Will Former FTX CEO Sam Bankman-Fried Speak at This Event?

The latest bankruptcy filing shows damning evidence against the ill-running of FTX. The latest developments indicate that Sam Bankman-Fried transferred assets to the Bahamas after the bankruptcy filing. The ex-CEO of FTX is still set to speak at an upcoming event.

As FTX lawyers prepare for the bankruptcy hearing, a court filing reveals damning fiscal and governance practices that extended throughout the FTX Group before it filed for bankruptcy last week.

Bahamas regulators vs U.S. Regulators

The latest developments indicate that FTX has filed an emergency court filing. The filing indicates that Bahamian regulators asked now-former FTX CEO, Sam Bankman-Fried, to transfer assets belonging to the company, to the Bahamas government. The motion, which was filed in the United States Bankruptcy Court in Delaware now indicates that there could be a major concern surrounding the regulatory body within the Bahamas.

“Auto-delete” management of Sam Bankman-Fried

Records of the company’s decision-making left much to be desired. Sam Bankman-Fried chose communication tools configured to auto-delete messages after a certain period and encouraged employees to use such tools.

Additionally, most companies in the FTX Group did not hold regular board meetings, and management had little knowledge of where corporate cash was deposited. The Group also did not keep precise records of company bank accounts, nor did it evaluate banking partners’ credit histories. Customer deposits were not visibly recorded as assets on the company’s balance sheet. 

Alameda Research, a hedge fund, and quant trading firm that was part of the FTX Group loaned $1 billion to Sam Bankman-Fried, $543 million to FTX’s engineering head Nishad Singh, and $55 million to FTX Digital Markets co-CEO Ryan Salame. 

The court filing also reveals shortcomings in the Group’s labor practices, as it had not adequately defined the roles of employees and contractors. This lack of employee data has made it difficult to identify existing employees. 

Some employees benefited from corporate funds used to purchase real estate, with later records showing that the property was registered under the employee’s name. There is no evidence to suggest that these disbursements were employee loans. When employees submitted requests for expense reimbursements, managers responded using emojis, revealing a lack of corporate policy around disbursements.

Sam Bankman-Fried to join political heavyweights unlikely

The event, hosted at the Lincoln Center in New York City, will also welcome New York City Mayor Eric Adams, BlackRock CEO Larry Fink, former Prime Israeli Prime Minister Benjamin Netanyahu, U.S. Treasury Secretary Janet Yellen, and Meta CEO Mark Zuckerberg.

CNBC Squawk Box anchor and Times writer Andrew Ross Sorkin will interview all the speakers on a single stage.

The DealBook Summit has historically looked to blend business, culture, and political themes. It has hosted past speakers like Apple CEO Tim Cook, former U.S. Vice President Al Gore, anti-crypto senator Elizabeth Warren, and bitcoin-bashing JPMorgan Chase CEO Jamie Dimon.

New York Times accused of bias, helping SBF

The crypto community, including famed influencer BitBoy, has decried the inclusion of SBF in the event. They have accused the former CEO and the Times of trying to repair his public image.

Another piece by the New York Times describing the interview of a psychiatrist who served as an in-house professional coach to FTX employees has been accused of damage control by downplaying troubling aspects of SBF and FTX’s corporate culture. 

In the article, the psychiatrist denies rumors that FTX employees used a prescription medication to enhance job performance and that employees took part in non-monogamous relationships. 

This is despite the fact another NYT writer David Yaffe-Bellamy commented on the company’s crypto-themed condoms upon visiting the company’s headquarters in May 2022.

Sam Bankman-Fried implicated in corporate governance shamble

In an official FTX Twitter thread on Nov. 17, 2022, FTX’s new CEO, John Ray, revealed that SBF had resigned from FTX, Alameda Research, and all its subsidiaries. Hence, he plays no role in the future of these companies.

Furthermore, Ray said he had never seen a worse failure of corporate governance.

“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 on Nov. 17, 2022. 

Additionally, FTX’s bankruptcy lawyers have accused the former CEO of trying to interrupt the transfer of a competing bankruptcy case from New York to Delaware.

In a court filing, the lawyers suggested SBF supported Bahamian authorities, who filed a case in New York over the insolvency of FTX Digital Markets in the Bahamas earlier this week.

The authorities believe that assets held in FTX custodial wallets are owed to FTX Digital Markets. They want to bring the assets under Bahamian control. FTX lawyers say this move could hamper the progress of the company’s Chapter 11 proceedings. It also prevents the consolidation of insolvency issues in a single court.

They allege that SBF’s recent tweets, where he suggested he could turn back the clock on his decision to file for bankruptcy if “we can win a jurisdictional battle vs. Delaware,” are sabotaging the bankruptcy process. 

Vox Media first unveiled the tweets.

“Auto-delete” management of Sam Bankman-Fried

Even as FTX lawyers prepare for the bankruptcy hearing, a court filing reveals damning fiscal and governance practices that extended throughout the FTX Group before it filed for bankruptcy last week.

Records of the company’s decision-making left much to be desired. Sam Bankman-Fried chose communication tools configured to auto-delete messages after a certain period and encouraged employees to use such tools.

Additionally, most companies in the FTX Group did not hold regular board meetings, and management had little knowledge of where corporate cash was deposited. The Group also did not keep precise records of company bank accounts, nor did it evaluate banking partners’ credit histories. Customer deposits were not visibly recorded as assets on the company’s balance sheet. 

Alameda Research, a hedge fund, and quant trading firm that was part of the FTX Group loaned $1 billion to Sam Bankman-Fried, $543 million to FTX’s engineering head Nishad Singh, and $55 million to FTX Digital Markets co-CEO Ryan Salame. 

The court filing also reveals shortcomings in the Group’s labor practices, as it had not adequately defined the roles of employees and contractors. This lack of employee data has made it difficult to identify existing employees. 

Some employees benefited from corporate funds used to purchase real estate, with later records showing that the property was registered under the employee’s name. There is no evidence to suggest that these disbursements were employee loans. When employees submitted requests for expense reimbursements, managers responded using emojis, revealing a lack of corporate policy around disbursements.

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