TL;DR
A recent Wall Street Journal coverage revealed that the former CEO of FTX – Sam Bankman-Fried (SBF) – had incurred substantial losses when trading Ripple’s native token. The $4 million worth of XRP had “simply vanished” from Alameda Research’s accounts since the 31-year-old American used the sister company to conduct the trading.
SBF assumed that the amount had been transferred from an exchange in the United States to one in South Korea, with the latter “just dragging its feet in crediting it.” Other people involved in the operation supposedly insisted that Bankman-Fried cease trading so they could figure out where the tokens had gone.
“At length, Sam agreed. He stopped trading for two weeks. The other members of the management team confirmed that millions of dollars’ worth of Ripple was indeed missing,” the report reads.
One of Alameda’s managers said the team considered telling investors about the issue so they could think about their options, “but Sam hated that idea.” SBF continued to insist that the missing assets were no big deal, telling his staff that there was an 80% chance that the XRP stash would eventually turn up somewhere.
“After the fact, if we never get any of the Ripple back, no one is going to say it is reasonable for us to have said we have 80% of the Ripple. Everyone is just going to say we lied to them. We’ll be accused by our investors of fraud,” a fellow manager of the company stated.
By the spring of 2022, many other executives of Alameda Research “had grown to fear how little Sam worried about where exactly their money was.” The firm was making approximately 250,000 trades a day, but the system was not recording all of them.
According to the coverage, the missing XRP tokens were “the final straw” that ended the trust connection between Alameda’s team and SBF.
Bankman-Fried was recently found guilty on all charges: two counts of wire fraud, four counts of conspiracy to commit fraud, and one count of conspiracy to commit money laundering. This comes roughly year after his cryptocurrency exchange collapsed, triggering multi-billion losses for investors, while many described this as one of the biggest financial frauds in the history of the USA.
His sentencing is scheduled for March 28 as he faces the ridiculous 115 years behind bars. SBF’s lawyer said his client respects the jury’s decision but is “very disappointed with the result,” suggesting a possible appeal on the conviction.
