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Exclusive: How a secret software change allowed FTX to use client money

Dec 13 (Reuters) – In mid-2020, FTX’s chief engineer made a secret change to the cryptocurrency exchange’s software.

He tweaked the code to exempt Alameda Research, a hedge fund owned by FTX founder Sam Bankman-Fried, from a feature on the trading platform that would have automatically sold off Alameda’s assets if it was losing too much borrowed money.

In a note explaining the change, the engineer, Nishad Singh, emphasized that FTX should never sell Alameda’s positions. “Be extra careful not to liquidate,” Singh wrote in the comment in the platform’s code, which it showed he helped author. Reuters reviewed the code base, which has not been previously reported.

Original Article: https://www.reuters.com/technology/how-secret-software-change-allowed-ftx-use-client-money-2022-12-13/

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