SBF and Former Executives of FTX Received $3.2 Billion
The Founder
and owner of collapsed cryptocurrency exchange FTX, Sam Bankman-Fried (SBF), received
$2.2 billion in loans and payments from the platform and related entities,
mainly Alameda Research, according to the team of administrators in charge of
restructuring the company.
Five former
executives of the now-defunct FTX and SBF were slated to receive a sum total of
$3.2 billion, with the majority sourced from the Alameda hedge fund, a
significant contributor to the platform’s collapse.
The
breakdown of these payments is as follows:
- Sam
Bankman-Fried received approximately $2.2 billion. - Nishad
Singh was given $587 million. - Zixiao
“Gary” Wang received $246 million. - Ryan
Salame received $87 million. - John
Samuel Trabucco received $25 million. - Caroline
Ellison was given $6 million.
However,
according to the crypto exchange’s bankruptcy court filings, the transfers made
did not account for $240 million that was spent on luxurious property in the
Bahamas, political and charitable donations directly made by FTX debtors, and
significant transfers to non-debtor units located in the Bahamas and other
jurisdictions.
Sharing the FTX Debtors’ press release just issued: https://t.co/r7PlneGSXF
— FTX (@FTX_Official) March 16, 2023
FTX filed
for bankruptcy four months ago, citing an inability to repay its obligations to
its customers who deposited funds on the exchange. The new CEO, Jon Ray, has
emphasized the company’s goal of paying off all liabilities, primarily to its
customers.
Meanwhile,
SBF, the owner of FTX, is facing accusations of embezzling billions of dollars
to cover Alameda Research’s losses and spending tens of millions lobbying
politicians in Washington. He maintains his innocence and is awaiting a trial
scheduled for 2 October 2023.
The Story Behind FTX’s
Fall
FTX was
considered one of the more reputable and trusted cryptocurrency exchanges and its Founder, Sam Bankman Fried, was one of the most popular personalities in the digital
assets industry. The exchange was founded in 2019, providing trading services
with altcoin derivatives contracts that were not available on other popular crypto
platforms (at the time, derivatives contracts of well-known cryptocurrencies
such as Bitcoin and Ether were the only ones in demand). FTX has since
diversified into other sectors, including spot trading.
FTX
experienced remarkable growth within a brief span of time. As a privately owned firm,
the exchange is not mandated to disclose its financials. Nevertheless,
according to internal documents that CNBC obtained, FTX recorded a revenue of
$1.02 billion in the previous year, which was a substantial increase from $89 million in
2020, resulting in a year-over-year growth rate of over 1,000%. Furthermore,
the exchange generated $270 million in revenue during Q1 2022, with projected
annual revenue of approximately $1.1 billion.
However, in
November 2022, FTX started to face difficulties after Binance’s CEO confirmed
that the crypto exchange had decided to sell its holdings of FTX’s FTT tokens.
This move raised concerns regarding the financial stability of FTX’s
competitor. Binance obtained these FTT tokens when it sold its stake in
FTX.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
Though Zhao
did not specify, his decision might have been alarmed by a previous Coindesk
report that revealed the balance sheet of Alameda Research, Bankman-Fried’s
trading firm. Alameda held $14.6 billion in assets at the end of last June:
$3.66 billion of that, the largest asset entry, was held in ‘unlocked FTT’, and
another $2.16 billion, the third largest held assets, was in ‘FTT collateral’.
So, what
was the problem? FTX creates FTT tokens that serve solely to offer discounts on
trading fees on its platform. While there is no proof of any wrongdoing, having
such a substantial amount of crypto exchange tokens listed on a balance sheet
can trigger concern.
The news
triggered a market panic, caused investors’ capital to flee and led to the
collapse of a business model that had previously seemed to work flawlessly. The
full story of FTX’s origins, development and demise was covered by Finance
Magnates here.
In the
recent developments regarding FTX, we learned that Alameda Research has filed a lawsuit against crypto asset manager Grayscale. The once-leading crypto exchange,
alongside other affiliated debtors, is seeking to “realize over a quarter
billion dollars in asset value for FTX Debtors’ customers and creditors.”
In the
meantime, Nishad Singh, the former Director of Engineering at the bankrupt
cryptocurrency exchange FTX and the third of close associates of Samuel
Bankman-Fried, pleaded guilty to fraud charges.
