In the ever-evolving world of cryptocurrency, a recent lawsuit against Sam Bankman Fried (SBF), the former CEO of crypto exchange FTX, has brought to light an alarming accusation. It is alleged that SBF has been utilizing company funds, amounting to about $10 million to finance his criminal defense.
According to the lawsuit, SBF and other executives abused their power and control over FTX’s funds to finance luxury lifestyles, make political and charitable donations as well as speculative investments and other pet projects.
For instance, the lawsuit claims that these executives issued over $725 million worth of equity to themselves without debtors receiving any value in exchange. Also, SBF and co-founder, Gary Wang misappropriated an additional $546 million to purchase shares in the trading platform Robinhood while Ellison acquired $10 million worth of stake in an artificial intelligence company after gifting herself $28.8 million in bonuses.
Additionally, the lawsuit alleges that Gabriel, SBF’s younger brother attempted to buy a sovereign island named Nauru which he plans to use to create a lab for experiments in human genetics and also create a post-apocalyptic haven for believers in effective altruism.
Interestingly, this lawsuit marks a recent attempt to claw back funds misappropriated amounting to over $1 billion by the former executives of the exchange before its Chapter 11 bankruptcy filing.
More Troubles for Sam Bankman-Fried and FTX
Recall that SBF who is already facing fraud charges and mismanagement of funds was accused of skirting campaign crypto laws by making straw donations early this year. According to the court documents, the former billionaire and two FTX executives allegedly made millions of dollars in political contributions between 2021 and 2022. He allegedly used funds that had been illegally loaned from customer accounts at Alameda Research.
Similarly, the disgraced CEO was accused of conspiring to pay a sum of approximately $40 million to Chinese government officials. It was believed that the main reason for doing so was to convince the Chinese authorities to unfreeze Alameda accounts, which hold more than $1 billion in assets. Although, SBF has pleaded not guilty to all the charges.
Meanwhile, prosecutors have vehemently opposed the dismissal of charges against the embattled CEO, asserting that the criminal charges brought against SBF hold significant weight and should not be dismissed on procedural grounds.