FTX CRYPT RAIDER
SBF used money from firm to buy parents vacay home
Sam Bankman-Fried extracted at least $300 million from his failed cryptocurrency exchange, FTX, and questions are raging as to whether there’s still more alleged looting to be uncovered, and, if so, will any of it ever be paid back.
While Bankman-Fried, 30, has cultivated a scruffy, do-gooder image, bankruptcy documents show that FTX raised some $421 million from investors, only to have him siphon off $300 million — with some of the money used to fund the purchase of a $16.4 million vacation home for his parents in the Bahamas.
At the time, BankmanFried told investors the cash-out was a partial reimbursement of money he’d spent to buy out rival Binance’s stake in FTX a few months earlier, according to The Wall Street Journal.
Unlocated assets
Joseph Bankman and Barbara Fried, both Stanford University law professors, were listed as the owners of the beachfront vacation home in the Old Fort Bay section of the Bahamas, according to property records from the island nation. BankmanFried’s parents were in the process of returning the home to FTX, according to a spokesperson.
“Since before the bankruptcy proceedings, Mr. Bankman and Ms. Fried have been seeking to return the deed to the company, and are awaiting further instructions,” the spokesperson told Reuters.
Last week, FTX’s new CEO, John J. Ray, said in a court filing that “only a fraction” of FTX’s digital assets have been located and secured. Ray also has accused Bankman-Fried of working with Bahamian regulators to “undermine” the US bankruptcy case and shift assets overseas.
In all, the company is said to owe more than $3 billion to investors and creditors, who could number more than 1 million across the company’s various entities worldwide, according to a court filing. The question now is if the customers and creditors can claw back some of the money from the company, which is said to have a cash balance of $1.24 billion.
“It will most likely take time, but eventually, many will recover their funds,” Derek Jacques, a bankSemafor, ruptcy attorney with the Mitten Law Firm near Detroit, told The Post. “This is assuming that no criminal penalties are doled out, which still appears to be a distinct possibility.”
Court documents unveiled during bankruptcy proceedings in Delaware as well as property records unearthed in the Bahamas indicate that BankmanFried apparently used the company as his own personal piggy bank.
Spending spree
The vacation home is part of an extensive realestate spending spree undertaken by FTX for the benefit of company executives. Property records show that FTX spent some $121 million on at least 19 homes in the Bahamas over the past two years.
The company shelled out $72 million for condominium apartments at the exclusive Albany beachfront resort as well as $30 million for a penthouse apartment for Bankman-Fried.
Records also indicated that FTX bought three apartments in the Bahamas ranging from $950,000 and $2 million each.
FTX filed for bankruptcy protection earlier this month after it was learned that it used customer funds to cover risky bets made by sister company Alameda Research, which was also founded by Bankman-Fried.