On November 11, FTX and its affiliates declared bankruptcy in the US state of Delaware. One of the most well-known crypto blowups, the company’s demise left customers and investors in a precarious situation.
A complaint was recently brought by the United States Commodity Futures Trading Commission [CFTC] against SBF, FTX, and Alameda Research. According to reports, they were all accused of fraud and making materially false claims about the sale of digital goods.
Due to the actions of these businesses, its clients suffered a massive loss of more than $8 billion. The fact that FTX and Alameda mixed monies and specifically utilized client deposits on the exchange were revealed.
Alameda Research Made The Move Prior To Bankruptcy
Now, in a recent development, it was established that Alameda Research sought to redeem about 3k wBTC days before declaring for bankruptcy. In a recent Twitter thread, BitGo CEO Mike Belshe provided the same assurance.
Furthermore, Etherscan’s on-chain data provided cross-verification that the transaction occurred on November 9.
Belshe went on to say that the company rejected the redemption request because the involved unidentified Alameda agent failed Bitgo’s security verification process. Belshe noted that the representative appeared to be ignorant of the burning of wrapped Bitcoin.
Once transmitted to a burn address, wBTC can be exchanged for Bitcoin. Conventionally, a 1:1 ratio is used to convert. It is significant to remember that Bitgo, along with Ren and Kyber, is a co-developer of wBTC.
The executive explained what transpired when the security details weren’t in accordance with the process. It was stated,
“So we held it up and we said no, no, no, no. This is not what the burn looks like. And we need to know who this person was.”
Alameda declared bankruptcy while they were holding it and awaiting word on the mentioned issues. Therefore, everything came to a stop.
Alameda’s 3,000 BTC mint request is still “stuck” on the platform, the Bitgo executive continued. Belshe noted that it was likely the company will leave the tokens in their current location. Any further action won’t be taken until the trustees overseeing Alameda’s bankruptcy case are ready to deal with it.