Following the collapse of FTX, more revelations as to the handling of the platform which many have believed to be mismanaged continue to come to light.
According to a Wall Street Journal report citing FTX’s financial record and familiar sources Sam Bankman-Fried (SBF) former CEO of now-collapsed FTX pocketed $300 million from the exchange’s $420 million raised in October 2021.
As per the reports, SBF at the time had reportedly told investors that the money was to partially reimburse him for the money he’d spent a few months earlier acquiring stakes that rival platform Binance held in FTX.
Interestingly, a total of 69 investors including Tiger Global, Sequoia Capital, BlackRock, Ontario Teachers’ Pension Plan Board, and Temasek participated in the October 2021 series B fundraising. The company attained a $25 billion valuation after securing funds from this round.
While it is still unclear what SBF did with the $300 million, FTX’s audited financial record in 2021 showed that the money was held by the firm on behalf of a “related party” for “operational expediency”.
Investors’ Questions SBF’s management of FTX
Since the beginning of FTX’s crisis, SBF has been the subject of intense legal and regulatory scrutiny for its handling of the platform’s finances.
Recall that some of these investors have written down their investments in FTX. Recently, Singaporean Temasek announced plans to write down its $275 million investment in the platform irrespective of the outcome of FTX’s bankruptcy proceedings. In its announcement, the firm said its belief in FTX and former CEO SBF appeared to have been misplaced.
Before FTX’s sudden collapse earlier in the month, the exchange was valued at $32 billion. The troubled platform filed for bankruptcy protection after Binance pulled out of its plans to acquire the platform.
SBF has since resigned as CEO leaving John Ray III, who have constantly questioned the previous management of the platform in the realms of leadership as investors grapple with the resulting consequences of the fallout.
The new CEO, an insolvency expert during a recent court filing, has said FTX will launch a deliberate and transparent investigation into SBF and other executives as it continues its bankruptcy proceedings.