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Customer Funds

All articles tagged with #customer funds

financetechnology1 year ago

"Fintech Bankruptcy Fallout: Millions of Depositors at Risk as User Deposits Frozen"

Fintech startup Synapse's bankruptcy has left millions of Americans without access to their funds, as the company's disputes with banking partners led to a technology system shutdown, affecting users of various fintech services. Customers, including a Maryland teacher with nearly $38,000 locked in a crypto app, are pleading for help in a California bankruptcy court, highlighting the vulnerabilities in the banking as a service partnership model and the lack of regulatory oversight. Regulators have yet to intervene, leaving impacted customers in a precarious situation.

via CNBC|
#banking-as-a-service#customer-funds#fdic
cryptocurrency2 years ago

"Former FTX Execs Rebound with New Crypto Exchange 'Backpack' after FTX Collapse"

Former FTX executives have joined forces to build a new cryptocurrency exchange in Dubai called Backpack Exchange, with a focus on securing customer funds. Led by ex-FTX lawyer Can Sun, the startup received a license to offer cryptocurrency services in the region. Backpack Exchange integrates a self-custody solution using multiparty computation (MPC) to ensure fund security. The exchange is currently in beta and plans for a wider launch later this month. The move comes after FTX CEO Sam Bankman-Fried's recent fraud trial, where Sun revealed that FTX's funds were at Alameda Research.

via Cointelegraph|
#cryptocurrency#cryptocurrency-exchange#customer-funds
finance2 years ago

The Trial of Sam Bankman-Fried: Uncovering Financial Deceit and Disappearing Funds

In the trial of Sam Bankman-Fried, FTX's top lawyer testified that he told Bankman-Fried there was no legal justification for using customer funds, to which Bankman-Fried replied "Yep." The attorney also revealed that Alameda Research, FTX's sister company, had special privileges and that funds were co-mingled without customer consent. Bankman-Fried is facing charges related to defrauding investors and customers, with several former executives already pleading guilty and testifying against him.

via Yahoo Finance|
#attorney-testimony#customer-funds#finance
finance2 years ago

"SBF's Trial Unveils Financial Deceit and Disappearing Billions"

In the trial of Sam Bankman-Fried, FTX's top attorney, Can Sun, testified that he was "shocked" to discover a $7 billion hole in FTX's finances and that customer funds had been co-mingled without consent. Sun revealed that Bankman-Fried asked for legal justifications for using customer money, but Sun stated there were none. Former members of Bankman-Fried's executive team have pleaded guilty to financial crimes and testified against him. Sun also described a panicky atmosphere in the company's office prior to FTX's bankruptcy declaration.

via Business Insider|
#alameda-research#can-sun#customer-funds
cryptocurrency2 years ago

FTX's Alleged Secret Backdoor: Billions in Customer Funds Stolen

Insiders from cryptocurrency exchange FTX have revealed that a concealed mechanism, allegedly linked to Alameda Research, allowed the unauthorized withdrawal of billions in customer funds. Despite being reported to higher-ups, no action was taken. The "backdoor" is now a focal point in the ongoing trial against FTX's former head, Sam Bankman-Fried, who faces charges of fraud. Prosecutors argue that Bankman-Fried misappropriated FTX customer funds by embedding "special features" in the platform's code, giving Alameda Research unprecedented access. Concerns about FTX's risk management protocols were raised by a team from LedgerX, but no substantial action was taken.

via Benzinga|
#backdoor#cryptocurrency#cryptocurrency-exchange
cryptocurrency2 years ago

FTX's Alameda Backdoor Scandal: Nightmare for Former Customers

Several employees at FTX reportedly knew about a backdoor access that Alameda Research, the hedge fund of ex-FTX CEO Sam Bankman-Fried, had into FTX customer wallets months before the collapse of the crypto exchange. The employees raised the issue with FTX's senior leadership, but it was allegedly ignored. The backdoor allowed Alameda to withdraw money from FTX and have a negative balance of up to $65 billion worth of crypto tokens. Bankman-Fried is currently facing a federal fraud trial, accused of using stolen customer funds to support his crypto empire.

via Gizmodo|
#alameda-research#cryptocurrency#customer-funds
cryptocurrency2 years ago

FTX Employees Aware of Alameda Backdoor Prior to Collapse: WSJ

Several employees at FTX, including those from LedgerX, reportedly knew about a backdoor in the exchange that allowed Alameda Research to withdraw billions in customer funds. The issue was flagged to FTX's director of engineering but was never fixed. LedgerX's chief risk officer, who raised concerns about the problem, was fired in August 2022. The news comes as FTX founder Sam Bankman-Fried faces charges of wire fraud, with one of his deputies expected to testify against him.

