Evidence of Wrongdoings and Unpaid Debts at FTX
As John J Ray III and his team investigate FTX’s internal dealings, new evidence of willful wrongdoings emerges. It is alleged that Bankman-Fried, along with other former FTX executives, were aware of an $8 billion liability in a hidden fiat account that could not be repaid. FTX’s new management accuses SBF of labeling customer funds as liabilities, suggesting that they were mixed with FTX funds.
Unauditable and Missing Funds
SBF had previously claimed that FTX is unauditable, making it difficult to track balances and transaction history accurately. Caroline Ellison, a former FTX executive, had already identified the $8 billion debt owed to customers back in March 2022. FTX’s new management can only speculate about where these funds went, but they have some ideas.
Diversion of Funds and Self-Awarded Bonuses
In addition to risky investments, FTX’s former leadership diverted money towards generous bonuses. Ellison awarded herself a $22.5 million bonus after discovering the budget deficit. Singh was granted $477 million worth of FTX shares for free. However, their actions were dwarfed by the CEO’s investments in dubious projects and using clients’ money for personal gains.
Wildly Speculative Ventures
The court filing reveals that FTX engaged in speculative and sci-fi ventures. SBF had plans to purchase the island of Nauru to build a doomsday bunker for the Effective Altruism movement. This venture aimed to survive a collapse and develop genetic enhancement regulations and a lab on the island.
Hot Take:
The evidence against FTX’s former executives is damning, with allegations of unpaid debts, misleading labeling of funds, diversion of money, and speculative ventures. The extent of their wrongdoings and the potential impact on FTX’s reputation and investors’ trust remains to be seen. It is crucial for crypto readers to stay informed about these developments to make informed decisions in the crypto market.
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