The crypto emperor may have had no clothes, but he reportedly had fancy dinners.
Disgraced crypto exchange FTX, run by previous crypto “white knight” Sam Bankman-Fried, filed for bankruptcy earlier this month amid concerns about a bank run on the platform and billion-dollar holes in its balance sheet.
He was ousted from the company after the bankruptcy filing despite continuing to try and raise money to make it an alternative offer in the legal process.
Either way, according to reports from Fox Business and New York Magazine, Bankman-Fried and staff were living a high-flying lifestyle in the Bahamas — including buying yachts and spending thousands on daily lunches — and not so much worried about cash flow, apparently.
FTX is based in the Bahamas (but reportedly never started building its supposed-$60-million headquarters in the country). The Bahamian unit specifically filed for bankruptcy via Chapter 15 on in New York last week. It is also being investigated in the country.
FTX is also currently going through bankruptcy proceedings in Delaware, with a hearing in the court Tuesday in which a lawyer for FTX said “a substantial amount of assets have either been stolen or are missing,” per the New York Times.
Bankman-Fried treated the company like his “personal fiefdom,” the lawyer added.
In its first-day bankruptcy filing, John Ray III, who took control of the company after the bankruptcy filing and is a known cleaner up of corporate messes, wrote that “never in my career have I seen such a complete failure of corporate controls.”
FTX Group used “corporate funds” to “purchase homes and other personal items,” the filing added. It has come out that Bankman-Fried and associated people owned hundreds of millions in real estate in the country.
Reports have offered some more vivid images of the life of luxury that came before the fall. Fox Business reported that Bankman-Fried would spend $2,500 a day at a fancy restaurant on New Providence Island, Cocoplum, per restaurant staff. The minimum entree at the restaurant is over $20.
In total, staff added, catering to the FTX office — and they were not, apparently, the only restaurant around doing so — would come to $10,000 a day, the outlet added.
The billionaire also stays at a $40-million penthouse on the island. Crucially, it is located in a lavish community known as Albany Marina, where a one-night stay in the attached hotel is about $3,000, per New York. You also cannot enter unless you’re a member.
The outlet also noted area realtors profited off FTX and related entities’ lavish spending. “The Realtors here never made so much money in their life,” a developer told New York.
It also looks like Bankman-Fried was a man about the (ocean) town. One yacht owner told Fox Business, he used to see Bankman-Fried on his 52-foot boat all the time. “Since all that happened, nobody’s seen him,” he told Fox. “I park my boat right there. Used to see him every day.”
The cracks started to show in FTX’s empire when Coinbase reported on the proliferation of FTX’s own crypto in Alameda’s balance sheet in early November, which led to panic and a bank run on the platform, as well as the proposed and then discarded acquisition by Binance.
The company then collapsed under the weight of increased scrutiny and customer panic and withdrawals, leading to the bankruptcy filing.