At Least $1B in FTX Funds Reportedly Missing as Global Regulators Move In

Already facing scrutiny from regulators around the world, collapsed crypto exchange FTX is now dealing with a new problem: the disappearance of at least $1 billion in customer funds.

That’s according to a report Sunday (Nov. 13) by Reuters, citing sources familiar with the matter. They say founder and ex-CEO Sam Bankman-Fried secretly transferred $10 billion of customer funds from FTX to his trading company Alameda Research, and that a bulk of that money has vanished.

The exact amount is unclear, with one source telling Reuters it was $1.7 billion, the other saying it was between $1 billion and $2 billion. The missing funds were revealed in records Bankman-Fried shared with other senior executives last Sunday, the sources — who were themselves senior FTX employees until recently — told Reuters.

Reuters said Bankman-Fried disagreed with the characterization of his $10 billion transfer, telling the news service via text that it wasn’t a secret transfer, but the result of “confusing internal labeling.”

When asked about the missing funds, Bankman-Fried responded “???,” Reuters said.

PYMNTS has reached out to FTX for comment.

Meanwhile, a report Friday by the Financial Times says that regulators in several countries — among them Australia, Japan and the Bahamas, where FTX is headquartered — have all taken action against the company.

As PYMNTS noted Sunday, crypto companies have been focused on disrupting traditional finance, existing as part of a new order that is built on top of a blockchain, only to now face their own disruption. FTX last week filed for bankruptcy protection for itself and around 130 other affiliated companies.

How this all plays out is up in the air, we wrote. U.S. Rep. Maxine Waters, D-Calif., and chairwoman of the House Financial Services Committee, said Thursday that “now more than ever, it is clear that there are major consequences when cryptocurrency entities operate without robust federal oversight and protections for consumers.”

Last week, PYMNTS reported that crypto companies are arguing a lack of clear federal regulations has kept these companies from operating in the U.S.