The executives running the bankrupt crypto exchange, FTX, may have broken speed records for how fast they could spend other people’s money. They just weren’t any good at managing it on behalf of their investors or safeguarding it for their crypto exchange customers.
Sam Bankman-Fried, CEO of FTX, lived in a 12,000 square foot, five-bedroom luxury penthouse overlooking the Atlantic Ocean in a prestigious resort in the Bahamas, which was put up for sale for $39.5 million the same day FTX filed for bankruptcy, according to reporting at the U.K. news outlet, The Guardian. The Block reports that an FTX-related entity called FTX Property Holdings “spent $74,230,193 on property in the Bahamas over 2022. The bulk of that money, $67,440,193.99, went to entities surrounding Albany Bahamas, a luxury condo resort in New Providence.”
According to data at the Federal Election Commission, Bankman-Fried sluiced $36 million on the campaign coffers of Democrats during the latest campaign cycle. Ryan Salame, the Co-CEO of FTX Digital Markets, the Bahamian subsidiary of FTX, dumped $23 million into the campaign coffers of Republicans and a Super PAC he created to support them, American Dream Federal Action.
Salame has also been on a buying spree in Lenox, Massachusetts, spending more than $5 million on restaurants and commercial buildings. Salame was operating the restaurants under the brand name of Lenox Eats, but that website appears to have been disabled in recent days. Fortunately, we located a web cache which provides details on Salame’s buying binge in Lenox. (Salame grew up in nearby Sandisfield, Massachusetts.)
Making the financial shenanigans at FTX that brought on its downfall all the more curious, Salame’s official bio states that he holds a CPA and “a Masters in Finance from Georgetown University,” and that he “worked for Ernst & Young, one of the largest and most respected global accounting firms.”
Another $20 million outflow from FTX went into an ad and marketing campaign with celebrity endorsers Tom Brady, the football icon, and his then wife, model Gisele Bündchen. (See video of one such ad below.)
Then there was the $135 million that went to grab the naming rights to the stadium where the Miami Heat play, which was renamed the FTX Arena. Millions more went to secure endorsements from other sports celebrities, including Shaquille O’Neal; Trevor Lawrence; David Ortiz and Udonis Haslem.
Millions of dollars also went to pay the hefty legal fees charged by one of Wall Street’s go-to law firms, Sullivan & Cromwell. As we reported on Sunday, Sullivan & Cromwell was involved in crypto acquisitions made by FTX and its sister companies, which also cost tens of millions of dollars.
According to OpenSecrets.org, FTX.US spent $690,000 between 2021 and 2022 on more than a dozen lobbyists hired to lobby members of Congress. Lobbying firms hired included Conaway Graves Group, Empire Consulting, Rich Feuer Anderson, and T Cap Solutions.
There have also been media reports, which Wall Street On Parade has not been able to independently verify, that Bankman-Fried (or FTX) owned a Gulfstream G450. According to Aircraft Bluebook’s 2022 data, a used Gulfstream G450 costs between $9 million for a 2005 model and $21.5 million for a 2017 model. The G450 is no longer manufactured.
If you add in FTX staff salaries and bonuses, along with pilots, housekeepers and expense accounts, it’s not difficult to see how FTX blew through its investors $1.8 billion and then moved on to its customers’ funds.
This first appeared on Wall Street on Parade.