Disgraced FTX founder ran the company as a ‘personal fiefdom’, say attorneys

FTX founder and former CEO Sam Bankman-Fried ran the now-bankrupt company as a ‘personal fiefdom’, according to attorneys representing the company at the first bankruptcy hearing. 

The attorneys said Bankman-Fried splurged as much as $300 million on homes and vacation properties for senior staff, home and abroad. 

The disgraced former CEO of the second-largest cryptocurrency exchange bought at least 19 properties worth nearly $121 million in the Bahamas alone, over the last two years, according to various media reports. 

The attorneys and the new CEO John J Ray III are now attempting to identify these assets, amassed by an extravagant spending Bankman-Fried in order to pay the creditors. 

“We have witnessed one of the most abrupt and difficult collapses in the history of corporate America,” said attorney James Bromley before adding that the court proceedings had “allowed everyone for the first time to see under the covers and recognise the emperor had no clothes.”

The hearing on Tuesday was conducted at the US Bankruptcy Court in Wilmington, Delaware and was live-streamed by thousands on social media platforms. 

While Bankman-Fried remains in the Bahamas, away from the clutches of authorities, the company is now attempting to sell some of its business, for which it had received interest from potential buyers. 

“As we review the business, we have already begun receiving interest from potential buyers for our assets and we will conduct an orderly process to reorganise or sell FTX assets around the world for the benefit of stakeholders.”

FTX filed for bankruptcy earlier this month after traders rushed to remove $6 billion off the platform in only 72 hours. The fate of the company was sealed after rival exchange Binance’s rescue deal fell through. 

According to reports, nearly $1 billion of customer funds have vanished from FTX, ever since the fall was first documented. Moreover, the cryptocurrency exchange owes fifty of its biggest creditors $3.1 billion, $1.45 billion of which is owed to the top ten creditors.

(With inputs from agencies)

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