Sam Bankman-Fried took billions from FTX customers, court told
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The news: FTX founder Sam Bankman-Fried plundered billions in customer funds from the cryptocurrency exchange to fund his own investments, a US court heard in the failed crypto tycoon's highly anticipated trial. Bankman-Fried's lawyers claim the FTX founder was a "math nerd who didn't drink or party", and whose company collapsed after a perfect storm of public attacks from competitors and the media.
The numbers: In early 2022 SBF's crypto exchange FTX was valued at USD32 billion ($50.6 billion). By November that year, FTX had filed for bankruptcy, owing at least USD3 billion to creditors and a further US8.7 billion in lost customer funds. Bankman-Fried's net worth in March 2022 was estimated to be roughly USD26 billion.
The context: Prosecutors in the trial allege FTX collapsed after Bankman-Fried plundered customer funds to purchase luxury houses, prop-up his crypto-focused hedge fund Alameda Research and donate to political campaigns and candidates. Bankman-Fried's lawyers claim bad press and undermining comments from Changpeng Zhao, the CEO of rival exchange Binance, led to FTX's collapse. Binance pulled out of a deal to acquire the struggling FTX less than 24 hours after a tentative agreement was made in early November 2022 after seeing the exchange's books.
