Sam Bankman-Fried’s now bankrupt crypto firm FTX owes as almost $600,000 to Jimmy Buffett’s Margaritaville resort, including a $55,319 bar tab. And the company also spent as much as $400,000 with food delivery company DoorDash in a brief period of time, giving employees $200 of DoorDash food credit every day. More and more such FTX expenses and debts came out in recent court filings.
The $600,000 was spent by FTX’s sister firm Alameda Research whose employees allegedly stayed at the Margaritaville resort for weeks. And lawyers representing creditors alleged that Sam Bankman-Fried treated a $65 billion line of credit that his company had as his “personal piggy bank.”
Sam Bankman-Fried stands accused of eight counts of fraud and conspiracy. If convicted on all counts, he could be sentenced to as much as 115 years in jail. The charges came after his FTX crypto currency exchange company went bust a few weeks ago. The big question over the fall of FTX is “what happened to all of the money that people left with the company?” FTX was a crypto bank, so to speak, a place where people could park their virtual assets. But unlike with banks, there is no regulation over the handling of cryptos and FTX is said to have moved people’s cryptos around, basically that the company spent their money.
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Based in the Bahamas, FTX was a cryptocurrency exchange that said it was built by traders, for traders. FTX offers industry-first derivatives, options, volatility products and leveraged tokens. FTX had more than one million traders using its services when it failed.
When FTZ crashed, Sam Bankman-Fried himself lost 94% of his total wealth, or about $14.6 billion and was forced to sell whatever was left of FTX to chief rival Binance.
FTX, it seems, was nothing more than a house of cards built upon its own assets. The company’s net worth was based on ownership of its own tokens. This means that FTX claimed to be wealthy because it owned the same crypto tokens the company issued. And these tokens had no tangible net worth.