Peter Easton, an accounting professor from the University of Notre Dame testified that FTX’s user deposits were reinvested into businesses, real estate, political contributions, and charity donations during the ongoing trial against fallen crypto tycoon Sam Bankman-Fried.
According to a CoinDesk report, the prosecutors in the trial brought forward Easton to show his analysis of the multi-billion dollar fraud.
Easton’s analysis showed a significant discrepancy between FTX’s user deposits and bank balances. By June 2022, FTX had only around $2 billion to back over $11 billion in user deposits.
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Additionally, Easton’s investigation discovered that FTX customer funds primarily financed the company’s investments in Modulo Capital and SkyBridge Capital, among others.
Eliora Katz, a former FTX lobbyist, also testified, highlighting the contrast between Bankman-Fried’s public statements about the exchange’s safeguards and the reality. The Department of Justice alleges poor financial record-keeping and improper use of customer money led to FTX’s collapse.
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