The latest lawsuit from FTX Trading reveals new details of massive fraud and personal desires of Bankman-Fried.
In particular, the complaint states that the former director of the company's subsidiary hedge fund Alameda Research (and Bankman-Fried's girlfriend) Caroline Allison estimated that FTX had a deficit of over $10 billion 8 months before the cryptocurrency exchange went bankrupt. The document also claims that Bankman-Fried and former FTX Chief Technical Director Gary Wong took $546 million from Alameda in May 2022 to purchase shares of Robinhood Markets.
Private Island and Bunker
But there is something more interesting in the complaint - the plans of the former owner of FTX to acquire the island state of Nauru and build a bunker there.
In case half or more of the world's population perishes, the island was planned to be used for the survival of supporters of "effective altruism" - a philosophy that Sam Bankman-Fried publicly associated himself with.
Awards for Themselves
Approximately during the evaluation of FTX's deficit, Caroline Allison paid herself a $22.5 million bonus through a series of convoluted transfers. The woman seemingly deposited money from Alameda into her FTX account, with $10 million of these funds later transferred to her personal bank account (some of the funds she invested in an AI startup).
In various instances in 2021 and 2022, Allison also allegedly awarded herself multi-million dollar bonuses.
Other top managers of FTX also distinguished themselves with such bonuses: Nishad Singh, former development director, supposedly received a fraudulent transfer of ordinary FTX shares totaling about $477 million, without paying anything in return, and in February 2020, Sam Bankman-Fried granted himself rights to over $6 million in shares without paying anything for it.
Allison also allegedly received $2.75 million in FTX options without providing anything in return from December 2020 to March 2021.
"Going Public"
Sam Bankman-Fried has repeatedly expressed ambitions to take FTX public. The complaint alleges that he took certain steps to do so, albeit fraudulently.
In April 2021, he signed a backdated fictitious "Payment Agent Agreement". The agreement was prepared for an external auditor who was supposed to prepare FTX's financial report as the company considered an initial public offering of shares.
Allison, Wong, and Singh have pleaded guilty to fraud and are cooperating with federal prosecutors. Sam Bankman-Fried has denied a number of accusations and is awaiting trial in October.
Source: Bloomberg
Comments (0)
There are no comments for now