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The ongoing lawsuit has shed light on surprising details that have left many saying, “you’ve got to be kidding me.” The file on the founder of FTX, Sam Bankman-Fried (SBF), seems to be getting thicker. Seemingly bewildering to crypto investors who had a difficult time in November, SBF now appears to have been a calculated fraudster, not as naive as he seemed, and may have foreseen the impending bankruptcy.
FTX Founder Sued
A lawsuit against FTX’s founder came to the forefront on May 17, 2023, as current FTX management sued its former CEO Sam Bankman-Fried, former Engineering Director Nishad Singh, and Zixiao. According to court documents, representatives of FTX Limited, and its affiliates Alameda Research and West Realm Shires (WRS), initiated the lawsuit due to their belief that the company is currently “worthless.”
Allegedly, before FTX‘s bankruptcy protection application, Bankman-Fried, Singh, and Wang purchased a stock swap company named Embed and a FINRA licensed broker-dealer. This deal was allegedly made to launch a service called FTX Stocks, which, however, never came to fruition. Their attorneys claim that this trio profited $248,010,467 from FTX Group shares embezzled to make the deal.
SBF, the Golden Child of the USA
SBF, once hailed as the “Golden Boy” of the USA, was a regular attendee at the House of Representatives we now follow closely, before CoinDesk’s news about the reserve FTT Token circulated. SBF was well-reputed and had politically influential parents; his generous donations to the Democrats opened doors for him. He presented himself as the founder of America’s most regulated cryptocurrency exchange. Meanwhile, Coinbase, now a publicly traded company subject to regular audits, is bearing the brunt of bureaucrats in the country. A year ago, FTX was a company consulted for its views on crypto regulations.
However, it appears political donations and influential parents aren’t enough to cover up the founder of FTX’s dirt. The controversial deal in question was concluded just a few weeks before the Chapter 11 bankruptcy petition dated November 11, 2022. According to attorneys, Bankman-Fried, Singh, and Wang committed a massive fraud exploiting the FTX Group’s lack of control and record-keeping, among other things. They allegedly spent FTX Group’s assets on homes, jets, and lavish political donations. SBF scored the final goal just a few weeks before the company’s bankruptcy.
They almost didn’t investigate Embed and accepted the significant terms proposed by Giles, the founder, CEO, and only representative of Embed during the negotiation, who personally received about $157 million in connection with the purchase. As a result, WRS paid considerably more than fair or reasonable equivalent value for Embed and made an incentive payment to Giles to complete the purchase transaction quickly.
