FTX Bankruptcy

Media companies love SBF. Ever since FTX bankruptcy revealed one of the largest frauds ever, it continues to make for great headlines. Unfortunately, we all know how exhausting it can be keeping up with the news as many investors prefer to move on & start focusing on repairing the industry. Since we haven’t covered the situation much since it happened, we decided to weed through the headlines & bring you the most important updates in one easy read. Here’s our first BREAKDOWN UPDATE!

Last Week

A 116-page list was published revealing businesses, non-profits, governments and everyone else who is owed money by FTX’s bankruptcy. The list included usual vendors such as Apple, Amazon, Microsoft & Adobe. While ~9.7 million customer names were redacted some notable names revealed much more. Here’s a few: Internal Revenue Service (IRS), Mercedes-Benz, Bodybuilding.com, 24-Hour Fitness, Red Sox star David Ortiz, Silvergate Bank, Carbone’s Miami, Nobu Hotel, Coachella music festival, multiple media companies, airlines, even Japan, Australia, & Hong Kong governments. The full list can be found here as other publishing sites have since removed it. One of the creditors was SkyBridge Capital, run by Anthony Scaramucci who sold 30% of his business to FTX. As a result, Scaramucci & SBF were close, but the exchange’s collapse resulted in a 39% loss of SkyBridge investor capital last year. This would be just another business that was burned by the fraudster. However, as Scaramucci prepares a new podcast, he has been more vocal about what happened at FTX and was perhaps one of the closest people to SBF before the bankruptcy. Scaramucci recently mentioned he bought a suit for SBF to wear as they went on a fundraising tour to Abu Dhabi, Dubai, and other Middle Eastern countries. On this trip, he states SBF “was saying some nasty things about CZ”; which ultimately led to the Binance CEO demanding repayment of his FTX investment and causing a liquidity shortfall. Federal prosecutors seized $50m from SBF’s account at Washington State Bank after he publicly claimed only $100k was left in his name after FTX collapse. SBF used customer funds wired to Alameda to purchase an ownership stake in the small bank, located in a town containing <150 people.

This Week

FTX bankruptcy team has requested subpoena’s for SBF’s family to testify in court. The team has contacted his mother & brother in an attempt to recover stolen funds and understand where/how it was spent by the family. Sam’s mother is listed as the owner of a $16.4m property in the Bahamas which was purchased with company funds. His brother runs a lobbying organization, Guarding Against Pandemics, which also purchased a multi-million dollar property near the U.S. Capitol. On the other hand, SBF’s father has shown ongoing cooperation. Friday - Federal prosecutors requested SBF’s bail should include a ban on private and encrypted communication with employees of FTX/Alameda. The request was filed after SBF contacted Ryne Miller, FTX-US General Counsel, to “at least vet things with each other” in discussions about his case. FTX/Alameda encrypted Slack & Signal company communications have put strain on the case, as the ‘auto-delete’ feature has wiped previous communication that would be useful. SBF’s past relationships and current communications could be considered witness tampering as the fraudster paid and treated his employees well. Saturday - In response, SBF’s lawyers requested certain bail restrictions be lifted. They suggest SBF should be allowed to access and transfer FTX assets, maintain contact with former employees, and he should also be allowed to use encrypted messaging systems.

Bonus

SBF also created a Substack blog earlier this month to post his arguments and mostly cast blame towards the bankruptcy team handling the case. That’s all folks! Hopefully you’re all caught up with the case & it didn’t take too long. If you prefer simple, easy-to-read updates like this, please let us know & be sure to subscribe to our weekly newsletter!