FTX employees discover backdoor that allowed Alameda Alameda to withdraw funds

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FTX employees discover backdoor that allowed Alameda Alameda to withdraw funds

Some U.S.-based employees of FTX reportedly knew that the exchange had a back door that allowed Alameda to withdraw customers' funds, the Wall Street Journal reported on Oct. 5th.

The employees stumbled upon this backdoor while examining the possibility of replicating the code used by FTX International for FTX US. FTX acquired the LedgerX team in 2021.

Julie Schoening, the chief risk officer at LedgerX, brought the story to the attention of Zach Dexter, the company's CEO. Dexter reportedly forwarded the information to Nishad Singh, FTX's director of engineering. Despite the discovery, the problem was not fixed. The Miami International Holdings CEO, LedgerX's new owners, denied that their employees knew of the backdoor. They wrote: 'It doesn't matter what you say,' they said.