Disgraced former FTX CEO Sam Bankman-Fried reportedly landed himself a $300 million windfall last year when his then-hot cryptocurrency exchange secured a massive fundraising round.
FTX raised $420,690,000 million from 69 different investors during a Series B-1 funding round that closed in October 2021 – both numbers clearly pointing to meme culture.
Of the massive sum, $300 million went to Bankman-Fried after he sold part of his personal stake in FTX, The Wall Street Journal reported Friday, citing financial records and people familiar with the transaction.
In a press release at the time, Bankman-Fried said that FTX “has been able to partner with investors who prioritize positioning FTX as the most transparent and compliant cryptocurrency exchange in the world.”
The 30-year-old reportedly told investors the money was a partial refund after he bought out rival platform Binance’s stake in FTX a few months earlier.
The Journal said it was unable to determine what Bankman-Fried did with the $300 million — although a 2021 financial statement said the company held the funds for “operational expediency” on behalf of a “related party.” .
Sam Bankman-Fried resigned as CEO of FTX last week. Bloomberg via Getty Images
Sam Bankman-Fried’s fortune has plummeted in recent days. Getty Images
At the time, FTX was valued at a whopping $25 billion — a valuation that had completely evaporated until last week, when the platform abruptly declared bankruptcy. Meanwhile, Bankman-Fried’s personal fortune plummeted from $16 billion to virtually nothing in a matter of days.
Sequoia Capital published a post on its website that referred to the FTX fundraising as a “meme round,” according to the Wall Street Journal. The numbers “420” and “69” refer to marijuana use and oral sex, respectively.
Sequoia Capital was recently forced to reduce the value of its investment in FTX to zero.
Sam Bankman-Fried is the founder of FTX, the cryptocurrency exchange that was once worth tens of billions. The company recently filed for bankruptcy through Getty Images. Bloomberg
Bankman-Fried’s handling of FTX’s finances will be subject to intense legal and regulatory scrutiny following the platform’s bankruptcy. The ex-CEO funneled $10 billion in FTX client funds to Alameda Research, the sister cryptocurrency trading firm he also owned. At least one billion dollars is still missing.
New FTX CEO John Ray III blasted the company’s previous corporate governance in a court filing Thursday, saying he has never seen “so complete a failure of corporate controls and so complete an absence of trustworthy financial information as here.” Ray is a bankruptcy expert who has guided the notorious energy company Enron through its difficult bankruptcy.
Ray said FTX will conduct a “full, transparent and deliberate investigation into the claims against Mr. Samuel Bankman-Fried” and his co-founders as it proceeds with bankruptcy.