New FTX CEO Discusses Possibility of Rebooting Defunct Crypto Exchange in First Interview Since Taking Over

January 19, 2023 Bitcoin.com

Disgraced FTX Co-Founder Awaits Trial, Passes Time Playing Video Games and Blogging on His New Substack Newsletter

January 13, 2023 Bitcoin.com

‘Visibly Shaking’ FTX Co-Founder Hammers out a ‘Wasted Day’ in Court as Bahamian, US Legal Team Prep for Extradition

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Court Documents Say FTX Boss Ryan Salame Snitched on SBF 2 Days Before the Bankruptcy Filing

December 15, 2022 Bitcoin.com

FTX ex-staffer: Extravagant expenditures and cult-like worshipping of SBF

December 15, 2022 Coin Telegraph

Bankman-Fried

A former FTX employee has revealed details regarding the lavish expenditures of the exchange as well as its intense company culture.

A former employee of crypto exchange FTX has seemingly exposed the company’s excessive luxury expenditures, obsessive workplace culture and grueling work hours leading to the hiring of a company psychiatrist in the year before its collapse.

Danielle Cloud, a former employee of FTX claiming to work in the marketing department, posted a series of Tweets on Dec. 13 saying FTX employed her in Oct. 2021 before she resigned roughly two weeks ago.

1. My ex - FTX

Two(ish) weeks ago, I formally resigned from my position as an FTX employee.
— Dani Cloud (@daniiicloud) December 13, 2022

“Things felt off. Cult-like,” Cloud wrote, describing the feeling when she first joined the exchange and comparing it to fraudulent ventures such as the luxury music festival Fyre Festival and health technology company Theranos.

She claimed to have “never heard of” FTX or its founder Sam Bankman-Fried but said “everyone employed at FTX was obsessed” with him.

“I supposed it made sense. The kid was young, the principles were revolutionary, the ideas were golden [...] who was I to challenge that?”

*Cloud (front row, center left) pictured with other FTX US employees in Feb. 2022. Image: FTX US President Brett Harrison's* *Twitter*

Cloud claimed the “best way” to land a role at FTX was to “be the female spouse of an existing employee” who could apparently within “a month or two” make their way into an executive position.

“Those who challenged it were churned,” she claimed.

Time off from work was also a “joke” according to Cloud. “The work week was Monday to Sunday,” she said and a coworker was “chewed out” for asking if the company had time off for Thanksgiving.

*Cloud with an unknown person at SALT’s Crypto Bahamas conference in May. The event was co-hosted by FTX. Image: Instagram*

Cloud started as a Know Your Customer (KYC) analyst at FTX US, the company’s United States arm, and was promoted to a full-time marketing role in May 2022 — a position that required her “to work out of the Bahamas majority of the time.”

FTX’s excess luxury expenditures

“The entire operation was iconically and moronically inefficient,” Cloud said regarding the exchange's headquarters in the Bahamas, “I never knew all the things money could buy.”

She claimed FTX either purchased or rented multimillion-dollar homes for its executives who threw lavish house parties and had private chefs.

11. The half dozen condos leased/purchased by FTX for free employee access... In addition to the expensed stays in luxury hotels. pic.twitter.com/RqCVfjm7eX
— Dani Cloud (@daniiicloud) December 14, 2022

Employees were provided “expensed stays in luxury hotels” in addition to access to the “half dozen condos” rented or bought by the company.

FTX’s Bahamian office had “food catered 24/7” with employee perks purported to include free groceries, a monthly pop-up barber and fortnightly massages.

*A still from a video taken by Cloud depicting an FTX work party at the Albany resort in the Bahamas. Bankman-Fried was known to reside at the location. Image: Instagram*

The Commodities Future Trading Commission (CFTC) on Dec. 13 filed a lawsuit against Bankman-Fried claiming he used FTX customer funds for luxury real estate purchases.

FTX reportedly spent over $250 million on real estate purchases buying 35 properties in the Bahamas as per a Dec. 13 report from CNBC.

Why a shrink was brought into FTX

Due to the high workload demands, Cloud said Bankman-Fried brought in a psychiatrist, Dr. George K. Lerner.

