Bankman-Fried's brother wanted to buy Nauru island with FTX clients' money
Ex-FTX CEO Bankman-Fried's brother wanted to buy the island of Nauru with crypto exchange clients' money
Sam Bankman-Fried is using money previously transferred to his father to fund his criminal defense
Gabriel, the younger brother of former FTX crypto exchange CEO Sam Bankman-Fried, planned to buy the island of Nauru with money from the platform's clients, The Block reported, citing court documents.
The goal of the purchase was to turn the island into a "post-apocalyptic haven for believers in effective altruism." Gabriel also wanted to create a testing ground for human genetics experiments and "other things that are useful to do in a sovereign country," the publication writes.
Before the collapse of FTX, Sam Bankman-Fried sponsored political and social programs, often with his brother Gabriel, a former Democratic Party staffer and founder of the human rights organization Guardian Against Pandemics (GAP).
According to The New York Times, GAP raised more than $22 million in its first year of operation in 2021, with most of the money coming from Sam Bankman-Fried. The lawsuit alleges that Sam Bankman-Fried funneled at least $35 million to GAP, with the lion's share coming from the accounts of the exchange's related fund, Alameda Research, containing client funds.
According to FTX Group lawyers, Bankman-Fried also transferred $10 million of the cryptocurrency exchange's funds to his personal account on the platform, and minutes later sent that money to his father's account. Bankman-Fried's father Joseph, a Stanford University law professor then sent nearly $7 million to his personal accounts at Morgan Stanley and TD Ameritrade.
The company's lawyers claim that Bankman-Fried is now using the funds he wired to his father to fund his criminal defense.
FTX is suing Bankman-Fried and other former executives of the crypto exchange to recover $1 billion, saying in the lawsuit that executives allegedly misappropriated the funds before the crypto exchange filed for bankruptcy.
The FTX crypto exchange also demanded the return of $71.5 million from charitable programs. Some of the money was received by Latona under the guise of "investments and donations to life science organizations."
FTX Group's bankruptcy proceedings have been ongoing for several months. Under new management, the company began pursuing recoveries from recipients of donations from Bankman-Fried and his former colleagues as early as late December 2022. The company said that if the previously transferred funds are not returned voluntarily, FTX representatives will go to court to demand the return of not only the money itself but also interest on it, which will accrue from the date of filing the documents with the court.
In June, FTX's new management recovered $7 billion of the exchange's liquid assets. The crypto platform's former management had used customer funds at will since its inception, court documents alleged.
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