The Founder
and owner of collapsed cryptocurrency exchange FTX, Sam Bankman-Fried (SBF), received
$2.2 billion in loans and payments from the platform and related entities,
mainly Alameda Research, according to the team of administrators in charge of
restructuring the company.
Five former
executives of the now-defunct FTX and SBF were slated to receive a sum total of
$3.2 billion, with the majority sourced from the Alameda hedge fund, a
significant contributor to the platform’s collapse.
The
breakdown of these payments is as follows:
- Sam
Bankman-Fried received approximately $2.2 billion. - Nishad
Singh was given $587 million. - Zixiao
“Gary” Wang received $246 million. - Ryan
Salame received $87 million. - John
Samuel Trabucco received $25 million. - Caroline
Ellison was given $6 million.
However,
according to the crypto exchange’s bankruptcy court filings, the transfers made
did not account for $240 million that was spent on luxurious property in the
Bahamas, political and charitable donations directly made by FTX debtors, and
significant transfers to non-debtor units located in the Bahamas and other
jurisdictions.
Sharing the FTX Debtors’ press release just issued: https://t.co/r7PlneGSXF
— FTX (@FTX_Official) March 16, 2023
FTX filed
for bankruptcy four months ago, citing an inability to repay its obligations to
its customers who deposited funds on the exchange. The new CEO, Jon Ray, has
emphasized the company’s goal of paying off all liabilities, primarily to its
customers.
Meanwhile,
SBF, the owner of FTX, is facing accusations of embezzling billions of dollars
to cover Alameda Research’s losses and spending tens of millions lobbying
politicians in Washington. He maintains his innocence and is awaiting a trial
scheduled for 2 October 2023.
The Story Behind FTX’s
Fall
FTX was
considered one of the more reputable and trusted cryptocurrency exchanges and its Founder, Sam Bankman Fried, was one of the most popular personalities in the digital
assets industry. The exchange was founded in 2019, providing trading services
with altcoin derivatives contracts that were not available on other popular crypto
platforms (at the time, derivatives contracts of well-known cryptocurrencies
such as Bitcoin and Ether were the only ones in demand). FTX has since
diversified into other sectors, including spot trading.
FTX
experienced remarkable growth within a brief span of time. As a privately owned firm,
the exchange is not mandated to disclose its financials. Nevertheless,
according to internal documents that CNBC obtained, FTX recorded a revenue of
$1.02 billion in the previous year, which was a substantial increase from $89 million in
2020, resulting in a year-over-year growth rate of over 1,000%. Furthermore,
the exchange generated $270 million in revenue during Q1 2022, with projected
annual revenue of approximately $1.1 billion.
However, in
November 2022, FTX started to face difficulties after Binance’s CEO confirmed
that the crypto exchange had decided to sell its holdings of FTX’s FTT tokens.
This move raised concerns regarding the financial stability of FTX’s
competitor. Binance obtained these FTT tokens when it sold its stake in
FTX.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
Though Zhao
did not specify, his decision might have been alarmed by a previous Coindesk
report that revealed the balance sheet of Alameda Research, Bankman-Fried’s
trading firm. Alameda held $14.6 billion in assets at the end of last June:
$3.66 billion of that, the largest asset entry, was held in ‘unlocked FTT’, and
another $2.16 billion, the third largest held assets, was in ‘FTT collateral’.
So, what
was the problem? FTX creates FTT tokens that serve solely to offer discounts on
trading fees on its platform. While there is no proof of any wrongdoing, having
such a substantial amount of crypto exchange tokens listed on a balance sheet
can trigger concern.
The news
triggered a market panic, caused investors’ capital to flee and led to the
collapse of a business model that had previously seemed to work flawlessly. The
full story of FTX’s origins, development and demise was covered by Finance
Magnates here.
In the
recent developments regarding FTX, we learned that Alameda Research has filed a lawsuit against crypto asset manager Grayscale. The once-leading crypto exchange,
alongside other affiliated debtors, is seeking to “realize over a quarter
billion dollars in asset value for FTX Debtors’ customers and creditors.”
In the
meantime, Nishad Singh, the former Director of Engineering at the bankrupt
cryptocurrency exchange FTX and the third of close associates of Samuel
Bankman-Fried, pleaded guilty to fraud charges.
Credit: Source link
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