FTX Management: a multi-million dollar lending scandal

With the filing of these Schedules of Assets and Liabilities and Financial Statements, FTX continues to move forward with its Chapter 11 proceedings

Negocios March 16
News Mundocrypto

In light of the recent financial turmoil at FTX and its subsidiaries, teams appointed to manage Sam Bankman-Fried's empire have uncovered information about massive loans taken out by former leaders. This investigation is in response to statements by FTX's new CEO, John Ray III, who cited an "unprecedented situation" regarding the financial management of the exchange. And the discoveries keep coming.

The company, also known as FTX Trading Ltd., and its affiliated debtors today filed Schedules of Assets and Liabilities and related Financial Statements with all entities involved in the Chapter 11 proceedings. This information discloses certain assets and liabilities of the FTX Debtors as of the petition date, based on current information.

Disproportionate Salaries

Among the highlights is that the Exhibits and SOFAs filed describe a total of $3.2 billion in payments and loans to founders, primarily from Alameda Research. Sam Bankman-Fried received about $2.2 billion, followed by Nishad Singh with $587 million, Zixiao "Gary" Wang with $246 million, Ryan Salame with $87 million, John Samuel Trabucco with $25 million and Caroline Ellison with $6 million.

These amounts do not include more than $240 million spent on the purchase of luxury properties in the Bahamas, political and charitable donations made directly by FTX's debtors, and substantial transfers to non-debtor subsidiaries in the Bahamas and other jurisdictions. Although some of the property purchased with the proceeds of these transfers is already under the control of the FTX Debtors or the governmental authorities with whom the FTX Debtors cooperate, the amount and timing of any eventual monetary recoveries cannot be predicted.

FTX is investigating

The company has stated that it will continue to work on identifying assets and liabilities, as well as pursuing potential monetary recoveries. Counsel and legal representatives will continue to support the FTX Debtors in this process. 

The firm expects that the FTX Debtors' continued efforts will result in further identification of assets, liabilities and transfers, including a description of intercompany claims between the FTX Debtors and their subsidiaries. However, no interested party should use the Schedules and SOFA for the purpose of estimating claim recoveries.

While Sam Bankman-Fried pleads not guilty to the first eight charges against him, he will soon have to answer to a dozen more, while most of his lieutenants have turned on him and confessed to the company's various illegal activities.