FTX blew $40m on luxury hotels and flights in nine months

DOJ informs potential FTX victims of their rights and asks them to come forward

The Bahamas                                 
FTX Digital Markets, the crypto exchanges’s Bahamian subsidiary, spent $15.4m on luxury accommodation – Photo: Shutterstock
                                

The cryptocurrency exchange FTX blew $40m (£33m) in just over nine months on a range of expenses according to bankruptcy court documents, including flights, entertainment and hotels.

Further details of FTX’s expenses emerge

FTX began November 2022 as the world’s second-largest cryptocurrency exchange and ended the month in disgrace after revelations of mismanagement and alleged fraud triggered its collapse.

According to Insider, FTX’s Bahamian subsidiary, FTX Digital Markets, generated no customer revenue but spent extensively. Between January and September 2022, it spent $15.4m on luxury hotels and accommodation. Around $5.8m of this sum went towards the Albany Hotel, a luxury resort with its own golf course and marina for yachts.

Sam Bankman-Fried, FTX’s co-founder and former CEO, lived in a $30m penthouse in Albany until he was arrested in December. The 30-year old pleaded not guilty in a US court on 3 January 2023 to charges that he took FTX customer deposits to fund his hedge fund, Alameda Research, to make political donations, and to purchase property.

Bankman-Fried was released after posting a $250m bail package. If convicted, he faces more than 100 years in prison.

DOJ attempts to contact FTX’s victims

At the time of writing (9 January 2023), the US Department of Justice (DOJ) updated its statement to Sam Bankman-Fried’s fraud victims, asking them to come forward and outlining their rights.

It said: “If you believe that you may have been a victim of fraud by Samuel Bankman-Fried, aka ‘SBF,’ please contact the victim/witness coordinator at the United States Attorney’s Office… for assistance in verifying whether you are a victim in this case.”

Federal law requires prosecutors to contact potential victims and to inform them of their rights.

With the total number of FTX creditors potentially surpassing one million, prosecutors sought permission to use a website to notify victims because it would be “impracticable” to contact each person individually.

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