On Wednesday, a court hearing disclosed that the bankrupt cryptocurrency exchange FTX had repurchased all of the firm’s shares, held by rival platform Binance, using funds from its customers.
In a post from 2022, Binance’s CEO, Changpeng Zhao, stated that the repurchase included the acquisition of FTX’s FTT tokens and over $2.1 billion in Binance USD (BUSD) stablecoins.
The U.S. Department of Justice (DOJ) hired Peter Easton, an accounting professor at the University of Notre Dame, to trace the billions of dollars between Alameda and FTX as part of the ongoing Sam Bankman-Fried trial.
The court asked Easton whether FTX ever spent user deposits, and he replied, “Oh, yes.” According to the professor’s testimony, these user deposits were claimed to have been given to charities, reinvested into real estate and business, and used to fund political campaigns.
Binance’s share of FTX was repurchased using these deposits. “Over a billion dollars came from customer funds from FTX exchange,” Easton stated in his testimony on Wednesday.
As part of a strategic alliance between the two companies, Binance made an undisclosed financial investment in FTX in 2019. Trading volume on the then-new FTX was $500 million per day, a far cry from over $50 billion at its peak.
Also Read: Nishad Singh Cross-examined On FTX/Alameda Fund Use
