When crypto peaked in November of 2021, FTX’s customers thought they owned around $20 billion in digital assets. But according to an expert witness in Sam Bankman-Fried’s criminal trial on Wednesday, the exchange’s digital wallets had closer to a quarter of that.
Notre Dame Alumni Professor of Accountancy Peter Easton, who specializes in financial statement analysis, found that FTX’s digital wallets contained close to $5 billion in crypto when the industry boomed and Bitcoin’s price touched $69,000.
Easton’s assessment tapped bank statements, a “gigantic” FTX database, documents from lenders, and public information recorded on “the blockchain,” he said in a Manhattan courthouse. He found that FTX’s digital wallets never contained funds that matched the combined total of what was stated in customer accounts, according to his investigation.
The former crypto mogul is fighting seven fraud and conspiracy charges that stem from the collapse of FTX last year. Bankman-Fried is accused of pilfering billions of dollars of cash and crypto from his now-defunct exchange through Alameda Research to spend as he pleased. He’s pleaded not guilty to all charges.
U.S. District Judge Lewis Kaplan found that the accountant’s assessment of FTX and Alameda would not amount to “improper narration” and rather be “the product of specialized knowledge and reliable methodology.”
This article talks about the criminal trial of Sam Bankman-Fried, the former crypto mogul accused of fraud and conspiracy in the collapse of FTX last year. Peter Easton, an expert witness, conducted an investigation and found that FTX’s digital wallets contained close to $5 billion in crypto when the industry boomed. U.S. District Judge Lewis Kaplan found that the accountant’s assessment of FTX and Alameda would not amount to “improper narration.” This is bad news for Bankman-Fried as it proves the validity of Easton’s investigation into his case. #SamBankmanFried #FTX #Crypto #AlamedaResearch
You can read more about this topic here: Decrypt: FTX Was Supposed to Have $20 Billion in Customer Assets—It Only Held $5 Billion