Sam Bankman-Fried ran FTX like ‘personal fiefdom’ as firm spent $300M on luxury real estate

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Sam Bankman-Fried handled FTX like a “private fiefdom,” as he and a handful of associates looted the now-defunct crypto alternate’s coffers to fund an epic spending spree that included a $300 million splurge on Bahamas actual property, legal professionals for the corporate claimed.

FTX’s chapter crew detailed the wild spending below 30-year-old Bankman-Fried in a carefully watched courtroom listening to on Tuesday — revealing rampant mismanagement by high executives till the platform collapsed with greater than $1 billion in consumer funds lacking.

Attorneys stated the $300 million spent on actual property was largely used to purchase mansions and beachfront trip properties for Bankman-Fried and different senior FTX executives.

The purchases went undisclosed throughout a months-long media blitz by which the scruffy-looking Bankman-Fried, sometimes wearing shorts and a T-shirt, portrayed himself as a socially aware benefactor for Democrats and progressive causes.

“Sadly, the FTX debtors weren’t significantly effectively run, and that’s an understatement,” legal professional James Bromley of the regulation agency Sullivan & Cromwell stated in a Delaware courtroom.

Bromley added the chapter course of had “allowed everybody for the primary time to see below the covers and acknowledge the emperor had no garments,” in line with the Monetary Occasions.

FTX declared chapter earlier this month.
SOPA Photos/LightRocket through Getty Photos

Below Bankman-Fried’s watch, “substantial quantities of cash had been spent on issues not associated to the enterprise,” Bromley said.

Attorneys are scrambling to parse FTX’s slipshod accounting to uncover what occurred to consumer holdings. The bankrupt entity has an estimated 1 million collectors with losses that might attain a number of billion dollars. The highest 50 collectors alone are owed greater than $3 billion.

“Now we have witnessed one of the abrupt and tough collapses within the historical past of company America,” stated Bromley.

Sam Bankman-Fried and his associates purchased $300 million in luxurious actual property.
TNS

The disclosures in Delaware courtroom adopted an earlier Reuters report revealing that Bankman-Fried’s dad and mom, Stanford regulation professors Joseph Bankman and Barbara Fried, had been amongst these in FTX’s circle who acquired luxurious property within the Bahamas.

The report cited property information that confirmed Bankman and Fried co-signed the deed for a seashore home within the unique Previous Fort Bay gated group. The property was recognized as a “trip residence” for the household.

When confronted with the information, a spokesperson for Bankman-Fried’s dad and mom stated they intend to return the property.

Albany Bahamas - Luxury Resort Community in The Bahamas.
A department of FTX bought seven beachfront condos for practically $72 million within the ritzy Albany group.
Albany Bahamas

“Since earlier than the chapter proceedings, Mr. Bankman and Ms. Fried have been looking for to return the deed to the corporate and are awaiting additional directions,” a spokesperson for Bankman-Fried’s dad and mom instructed the outlet.

In complete, the report uncovered information for no less than 19 properties with a complete worth of practically $121 million.

A unit of FTX purchased seven beachfront condos for practically $72 million within the Bahamas’ ritzy Albany resort city — the identical group the place Bankman-Fried and his “cabal of roommates” lived whereas working FTX and its doomed sister cryptocurrency buying and selling platform, Alameda Analysis.

Bahamas Penthouse
FTX executives ran the corporate from a luxurious penthouse within the Bahamas.
Seaside Actual Property

The true property disclosures had been among the many most notable particulars to emerge from the listening to throughout what has already been a chaotic chapter course of. The corporate’s representatives are planning to unload components of the enterprise which might be nonetheless viable.

FTX’s legal professionals stated the cryptocurrency platform has suffered “substantial” losses to its remaining belongings as a consequence of a sequence of cyberattacks.

Attorneys stated the corporate was investigating the circumstances behind a deal final 12 months by which rival platform Binance offered off its stake in FTX.

Final week, the Wall Road Journal reported Bankman-Fried cashed out $300 million in 2021 simply after FTX closed a $421 million fundraising spherical. On the time, he reportedly portrayed the money seize to traders as a partial reimbursement for getting out Binance’s stake.

At its peak, FTX was as soon as valued at a whopping $40 billion throughout its US and worldwide properties. The quantity highlighted the gorgeous extent of the agency’s downfall out of business following a sudden liquidity crunch earlier this month.

Bahamas penthouse.
The penthouse went available on the market after the crypto empire fell.
Seaside Actual Property

The chaos started after a CoinDesk report revealed Alameda was closely invested in FTT, a token supplied by FTX. The revelation crushed confidence within the token’s viability and led panicked traders to dump their holdings.

Bromley stated FTX filed for chapter after a crush of withdrawals that was an “efficient run on the financial institution.”

Bankman-Fried has confronted intense scrutiny for his private function within the firm’s freefall. The ex-CEO shocked the general public final week after he ripped regulators and known as ethics a “dumb sport we woke Westerners play” in a wild interview with Vox.

Bankman-Fried additionally appeared to pin the blame for FTX’s collapse on Alameda — even if he additionally owned that agency and that his ex-lover Caroline Ellison served as its CEO.

With Submit wires

Sam Bankman-Fried ran FTX like ‘personal fiefdom’ as firm spent $300M on luxury real estate

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