Tech Startups
In just a matter of days, FTX founder Sam Bankman-Fried went from crypto white knight to villain. His billion-dollar fortune has collapsed, making it one of the most shocking and sudden financial implosions in modern history.
He is facing multiple investigations from The Department of Justice and the Securities and Exchange Commission (SEC). The FBI is also planning to extradite the disgraced FTX founder from the Bahamas to the United States. However, there were speculations that Bankman-Fried is potentially looking to flee to Dubai.
But as we learn more about Bankman-Fried and his now-bankrupt empire, it turns out that despite being a crypto exchange with $1.4 billion in bitcoin liabilities, FTX did not have any bitcoin assets. “There are no bitcoin assets listed, despite bitcoin liabilities of $1.4bn,” Financial Times said in a report about FTX.
It gets even worse. Reuters reported over the weekend that Bankman-Fried secretly moved $10 billion to Alameda Research using a “backdoor” he built into FTX software without alerting external auditors. The sources told Reuters the “backdoor” allowed Bankman-Fried to execute commands that could alter the company’s financial records without alerting other people, including external auditors.
“This setup meant that the movement of the $10 billion in funds to Alameda did not trigger internal compliance or accounting red flags at FTX,” Reuters reported, citing the two sources. However, Bankman-Fried denied implementing a “backdoor” in his text message to Reuters.
That’s not all. Bankman-Fried’s FTX was also a shell company used to funnel and launder money to politicians and governments around the world. According to multiple reports, Sam Bankman-Fried was a major Democratic Party donor. In fact, Bankman-Fried first came into the spotlight after he made the second-largest donation to then-Vice President Joe Biden’s presidential campaign.
According to a report by The Wall Street Journal, Bankman-Fried donated a whopping $5.2 million to Joe Biden’s campaign, behind only former New York Mayor Michael Bloomberg who made a donation of $56 million.
This year, the disgraced FTX founder also spent $40 million on the midterm elections, with the bulk of that money going to Democratic candidates, also making him the Democratic Party’s second-biggest donor. He once disclosed his support for bipartisan politicians was also in a bid to lure more crypto allies.
Bankman Fried is also behind the Protect Our Future PAC, which has raised more than $28 million this year. His mom, Barbara Fried, is a Stanford Law School professor and a co-founder of Mind the Gap, a pro-Democratic super PAC organization “known for its secretive operations, where it attempts to quickly gather donations over a short period of time to prevent Republicans from mobilizing their own donors in response,” the PAC said on its website.
In an interview with NBC, Bankman-Fried also explained why it is so critical to make donations to his favorite political party.
While some called his donation to the Democratic Party a money-laundering operation, others have also linked members of his family and business associates to the World Economic Forum (WEF)…
