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- The ex-chief minister of FTX, Sam Bankman-Fried has raised hundreds of millions of dollars on his own in 2021 after a funding round initiated for the beset crypto exchange platform.
In line with the report of the new Wall Street Journal, FTX introduced a $420 million funding binge in October 2021, describing to high-profile investors that the fund will be used to develop the crypto exchange, enhance the experience of its clients and grab the interest of regulators.
Although, the report mentions that about 75% of the funds generated went directly to the chief executive officer, Sam Bankman-Fried. As per the same reports, the CEO alone generated $300 million by selling the shares of his firm.
Persons who know the matter closely stated that the CEO told investors back then that the money will be provided as limited payment for the funds he utilized to purchase out Binance’s share in the firm.
In July 2021, Sam Bankman-Fried purchased Binance’s share in FTX. The foe crypto exchange was the initial investor to support FTX.
In November 2022, the chief executive officer of Binance, Changpeng Zhao disclosed that his company got a $2.1 billion monetary value of crypto assets as a segment of the buyout deal with the collapsed exchange.
As per the Wall Street Journal, it can’t be stated how Bankman-Fried collected those funds to purchase the controlling share of Binance. Also, the way Bankman-Fried managed the $300 million is also not very clear.
In line with the audited financial statements witnessed by the Wall Street Journal shows that the funds were kept by FTX which was intended for operational convenience for the sake of a “linked party.”
FTX Bankruptcy
On November 11, the crypto exchange, FTX filed for Chapter 11 bankruptcy protection. The firm’s estimation slipped from $32 billion to bankruptcy in just a few days which also pulled the net worth of the chief executive officer, Sam Bankman-Fried which was $16 billion to almost zero.
The downfall of FTX sent a shockwave to the unstable crypto market, which lost billions in worth, falling below $1 trillion. The result of FTX’s swift fall and declination has influenced cryptocurrencies and can even push down wider markets.
After this, on November 16, a class-action case was filed in a Florida federal court, accusing that the CEO has made a fraud crypto scheme that was intended to get benefited by an immature investor from all over the country.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
