FTX used $4 billion including customer funds to keep Alameda afloat: Reuters

Quick Take

  • FTX founder Sam Bankman-Fried transferred at least $4 billion to prop up sister company Alameda Research, according to Reuters.
  • He didn’t inform other executives about the transfer of funds to Alameda for fear of leaks, Reuters said. 

FTX chief Sam Bankman-Fried transferred at least $4 billion in FTX funds to Alameda Research, including native token FTT and shares in Robinhood, according to Reuters.

The transfers were made after Alameda, Bankman-Fried's trading firm, suffered losses from deals in May and June, including a loan agreement with Voyager Digital, Reuters said, citing people close to the subject. These funds included customer deposits, according to the report.

Bankman-Fried didn't inform other FTX executives about the transfer of funds to Alameda because he was afraid of leaks, Reuters said. 

Crypto exchange FTX has suffered a spectacular fall from grace this week after Changpeng Zhao, the CEO of larger rival Binance, said he would begin selling off holdings of  FTX's exchange token, FTT. After seeing a flood of client withdrawals, FTX announced on Tuesday it would sell its non-U.S. assets to Binance. That deal then fell apart on Wednesday after Binance walked away. 

After all this, FTX is once again looking to raise money, according to a Slack message shared by Bankman-Fried to his staff on Thursday seen by The Block.


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Reuters also gave details on the two exchanges' past financial dealings. In 2019, Zhao bought a 20% stake in FTX for about $100 million. After their relationship soured, Bankman-Fried bought back the stake for about $2 billion in July 2021, according to the report.  

A spokesperson for FTX declined to comment, saying "what has been posted on Twitter are the only official comments FTX will be making at this time." Binance didn't immediately respond to a request for comment from The Block.

Reuters said the exchanges didn't respond to its requests for comment. 

Update: Story updated with response from FTX. 

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Inbar is a reporter covering crypto policy and regulation with a focus on Europe. Before The Block, she worked with several publications in Brussels including The Parliament Magazine and Are We Europe. Inbar holds a bachelor's degree in international relations from University College Utrecht and a master's degree in international politics from KU Leuven.


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