The CEO of now-bankrupt cryptocurrency exchange FTX, Sam Bankman-Fried personally pocketed $300 million in a big funding round that was held in October 2021, reported Wall Street Journal. According to the report, he had personally cashed in such a huge amount of money from a funding round that had raised about $420 million for the company. A group of investors at that time included Temasek and Tiger Global. The report said that the arrangement had remained undisclosed earlier. Bankman-Fried had told the investors that the fund was to be used to reimburse him for the money he spent to purchase Binance's stake in FTX Group earlier.
According to Coindesk.com, Bankman Fried purchased around 15% of FTX in July 2021, which was owned by Binance. It was the first investor in FTX Group.
According to the same WSJ report, "Nearly three-quarters of the money, $300 million, went instead to FTX founder Sam Bankman-Fried, who sold some of his stakes in the company."
It also added that the money he pocketed personally was "a lot of money that investors probably wanted to go directly into the company." It remains unclear as to what was done with the $300 million received by Bankman-Fried. "It could not be determined what Mr. Bankman-Fried did with the $300 million and whether the money was plowed back into FTX or kept separate," as per the Wall Street Journal. It further said, "The money was retained by the company for operational expediency on behalf of a related party."
Recent filings in the US court, about the FTX failure and its spectacular collapse, said that the crypto exchange company was mismanaged. It also added that it was a "complete failure of corporate controls". The court filing revealed that the company never had any board meetings. It also did not have any balance sheet.
The newly appointed CEO of FTX Group, John J. Ray, said, "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here."
As per the court filing, corporate funds were used to purchase real estate for personal use. The court filings showed multiple failures, such as "the concentration of control in the hands of a very small group of inexperienced, unsophisticated, and potentially compromised individuals."
Before the unprecedented collapse of the FTX Group, the company stood at a whopping $32 billion value.
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