A now-deleted profile on Bankman-Fried written in September by venture firm Sequoia Capital described Lerner as “the person who knows [Bankman-Fried] the best” and “the FTX company therapist.”

Cloud said Lerner was “propositioned as a coach” there to consult on business growth and was said to be “critical” to FTX employee satisfaction and its retention strategy, but alleged Lerner asked her intimate questions about her relationship with her fiancé.

She also claimed administration staff were “pushed to illegally ship prescriptions to Nassau” which were written in California and Florida.

In a Dec. 13 congressional hearing FTX’s CEO John Ray said there was “no record keeping whatsoever” at the company, and many invoices and expense receipts were submitted through the messaging app Slack.

FTX also used the accounting software Quickbooks according to Ray who said he has “nothing against Quickbooks” but it’s not a tool “for a multi-billion-dollar company.”

Crypto Twitter explodes over the news of Sam Bankman-Fried’s arrest

December 13, 2022 Coin Telegraph

Alexandria Ocasio-Cortez

US politicians, crypto execs and influencers fired up their Twitter apps upon learning that Sam Bankman-Fried was in custody in the Bahamas.

Crypto Twitter has blown up over the shocking news of Sam Bankman-Fried’s arrest in the Bahamas, with many surprised it had occurred so quickly.

On Dec. 12, the disgraced FTX founder was arrested by the Royal Bahamas Police after they received notification that the United States government had filed criminal charges against him.

Within hours, politicians, crypto executives and influencers had all booted up their Twitter apps to comment on the arrest of the former CEO.

New York Democratic Representative Alexandria Ocasio-Cortez, who’s held a fairly neutral view on the crypto industry to date, told her 13.4 million Twitter followers that Bankman-Fried’s was a step toward “justice being served,” but noted that the arrest would postpone Bankman-Fried’s testimony before the House Financial Services Committee, which was scheduled for Dec. 13.

Bankman-Fried was set to testify before the House tomorrow. Tonight he was arrested.

While I am disappointed we will not have the opportunity to present our line of questioning, we look forward to more information coming to light and justice being served in this case. https://t.co/HS9u1n5Kur
— Alexandria Ocasio-Cortez (@AOC) December 13, 2022

U.S. Senator Cynthia Lummis was also pleased, tweeting that prosecutors made the right decision to hold Bankman-Fried accountable for the “good, old-fashioned fraud” he allegedly committed.

What happened at FTX appears to be good, old-fashioned fraud, and I'm glad prosecutors have been investigating what happened to ensure everyone who committed crimes is held accountable for what they did.
— Senator Cynthia Lummis (@SenLummis) December 13, 2022

Fellow U.S. senator and crypto skeptic Elizabeth Warren agreed, stating in a Dec. 13 tweet to her 7 million followers that the U.S. Department of Justice needs to hold more lawbreaking corporate executives accountable.

Others took the opportunity to make light of it all. Benjamin Cowen, the chief executive and founder of the crypto-analysis channel called Into The Cryptoverse, used ChatGPT to create poetry about Bankman-Fried’s latest predicament.

“Write a poem about SBF, the CEO of FTX, who was arrested in the Bahamas for wire fraud.” pic.twitter.com/OWMXlhcqPt
— Benjamin Cowen (@intocryptoverse) December 13, 2022

Meanwhile, memes are already making the rounds on Twitter:

Sam Bankman-Fried goes to jail finally. pic.twitter.com/i2JqL7JiD6
— DRE THE NOID (@THEGOONEEZ) December 13, 2022

Much is also being said about Bankman-Fried’s Twitter posts and media appearances since FTX’s stunning collapse in November.

The co-host of Not Investment Advice, Trung Phan, told his 538,000 Twitter followers on Dec. 13 that Bankman-Fried’s erratic public behavior will make life harder for his defense attorney, while others believe that Bankman-Fried’s arrest will likely see him pointing the finger at colleagues and people linked to the FTX debacle, including those that received his sizeable political donations.

In what is likely his last Twitter Spaces interview, with Unusual Whales on Dec. 12, Bankman-Fried stated “I don’t think I’ll be arrested” when pressed about the possibility.

