At least $1 billion of customer funds have vanished from collapsed crypto exchange FTX, according to two people familiar with the matter.
The exchange's founder Sam Bankman-Fried secretly transferred $10bn of customer funds from FTX to his trading company Alameda Research, the people told Reuters.
A large portion of that total has since disappeared, they said. One source put the missing amount at about $1.7bn. The other said the gap was between $1bn and $2bn.
The financial hole was revealed in records that Mr Bankman-Fried shared with other senior executives last Sunday, according to the two sources.
The records provided an up-to-date account of the situation at the time, they said.
Both sources held senior FTX positions until this week and said they were briefed on the company's finances by top staff.
Bahamas-based FTX filed for bankruptcy on Friday after a rush of customer withdrawals earlier this week.
A rescue deal with rival exchange Binance fell through, precipitating crypto’s highest-profile collapse in recent years.
In text messages to Reuters, Mr Bankman-Fried said he "disagreed with the characterisation" of the $10bn transfer.
"We didn't secretly transfer," he said. "We had confusing internal labelling and misread it," he added, without elaborating.
Asked about the missing funds, Mr Bankman-Fried responded: "???"
In a tweet on Friday, Mr Bankman-Fried said he was "piecing together" what had happened at FTX.
"I was shocked to see things unravel the way they did earlier this week," he wrote. "I will, soon, write up a more complete post on the play by play."
At the heart of FTX's problems were losses at Alameda that most FTX executives did not know about, Reuters has previously reported.
Customer withdrawals had surged last Sunday after Changpeng Zhao, chief executive of giant crypto exchange Binance, said Binance would sell its entire stake in FTX's digital token, worth at least $580 million, "due to recent revelations".
Four days before, news outlet CoinDesk reported that much of Alameda's $14.6bn in assets were held in the token.
That Sunday, Mr Bankman-Fried held a meeting with several executives in the Bahamas capital Nassau to calculate how much outside funding he needed to cover FTX's shortfall, the two people with knowledge of FTX's finances said.
Mr Bankman-Fried confirmed to Reuters that the meeting took place.
He showed several spreadsheets to the heads of the company's regulatory and legal teams that revealed FTX had moved around $10bn in client funds from FTX to Alameda, the two people said.
The spreadsheets displayed how much money FTX loaned to Alameda and what it was used for, they said.
The documents showed that between $1bn and $2bn of these funds were not accounted for among Alameda's assets, the sources said.
The spreadsheets did not indicate where this money was moved, and the sources said they don't know what became of it.
In a subsequent examination, FTX legal and finance teams also learned that Mr Bankman-Fried implemented what the two people described as a "backdoor" in FTX's book-keeping system, which was built using bespoke software.
They said the "backdoor" allowed Mr Bankman-Fried to execute commands that could alter the company's financial records without alerting other people, including external auditors.
This set-up meant that the movement of the $10bn in funds to Alameda did not trigger internal compliance or accounting red flags at FTX, they said.
I was shocked to see things unravel the way they did earlier this week. I will, soon, write up a more complete post on the play by play
Sam Bankman-Fried,
founder of FTX
In his text message to Reuters, Mr Bankman-Fried denied implementing a "backdoor".
The US Securities and Exchange Commission is investigating FTX.com's handling of customer funds, as well its crypto-lending activities, a source with knowledge of the inquiry told Reuters on Wednesday.
The Department of Justice and the Commodity Futures Trading Commission are also investigating, the source said.
FTX's bankruptcy marked a stunning reversal for Mr Bankman-Fried.
The 30-year-old had set up FTX in 2019 and led it to become one of the largest crypto exchanges, accumulating a personal fortune estimated at nearly $17bn.
FTX was valued in January at $32bn, with investors including SoftBank and BlackRock.
The crisis has sent reverberations through the crypto world, with the price of major coins plummeting. And FTX's collapse is drawing comparisons to earlier major business meltdowns.
