Disgraced FTX Boss Bankman-Fried's Parents Bought Bahamas Property Worth $121 Million Before His Crypto Empire Fell
Two-Year buying binge.
The crypto firm FTX collapsed spectacularly this month, with CEO Sam Bankman-Fried's personal worth wiped from $16 billion to zero. The company has filed for Chapter 11 bankruptcy protection, and details about executives' spending are coming to light. Notably, FTX reportedly bought property worth $121 million in the two years before the business ran aground, including a $16.4 million vacation home in the Bahamas for Bankman-Fried's parents.
Several other luxury beachfront homes were also purchased by the company. Read on to find out more about the company's real-estate buying binge, the extent of the company's collapse, and why a CEO brought in to restructure the bankrupt firm called its financial situation "unprecedented."
Reuters reports that Bankman-Fried's FTX bought at least 19 properties worth nearly $121 million in the Bahamas over the past two years. They include $72 million on apartments at a luxury resort "for key personnel," a $30 million penthouse (allegedly for Bankman-Fried), a $16.4 million vacation home for Bankman-Fried's parents, and three additional apartments priced between $950,000 and $2 million each.
According to property records, the three apartments were in One Cable Beach, a beachfront complex in New Providence. Records showed the condos were bought by Nishad Singh, the former head of engineering at FTX, Gary Wang, an FTX co-founder, and Bankman-Fried for residential use. Two of the properties were earmarked for commercial use.
Records also show that FTX also bought a $16.4 million vacation home for Bankman-Fried's parents, who are law professors at Stanford University. The beachside property is located in the gated community of Old Fort Bay. Documents, according to Reuters, were signed by Bankman-Fried's parents, Joseph Bankman and Barbara Fried.
When asked by Reuters why the couple decided to buy a vacation home in the Bahamas and how it was paid for, a spokesperson for the professors said only that Bankman and Fried had been trying to return the property to FTX. "Since before the bankruptcy proceedings, Mr. Bankman and Ms. Fried have been seeking to return the deed to the company and are awaiting further instructions," the spokesperson said.
FTX is one of the world's largest cryptocurrency exchanges. The company filed for bankruptcy earlier this month after a slew of customer withdrawals. Reuters reports that the firm's collapse has left 1 million creditors facing losses totaling billions of dollars, Bankman-Fried secretly used $10 billion in customer funds to prop up the business, and at least $1 billion of those deposits had disappeared. In bankruptcy court earlier this month, John Ray, FTX's new chief executive, said he understood that corporate funds were used to "purchase homes and other personal items for employees and advisors."
Ray was brought in as FTX CEO on Nov. 11 after Bankman-Fried was convinced by his lawyers and his father to resign. "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here," said Ray. "From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented."
This week, it was reported that the U.S. Attorney's Office for the Southern District of New York had opened an investigation into FTX months before it declared bankruptcy. Agents spent months investigating the firm. According to reports, both FTX and Bankman-Fried were suspected of committing federal fraud. At this point, it's unclear what the investigators' conclusions were.