The Royal Bahamas Police Force made the arrest following the formal notification from the U.S. that it has filed criminal charges against Bankman-Fried, according to a Dec. 12 announcement by the Bahamas’ Office of the Attorney General.

Sam Bankman-Fried reveals the circumstances behind Bahamian withdrawals

November 30, 2022 Coin Telegraph

000

The former FTX CEO has explained why the exchange only reopened withdrawals for Bahamian citizens shortly before filing for bankruptcy.

FTX’s former CEO Sam Bankman-Fried has divulged what really went on in the days before it filed for bankruptcy when the exchange selectively reopened withdrawals — only for Bahamian users.

In a telephone interview with crypto blogger Tiffany Fong, dated Nov. 16, Bankman-Fried claims to have made the decision to reopen withdrawals to Bahamian citizens as he did not want himself, nor the exchange, to be in a country “with a lot of angry people in it.”

“The reason I did it was it was critical to the exchange being able to have a future because that’s where I am right now, and you do not want to be in a country with a lot of angry people in it and you do not want your company to be incorporated in a country with a lot of angry people in it,” he said.

Bankman-Fried claims he gave Bahamian securities regulators a “one-day heads up” that FTX was going to do it, but said the regulator neither responded with a “yes or no,” before he ultimately decided to go ahead with allowing withdrawals.

“So it was realistically speaking, it’s shitty, but [...] the pathway for FTX involved Bahamians not being pissed at it.”

The now-defunct crypto exchange initially halted all withdrawals on Nov. 8 as a result of liquidity issues.

On Nov. 10, only a day before it filed for bankruptcy, the exchange noted it had begun to facilitate withdrawals of Bahamian funds. At the time, it claimed that it was in compliance with the demands of the country’s regulators — leading to millions of dollars worth of funds extracted from the exchange.

However, the Securities Commission of The Bahamas (SCB) threw a wrench into FTX’s narrative, stating on Nov. 12 that it had neither instructed nor authorized FTX to prioritize withdrawals of Bahamian clients.

They also warned that any withdrawal of funds could be clawed back as part of the firm’s liquidation proceedings.

Cointelegraph contacted the SCB for confirmation on if it had received communication from FTX prior to the exchange’s withdrawals reopening, and what its response was at the time. The SCB did not immediately respond.

Audio from my first interview with Sam Bankman-Fried. SBF talks bankruptcy, the alleged “backdoor,” donations to the Democratic Party, Ukraine money laundering rumors, the hack, Alameda’s margin position on FTX, using FTT as collateral & more. https://t.co/qVfUv6dhww
— Tiffany Fong (@TiffanyFong_) November 29, 2022

In his most recent interview with Fong, Bankman-Fried denied the move was to facilitate withdrawals by people within FTX after Fong suggested that this is how it was being seen.

“Oh it wasn’t insider withdrawals, this was trying to create a regulatory pathway forward for the exchange.”

SBF was hot on FTX hacker’s trail

The former FTX CEO also noted during the Nov. 16 interview that he was close to finding out the identity of the FTX hacker, who is understood to have stolen over $450 million worth of assets soon after the exchange filed for bankruptcy on Nov. 11.

“I don’t know exactly who because they shut off all access to the systems when I was halfway through exploring it. I’ve narrowed it down to eight people. I don’t know which one it was but I have a pretty decent sense.”

Bankman-Fried said he believes it was “either an ex-employee or somewhere someone installed malware on an ex-employee’s computer.”

In a separate, more recent interview with Sam Bankman-Fried by Axios on Nov. 29, the former FTX CEO has revealed he only has around $100,000 left in his bank account as of today.

This is despite Bankman-Fried being worth an estimated $26 billion at his peak.

Bankman-Fried claims that he had “basically everything” tied up in the now-bankrupt company.

"I mean, I have no idea. I don't know. I had $100,000 in my bank account last I checked," he said.

FTX resumes paying staff and contractors after weeks in limbo

November 29, 2022 Coin Telegraph

Benefits

The payments will exclude former FTX CEO Sam Bankman-Fried, and certain former execs including Gary Wang, Nishad Singh, and Alameda's Caroline Ellison.

