On 12 November, anonymous sources cited by the Wall Street Journal said Alameda CEO Caroline Ellison disclosed to other Alameda employees that she, Sam Bankman-Fried, Gary Wang, and Nishad Singh knew that client deposits were transferred from FTX to Alameda. An anonymous source cited by the New York (pipihosa.com) Times on 14 November said the same. Anonymous sources cited by the Wall Street Journal said the funds were used in part to pay back loans Alameda had taken to make investments.

This was explicitly forbidden by FTX’s terms of service. Following months of arguments and disagreements between Changpeng Zhao, the CEO of Binance, and Bankman-Fried, tensions between the two had intensified days before the crisis. FTX used software to conceal the misuse of customer funds. On 12 November 2022, the Wall Street Journal reported that anonymous sources had said that Alameda CEO Caroline Ellison said that she, Bankman-Fried, Gary Wang, and Nishad Singh were aware of that decision.

Gladstone, Alexander; Ge Huang, Vicky; Biswas, Soma (15 November 2022). “BlockFi Prepares for Potential Bankruptcy as Crypto Contagion Spreads”. Shen, Muyao (16 November 2022). “Winklevosses’ Gemini Delays Withdrawals on Lending Program”. The New York Times. Ross Sorkin, Andrew; Mattu, Ravi; Warner, Bernhard; Kessler, Sarah; Gandel, Stephen; J. de la Merced, Michael; Hirsch, Lauren; Livni, Ephrat (17 November 2022). “Investor Losses from FTX’s Implosion Are Growing”. Greifeld, Katherine; Hajric, Vildana (16 November 2022). “Silbert’s Once-$10 Billion Crypto Empire Is Showing Cracks”.

Anonymous sources cited by the New York – https://www.pipihosa.com/2023/11/17/more-bitcoin-etf-rejections-quite-likely-bitgos-belshe-says/ – Times said that the exchange owes as much as $8 billion. Authorities in the Bahamas, including the Royal Bahamas Police Force, questioned Bankman-Fried on 12 November. Despite FTX’s bankruptcy, Bankman-Fried continued to attempt to raise money for the firm during the weekend of 12 and 13 November. Bankman-Fried resigned as CEO and was replaced by John J. Ray III, a corporate restructuring specialist who previously oversaw the liquidation of Enron. FTX employees had begun leaving for Hong Kong, the location of the company’s former headquarters, or other locations. The crypto lender BlockFi, which was affiliated with FTX, announced on 10 November that it was suspending operations as a result of FTX’s collapse.