The first full working week began with news about the FTX exchange. Of course, this news is not the most cheerful, but the cryptans are still worried about the fate of the bankrupt exchange.
$40 million for hospitality
Edition business insiderciting court documents, wrote that in the nine months before the collapse of FTX, top managers of the company spent $40 million on hotels, flights and restaurants.
Moreover, only $15 million was spent on housing, of which $5.8 million was spent on accommodation in a prestigious area of New Providence in the Bahamas. It was in this place that the former head of the business empire, Sam Bankman-Freed, lived before his arrest.
$3.6 million was allocated to pay for accommodation in the four-star Grand Hyatt hotel, $800,000 in the five-star Rosewood. Another $7 million was spent on restaurants and food, $4 million on air travel and $500,000 on delivery services. In general, the leaders of the company did not limit themselves in anything and spent the money of clients without any hesitation. This is not counting the fact that employees were compensated for gasoline, expensive cars and any related expenses when traveling around the world.
In November, it also became known that Sam Bankman-Fried, his parents and FTX executives owned a total of 19 of the most expensive properties worth $121 million.
Arrest of shares
While the media counted FTX spending on the luxurious life of its leaders, the US Department of Justice seized for 55,273,469 shares of Robinhood worth approximately $456 million in exchange litigation. In addition, the agency seized $20 million that was kept by the brokerage company ED&F Man Capital Markets.
The Justice Department emphasizes that the assets were involved in crimes related to fraud and money laundering.
In November, bankrupt BlockFi filed a lawsuit against Sam Bankman-Fried’s company Emergent Fidelity Technologies in an attempt to return shares of Robinhood promised to it as collateral.
BlockFi effectively blamed its bankruptcy on FTX and Alameda, saying the latter defaulted on a $680 million secured loan in early November, just as the SBF empire began to crumble. On Nov. 9, an agreement was struck between BlockFi and Emergent to “guarantee the payment obligations of an unnamed borrower by providing shares as collateral.” The borrower turned out to be Alameda, and the stock in question was Robinhood (HOOD).
In May 2022, Emergent spent more than $648 million to acquire 56.28 million shares of the online broker (7.6% stake). This caused a 23% jump in the share price.
Shortly before FTX filed for bankruptcy, there were reports that Bankman-Fried was trying to sell Robinhood shares privately using the Signal app. According to the FT, he continued to negotiate the terms even after reaching an agreement with BlockFi.
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