'It's stolen customer money': Coinbase CEO Brian Armstrong blasts claims of accounting mistakes in FTX's downfall




Coinbase CEO Brian Armstrong
Coinbase CEO Brian Armstrong  
  • Coinbase's Brian Armstrong rejects claims that FTX's downfall was due to an accounting error.

  • FTX founder says he didn't "knowingly commingle funds" between his crypto exchange and hedge fund.

  • "Even the most gullible person should not believe Sam's claim that this was an accounting error," Armstrong tweeted.

Coinbase CEO Brian Armstrong blasted Sam Bankman-Fried's claims that his once-$32 billion crypto empire unraveled due in part to accounting mistakes.

In the wake of FTX's collapse, Bankman-Fried says he didn't "knowingly commingle funds" between his crypto exchange FTX and quant trading firm Alameda Research. Bankman-Fried, who got his start at top prop trading shop Jane Street and a has degree from Massachusetts Institute of Technology, blamed the $8 billion balance sheet hole on poor accounting, per a recent Bloomberg interview.

"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. Even the most gullible person should not believe Sam's claim that this was an accounting error," Armstrong tweeted on Friday.

Armstrong added: "It's stolen customer money used in his hedge fund, plain and simple."

 

Around $10 billion worth of customer deposits reportedly were transferred to Alameda following FTX's downfall by Bankman-Fried, Reuters first reported on November 13. The bombshell report alleged that $1 billion to $2 billion worth of client funds are unaccounted for as well.

Elsewhere, Galaxy Investment Partners chief exec Mike Novogratz says Bankman-Fried is "delusional" about his level of culpability in the exchange's collapse. "Let's be really clear. Sam was delusional about what happened and his culpability in it," he said on CNBC.

Bankman-Fried will likely face jail time, Novogratz speculated. "They perpetuated a large fraud and it wasn't just Sam," Novogratz said. "You don't pull this off with one person."

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