FTX has used customer deposits to invest in many companies. In June last year, the funding gap was as high as US$9 billion.

Peter Easton, an accounting professor at the University of Notre Dame, testified on Wednesday that FTX customer deposits were reinvested in business and real estate and used for political contributions and charitable contributions. It is reported that Easton was hired by the U.S. Department of Justice to track billions of dollars in funds from Alameda and FTX. Easton said that around March 2021, total customer deposits fell below FTX’s bank balance, meaning that customer funds had lost support by then. By June 2022, when FTX deposits peaked, the exchange had only about $2 billion on hand to support $11.3 billion in customer deposits, leaving a funding gap of up to $9 billion. Easton said it could therefore conclude that its acquisition of Modulo Capital was completed using client funds. Modulo Capital is a Bahamas-based financial company owned by FTX. Easton’s investigation also revealed that the majority of FTX’s investments in SkyBridge Capital were made using client funds. At the same time, most of FTX’s $550 million investment in Bitcoin mining company Genesis Digital Assets also came from customer deposits. Additionally, FTX client funds flowed into a bank account at Paper Bird, Inc., an entity separately owned by SBF. The "majority" of SBF's $100 million investment in mobile banking platform Dave, Inc. through Paper Bird came from FTX customer deposits. (CoinDesk)