As part of its extensive legal complaint filed Tuesday, the US Commodities and Futures Trading Commission has alleged that former FTX CEO Sam Bankman-Fried went through a series of convoluted and illegal measures to hide the liabilities of his trading firm Alameda Research. 

In the complaint, the CFTC said that Bankman-Fried directed FTX executives to reallocate Alameda’s $8 billion in liabilities to a customer account on FTX’s systems that wasn’t identifiable as an Alameda-associated account.

This was because the account in question was not opened under the “” identifier—something that could be used to recognize other Alameda-sub accounts on FTX.

Bankman-Fried reportedly referred to this account as “our Korean friend’s account” and “the weird Korean account” in subsequent discussions with FTX executives with knowledge of it. The FTX system notes described the account as “FTX fiat old,” making Alameda’s $8 billion negative balance on the exchange suddenly less apparent.

The revelations come in the wake of two simultaneous criminal complaints filed by the US Securities and Exchange Commission and the Commodities and Futures Trading Commission on Tuesday, joining the Southern District Court of New York’s complaint earlier that day. 

Along with the disguised account, both regulators flagged Bankman-Fried’s extension to Alameda Research of special trading privileges, including a designation called “allow negative flag.” The designation allowed the firm to execute transactions even if it lacked the funds, and without triggering the “auto-liquidation” feature that applied to standard accounts. These same types of exemptions were also applied to the “so-called Korean account,” said the CFTC.

Bankman-Fried has long maintained ignorance over the colossal, ultimately explosive uncollateralized loans Alameda built up on FTX, denying that there was any “special access” that allowed the trading firm to keep on trading and borrowing even when deep in the red. 

Growing deeply indebted, Alameda eventually used FTX customer funds, under Bankman-Fried’s orders, to meet loan recalls and margin calls in June 2022, the CFTC alleges. Then, in September, the former FTX CEO reportedly suggested shutting down Alameda entirely.

In a document titled “We came, we saw, we researched,” Bankman Fried named a number of reasons for closing down the trading firm, including the fact that it was not making enough money to justify its existence.

When news of FTX’s insolvency finally came to light, and Bankman-Fried and other executives rushed to raise as much capital as they could to fill the shortfall, a balance sheet was prepared and shared with investors. This balance sheet included an $8 billion negative balance from an account that had been labeled “fiat@.”