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Coinbase CEO Says FTX Clearly Stole User Funds, Rejects Claims of Accounting Error

UTC by Bhushan Akolkar · 3 min read
Coinbase CEO Says FTX Clearly Stole User Funds, Rejects Claims of Accounting Error
Photo: TechCrunch / Flickr

Coinbase chief slammed crypto exchange FTX over their excuses for an accounting error. Brian Armstrong said that FTX clearly stole customers’ money by moving funds to Alameda Research.

After all, what’s transpired in the crypto space with the collapse of crypto exchange FTX, industry heavyweights have weighed in with their opinion. Coinbase chief Brian Armstrong lashed out at FTX founder Sam Bankman-Fried for his handling of customer funds. As we know, SBF has been giving public interviews over the last week while trying to claim innocence over the matter.

Coinbase CEO Speaks about FTX Users’ Funds

Brian Armstrong has slammed FTX over the $8 billion hole on its balance sheet. He said that there’s no way that billions of dollars might have simply slipped past FTX’s founder and former CEO. In a message on Twitter, Armstrong wrote:

“I don’t care how messy your accounting is (or how rich you are) – you’re definitely going to notice if you find an extra $8B to spend. Even the most gullible person should not believe Sam’s claim that this was an accounting error. It’s stolen customer money used in his hedge fund, plain and simple”.

Amid the massive FTX collapse, there have been allegations that more than $10 billion worth of customers’ funds have been moved secretly to its sister firm Alameda Research, as reported by Reuters.

FTX Founder Claims Innocence

In his recent interviews, the FTX founder has been claiming innocence noting that he didn’t “knowingly commingle funds” between FTX with Alameda. During his interview with Bloomberg, SBF admitted that FTX’s $8 billion hole on its balance sheet was due to the company’s lackluster accounting measures.

SBF also explained the reason behind depositing funds from customer accounts at FTX, to Alameda Research. The FTX founder said that some banks were more willing to work with a hedge fund instead of a crypto exchange. As a result, some accounts were double-counted when user funds were credited.

FTX’snewly appointed CEO John Jay Ray III has accused SBF and his team of faulty accounting controls. John Jay Ray III has been popular for handling the Enron mess in the past. However, he described the FTX situation as “unprecedented” as court documents revealed that the exchange didn’t have an accounting department.

The FTX collapse has put a severe dent in the industry’s image. A large part of crypto holders have been moving their funds from the exchanges and into self-custody. Top players like Coinbase and Binance are trying to win back customers’ trust. Coinbase put an ad in the WSJ saying “Trust Us”. They added that millions of crypto users placed their trust and money with others who didn’t deserve it. Following FTX’s collapse, Coinbase’s stock price has also tanked by a staggering 17%.

On the other hand, crypto exchange Binance has launched its Proof-of-Reserve to maintain complete transparency with its customers.

Blockchain News, Cryptocurrency News, News
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