Newly released court documents reveal a “$65 billion back door” that FTX had set up for Alameda, the now-defunct crypto exchange’s trading arm.
A case docket with a deck detailing FTX’s assets and liabilities shows that Alameda Research had the ability to borrow up to $65 billion from FTX without posting collateral, while FTX customers were subject to strict rules of collateral.
The deck also features code in the FTX platform that allegedly allowed for a back door for assets to be transferred from the exchange to Alameda under the radar. This meant that “certain individuals” could withdraw assets without leaving a record on the exchange ledger.
Alameda was also exempt from being liquidated when trades when against it, according to the documents.