Alameda Research Had $65 Billion Secret Line Of Credit On FTX: Report

Former FTX CEO Sam Bankman-Fried (SBF) Opens $65 Billion ‘Secret Backdoor Credit Facility’ For Alameda Research In Crypto Exchange Co-Founder Gary Wang FTX attorney Andrew Dietrich said.

The attorney disclosed the information at a Delaware bankruptcy court hearing on Jan. 11, the New York Post reported. The questionable line of credit was financed with funds from FTX customers. According to Dietrich’s testimony, “The backdoor was a covert method for Alameda to borrow from customers on the exchange without authorization.”

“Mr. Wang created this backdoor by inserting a single number into the millions of lines of code for the exchange, creating a line of credit from FTX to Alameda that the customer did not agree to.

“And we know the size of that line of credit. It was $65 billion.”

Alameda Research, a sister company of FTX, was at the center of the dramatic collapse of cryptocurrency exchanges. In November 2022, FTX Group and over 130 subsidiaries filed for bankruptcy in the United States due to a “liquidity crisis.”

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In a “pre-death brief” published Jan. 12, SBF denied the allegations of stealing FTX funds. He said, “Alameda has lost liquidity and FTX International has lost liquidity as well because Alameda had opened margin positions on FTX. changed to.”

In December, the US Commodity Futures Trading Commission (CFTC) filed a complaint alleging a number of unfair business practices between the two companies. The commission claimed that FTX executives created a feature in the code that “allowed Alameda to maintain an essentially unlimited line of credit on FTX.”

Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang have already pleaded guilty to charges related to the case. Bankman-Fried has pleaded not guilty to eight criminal charges against him, including campaign finance violations and wire fraud. His trial is scheduled to begin in October.