At the end of last year, the gigantic crypto exchange FTX went bankrupt with a lot of noise. It caused another big wave of problems for other companies, and a lot of money was lost. But maybe more money can be won back than expected. The new board is suing the former top of FTX to get that done.
SBF pays lawsuit with money from bankrupt crypto exchange
This is evident from a charge (link to source downloads a PDF file) that FTX has filed with a bankruptcy court. FTX is currently pursuing several lawsuits, including against former FTX CEO Sam Bankman-Fried (SBF).
In a new lawsuit, FTX is targeting SBF as well as FTX co-founder Zixiao Wang (aka Gary Wang), director of engineering Nishad Singh, and former Alameda Research CEO Caroline Ellison.
All of them would even take money from FTX during the lawsuit, while they are no longer part of the company since the bankruptcy. All of the defendants, according to FTX’s lawyers, are using “illegal loans provided by FTX” to pay their own lawyers in the lawsuit.
The loans issued by FTX were allegedly drafted by Bankman-Fried’s father, who is a law professor at Stanford University.
Bitcoin exchange ex-CEO also gave father money
It also appears that the former top executives have paid out more than $ 725 million in shares to themselves, while this money has not ended up with creditors. After all, they have priority since the company was declared bankrupt.
Bankman-Fried and Wang are also said to have pulled another $546 million from FTX to invest in the trading platform Robinhood.
In addition, even Bankman-Fried’s father would have received a total of $ 6.75 million as a “gift” in his FTX account through six transactions. He then moved this amount to his accounts at JP Morgan and TD Ameritrade.
The fact that SBF pays its defense in the lawsuit with money from FTX was already known in April. However, it was not clear at the time that this did not only apply to himself and what amounts were involved.
In the new lawsuit, the lawyers found that FTX was deeply in debt due to these kinds of expenses. In private notes, Alameda CEO Caroline Ellison would have already estimated the negative cash balance at more than $10 billion.