Scandal-plagued FTX mogul Sam Bankman-Fried took billions of dollars out of the cryptocurrency company to spend on swanky real estate, personal needs for himself and others and countless political donations, federal documents indicated.
“It’s taking money from customers,” New FTX CEO John Ray told Congress during a scathing review of the company he took over from Bankman-Fried. “and using it for our own purposes.”
Bankman-Fried was arrested in the Bahamas Monday and is facing federal charges in the US weeks after FTX filed for bankruptcy.
Funds from FTX included more than $8 billion that went toward affiliated trading firm Alameda Research that Bankman-Fried founded in 2017 and ran with Caroline Ellison, according to the SEC complaint. Between $1 billion and $2 billion of those funds are missing, Reuters reported.
The transferred funds from FTX to the hedge fund Alameda were not only used for Alameda’s proprietary trading but to fund loans to Bankman-Fried and other FTX executives, the SEC filing states.
Bankman-Fried, 30, gave himself $1.338 billion through personal loans, according to the SEC.
“Between March 2020 and September 2022, Bankman-Fried executed promissory notes for loans from Alameda totaling more than $1.338 billion,” the SEC said. “including two instances in which Bankman-Fried was both the borrower in his individual capacity and the lender in his capacity as CEO of Alameda.”
Another $300 million from FTX comingled with Alameda was doled out to luxury Bahamas real estate, according to company attorneys in a bankruptcy court filing. The real estate purchases went toward him, his parents and other FTX executives, the SEC said.
The SEC alleged the loans to Bankman-Fried and other individuals were “poorly documented, and at times, not documented at all.” Records for the purchase and ownership of real estate were also “poorly organized and documented.”
“Neither the fact of the loans and purchases, nor the poor documentation of significant company liabilities and expenditures, was disclosed to investors,” the SEC said.
And Bankman-Fried and other company executives even had some money left over for politics. Political donations tied to Bankman-Fried and other FTX executives like Ryan Salame and Nishad Singh pumped about $73 million into political candidates and causes, according to Bloomberg.
Taking back campaign funds through bankruptcy proceedings can be a layered and extended process, according to the Bloomberg report that depends on multiple federal and state laws.
Bankman-Fried was the second largest individual donor to Democrats behind billionaire businessman George Soros.
The post Sam Bankman-Fried spent FTX funds on swanky real estate, donations — and himself: SEC appeared first on New York Post.