In what is being called one of the biggest collapses in the cryptocurrency world, FTX is missing up to $3 billion of client money.
As per the reports, Bankman-Fried funnelled customer funds into Alameda Research, a trading firm that he owns, in order to prop up the firm’s trading operations.
According to Mr Bankman-Fried, the transfers happened because the internal labeling was confusing and it was misread.
According to Reuters, two senior FTX officials claimed they saw the evidence that the money was missing in copies of financial records Mr Bankman-Fried shared with company executives last week.
As FTX filed for Chapter 11 bankruptcy on Friday, Mr Bankman-Fried stepped down from his CEO position. This left investors unable to claim their funds as the Bahamas-based company scrambled to shore up a $12 billion (US$8 bn) liquidity crisis.
Amid the situation, The Miami Heat and Miami-Dade County have announced they are severing ties with FTX Arena and rebranding the venue.
“We are terminating our business relationships with FTX and finding a new naming rights partner for the arena,” the team and county wrote in a joint statement.
Bankman-Fried, who is better known in the industry by his nickname “SBF,” is a brash young entrepreneur who is not afraid to take risks.
And those risks have paid off. In just over a year, FTX has become one of the leading cryptocurrency exchanges.
However, the bankruptcy filing is a major setback for Bankman-Fried.