Bankrupt company FTX has sued its former executives, including Sam Bankman-Fried and Gary Wang, for allegedly using company funds for personal gain through ingenious financial schemes. FTX hopes here to recover more than a billion dollars in order to participate in the reimbursement of its injured customers.
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The FTX circus continues
The bankrupt company FTX, chaired by John Ray III as part of its restructuring, seeks to recover $1 billion with Sam Bankman-Fried, Gary Wang (co-founder of FTX), Nishad Singh (former chief engineer) and Caroline Ellison, who was at the head of Alameda Research.
More specifically, the latter are accused of having massively spent company funds – and therefore customers – in order to enrich themselves personally through dubious investments. In other words, these numerous and costly investments have in no way benefited the company.
According to the court document filed yesterday, Thursday July 20, the leaders of FTX would have perpetrated a “ massive fraud running from February 2020 to November 2022. For example, the embezzled funds would have enabled Sam Bankman-Fried and Gary Wang to acquire $546 million worth of Robinhood stock by borrowing unsecured and interest-free from Alameda Research. In addition, Caroline Ellison was the only person in charge of validating or refusing the loans issued by the company at that time.
Via ingenious financial arrangements, the 4 interested parties were also able to pay the equivalent of 725 million dollars in the form of FTX shares, which they literally never had to pay out of pocket. Finally, they also squandered their clients’ money through luxury homes, political and charitable contributions, or in various dodgy investments. Even Sam Bankman-Fried’s father reportedly got a $10 million loan to cover his legal costs.
This is the latest action taken by the new management of FTX with the aim of earn funds to reimburse the many injured customers. As such, we remind you that you have until September 29 to file a claim with the exchange if you have funds blocked on the platform since its bankruptcy.
👉 In similar news – FTX withdrawals: our advice to avoid phishing scams
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Source: Bloomberg
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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