Amid the ongoing trial of FTX co-founder and former CEO Sam Bankman-Fried, a report has surfaced alleging that some of the company’s US-based employees found a hidden backdoor allegedly used by Alameda Research to siphon billions worth of customer funds from FTX, six months before the crypto exchange’s fall.The employees reported the issue to the head of their division, Julie Schoening, who was the Chief Risk Officer at LedgerX and was concerned about Alameda’s supposed preferential treatment. Schoening took the matter to LedgerX boss Zach Dexter, while Dexter alerted FTX’s director of engineering, Nishad Singh, about the auto-liquidation issue. Dexter believed the problem to be resolved after Singh reportedly removed a section of code, but the issue was never fixed.Schoening was fired from her job in August 2022 following reports that she circulated inappropriate messages to employees. Some sources suggested that Schoening’s job termination may have happened as a result of her team’s identification of FTX’s risk management issues.Alameda’s secret backdoor is one of the cases brought by prosecutors against Sam Bankman-Fried, who is facing criminal charges. The former FTX boss is currently undergoing trial in New York, and the prosecution’s first witness, an FTX customer, recently testified against SBF in court. Bankman-Fried’s attorneys are looking to make users accountable, arguing that it was their choice to buy and hold crypto. The defense counsel also maintains that SBF did not defraud anyone. A spokesperson for Miami International Holdings said that following an internal investigation, LedgerX found no evidence that any of its employees were aware of any reported code enabling Alameda to take FTX customer assets. The fired LedgerX executive threatened to sue FTX over the termination, with anonymous sources stating that both sides reached a $5 million settlement deal, which, however, could not be completed due to the crypto exchange’s collapse in November 2022.

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Information	Details
Geography	North America
Countries	🇺🇸
Sentiment	neutral
Relevance Score	8
People	Julie Schoening, Zach Dexter, Sam Bankman-Fried, Nishad Singh, Marc-Antoine Julliard
Companies	LedgerX, Miami International Holdings, Marc-Antoine Julliard, FTX, Alameda Research
Currencies	alameda, FintruX, Ethereum, Bitcoin
Securities	None