FTX Executives Used ‘Korea’ Account to Mask Giant Alameda Liabilities

(Bloomberg) — A GitHub account bearing the name of former FTX executive Nishad Singh authored code that hid Alameda Research’s ballooning liabilities on the now-collapsed cryptocurrency exchange, according to internal documentation reviewed by Bloomberg News.

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The documentation, in the form of comments associated with specific lines of code, offers clues to the origins of a mysterious account on FTX that a regulator alleges helped mask mounting debts of its sister trading firm Alameda Research. The relationship between the two firms, and alleged misuse of FTX customer funds, led to criminal charges against founder Sam Bankman-Fried.

Singh, who was FTX’s engineering director, has not been charged with a crime. GitHub is a programming code repository that companies and individual software developers use to store and share code. GitHub is frequently used to allow developers to work together. It wasn’t immediately clear whether any other FTX employees had access to the account.

The GitHub account bearing his name annotated the code snippets reviewed by Bloomberg with comments including “Korea KYC” and “BD expenses accounts,” the documentation reviewed by Bloomberg News showed. The later was tied to a “Korea expenses” account.

Alameda shunted debts, which soared to $8 billion, to an FTX customer account that wasn’t easily identifiable as belonging to Alameda, the US Commodity Futures Trading Commission alleged in a civil complaint Tuesday. Bankman-Fried, who founded Alameda and FTX, called it “our Korean friend’s account” and directed it to be created at least partially to mask Alameda’s gaping liabilities, the CFTC alledged.

The so-called Korean account enjoyed the same privileges of Alameda’s main account and sub-accounts, including exemptions from parts of FTX’s risk management policies, the lawsuit said.

Singh and representatives for Bankman-Fried and FTX didn’t immediately respond to requests for comment. Bankman-Fried is being held without bail at a jail in the Bahamas awaiting an extradition hearing in February.

Though Alameda enjoyed virtually unlimited access to FTX customer funds for its own trading purposes since the exchange was created, the firm began to spiral in May, after a $60 billion crypto ecosystem built on tokens TerraUSD and Luna collapsed, and lenders demanded payments. That led Alameda to ramp up its use of FTX customer funds, regulators alleged.

Do Kwon, a South Korean national who was behind TerraUSD, is reportedly in Serbia. A South Korean court issued an arrest warrant for him in September on allegations that he violated capital-markets laws.

Months after the jarring round of margin calls began, Bankman-Fried contemplated closing down Alameda around September, according to the CFTC complaint. He drafted a Twitter thread to announce its closure, saying “I feel really uncertain what’s right!” But Alameda never shut.

Bankman-Fried was jailed Tuesday after US authorities brought eight criminal charges against him, including fraud and conspiracy to commit money laundering. The US Securities and Exchange Commission also sued him.

The CFTC complaint described the “Korean account” as a sub-account of Alameda that was not opened under an “alameda-research.com” identifier and not otherwise readily identifiable as being an Alameda-associated account.

–With assistance from Olga Kharif.