#FTX Group Scandal: Alameda Accused of Stealing Encrypted Assets
On April 10th, according to a report released by FTX creditors, on July 31, 2019, former FTX engineering director Nishad Singh changed the code base to allow Alameda to extract an
On April 10th, according to a report released by FTX creditors, on July 31, 2019, former FTX engineering director Nishad Singh changed the code base to allow Alameda to extract an unlimited amount of encrypted assets from FTX; A week later, it was modified to exempt Alameda from automatic liquidation, and FTX Group kept almost all encrypted assets in a hot wallet (SBF falsely claimed to use a cold wallet).
FTX creditors have recovered over $1.4 billion in digital assets, and another $1.7 billion is currently being recovered
The FTX Group, a cryptocurrency trading platform, has been making headlines recently. According to a report by FTX creditors, on July 31, 2019, former FTX engineering director, Nishad Singh, changed the code base to allow Alameda to extract an unlimited amount of encrypted assets from FTX. A week later, it was modified to exempt Alameda from automatic liquidation.
Rumors about the scandal first surfaced in April 10th this year. In this article, we’ll explore what happened, who’s involved, and how this affects the cryptocurrency world.
##What is FTX Group?
FTX Group is a cryptocurrency trading platform that was launched in 2019. It was founded by Sam Bankman-Fried (SBF), a former quant trader at Jane Street Capital, and Gary Wang, a computer science professor at MIT.
The platform is known for offering derivatives contracts in Bitcoin, Ethereum, and other cryptocurrencies. Additionally, it offers the ability to trade directly on the spot market and provides OTC services.
##The Scandal Explained
According to the report by FTX creditors, Alameda, a quant trading firm, was given unlimited access to extract encrypted assets from FTX. This was made possible by Singh, who modified the code base.
The report also showed that a week later, the code was modified again to exempt Alameda from automatic liquidation. This meant that even if Alameda’s trades went wrong, they wouldn’t be automatically liquidated like other traders.
FTX Group also kept almost all encrypted assets in a hot wallet, which can be easily hacked, instead of a cold wallet, which is more secure. SBF had falsely claimed that the company used a cold wallet.
The report also revealed that Alameda and FTX Group share a common owner, Sam Bankman-Fried.
##What are the consequences?
The scandal has raised a lot of eyebrows in the cryptocurrency world. It has called into question the security and fairness of the FTX Group’s trading platform.
The report has also led to accusations of insider trading and market manipulation. If these accusations turn out to be true, it could have far-reaching consequences for the broader cryptocurrency market.
Furthermore, the scandal has raised concerns about the lack of transparency and accountability in the cryptocurrency industry. The lack of clear regulations and oversight has increased the risk of scams, frauds, and other illegal activities.
##Conclusion
The FTX Group scandal has brought a lot of attention to the cryptocurrency world. It has highlighted the need for more transparency and accountability in the industry.
It’s also a reminder that investors should conduct due diligence and research before investing in any cryptocurrency. It’s essential to understand the risks and potential rewards before making any investment decisions.
##FAQs
**Q1. What is FTX Group?**
FTX Group is a cryptocurrency trading platform that offers derivatives contracts in Bitcoin, Ethereum, and other cryptocurrencies.
**Q2. What is a hot wallet?**
A hot wallet is an online wallet that is connected to the internet and is, thus, more vulnerable to hacking.
**Q3. What is a cold wallet?**
A cold wallet is an offline wallet that is not connected to the internet and is, thus, more secure.
##Keywords
FTX Group, Alameda, cryptocurrency scandal.
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