Real Estate

FTX used corporate funds to purchase employee houses, new filing shows

The emblem of FTX is seen on a flag on the entrance of the FTX Arena in Miami, Florida, November 12, 2022.

Marco Bello | Reuters

Corporate funds have been used to purchase Bahama houses and “personal items” within the identify of workers and advisors of FTX, a chapter declaration mentioned, days after the penthouse house of founder Sam Bankman-Fried was listed for almost $40 million.

It is just not instantly clear what the supply of these corporate funds was.

In a declaration to the courtroom, newly appointed FTX CEO John Ray III mentioned {that a} lack of disbursement controls meant accounting for spending was completed in a approach that was not “appropriate for a business enterprise.”

Corporate housing preparations should not uncommon, particularly in high-cost areas, however Ray’s filing famous that “certain real estate was recorded in the personal name of these employees and advisors,” a nontypical association.

A penthouse residence in the identical non-public advanced that Bankman-Fried and different FTX executives lived in was listed for just below $40 million a couple of days in the past. The penthouse has been widely reported as having belonged to the onetime billionaire and FTX founder.

In the identical filing, Ray excoriated the previous govt’s group for a “complete lack of financial controls,” saying that he didn’t have faith within the stability sheet statements of FTX’s corporations.

Auditing for one of many FTX corporate verticals – what Ray referred to as “Silos” – was completed by Prager Metis, a agency with “which I am not familiar,” Ray wrote.

Bankman-Fried wasn’t instantly out there for remark.

Ray, who oversaw Enron’s chapter proceedings and restructuring, declared he had 40 years of expertise within the chapter and corporate space.

“The Debtors do not have an accounting department,” Ray wrote, stating he anticipated it will be “some time” earlier than dependable monetary statements might be ready.

FTX and affiliated corporations, together with Alameda Research, Bankman-Fried’s crypto buying and selling agency, filed for Chapter 11 chapter safety earlier this month.

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