According to bankruptcy court filings, Sam Bankman-Fried, the founder of FTX, secretly transferred $2.2 billion from the cryptocurrency exchange to his personal account and $1 billion to five members of his inner circle before the platform collapsed.
Bankman-Fried and his friends allegedly used funds primarily from Alameda Research, a crypto trading hedge fund affiliated with FTX, to make the transfers.
John Ray, the CEO of FTX appointed after the bankruptcy filings, is currently in charge of locating cryptocurrency and other assets to return to the millions of FTX customers whose accounts have been frozen since the collapse.
Bankman-Fried is facing federal charges related to FTX’s collapse, accused of looting the platform for personal gain as well as securities fraud.
However, he has pleaded not guilty and is detained at his parents’ house in California until the trial starts in October.
FTX’s management has claimed that Bankman-Fried’s alleged $3.2 billion transfers did not include a $240 million luxury property in the Bahamas, political and charitable donations, and substantial transfers to subsidiaries.
Three FTX insiders – Nishad Singh, Gary Wang, and Caroline Ellison – have already pleaded guilty and are cooperating with prosecutors.
They allegedly received more than $800 million, with Ellison, the former head of Alameda, reportedly receiving $6 million and having access to an unlimited line of credit on FTX.com.
Two other former FTX executives, Ryan Salame and John Samuel Trabucco, have reportedly received more than $100 million combined.
»Federal Charges and Guilty Pleas: The Scandalous Collapse of FTX«
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