via CoinDesk|
#alameda-research#backdoor#cryptocurrency
cryptocurrencyfraud-trial2 years ago

Sam Bankman-Fried's Fraud Trial: Unveiling the Defense Strategy

Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, is expected to defend himself at his fraud trial by arguing that he did not believe the use of customer funds was improper and challenging the credibility of those who claim otherwise. Bankman-Fried's defense may rely on the argument that he lacked criminal intent despite making mistakes that led to FTX's collapse. However, testimony from former colleagues who have pleaded guilty and are set to testify against him could undermine his claim of good faith. Prosecutors allege that Bankman-Fried approved the use of customer funds and altered FTX's code to benefit his hedge fund. The trial will determine whether fraud occurred.

via Reuters|
#cryptocurrency#cryptocurrencyfraud-trial#customer-funds
cryptocurrency2 years ago

FTX's Explosive Asset Recovery Report Reveals Massive Misuse of Customer Funds

The second report from the FTX restructuring team reveals shocking details about the misappropriation of customer funds at the defunct crypto exchange. The report alleges that FTX executives, including CEO Sam Bankman-Fried, were aware as early as August 2022 that the exchange was missing over $8 billion in customer funds. It also highlights flows of customer funds to entities controlled by Bankman-Fried's friends and family, including political donations and venture capital investments. The report suggests a coordinated criminal effort and provides evidence of fraudulent activities, including backdated documents and personal loans to fund illegal political donations. These revelations could have significant implications for Bankman-Fried's criminal trial.

via CoinDesk|
#criminal-investigation#cryptocurrency#customer-funds
business2 years ago

FTX Accused of Misusing Customer Funds and Lying to Banks.

A report alleges that a senior attorney helped FTX founder, Sam Bankman-Fried, misuse customer funds. The report claims that the attorney, Kirill Bensonoff, advised Bankman-Fried on how to use customer funds to cover losses during a market downturn. FTX has denied the allegations and stated that Bensonoff was not involved in any decision-making regarding customer funds.

via The Wall Street Journal|
#attorney#business#cryptocurrency
cryptocurrency2 years ago

FTX Owes Customers Billions: Investigative Reports and Internal Audit Unveil the Truth.

FTX.com owed its customers $8.7 billion due to commingling and misusing their deposits, according to a report filed by the FTX team. The company has recovered $7 billion in liquid assets so far, and additional recoveries are anticipated. The report accuses senior executives of hiding the trouble as early as August 2022 and misusing customer money. FTX is currently in bankruptcy proceedings in Delaware, and its founder and former CEO Sam Bankman-Fried is facing criminal charges.

via CoinDesk|
#bankruptcy#cryptocurrency#customer-funds
cryptocurrency2 years ago

Binance's Legal Battle with SEC Intensifies.

Lawyers for the US Securities and Exchange Commission (SEC) struggled to justify their request for a near-total financial freeze order against Binance.US, as they had no clear evidence that US customer funds were being moved offshore. The SEC's request for an emergency injunction to freeze the assets of Binance.US and repatriate assets held abroad by related entities was part of its attempt to paint Binance as a fraudulent parallel to FTX. Judge Amy Berman Jackson rejected the SEC's request for an emergency asset freeze, an early defeat in a potentially lengthy trial.

via CoinDesk|
#asset-freeze#binance#cryptocurrency
cryptocurrency2 years ago

Binance and SEC reach agreement on US customer funds and wallet keys.

Binance and the US SEC have agreed that only Binance.US employees will have access to customer funds in the short term. Binance.US will take steps to ensure that no Binance Holdings officials have access to private keys for its various wallets, hardware wallets or root access to Binance.US's Amazon Web Services tools. The proposed agreement comes after the SEC sued Binance, its CEO and founder Changpeng Zhao and Binance.US's operator last week.

via Reuters|
#agreement#binance#cryptocurrency
cryptocurrency2 years ago

Binance and SEC Reach Agreement on US Customer Funds and Wallet Keys

Binance and Binance.US have reached a temporary agreement with the SEC to ensure that only Binance.US employees can access customer funds, wallets, and Amazon Web Services tools. The agreement also requires Binance.US to create new crypto wallets that global exchange employees cannot access, provide additional information to the SEC, and agree to an expedited discovery schedule. The SEC sued Binance and Binance.US last week on charges of offering and trading unregistered securities, but also alleged massive commingling of funds and poor practices.

via CoinDesk|
#binance#cryptocurrency#cryptocurrency-trading