FTX spent £250m on property in Bahamas: Founder accused of running crypto exchange as his ‘personal fiefdom’
Stricken crypto exchange FTX was run as a ‘personal fiefdom’ of founder Sam Bankman-Fried and spent £250million on property in the Bahamas, a court heard yesterday.
At a bankruptcy hearing in Delaware following the collapse of the £27billion company this month, a lawyer for FTX said the property empire was largely made up of homes and holiday houses for senior staff.
The revelations came just hours after Reuters reported that FTX, senior executives and Bankman-Fried’s parents bought at least 19 properties worth £100million in the Bahamas in the past two years alone.
Personal fiefdom: FTX founder Sam Bankman-Fried, 30, (pictured) is at the centre of one of the most stunning financial failures in history
FTX, one of the world’s largest crypto exchanges where users buy and sell digital currencies, imploded this month.
It has left an estimated 1m creditors facing losses of billions of pounds – with its 50 biggest customers owed more than £52million on average. Some 8pc of FTX users were based in the UK, suggesting 80,000 Britons have lost out.
‘We have witnessed one of the most abrupt and difficult collapses in the history of corporate America,’ James Bromley, a partner at law firm Sullivan & Cromwell, told the court.
He said the bankruptcy proceedings ‘allowed everyone for the first time to see under the covers and recognise the emperor had no clothes’.
The scandal is a humiliation for Bankman-Fried – the 30-year-old one-time crypto star known by his initials SBF now at the centre of one of the most stunning financial failures in history.
His fall from grace is also awkward for his cheerleaders, including a host of politicians and celebrities.
As recently as April, he drew Tony Blair, Bill Clinton, supermodel Gisele Bundchen and actor Orlando Bloom to a glamorous crypto convention in the Bahamas. And he was a donor to Democratic politicians in the US.
The Delaware court heard a ‘substantial amount’ of FTX assets ‘have either been stolen or are missing’. But it was also told the company has just over £1billion in cash after new management located more of its money.
While it is known that FTX and its employees bought properties in the Bahamas, where it established its headquarters in September last year, the records uncovered by Reuters show the scale of their buying spree and the intended use of the homes.
Most of the purchases were luxury beachfront homes, including seven in an expansive resort community called Albany costing more than £60million.
The documents for another home with beach access in Old Fort Bay – a gated community that was once home to a British colonial fort built in the 1700s to protect against pirates – show Bankman-Fried’s parents, both law professors at Stanford University, as signatories.
Documents show the property was a ‘vacation home’.