SBF Had a Secret 'Back Door' to Transfer Billions: Report

November 14, 2022 at 09:56 AM GST updated: November 15, 2022 at 07:25 AM 2 mins read People

FTX accounting software has a “backdoor” that is revealed by a deep dig.
Ryne Miller: FTX.Com had relocated all digital assets to cold storage.
The SEC is looking into FTX’s management and handling of client funds.

It has recently been revealed that Sam Bankman-Fried, the creator of FTX, transferred around $10 billion from FTX to Alameda Research late on Friday night (SBF).

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After multiple suspicious wallet transactions were brought to light, which showed that between $1 and $2 billion in customer money were missing, rumors of a hack started to circulate.

According to blockchain transactions, FTX’s wallet address has acquired Ethereum, Solana, and BNB tokens worth $105.3 million from foreign and US-based wallets since November 11 at 9:20 ET.

Foobar kept a meticulously detailed Twitter thread of the current transactions at moment, allowing the public to watch the cash movement as it happened.

Hundreds of millions of dollars are now flowing out of FTX wallets, some speculate liquidators but it's late on a friday night, not typical times for such rapid heavy movements. Some withdrawals are being swapped from Tether to DAI. Hack or insider actions? $26 million here pic.twitter.com/8wWlaE7na9
— foobar/ (@0xfoobar) November 12, 2022

The wallet was also discovered to have authorized $24 million in LINK on CowSwap as the crypto community continued to watch wallet transaction outflows and inflows. On-chain data shows that the same wallet also purchased millions of LIDO.

Ryne Miller, the general counsel for FTX US, said that after declaring Chapter 11 bankruptcy, FTX US and FTX.Com had relocated all digital assets to cold storage. Miller continued by saying that the procedure had been accelerated to lessen the impact of the discovered unlawful transactions.

https://twitter.com/_Ryne_Miller/status/1591326796305530880?s=20&t=gZDpyHWRCpwUKe-norEwew

The startling news that “FTX had a “backdoor” inserted into its accounting software by SBF” was tweeted by Bitcoin Archive a little over two hours later. This approach relocated billions of dollars worth of assets without informing personnel or outside auditors.

BREAKING: FTX had a “backdoor” built into its accounting software by SBF, which he used to move billions without triggering alerts to other staff, auditors etc – Reuters
— Bitcoin Archive (@BTC_Archive) November 12, 2022

Additionally, by utilizing this “backdoor” to transfer the $10 billion to Alameda, internal compliance and accounting red flags were avoided.

The U.S. Securities and Exchange Commission (SEC) is looking into FTX’s management and handling of client funds. With this most recent development, FTX is now under even closer scrutiny as a result of the SEC investigation.