FTX Dubai Subsidiary Sent $10M To Shady Alameda-Linked Subsidiary Post-BankruptcyJanuary 13, 2023
Days after the epic collapse of Sam Bankman Fried’s crypto empire, details have emerged that FTX’s Dubai subsidiary transferred $10M to a little know US firm owned by Alameda Research.
According to a Jan 9 report by DL News, citing sources familiar with the matter, FTX FZE, also known as FTX-MENA, conducted a $10 million bank wire transfer for the funds to Alameda-owned North Dimension on November 16. One document revealed that New York-based bank JP Morgan received the funds.
Following the transfer, a document marked as “restricted” showed that about $460,000 worth of assets were left in the account. According to court documents, FTX ZE held at least three bank accounts in Dubai. Notably, the UAE’s Virtual Assets Regulatory Authority which is the crypto regulating authority in the country, suspended FTX FZE’s license in November after approving it in July.
Based on bankruptcy documents filed last November, North Dimension Inc was listed as one of the 130 companies in Sam Bankman-Fried’s sprawling empire. However, unlike FTX, its name assumed a low profile, and little was known about its business.
Still, despite North Dimensions’ opaqueness, regulators noted that the firm played a crucial role in the mess at FTX. In fact, they contended that FTX officials wanted it that way to help move FTX funds with little to no scrutiny. On Dec 21, the US Commodity Futures Trading Commission referred to North Dimension as a “Delaware-registered wholly-owned subsidiary of Alameda” that “deliberately did not have a name that was readily identifiable” with the hedge fund.
North Dimensions, a subsidiary of Alameda Research-the trading firm founded by Bankman-Fried, was used to siphon user funds from FTX to Alameda, according to a complaint filed by the Securities and Exchange Commission last month. Interestingly, an investigation by NBC News revealed North Dimension Inc., founded in 2020, was also registered as a fake online electronics company on a website that has since been brought down.
“If John Ray(FTX Bankruptcy lawyer) authorized this, it’s fine. If not, it’s embezzlement and bankruptcy fraud. I have a hard time seeing a bank approve that wire after the bankruptcy was filed unless John Ray approved it,” J.W. Verret, a professor of securities law at George Mason Law School, noted.
Last week, FTX founder Sam Bankman-Fried pleaded not guilty to criminal charges of defrauding FTX customers and using FTX funds to prop up Alameda. Later on, Caroline Ellison- The former CEO of Alameda Research and Gary Wang, an FTX co-founder, pleaded guilty to all fraud charges against them and have reportedly been cooperating with prosecutors.
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