KEY POINTS
  • Alameda Research, a trading firm founded by Sam Bankman-Fried, was trading billions of dollars from FTX accounts and leveraging the exchange's native token as collateral, according to a source.
  • Many employees and outside auditors were unaware that FTX did not have enough money to match customer withdrawals, the source says.
  • Three sources familiar with the company told CNBC that they were blindsided by FTX's missteps and that only a small cohort knew about the potential misuse of customer deposits.

The quant trading firm Sam Bankman-Fried founded was able to quietly use customer funds from his exchange FTX in a way that flew under the radar of investors, employees and auditors in the process, according to a source.

The way they did it was by using billions from FTX users without their knowledge, says the source.