According to a Wall Street Journal investigation on Thursday, certain FTX personnel in the United States were aware of the exchange’s backdoor, which allowed Alameda Research to withdraw billions in customer assets.The workers alerted FTX’s director of engineering Nishad Singh to their discovery, but the issue was never resolved, according to the WSJ, which cited people familiar with the situation.The group was investigating whether the code for FTX’s primary exchange could be used in the United States while working for LedgerX, the crypto derivatives exchange that FTX acquired in 2021.
Julie Schoening, the chief risk officer of LedgerX, brought up the issues with her employer Zach Dexter, who later spoke with Nishad Singh, one of FTX founder Sam Bankman-Fried’s closest assistants, about them.In August 2022, Schoening was let go amid claims that by calling attention to the issues, she had irked her superiors.
“Following a thorough internal investigation, LedgerX has found no evidence that any of its employees were aware of any reported code enabling Alameda to take FTX customer assets, and firmly denies any contrary allegation,” Miami International Holdings, LedgerX’s new owners, said in a statement to the WSJ.
The information is revealed at the beginning of Bankman-Fried’s wire fraud trial in New York.To all accusations, he has entered a not guilty plea.Singh, who entered a guilty plea, is anticipated to give a testimony against his former boss.Requests for comment were not immediately answered by FTX or LedgerX.