On Friday, FTX said it had turned over control of the company to John J. Ray III, the restructuring specialist who handled the liquidation of Enron — one of the largest bankruptcies in history.
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Dubai works towards better air quality by 2021
Dubai is on a mission to record good air quality for 90 per cent of the year – up from 86 per cent annually today – by 2021.
The municipality plans to have seven mobile air-monitoring stations by 2020 to capture more accurate data in hourly and daily trends of pollution.
These will be on the Palm Jumeirah, Al Qusais, Muhaisnah, Rashidiyah, Al Wasl, Al Quoz and Dubai Investment Park.
“It will allow real-time responding for emergency cases,” said Khaldoon Al Daraji, first environment safety officer at the municipality.
“We’re in a good position except for the cases that are out of our hands, such as sandstorms.
“Sandstorms are our main concern because the UAE is just a receiver.
“The hotspots are Iran, Saudi Arabia and southern Iraq, but we’re working hard with the region to reduce the cycle of sandstorm generation.”
Mr Al Daraji said monitoring as it stood covered 47 per cent of Dubai.
There are 12 fixed stations in the emirate, but Dubai also receives information from monitors belonging to other entities.
“There are 25 stations in total,” Mr Al Daraji said.
“We added new technology and equipment used for the first time for the detection of heavy metals.
“A hundred parameters can be detected but we want to expand it to make sure that the data captured can allow a baseline study in some areas to ensure they are well positioned.”
SPECS
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WIDE%20VIEW
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The%C2%A0specs%20
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
SPEC SHEET
Display: 6.8" edge quad-HD dynamic Amoled 2X, Infinity-O, 3088 x 1440, 500ppi, HDR10 , 120Hz
Processor: 4nm Snapdragon 8 Gen 1/Exynos 2200, 8-core
Memory: 8/12GB RAM
Storage: 128/256/512GB/1TB
Platform: Android 12
Main camera: quad 12MP ultra-wide f/2.2, 108MP wide f/1.8, 10MP telephoto f/4.9, 10MP telephoto 2.4; Space Zoom up to 100x, auto HDR, expert RAW
Video: 8K@24fps, 4K@60fps, full-HD@60fps, HD@30fps, super slo-mo@960fps
Front camera: 40MP f/2.2
Battery: 5000mAh, fast wireless charging 2.0 Wireless PowerShare
Connectivity: 5G, Wi-Fi, Bluetooth 5.2, NFC
I/O: USB-C
SIM: single nano, or nano and SIM, nano and nano, eSIM/nano and nano
Colours: burgundy, green, phantom black, phantom white, graphite, sky blue, red
Price: Dh4,699 for 128GB, Dh5,099 for 256GB, Dh5,499 for 512GB; 1TB unavailable in the UAE
Padmaavat
Director: Sanjay Leela Bhansali
Starring: Ranveer Singh, Deepika Padukone, Shahid Kapoor, Jim Sarbh
3.5/5
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
UAE currency: the story behind the money in your pockets
RESULTS
6.30pm: Al Maktoum Challenge Round-1 Group 1 (PA) Dh119,373 (Dirt) 1,600m
Winner: Brraq, Adrie de Vries (jockey), Jean-Claude Pecout (trainer)
7.05pm: Handicap (TB) Dh102,500 (D) 1,200m
Winner: Taamol, Connor Beasley, Ali Rashid Al Raihe.
7.40pm: Handicap (TB) Dh105,000 (Turf) 1,800m
Winner: Eqtiraan, Connor Beasley, Ali Rashid Al Raihe.
8.15pm: UAE 1000 Guineas Trial (TB) Dh183,650 (D) 1,400m
Winner: Soft Whisper, Pat Cosgrave, Saeed bin Suroor.
9.50pm: Handicap (TB) Dh105,000 (D) 1,600m
Winner: Hypothetical, Mickael Barzalona, Salem bin Ghadayer.
9.25pm: Handicap (TB) Dh95,000 (T) 1,000m
Winner: Etisalat, Sando Paiva, Ali Rashid Al Raihe
