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SBF made off with about $3 billion from the collapse of FTX

Published on 25 Comments on SBF made off with about $3 billion from the collapse of FTX

John Ray is the temporary CEO named to clean up crypto giant FTX after its spectacular collapse last month. He testified before Congress today about the biggest problems he's uncovered so far:

"Loans and other payments" include $1 billion that Sam Bankman-Fried personally received from Alameda, but there was also $2.3 billion for Paper Bird, a company he controlled and had 75% ownership of. This means that FTX—an SBF company—illegally loaned $10 billion in customer deposits to Alameda—also an SBF company—which then turned around and gave $2.7-3.3 billion to SBF. Most of the rest was put into highly leveraged investments, presumably in the hopes of getting lucky and restoring the customer funds before anyone noticed.

This is the FTX story people should be paying attention to. In the end, it's just a drearily familiar high-finance scam dressed up in malaria bed nets.

UPDATE: "Plain old embezzlement." Excellent. I'm glad that John Ray gets it.

25 thoughts on “SBF made off with about $3 billion from the collapse of FTX”

  1. Anandakos

    Three billion. That's a lot of "under the table". It must be a honkin big piece of furniture.

    I expect that his name will soon be pronounced "Fryed". Jes' sayin'.

    Stanford is going to be hiring two new professors. The family that lies together fries together.

      1. MarySeifert

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      1. xi-willikers

        The house he bought them with FTX funds. I assume they took a “no questions asked” approach or at least that’s what they’ll claim

  2. jte21

    The guy was basically raiding the till on an epic scale to fund his lavish lifestyle, political donations, and personal investments. Fucking unbelievable. Wait. No. Actually completely believable. We'll see how well his "Aw, shucks, I was just an ignorant kid who didn't really know anything about crypto or investing and what's money? Mommy is that you?" routine plays in federal court.

  3. different_name

    > In the end, it's just a drearily familiar high-finance scam

    Yep. The really naive victims believed the bullshit. The rest just thought they were smart enough to get out before everything tanked.

    We've been watching this show for, literally, hundreds of years.

  5. Special Newb

    I still want to here more about Ellison. She was the one in charge of Alameda when it tanked, she was the one that helped SBF pitch the illegal money transfers ro Alameda. She should also be arrested but she's where? Her old bedroom at her parents house?

      1. Special Newb

        My understanding is Ellison was one of the first people who joined SBF so I'm not sure scapegoat tracks. She is the daughter of ivy academics and highly educated in her own right as well.

        I did see her family hired a former SEC lawyer who PROSECUTED THERANOS to be her attorney.

  6. NotCynicalEnough

    Of course the obvious question is where did all that money go once SBF got his hands on it. It didn't all go to "effective altruism" and bribery. You keep hoping that the MSM would eventually catch on that every VC funded crypto startup was just another con the hope being that they could cash out (in real money) before the marks got wise but it never happens.

    1. Anandakos

      Yeah, "proof of effort" was always a scam. Does the block chain include e-copies of the electricity bills for the victorious miners? Where's the "proof"?

  10. Justin

    Increase interest rates then crash the crypto and stock market. That’ll take a bite out of inflation. Hope you all had fun vacations last year.

  11. golack

    Just to note, the numbers being bandied about are valuation for crypto holdings. How much was converted into "real" currencies, i.e. sold to suckers.
    This kinda looks like what Trump did with his casino(s?)...but on a larger scale...

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