FTX

FTX Founder Faces Fraud Allegations in Explosive Testimony

The former top lawyer of cryptocurrency exchange FTX, Can Sun has presented his testimony in a recent fraud trial. He stated that the founder of FTX, Sam Bankman-Fried had asked him to come up with "legal justifications” that will speak for the disappearance of $7 billion in customer funds.

Can Sun has stated that FTX, to cover customer withdrawals, asked for emergency capital from investment fund Apollo. Upon Apollo's request for financial statements to FTX, it was discovered that FTX was billions of dollars short and owed billions to Bankman-Fried's crypto-focused hedge fund, Alameda Research.

According to the Sun's testimony we can conclude that FTX did not have the funds to fulfill customer withdrawals. He has also suspected unlawful use of funds by Alameda. Bankman-Fried asked him to find legal justifications for the missing funds, but Sun could not identify any. As a result, FTX declared bankruptcy.

Experts have assumed that Bankman-Fried has looted customer funds to support Alameda and for political contributions but Bankman-Fried has denied his fraud charges. Prosecutors claim that FTX customer funds were funneled to Alameda, and the hedge fund lent $2.2 billion to Bankman-Fried and other FTX executives for various purposes.

Besides these, Sun has also revealed that he was involved in documenting loans from Alameda to Bankman-Fried and other executives but was unaware that these loans came from customer funds. The trial will again take place on October 26. It is anticipated that Bankman-Fried may be sent to imprisonment if convicted.