Coinbase CEO Rejects FTX Accounting Error, Says Funds Were Obviously Stolen

Coinbase CEO Brian Armstrong on Saturday denounced Sam Bankman-Fried’s explanation of how FTX fell into the $8 billion hole.

Armstrong said he could not simply slip past the Massachusetts Institute of Technology graduate with a degree in physics, the founder and former CEO of FTX, and have billions of dollars out of him.

“I don’t care how messy your accounting is…if you find $8 billion in extra spending, you’ll definitely notice,” he said. twitter“Even the most gullible should not believe Sam’s claim that this was an accounting error.”

The Coinbase CEO has said how he believes FTX’s balance sheet mismatch was created. It was stolen client money that was used in his hedge fund, plain and simple, Armstrong wrote.

In the wake of the collapse of FTX, $10 billion worth of customer funds were allegedly secretly transferred to Alameda Research, a hedge co-founded by Bankman-Fried, according to a report from. Reuters.

However, Bankman-Fried, also known as “SBF,” insists there was no “deliberate commingling of funds” between FTX and Alameda.He attributed the $8 billion hole to lackluster accounting in his recent interview bloomberg.

He explained that some banks were more willing to work with hedge funds than cryptocurrency exchanges, so funds deposited into their accounts by FTX users were sent to Alameda. This led to double counting of some assets as they were credited to users’ accounts, he claims.

Since then, FTX has been described as a poorly managed company by the new CEO, John Jay Ray III, who oversees the exchange’s bankruptcy. The high-profile lawyer, perhaps best known for handling the Enron bankruptcy, described the FTX situation as “unprecedented,” with court documents revealing the exchange had no accounting department. Did.

With the collapse of SBF’s empire casting a shadow over the entire industry and its future prospects, Coinbase is using the collapse of FTX to establish itself as a trusted name in cryptocurrency.

Less than a week after FTX filed for bankruptcy, Coinbase put out a full-page ad wall street journal, Titled “Trust us”. These days, millions of people have entrusted their trust and money to those who don’t deserve it.

Nonetheless, FTX’s rapid shutdown has hurt investor confidence in cryptocurrencies, both in terms of digital asset prices and industry-related stocks.FTX filed for bankruptcy on November 11. After that, Coinbase’s stock price fell 17% from $57.46 to $47.67.