FTX founder Bankman-Fried denies fleeing to South America amid crypto collapse

FTX founder Sam Bankman-Fried denied speculation on Twitter that he had flown to South America after the cryptocurrency exchange filed for bankruptcy.

When asked if he had flown to Argentina, as had been rumored on social media, the former CEO told Reuters via text message that he was in the Bahamas, where the company is headquartered.

Bankman-Fried, 30, was CEO until Friday.

He also denied that he “secretly” transferred $10 billion in client funds from FTX to his trading company, Alameda Research, and denied that he implemented a “backdoor” in FTX’s accounting system.

INSIDE THE CRYPTO CRASH FTX: EVERYTHING YOU NEED TO KNOW

Sam Bankman-Fried

Sam Bankman-Fried, Founder and CEO of FTX Cryptocurrency Derivatives Exchange, speaks at the Institute of International Finance (IIF) annual meeting of members in Washington, DC, USA, on Thursday, October 13, 2022.

“We had confusing internal labeling and misread it,” he said of the $10 billion transfer.

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At least that’s what Reuters reported, citing two people familiar with the matter $1 billion in client funds were gonewith records revealing the financial hole.

When asked about the missing funds, Bankman-Fried replied: “???”

In a statement, FTX said that John J. Ray III was named CEO in his place.

Also on Saturday, FTX said it was moving funds to offline storage after reporting “unauthorized transactions.”

Analysts said assets worth millions of dollars had been pulled from the platform.

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FTX

This illustration photo shows a smart phone screen showing the logo of FTX, the crypto exchange platform, with a screen showing the FTX website in the background in Arlington, Virginia on February 10, 2022.

“Following the filing of Chapter 11 bankruptcy – FTX US and FTX [dot] com has initiated precautionary steps to move all digital assets into cold storage. The process was expedited tonight – to mitigate the damage of monitoring unauthorized transactions,” FTX US General Counsel Ryan Miller tweeted.

Cold storage refers to crypto wallets that are not connected to the internet to protect themselves from hackers.

Miller previously wrote that FTX was “investigating anomalies with wallet movements related to the consolidation of FTX balances between exchanges,” though he noted that the facts were unclear “like other movements [were] it’s not clear.”

Founder of FTX

Sam Bankman-Fried, founder and CEO of FTX Cryptocurrency Derivatives Exchange, speaks during a Senate Agriculture, Food and Forestry Committee hearing in Washington, DC, February 9, 2022.

All of this comes on the heels of Bahamas-based FTX – ex the third largest crypto exchange in the world – filed for Chapter 11 bankruptcy protection.

A rescue deal with rival exchange Binance, which briefly agreed to step in, failed.

Binance cited red flags that came up during the due diligence process.

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“I screwed up and should have done better,” Bankman-Fried wrote in a lengthy thread Thursday.

As of 2019 FTX had more than 1 million users.

Fox Business Digital’s requests for comment from Bankman-Fried and FTX were not immediately returned.

FOX Business’ Megan Haney and Reuters contributed to this report.

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