Bankrupt FTX Run As Chief's "personal Fiefdom"

Stricken crypto exchange FTX was run as a "personal fiefdom" of Sam Bankman-Fried, attorneys for the firm said on Tuesday, describing that one of the company's units spent US$300 million on Bahamas real estate.

The collapse of FTX, once one of the world's largest cryptocurrency exchanges, has left an estimated 1 million creditors facing losses totaling billions of dollars.

An attorney for FTX said at a bankruptcy hearing on Tuesday that the US$300 million in real estate was largely homes and vacation properties for senior staff. The company intends to sell off healthy business units, an attorney said.

Reuters earlier reported that Bankman-Fried's FTX, his parents and senior executives of the failed cryptocurrency exchange bought at least 19 properties worth nearly US$121 million in the Bahamas over the past two years, official property records show.

At the hearing, an attorney for FTX also said that the company continues to suffer cyberattacks as bankruptcy begins, and that "substantial" assets are missing.

Its cash balance of US$1.24 billion as of Sunday was "substantially higher" than previously thought, a filing Monday night by Edgar Mosley of Alvarez & Marshal, a consultancy firm advising FTX, said.

It includes around US$400 million at accounts related to Alameda Research, the crypto trading firm owned by FTX founder Bankman-Fried, and US$172 million at FTX's Japan arm.

FTX, which said on Saturday it has launched a strategic review of its global assets and is preparing for the sale or reorganization of some businesses, had previously said that it owes its 50 biggest creditors nearly US$3.1 billion.

The details of FTX's cash balances came ahead of a hearing in Delaware on FTX's so-called first-day motions, which kicked off on Tuesday.

FTX has asked Judge John Dorsey to sign off on initial steps in its bankruptcy, including paying employees and critical vendors, which will allow it to continue operating during Chapter 11 bankruptcy proceedings. (Reuters)