As Sam Bankman-Fried falls further into the cryptocurrency pit, some anonymous statements and documents are accelerating his decline. Here are the allegations against FTX and the people behind it, which announced its bankruptcy the other day…
What had happened?
Earlier this month, a balance sheet was leaked showing that the assets of two of Bankman-Fried’s startups – crypto exchange FTX and trading firm Alameda Research – are largely in FTX’s in-house crypto token. With the crypto market already shaky, the reports sparked a panic among traders. The price of FTT fell, as did Bankman-Fried’s fortune.
CoinDesk on Thursday revealed more secrets about the functioning of Bankman-Fried’s crypto empire, including the unconventional nature of his close circle. “The whole operation was led by a gang of children in the Bahamas,” the reports said, citing a source familiar with the matter. The publication said several current and former employees of FTX and Alameda Research have agreed to talk about their experiences on the condition of anonymity.
FTX is full of “conflicts of interest”
These sources said both operations were carried out by Bankman-Fried’s close circle of 10 roommates. Reportedly, they were romantically involved with each other at one point. The consensus among all sources was that FTX was “a place full of conflicts of interest, nepotism and lack of oversight”.
Among the named members of Bankman-Fried’s inner circle was Alameda’s current CEO, Caroline Ellison. Ellison was the only employee reported to have been romantically involved with Bankman-Fried at one point. Others included Gary Wang, FTX’s co-founder and chief technology officer, and Nishad Singh, FTX’s director of engineering. Regarding Bankman-Fried, Wang and Singh, a source said, “They would do anything for each other.”
The publication also noted that most of the 10 roommates were either Bankman-Fried’s college friends from the Massachusetts Institute of Technology or former colleagues from Jane Street. Some employees outside Bankman-Fried’s inner circle said that what happened last week was shocking to everyone. An anonymous source said, “Some employees kept their savings in FTX. We believed everything was okay,” he said.
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