The revelations relate to last year’s round of fundraising by investors from the now-bankrupt crypto exchange.
The rain of revelations surrounding the controversial collapse of the FTX crypto exchange continues. New information is added to the new information by a report in the Wall Street Journal, which claims that Sam Bankman Fraud Fried actually pocketed $300 million of the company’s investors’ money.
The article explains that FTX, in its investment opening last October, managed to raise $420 million from big names in the market. These funds were to be used to expand and strengthen the company.
However, according to documents obtained by the WSJ, almost three quarters of the funds, or $300 million, ended up in the hands of Sam Bankman-Fried himself, who simply chose to sell investors part of his own stake in FTX.
FTX’s founder claimed to investors that the transaction was partial compensation for the money he had spent to buy out the stake in FTX held by rival, leading cryptocurrency exchange, Binance
The WSJ notes that it is unclear what Bankman-Freed did with that money and whether he ultimately invested it back into FTX. In any case, the transaction reaffirms the controversial, if not illegal, way the company operates and the transactions of its head with other companies while the cryptocurrency industry was in a period of euphoria.
We recall that the new CEO of FTX who has taken on the role of liquidator, John Ray, in his statements yesterday spoke of unprecedented financial mismanagement.
“Never in my career have I seen such a lack of corporate controls and such a complete absence of reliable financial reporting as in this case.”
– John Ray
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