The the wall street journal reports that in a funding round that raised $420 million for cryptocurrency exchange FTX, nearly three-quarters of the money went directly to founder and Democratic super donor Sam Bankman-Fried.
The the wall street journal reports that in October 2018, FTX raised $420 million from a range of well-known investors to improve user experience, increase business reach and build a better relationship with regulators.
The Wall Street Journal reviewed FTX’s financial records and spoke to people familiar with the transaction to learn that nearly three-quarters of the money raised, $300 million, went to Sam Bankman-Fried, the founder of the exchange.
According to people familiar with the matter, Mr. Bankman-Fried’s exit was significant, even by global startup standards in Silicon Valley, where such sales were historically considered unacceptable because they allowed founders to profit before investors. According to Bankman-Fried, he bought out rival Binance’s stake in FTX a few months before the deal and refunded investors some of the money he had spent.
The deal provides insight into how funds were transferred between Bankman-Fried and the many companies he oversaw during the growth of the cryptocurrency exchange. Bankman-Fried used his various companies as a source of funding which provided the money for a number of philanthropic and political donations to Democrats as well as the purchase of stock from stock trading platform Robinhood Markets Inc.
Now, Bankman-Fried’s business dealings are under scrutiny amid the bankruptcy of FTX and its investment firm Alameda Research. FTX, which allegedly lent funds to clients at Alameda, now faces a funding shortfall of around $8 billion according to new FTX CEO John Ray.
Ray said the process would involve “a thorough, transparent and deliberate investigation into the claims against Mr. Samuel Bankman-Fried” and other co-founders of his companies.
Ray said the bankruptcy filing highlights “the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals.”
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Lucas Nolan is a reporter for Breitbart News covering free speech and online censorship issues. Follow him on Twitter @LucasNolan