A bankruptcy attorney claims that FTX spent roughly $300 million on real estate in the Bahamas for its executives.
A member of the bankruptcy team for FTX, James Bromley of Sullivan & Cromwell, said in a US court that FTX founder Sam Bankman-Fried treated the cryptocurrency platform like his own personal piggy bank and wasted a lot of money on personal interests.
$300 Million Worth of Real Estate in the Bahamas
On the initial day of FTX’s insolvency trial, Bromley testified that one of the company’s US subsidiaries spent about $300 million on real estate in the Bahamas. Preliminary investigations showed that most of these properties were utilized as primary residences or holiday homes by FTX’s top executives.
In a recent legal filing, new CEO John J. Ray III was critical of the FTX Group, alleging that they had used company money to buy mansions and other luxury things for workers and advisers.
On Tuesday, counsel for FTX presented testimony detailing the company’s financial woes and the chain of events that led to its bankruptcy. According to the Wall Street Journal, FTX loaned Alameda almost $10 billion in deposits.
FTX Maintained Unreliable Bookkeeping
According to Bromley, this is arguably the biggest catastrophic and demanding failures in the chronicles of American business. The FTX network of enterprises had untrustworthy books and records, and the network itself had been controlled by a small group of untrained and unsophisticated persons.
He continued, saying that despite the group’s global reach, it operated more like Sam Bankman-private Fried’s estate.
This is a textbook example of lax corporate oversight on a scale never before seen in the professional literature.
According to Bromley, resignations were widespread once the swap failed in early November. On November 11, FTX CEO Bankman-Fried resigned, and he informed Vox that Nishad Singh who is the Engineering Director and CTO Gary Wang has also walked out of the business.
At the end of October, there were 520 people working for the FTX Group, including 330 people working for the US Company from across the world (this number has since decreased to roughly 260).
Collapse Unearthed Sam Bankman-Fried’s Lavish Lifestyle
Bankman-Fried’s extravagant lifestyle, which included lavishing money on the company’s personnel, has been exposed in the wake of FTX’s bankruptcy earlier this month. Despite Bankman-claims that he was amassing his money so that he could donate nearly all of it to charity, the evidence suggests otherwise.
With the bankruptcy processes still ongoing, everyone can now see that the emperor has no clothing.
A Massive Cleanup Is Underway
This past week, FTX declared bankruptcy when rival exchange Binance liquidated its holdings of FTX’s native cryptocurrency, FTT, plunging it into a financial crisis. The worth of FTT has dropped by about 95% since early November.
In a Chapter 11 petition, Ray criticized Bankman-Fried and other top executives, claiming that FTX only had $659,000.00 in cryptocurrency and that its books had been reviewed by an accounting company with an operation in the Metaverse.
Lawyers are currently seeking to locate FTX’s assets so that they may begin repaying the company’s creditors. On Tuesday, Ray said that the business was in talks with possible purchasers to restructure or sell FTX’s global holdings.
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