The crypto exchange secretly funneled billions in customer deposits to sister hedge fund Alameda Research, resulting in an $8 billion shortfall and criminal fraud convictions. This loss was 25% smaller than the $10.4 billion erased in the Wirecard scandal (#3), but FTX collapsed in just 7 days—the fastest implosion among the top 10 scams. Sam Bankman-Fried's misuse of $8 billion in customer funds was enabled by a secret exemption in FTX's code that allowed Alameda to carry a negative balance of up to $65 billion, a 225% gap between reported assets and actual holdings.
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