Stricken crypto exchange FTX spent £250m on property in Bahamas

The stricken crypto exchange FTX was run as a “personal fiefdom” by founder Sam Bankman-Fried and spent £250 million on property in the Bahamas, a court found yesterday.

During a bankruptcy hearing in Delaware following the company’s £27 billion collapse this month, an FTX attorney said the real estate empire was largely made up of homes and vacation homes for senior personnel.

The revelations came just hours after Reuters reported that FTX, senior executives and Bankman-Fried’s parents bought at least 19 properties worth £100 million in the Bahamas in the past two years alone.

FTX, one of the world’s largest crypto exchanges where users buy and sell digital currencies, imploded this month.

It has faced an estimated 1 million creditors with billions of pounds in losses – with the 50 largest clients owing more than £52 million on average. About 8 percent of FTX users were based in the UK, suggesting 80,000 Brits lost it.

“We have witnessed one of the most abrupt and difficult collapses in corporate America’s history,” James Bromley, a partner at the law firm of Sullivan & Cromwell, told the court.

He said the bankruptcy proceedings “allowed everyone for the first time to look under the covers and recognize that the Emperor had no clothes.”

The scandal is a humiliation for Bankman-Fried — the 30-year-old one-time crypto star known by his initials SBF, who is now at the center of one of the most stunning financial failures in history.

His fall from grace is also inconvenient for his cheerleading squad, which includes a host of politicians and celebrities.

In April, he drew Tony Blair, Bill Clinton, supermodel Gisele Bundchen and actor Orlando Bloom to a glamorous crypto convention in the Bahamas. And he was a donor to Democratic politicians in the US.

The Delaware court heard that a “substantial amount” of FTX assets were “either stolen or missing.” But it was also told the company has just over £1bn in cash after new management finds more of its cash.

While FTX and its employees are known to have purchased properties in the Bahamas, where it set up headquarters last September, the data uncovered by Reuters shows the extent of their buying spree and the homes’ intended uses.

Most of the purchases were luxury beachfront homes, including seven in a sprawling resort community called Albany that cost more than £60 million.

The documents for another house with beach access in Old Fort Bay — a gated community that was once home to a British colonial fort built in the 18th century to protect against pirates — show Bankman-Fried’s parents, both law professors at Stanford University, as signatories.

Documents show that the property was a ‘holiday home’.