FTX Spent Prepaid Funds on Endorsements and Partnerships
A recent court document has revealed that cryptocurrency exchange FTX spent a significant amount of prepaid funds on endorsement and partnership agreements before its collapse in November 2022. FTX reportedly made a payment of $1.98 million to Coachella, the popular music festival known for hosting famous acts. The court filing listed several celebrities, brands, and sporting teams that received prepayments from the now-defunct exchange. These prepaid expenses included contracts, leases, insurance, taxes, and rent. However, the debtors are currently investigating which funds can be recovered through bankruptcy proceedings.
Uncertainty Surrounding FTX’s Payment to Coachella
The court filing also stated that ongoing investigations and reconciliations are being conducted by the FTX debtors. This may result in revisions and adjustments to the payment schedules. The individuals who previously managed FTX financial records are reportedly unreachable, which further complicates the task. It is unclear whether this is due to legal obligations or their unwillingness to cooperate. The document warns against relying on the provided payment schedules to assess FTX’s current or future financial status. Notably, the largest payments listed were made to Kevin O’Leary and MLB Advanced Media.
FTX Debtors Continue Efforts to Recover Funds
FTX debtors have recently escalated their efforts to recover funds. They have filed a lawsuit against FTX Europe, the exchange’s European arm, seeking to recover $323 million. The debtors claim that the funds were misused by investors, including Sam Bankman-Fried and his associates, instead of being used to expand FTX’s presence in Europe.
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