FTX founder Sam Bankman-Fried ran the cryptocurrency exchange as his “personal fiefdom” before its implosion, according to a lawyer working on the bankruptcy, with “substantial amounts of money” spent on items unrelated to the business such as vacation homes in the Bahamas.
“We have witnessed one of the most abrupt and difficult collapses in the history of corporate America,” James Bromley of Sullivan & Cromwell told a US court on Tuesday. He added that bankruptcy proceedings had “allowed everyone for the first time to see under the covers and recognise the emperor had no clothes”.
FTX filed for US bankruptcy protection on November 11 as its customers fled and executives discovered billions of dollars in missing funds, exacerbating turmoil in cryptocurrency markets.