According to a lawsuit by the Commodities Futures Trading Commission (CFTC), former FTX CEO Sam Bankman-Fried instructed company personnel to transfer Alameda Research’s sizable liability with the exchange to “the weird Korean account” in order to conceal its liability with the company.
The GitHub account belonged to Nishad Singh, former FTX Engineering Director. No charges have been brought against Singh, and it is unclear whether any other executives had access to the secret account.
SBF instructed FTX executives to transfer money to what he called “our Korean friend’s account” and “the weird Korean account.”
According to the CFTC, the Korean account belonged to Alameda but was not associated with it, making it possible for Alameda’s negative balance to be concealed on FTX ledgers.
The CFTC asserts that a piece of code known as “allow negative flag” gave the Korean account the ability to carry out a transaction even though it lacked the necessary funds.
The “Korean account,” according to the CFTC, had access to the same benefits as Alameda’s primary account and sub-accounts, including exemptions from some of FTX’s risk management guidelines.
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