Bankrupt crypto exchange FTX has announced it will be “resuming ordinary” cash payments, salaries and benefits to its remaining employees around the world.

The announcement came from new FTX CEO John Ray III on Nov. 28, as the insolvency professional looks to help FTX and its approximated 101 affiliated companies (FTX Debtors) navigate their way through the U.S. Bankruptcy Court in Delaware.

"With the Court's approval of our First Day motions and the work being done on global cash management, I am pleased that the FTX group is resuming ordinary course cash payments of salaries and benefits to our remaining employees around the world.”

“FTX also is making cash payments to selected non-U.S. vendors and service providers where necessary to preserve business operations, subject to the limits approved by the Bankruptcy Court,” he added.

The announcement comes around 10 days after FTX debtors filed a motion to pay prepetition compensation and benefits to employees and contractors in the Delaware bankruptcy court on Nov. 19, which excludes payments to former FTX CEO and founder Sam Bankman-Fried, along with Gary Wang, Nishad Singh, and Caroline Ellison.

Sharing our press release just issued: FTX Resumes Ordinary Course Payments of Employees and Certain Foreign Contractors
https://t.co/8CDnlsvu2j
— FTX (@FTX_Official) November 28, 2022

The latest announcement will mean that the remaining employees and contractors of FTX will be receiving nearly three weeks' worth of pay, which was presumably halted after the company filed for bankruptcy on Nov. 11.

Ray acknowledged the financial hardship imposed on FTX employees and foreign contractors with the payment delay and thanked them for their support.

“We recognize the hardship imposed by the temporary interruption in these payments and thank all of our valuable employees and partners for their support."

The relief will include cash payments owed to workers at FTX Trading and 101 other affiliated companies since the Nov. 11 bankruptcy filing, in addition to the many vendors and service providers who still need to be paid out by FTX.

However, the resumption of payments won’t apply to all FTX subsidiaries and related companies.

In The Bahamas, where the crypto exchange is headquartered, only employees and contractors of the FTX Debtors will receive relief, but not those who worked for FTX Digital Markets, which is subject to a separate liquidation proceeding in The Bahamas.

It also won't apply to Australia-based employees and contractors for FTX Australia and its subsidiary FTX Express, which are also subject to separate proceedings in Australia.

On Nov. 22, FTX Trading announced it had been granted interim and final approvals for all of the "First Day" motions for matters related to its bankruptcy filing on Nov. 11.

At the time, Ray said he expected the motions to fast-track FTX Debtor’s efforts to reimburse other stakeholders affected by the trading platform’s collapse, such as FTX users and creditors, with the new CEO suggesting that a potential buyout of FTX’s assets could benefit stakeholders sooner rather than later.

However, some insolvency lawyers warn that the process could take years, or even decades, given the complexity and scope of FTX’s collapse.

Insolvency lawyer Stephen Earel, partner at Co Cordis in Australia recently told Cointelegraph that it’ll take the courts several years, if not decades, to determine who owned what crypto assets before coming up with a plan to redistribute those funds.

FTX Trading alone owes its top 50 creditors $3.1 billion, according to a document submitted as part of its Chapter 11 bankruptcy proceedings.

FTX under ‘active’ civil and criminal investigation: Bahamas AG

November 28, 2022 Coin Telegraph

Bahamian authorities

Bahamian Securities Commission, the Prime Minister’s financial intelligence unit, and a financial crimes unit are all involved in the FTX investigation.

The Bahamas Attorney General (AG) and Minister of Legal Affairs Ryan Pinder has confirmed that the collapsed crypto exchange FTX is the focus of an "active and ongoing" investigation by authorities from the Caribbean nation.

In a national statement that was delivered live on the Facebook page of the Office of the Prime Minister on Nov. 27, Pinder explained the "affairs of FTX Digital Markets" are under scrutiny from both "civil and criminal authorities" and Bahamian authorities are working with "a number of specialists and experts and will continue to do so as the need arises."

"The Securities Commission, our financial intelligence unit, and the financial crimes unit of the Royal Bahamas Police Force will continue to investigate the facts and circumstances regarding FTX's insolvency crisis and any potential violations of Bahamian law," he added.

