Sam Bankman-Fried allegedly ordered the line of credit and financed it with FTX customer funds.
Former FTX CEO Sam Bankman-Fried reportedly ordered Gary Wang, co-founder of the crypto exchange, to open a $65 billion"secret backdoor line of credit" for Alameda Research, according to FTX attorney Andrew Dietderich.
The attorney disclosed the information during a Delaware bankruptcy court hearing on Jan. 11, the New York Post. The alleged line of credit was financed with FTX customers' funds. As per Dietderich testimony, the “backdoor was a secret way for Alameda to borrow from customers on the exchange without permission.”
“Mr. Wang created this backdoor by inserting a single number into millions of lines of code for the exchange, creating a line of credit from FTX to Alameda, to which customers did not consent,” Dietderich told the court, adding that:Alameda Research is the sister company of FTX, and it was at the heart of the crypto exchange's dramatic collapse.
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