FTX: Bribes, Prostitutes and Scorned Ex-partners
As the saying goes, one should never mix pleasure with business and personal lives plus business lives should always remain separate. Of course there are many small family businesses across the world that make things work. But any small business that’s run by a family will tell you the same thing, it’s challenging at the best of times.
Husband’s and wives operating small family businesses are probably at a different scale in comparison to todays story which focuses on the love scandal that seems to have been part of the cause that has brough FTX down. If you thought Crypto Currency was volatile, hell have no fury like a woman scorned. Scorned is probably too light to explain what Sam Bankman-Fried’s ex partner ex-Alameda Research CEO Caroline Ellison. Although she claims they were more on and off again while living in a penthouse in the Bahamas.
Either way, any high ranking professional will always provide you with the same advice, do not get romantically involved with people in the office or who you work with. If things work out it is great but more often than not relationships breakdown which causes significant issues in the partnership or business.
Attempted Chinese Bribes
Caroline seems to be opening the book against Sam in the latest debacle to unfold in the expected 6 week trial where Sam will face the music. Despite claiming he is innocent, Caroline’s bombshell omission seems pretty concerning.
It seems Crypto funds tied to FTX were caught up in a money laundering scheme in China. (We are not alleging FTX was involved or participant). Those funds were tied to accounts belonging to Thai prostitutes and frozen by the Chinese Government.
Caroline Alleges that Sam initially employed lawyers in an attempt to unfreeze the accounts and reclaim the funds the move was unsuccessful so Sam allegedly ordered Caroline to pay bribes to wallets that were assumed to be linked to Chinese Government officials.
It’s unclear if the move paid off for Sam and FTX as there isn’t any information pertaining to the Chinese Government officials actions. But what also is evident from Caroline’s statement is that Sam may have known that this was illegal behavior as Caroline reported on these actions in code to make it hard for anyone investigating to know that it was.
A step that if proven may provide further insights into what was occurring with investor funds at FTX.
More Explosive Allegations of Directed Illegal Activity.
Caroline further stated in her witness statement that she was often directed to commit crimes and has come out to jurors in an open and transparent way exposing much of the issues and behaviours that seem to have caused FTX to crumble.
Another interesting admission Caroline made is that FTX often held multiple accounts on different exchanges to undertake trades of different crypto currencies. While there isn’t much evidence to support what those trades were at this stage, it may come back to research that recently showed that Centralised Exchanges (CEX) were undertaking market manipulation setting off false trading volume. Again we are not suggesting FTX performed this or participated in this behaviour.
Fall from the top
FTX was once at the forefront of the Decentralised Finance (De-Fi) world and a household name attracting celebrities, politicians and global investors and was in the running to bypass Binance. But as we delve deeper into how the billion dollar company was being managed we find more and more incompetence and a possible lack of interest in financial laws.
Millions of invetors have lost Billions of dollars many of which will never be recovered causing widespread chaos in people’s lives. Insurance is not available to Crypto Currency investors and the actions that unfolded that have led to this are slowly being released and serve as a reminder to everyone who participates in investing in Crypto currency. To ensure that they understand the risk associated with the emerging sector and undertake appropriate research.
Many people invested life savings into FTX and are now without money as the exchange continues to crumble and liquidators look at liquidating more assets to pay back debtors. Ultimately it is the retail investors that lose out massively.
The question still remains if we will see Crypto currency sector regain it’s prominence or if too many people have been harmed along the way?
We will know more once these court proceedings come to a close.
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