• May 21, 2024

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Brian Armstrong: FTX’s Collapse Was Not the Result of an Accounting Error

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Coinbase CEO Brian Armstrong has said that even the most naive person cannot believe that the multi-billion dollar “hole” in FTX’s balance sheet was the result of an accounting error.

He has said:

“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.”

FTX founder and former CEO Sam Bankman-Fried attributed in a recent interview the platform’s liquidity shortfall to poor reporting. According to him, user funds were sent to the affiliated Alameda Research, as some banks were more inclined to work with hedge funds than with a crypto exchange. All this led to double-counting of some assets, he said.

However, Armstrong has questioned his version and has said:

“It’s stolen customer money used in his hedge fund, plain and simple.”