A forensic accountant at Sam Bankman-Fried’s trial tried piecing together where $9 billion of missing FTX customer funds went on Wednesday. “Oh, yes,” said the accountant when asked if FTX ever misused customer funds.
Peter Easton, an accounting professor at the University of Notre Dame brought in by the prosecution, says user deposits were reinvested into businesses and real estate, used to make political contributions, and donated to charity, reports CoinDesk Thursday.
Importantly, Easton points to certain transactions that SBF was involved in that would have required customer funds to complete. In a key interview with ABC’s George Stephanopoulos back in November 2022, the FTX founder denied that he knew “that there was any improper use of customer funds.”
Customer funds peaked at FTX in June of 2022 when $11.3 billion was supposed to be held at Alameda Research, but its bank accounts only held $2.3 billion. Easton found customer funds lost their backing as early as March 2021.
Easton says customer funds were invested in Anthony Scaramucci’s SkyBridge Capital and Lily Zhang’s Modulo Capital. Modulo Capital returned $404 million to FTX in March of 2023 saying the funds had been wrongly transferred. FTX customers also unknowingly funded a $550 million investment into Genesis Digital Assets, a crypto mining firm, not to be confused with the other Genesis making crypto news the same day.
Former Alameda Research employee Aditya Baradwaj published a full list of SBF’s political donations that surfaced in the trial, which totaled $133 million. The list includes a $10 million gift to SBF’s father, Joseph Bankman, tens of millions of dollars to Republican and Democratic super PACs, and donations to various charities.
FTX’s Head of Engineering Nishad Singh told the court earlier in the week he felt “betrayed” by SBF. Singh says he deserves blame for much of the wrongdoing, but his testimony solidified the prosecution’s assertion that SBF was the true coordinator of FTX’s fraud. Singh only found out about the fraud two months before the world did, but he stayed on to try and save the sinking ship.
“How could I live with myself if my departure precipitated a fall that could’ve been avoidable?” Singh said in court.
The Head of Engineering had questions about FTX’s finances during his final months at the company. When Singh asked how much the company was short, SBF said this was the “wrong question,” and the better question to ask was “how can we deliver?”