Cryptocurrency exchange FTX, which filed for Chapter 11 bankruptcy last November, not only used client funds for shady transactions and expensive real estate for its employees, but also generously paid for staff lodging and travel at expensive hotels in the Bahamas.
According to documents filed in Delaware (U.S.) bankruptcy court, Insider, the Bahamian arm of FTX, spent $40 million on hotel stays, entertainment and flights in just over nine months.
Lawyers discovered that the "daughter" of Bahamas-based cryptocurrency exchange FTX Digital Markets Ltd. Instead of earning revenue from clients, it spends investors' funds generously. Between January 2022 and September 2022, the company spent $15.4 million to furnish its employees with luxury hotels, homes and apartments.
Much of that, about $5.8 million, went to employees at the waterfront Albany hotel, which has its own marina and golf course. $3.6 million went to the four-star Grand Hyatt, with the cheapest room at $369 a night, and another $800,000 to the five-star Rosewood, where accommodations cost at least $1,100 a night. FTX co-founder and former CEO Sam Bankman-Fried lived in a $30 million penthouse at a Bahamian resort in Albany before his arrest.
FTX also spent $6.9 million on "food and entertainment," according to court documents. Another $3.9 million was spent on airfare and more than $500,000 on "postage and shipping."
Sam Bankman-Fried faces eight counts, including wire fraud and illegal campaign financing. If proven guilty on all counts, Bankman-Fried faces up to 115 years in prison. However, the former FTX CEO has pleaded not guilty to all charges.
