CoinVoice recently learned that on October 5, according to WSJ, people familiar with the matter said that a few months before FTX collapsed, some of its US employees discovered the so-called "backdoor" on the platform. Alameda Research allegedly used this "backdoor" to withdraw billions of dollars in customer funds from FTX.

Employees who discovered the problem reported it to their department’s top brass, who some said discussed the issue with an assistant to FTX founder SBF. However, the issue was never resolved. In the summer of 2022, team executives who raised concerns about Alameda’s special rights to FTX were fired.

This “backdoor” played a major role in the case against SBF, whose trial on fraud charges began this week in federal court in New York. The former FTX head has pleaded not guilty to all charges.

Prosecutors allege that SBF stole FTX customers’ funds by secretly ordering the programming of “special functions,” including giving Alameda the ability to handle FTX’s massive pool of funds. Court documents show that a line of code hidden deep in FTX’s code allowed Alameda to have up to $65 billion in liabilities on FTX. [Original link]