In new findings in the FTX bankruptcy case, liquidators claim that FTX’s inner circle swindled $3.2B (£2.6 billion) in transfers and debts owed to notorious FTX founder Sam Bankman-Fried and his entourage. The information is contained in the records of the company’s assets and liabilities and accounts of financial dealings submitted to the court on Wednesday by FTX and its 101 connected debtors.
Fingers pointed at disgraced Bankman-Fried and associates.
According to FTX’s current management, $2.2 billion of the $3.2 billion given to SBF’s inner circle went to Bankman-Fried alone. Former FTX co-lead engineer Nishad Singh allegedly pocketed $587 million, while former Alameda Research CEO Caroline Ellison and FTX CTO Zixiao “Gary” Wang allegedly took $6 million and $246 million, each.
According to the SEC, Alameda Research, which Bankman-Fried co-founded, operated as a cryptocurrency-trading investment firm that drained billions from FTX and its clients’ money. Alameda invested the funds in startups and other ventures. Singh, Ellison, and Wang have all pleaded guilty to fraud charges brought by the US government.
FTX’s inner circle swindled $3.2B. This figure excludes political and charitable contributions, “significant” transfers to affiliates, and a $240 million investment in high-end property in the Bahamas. Bankman-Fried is thought to have given approximately $40 million to election campaigns.
Stolen crypto plays a part in the company’s scandal.
In January, FTX’s liquidation leadership announced that it had already retrieved $5.5 billion in assets, as well as $415 million in cryptocurrency taken in a November attack on the business’s systems, approximately when the company collapsed.
That collapse essentially amounted to a bank run as frightened investors attempted to cancel their investments due to suspicions that the company was not stable. Customers were unable to recover all of their funds because the company had botched its records to the point where John Ray III, FTX’s liquidation CEO who previously supervised Enron’s demise, stated that things at FTX were even worse than the 2001-era disaster. According to reports, at least $1 billion in consumer funds disappeared without a trace.
Following the scandal where FTX’s inner circle swindled $3.2B, Ray is currently coordinating attempts to salvage cryptocurrency and other assets so that millions of FTX users’ accounts, which have been frozen since the disaster, can be reopened. SBF is set to go on trial in October, and by then, any number of revelations and further charges could be established.
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