- Tram Ho
When crypto exchange FTX moved its headquarters to the Bahamas from Hong Kong last year, employees discovered that Amazon was not shipping to the island. They quickly found an alternative, signing a separate agreement with an airline to fulfill orders from a warehouse in Miami, USA.
FTX’s airline deal was revealed in interviews with former employees of the company. It exemplifies the lavish privileges Sam Bankman-Fried’s cryptocurrency exchange (SBF) offered to its employees before going bankrupt this month.
Bankman-Fried said his motivation in building FTX into a massive $32 billion crypto empire was to maximize how much he could donate to charity over his lifetime. mine.
Behind those great promises, however, is an environment where every employee’s needs are met, and where a group of senior executives in their late twenties, early thirties decades spent millions on everything from travel to sports sponsorships and luxury homes.
According to former employees and corporate bankruptcy filings, the lack of internal control is often seen in large financial firms. This means that FTX spending is not strictly controlled.
“ The situation at FTX is kids taking over other kids, ” said one former employee. They added: “ The whole operation is absurdly inefficient, but equally mesmerizing. I have never seen so much money in my life. I don’t think anyone has, not even Sam Bankman-Fried .”
The $135 million deal to secure naming rights to Miami’s national basketball stadium underscores FTX’s culture of profligate spending.
Some employees questioned the Miami deal in the company’s Slack messages. They wonder if it really brings in new customers and provides value for money. “ They never monitor how much interest we actually get. Nobody really follows up on ‘what’s next’ after you get the deal ,” said one former employee referring to the senior management team.
The person said value-for-money concerns from employees with marketing experience were ignored by Bankman-Fried and the company’s top executives. Bankman-Fried or one of two other executives signed off on hundreds of millions of dollars in funding deals.
“ Things are crazy, ” said the employee. “ If Sam says OK, that’s fine. Regardless of the amount “.
John Ray, the new chief executive officer of FTX who is responsible for leading the exchange through bankruptcy, said he has never seen “ such a complete failure of corporate control ”.
“ The company does not have the type of disbursement controls that I believe would be appropriate for a business enterprise ,” he said in the filing, adding that the company’s money was used to purchase homes and personal belongings. employees and advisors of FTX.
“ There appears to be no documentation for some of these transactions… and certain properties have been recorded in the personal names of these employees and advisors, ” Ray added.
FTX has spent at least $300 million on real estate in the Bahamas, the company’s lawyers told bankruptcy court last week. ” Most of those purchases involve homes and resort properties used by senior executives, ” they said.
The real estate portfolio includes at least six multi-million dollar residences in the exclusive and luxurious Albany Bahamas complex, including the penthouse where Bankman-Fried lives with executives. conduct his subordinates. Bankman-Fried declined to comment on the company’s spending.
According to one employee, the perks enjoyed by employees of the exchange include round-the-clock food service at the office in the Bahamas, “ in addition to the free groceries, there is also a barber shop and a barber shop. – away every two weeks .
The company also provides its Bahamas employees with “full cars and gas for all employees and unlimited, all-expenses-paid trips to any office globally,” employees said. this added. Employees at FTX US, their separate branch for the US market, are given $200 a day in DoorDash food delivery credits.
Alameda Research, a crypto hedge fund founded by Bankman-Fried, also owes Margaritaville Beach Resort in Nassau $55,319, according to bankruptcy filings this week. Reportedly, a glass of avocado at one of the resort’s bars costs 13 USD.
Bankruptcy filings describe a messy costing system. “ FTX employees submitted payment requests through an online ‘chat’ platform, where a different group of supervisors approved disbursements by responding with icons, ” Ray said. emotions ”.
Bankruptcy filings also show that Bankman-Fried companies also extended loans to executives. His trading firm Alameda Research lent $1 billion to Bankman-Fried, $543 million to chief technical officer Nishad Singh and $55 million to Ryan Salame, co-CEO of FTX Digital Markets, a subsidiary of FTX Digital Markets. in the Bahamas.
Salame, in addition to his role at FTX, purchased four local restaurants in the western Massachusetts town of Lenox, near where he grew up, including Olde Heritage Tavern and Sweet Dreams bakery.
Sam Trabucco, the former co-CEO of Alameda, bought a boat shortly before stepping down in August, just months before the company collapsed. He named the boat “Soak my Decks”.
The status of “young group” brought FTX to the brink of collapse
The son of two Stanford law professors, Bankman-Fried took up a job as a Jane Street trader after graduating with a degree in physics from MIT. He then left to work briefly at the Center for Effective Altruism, a charitable initiative.
But Bankman-Fried was quickly intrigued by the arbitrage on the various crypto exchanges in Asia. He made his first million by taking advantage of this inefficiencies through his own trading company, Alameda Research. Then he founded FTX.
Former employees describe “SBF” as an object of loyalty that is cult in the company: “ Everybody who works at FTX is obsessed and I think that makes sense. He is young, has revolutionary principles, golden ideas. He is the richest 29-30 year old man on Earth .
FTX’s chief technology officer and second-largest shareholder Gary Wang and Bankman-Fried first met at high school math camp and continued their friendship as roommates at MIT.
One former employee said they “have their own language”. Wang is an isolated character, but a good programmer. “ Gary definitely has access to all things technology ,” said one former employee, adding: “ Gary will start most of the new projects on his own… He doesn’t hold the management job .”
Singh graduated from the University of California, Berkeley and worked at Facebook before joining Alameda Research as a director of engineering.
He became an important member of Bankman-Fried’s inner circle because, according to former employees, he controlled the majority of the company’s tokens. In a blog post, Bankman-Fried said he met Singh because the young programmer was his brother’s high school friend. He is “super productive and always coding. Very sociable and friendly, everyone loves him,” said a former employee.
A Stanford graduate, Ellison met Bankman-Fried at Jane Street before joining Alameda. Her co-CEO, Sam Trabucco, in April said Ellison is responsible for running Alameda’s systems, while Trabucco leads trading strategy. Former employees said Ellison and Bankman-Fried had been romantically involved for the past eight months.
Source: Financial Times
Source : Genk