Cryptocurrency exchange FTX had garnered $420M from a number of high-profile investors in October 2021, when the firm flourished against a backdrop of heightened token prices, but almost three-quarters of that figure ended up in the hands of ex-CEO and founder Sam Bankman-Fried, The Wall Street Journal reported Friday, citing the company's financial records and people with knowledge on the matter. SBF was said to have sold some his personal stake in FTX at the time in a move that ultimately allowed him to receive profits prior to investors. The founder of FTX, which was then valued at $25B, justified his cashout as a "partial reimbursement of money he spent to buy out rival Binance’s stake in FTX a few months earlier," some of the people familiar with the transaction said, as quoted by The WSJ . FTX last year raised money for some six months and raked in roughly $2B from big-money investors, The WSJ noted, including Sequia Capital, funds managed by asset management giant BlackRock ( BLK ), and Singapore's state investment fund Temasek. But the days of FTX's prosperity came to an abrupt end after traders withdrew their funds en masse last week upon discovery of an $8B funding gap. FTX and its more than 130 affiliates then filed for Chapter 11 bankruptcy, and SBF stepped down from his CEO role. FTX's new boss, John Ray III, highlighted an array of poor management practices under SBF's leadership in a court filing earlier this week, including “the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals.” The filing also suggested that Alameda Research, an affiliated quant trading firm of FTX, loaned out $4.1B to related parties, $1B of which went directly to SBF. Alameda was a key player in the demise of FTX as the latter was said to have lent more than half of its customer assets to the former. It's yet to be determined what SBF did with his $300M, but FTX's audited financial statement last year indicated the company kept the money for "operational expediency," The WSJ reported. Earlier this week, (Nov. 17) Sen. Warren sought clarity on FTX collapse, calling it an "appalling case of greed and deception."
$285 Million in Bitcoin Shorts Wiped Out
