According to Bloomberg, a secret account hid code detailing Alameda’s massive liabilities. The GitHub account was in the name of former FTX executive Nishad Singh, the report added.
The outlet claims to have viewed documentation that revealed comments associated with specific lines of code. In them were clues to the mysterious account that was used to mask Alameda’s mounting debts.
Additionally, Alameda’s chief executive and senior FTX officials knew that FTX had lent customers’ money to the company to help it meet its liabilities, alleged the WSJ.
FTX engineering director Singh has not been charged, and it wasn’t clear if any other executives had access to the clandestine account, the report added.
Dodgy Account Masking Liabilities
Singh’s GitHub account had annotated code snippets with comments, including “Korea KYC” and “BD expenses accounts,” which were tied to something called a “Korea expenses” account, Bloomberg added.
Alameda’s debts were shunted into an FTX account that was not easily identifiable, suggesting that the company was covering up its liabilities. In a scheduled hearing, the U.S. Commodity Futures Trading Commission (CFTC) made the allegations earlier this week.
According to the agency, the “Korean account” enjoyed the same privileges as Alameda’s main account and sub-accounts, including exemptions from parts of FTX’s risk management policies.
On Dec. 6 Alameda’s dubious investment portfolio was revealed. Several crypto and web3 companies were included as expected, but there were also a number of very suspect-looking investments. These included a strawberry farm, a fertility clinic, pharmaceutical firms, and Chinese media outlets. The FTX venture firm invested in more than 500 illiquid entities using ten holding companies.
Bankman-Fried was arrested in the Bahamas on Dec. 13. He was denied parole and said that he would fight extradition to the United States. Authorities brought eight criminal charges against him, including fraud and conspiracy to commit money laundering.
Alameda Advantages
As reported by CryptoPotato on Dec. 14, Alameda also had a speed advantage with FTX enabling it to trade faster than its rivals.
SBF has also been involved in a market manipulation probe. Federal prosecutors are investigating whether FTX had any role in the collapse of the Terra/Luna ecosystem, as a number of spurious transactions were identified. Around the time, a flood of UST sell orders originated from FTX.
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