Pinder also revealed the relevant Bahamian authorities would try to hold to account any companies or individuals found to have committed any wrongdoing during the investigation, while they will cooperate with other regulatory agencies and law enforcement bodies around the world.

"These events remind us of the lessons learned from securities and other financial regulation about the need for strong cross-border cooperation. The public worldwide will be best served by a strong international regulatory cooperation," he said.

The Securities Commission of The Bahamas suspended FTX Digital Markets (FDM) license to conduct business and stripped its directors of their power on Nov. 10.

On Nov. 12 they ordered the transfer of all FDM digital assets to a digital wallet owned by the commission for "safekeeping."

Pinder mentioned the country's regulatory authority has taken further protective measures approved by the Supreme Court but declined to elaborate further until "we are confident that doing so will not jeopardize any aspect of the ongoing investigations."

Pinder also took the chance to slam the Nov. 17 emergency motion by FTX Trading Limited, which called out the "Bahamian government" for "directing unauthorized access to the Debtors' systems" after the commencement of Chapter 11 bankruptcy filings in the United States.

He called the allegations "extremely regrettable" for misrepresenting "the timely action taken by the Securities Commission," while also defending all the steps taken by the country's regulator so far.

The Bahamas has encouraged crypto companies to the island country to aid its economy but it’s since been shaken by FTX’s collapse.

It was also hard hit by 2019’s Hurricane Dorian and the COVID-19 pandemic starting in 2020 ground its heavily tourism-based economy to a halt. With FTX gone, so have many jobs in the small nation.

But Pinder outlined his belief that despite the "personal tragedies" associated with the collapse of FTX, he expects "little contagion beyond the digital asset sphere both here in the Bahamas and around the world."

He referenced a Nov. 22 Standard & Poor's ratings for The Bahamas that forecasted a stable outlook citing the tourism sector's performance.

"Standards and poor has projected a stable outlook for our economy resting in part on the assumption that there will be no material adverse impact on the Bahamas from the worldwide collapse of FTX," Pinder said.

Recent FTX hacks prove it was right to ‘secure’ its assets: Bahamian regulator

November 24, 2022 Coin Telegraph

Bankruptcy

The Securities Commission of The Bahamas said the continued hacking attempts on FTX prove it made the right call to "secure" FTX's digital assets.

The Securities Commission of The Bahamas says the continued “hacking attempts” on FTX’s digital assets prove they made the right call to take control of the exchange’s assets on Nov. 12.

In a statement on Nov. 23, the commission said the fact that FTX's "systems were compromised, and that they continue to face new hacking attempts – reinforces the wisdom of the commission's prompt action to secure these digital assets."

On the same day that FTX filed for bankruptcy on Nov. 11, the crypto community began flagging roughly $266.3 million worth of outflows on wallets associated with FTX. By Nov. 12, the outflows had ballooned to more than $650 million.

Blockchain analysts have suggested that $477 million is suspected to have been stolen, while the remainder was moved to secure storage by FTX themselves.

In its latest statement, the commission said while it suspended FTX Digital Markets (FDM) license to conduct business and stripped its directors of their power on Nov. 10, this was not sufficient in protecting customers and creditors of FDM.

The commission further explained that due to the "nature of digital assets" and "the risks associated with hacking and compromise," it sought an order from the Supreme Court to transfer all digital assets from FTX to the commission for "safekeeping.”

The latest statement reinforces recent analysis from blockchain analytics firm Chainalysis, and Twitter crypto sleuth ZachXBT, who said that on-chain evidence suggests that the actions of the Bahamian regulator is not related to the alleged “FTX hacker.”

The commission has also lashed out at the Nov. 17 emergency motion by FTX Trading Limited, which called out the "Bahamian government" for "directing unauthorized access to the Debtors' systems" after the commencement of Chapter 11 bankruptcy filings.

“It is unfortunate that in Chapter 11 filings, the new CEO of FTX Trading Ltd. misrepresented this timely action through the intemperate and inaccurate allegations lodged in the Transfer Motion,” the Commission said.

The Bahamas

FTX’s excess luxury expenditures

Why a shrink was brought into FTX

SBF was hot on FTX hacker’s trail

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