Former FTX founder Sam Bankman-Fried received nearly $1 billion in cash payments from the crypto exchange before its collapse, while other ex-executives also benefited from the funds, court filings reveal.
The collapsed crypto exchange FTX has been granted permission to liquidate its digital assets to repay creditors, including Bitcoin, Ether, and Solana, amounting to around $3.4 billion. The founder of FTX, Sam Bankman-Fried, is facing charges of fraud and conspiracy, with his bail being revoked last month.
Stanford law professors Joseph Bankman and Barbara Fried, parents of the disgraced ex-CEO of FTX, were more involved with the crypto company than they claimed, with court documents revealing their influence and $26 million in profits from FTX in 2022 alone.
Crypto exchange FTX has filed a lawsuit against the parents of its founder and former CEO, Sam Bankman-Fried, seeking to recover millions of dollars in fraudulently transferred funds and alleging misappropriation and malicious conduct. The filing accuses Bankman's parents of using their expertise in law to enrich themselves and divert funds from FTX, and also claims that Bankman attempted to sell the exchange to Binance. Bankman-Fried is currently in jail awaiting trial, and his parents have not responded to the lawsuit.
The bankruptcy estate of FTX has sued the parents of founder Sam Bankman-Fried, alleging that they fraudulently transferred and misappropriated millions of dollars from the cryptocurrency exchange, while also playing a role in covering up allegations of fraud. The estate is seeking to recover the funds as part of the bankruptcy process.
Former FTX developer Adam Yedidia testified that crypto exchange FTX used customer deposits to pay its loans, revealing an $8 billion deficit that led to the exchange's bankruptcy during the criminal trial of former CEO Sam Bankman-Fried.
Crypto hedge fund Alameda Research had exclusive privileges on FTX exchange that allowed them to use $8 billion of customers' funds, according to testimony from a former top executive, Gary Wang, who co-founded both companies with Sam Bankman-Fried.
The co-founder of FTX, a bankrupt digital asset exchange, revealed that its sister firm, Alameda, had been using billions of dollars of FTX customer assets for trading purposes since 2019, leading to accusations of fraud and mishandling of customer funds.
FTX's hedge fund, Alameda Research, reportedly lost over $190 million due to avoidable scams and security incidents, including phishing attacks and questionable yield farming on dubious blockchains, as a result of the firm's focus on speed over security, according to a former engineer turned whistleblower. These revelations come amidst the ongoing fraud trial of FTX founder, Sam Bankman-Fried.
Bankrupt crypto exchange FTX used customer funds to repurchase its stake held by competitor exchange Binance, according to court hearing testimony, with over $1 billion coming from customer deposits.
A forensic accountant at Sam Bankman-Fried's trial revealed that $9 billion of missing FTX customer funds were reinvested in businesses and real estate, used for political contributions, and donated to charity, contradicting the founder's denial of any improper use of customer funds.