecution and extradition process.