Sam Bankman-Fried (30), CEO of the third largest crypto exchange, lost everything in a matter of days. His company, FTX, went bankrupt. For a long time he was considered a crypto genius. Now he is held responsible for the biggest fraud scandal in the crypto world. He is said to have stolen billions of dollars from his customers. And it put the entire crypto industry in a bad light.
Court documents show that things are worse than feared. The executives of Bahamas-based crypto exchange FTX were having fun before the crash – at the expense of customers. And the company was partly amateur. There was almost no internal control. First-class cases have already been announced.
For example: With some of the money, Bankman-Fried and his friends are said to be enjoying life in the Bahamas. Ten teenagers are said to live in a luxury apartment, do drugs and hold orgies. According to Bild’s report, Bankman-Fried paid $30 million for the accommodation. The team is said to use sedatives and stimulants on a regular basis.
More than a million victims
The deceived, including many small investors, are now defending themselves with class action lawsuits. Your luck isn’t bad. Because: According to the indictment, interest-bearing cryptocurrency accounts should not have been offered due to the lack of a license in the USA.
Additionally, the number of creditors who lost money after the crypto exchange exploded is much higher. Initially, there was talk of 100,000 investors. According to the indictment, it must have been more than a million. It’s no surprise that politicians are speaking out loud now. The US House of Representatives is planning a hearing on the matter.
Young, inexperienced employees
The crypto exchange didn’t even have an accounting department. Unbelievable for a company that was once valued at $32 billion. Young, inexperienced employees are said to take care of finances. Audit of the company’s finances was carried out by a company with “offices” from Metaverse. And: The authorities seem overwhelmed by FTX’s oversight.
John Ray, 63, new CEO of FTX specializing in liquidations, told Bloomberg news agency: “In my career, I have never seen such a complete failure of corporate controls and such a lack of reliable financial information as in this case.”
Bought luxury apartments
Another claim: FTX is said to be using company funds to buy homes for its employees in the Bahamas. And, for example, he invested $121 million in a luxury resort complex just above the sea. Other flats were paid for with FTX funds. Registered in the real estate registry but exclusively to crypto exchange employees. (be)