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News

FTX Accused Of Using Alameda’s Bank Account To Avoid The Law

November 29, 2022 - Around 2 mins mins to read
FTX and Alameda, its sister company, colluded from the start to settle financial problems before it went bankrupt, according to Bloomberg.
FTX Accused Of Using Alameda's Bank Account To Avoid The Law

Due to a lack of regulatory monitoring, banks have been unwilling to work with crypto exchanges; hence FTX is having difficulty obtaining its banking partner to process fiat transactions. The company has addressed this issue by processing bitcoin exchange transactions through the sister company’s bank account.

Allegations of banking loophole abuse surfaced last week when bankruptcy proceedings revealed that FTX owned a stake in a small bank in Washington state through sister company Alameda. Many people believed at the time that the investment in the rural bank was made to avoid the requirements of obtaining a banking license.

FTX Accused Of Using Alameda's Bank Account To Avoid The Law

According to reports, some consumers were encouraged to wire their money through Alameda, which has a banking connection with fintech bank Silvergate Capital.

The clash between Alameda and FTX over the customer’s fund became the primary source of failure later on. Bankman-Fried asserted that while FTX never gambled with its customers’ money, it did lend it to Alameda. According to reports, the previous CEO stated that Alameda had adequate collateral to support the loans, but most of it was in the FTX native token, FTT.

FTX Accused Of Using Alameda's Bank Account To Avoid The Law

The extent of the misconduct in using Alameda’s banking accounts for the client deposits is determined by the agreement between the bank and Alameda. Silvergate responded in a statement to Bloomberg that the bank does not comment on customers or their actions as a matter of policy.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Website: coincu.com

Harold

Coincu News

Alameda

FTT

FTX

Sam Bankman-Fried

Silvergate

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.
News

FTX Accused Of Using Alameda’s Bank Account To Avoid The Law

FTX and Alameda, its sister company, colluded from the start to settle financial problems before it went bankrupt, according to Bloomberg.
FTX Accused Of Using Alameda's Bank Account To Avoid The Law

Due to a lack of regulatory monitoring, banks have been unwilling to work with crypto exchanges; hence FTX is having difficulty obtaining its banking partner to process fiat transactions. The company has addressed this issue by processing bitcoin exchange transactions through the sister company’s bank account.

Allegations of banking loophole abuse surfaced last week when bankruptcy proceedings revealed that FTX owned a stake in a small bank in Washington state through sister company Alameda. Many people believed at the time that the investment in the rural bank was made to avoid the requirements of obtaining a banking license.

FTX Accused Of Using Alameda's Bank Account To Avoid The Law

According to reports, some consumers were encouraged to wire their money through Alameda, which has a banking connection with fintech bank Silvergate Capital.

The clash between Alameda and FTX over the customer’s fund became the primary source of failure later on. Bankman-Fried asserted that while FTX never gambled with its customers’ money, it did lend it to Alameda. According to reports, the previous CEO stated that Alameda had adequate collateral to support the loans, but most of it was in the FTX native token, FTT.

FTX Accused Of Using Alameda's Bank Account To Avoid The Law

The extent of the misconduct in using Alameda’s banking accounts for the client deposits is determined by the agreement between the bank and Alameda. Silvergate responded in a statement to Bloomberg that the bank does not comment on customers or their actions as a matter of policy.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Website: coincu.com

Harold

Coincu News