FTX filed for Chapter 11 bankruptcy in November 2022 and shortly after the new CEO John J. Ray III described the exchange’s collapse as a “complete failure of corporate controls and a complete absence of trustworthy financial information.“
Four months after filing for bankruptcy, the new FTX management has disclosed that the firm paid up to $2.2 billion to the previous CEO Sam Bankman-Fried who is currently facing charges in the US.
$3.2 billion to SBf and other key employees
The new management in a press statement said that according to a Schedules of Assets and Liabilities and Statements of Financial Affairs filed on Wednesday, FTX paid a total of $3.2 billion to Bankman-Fried and other key employees.
The $3.2 billion, however, does not include the $240 million used in purchasing luxury property in the Bahamas and charitable and political donations.
Out of the money paid out to the key employees, Sam Bankman-Fried was the highest paid followed by the director of engineering Nishad Singh, who was paid about $587 million. Signh has since pleaded guilty to charges including conspiracy and fraud in his role in the FTX collapse.
Interestingly, the payouts were mostly made from SBF-owned Alameda Research, whose financial disclosure started the financial turmoil that brought FTX tumbling in the wake of accusations that Alameda ‘secretly’ traded billions of FTX customer funds.