Court filings show FTX spent $40M on food, airfare, and accommodations in 9 months
January 9, 2023 7:15 AM
According to the filings in this case, FTX did not try to save money on business expenses while operating in the Bahamas.
Court documents revealed that in the nine months leading up to the collapse of the FTX exchange, the Bahamian business behind the exchange spent an unbelievable amount of money on things like flights, hotels, and meals.
Business Insider studied bankruptcy court filings, which revealed that FTX Digital Markets burned through $40 million between January and September 2022, just two months before filing for bankruptcy due to cash flow problems.
The Albany Hotel alone raked in $5.8 million of the total $15.2 million spent on high-end hotels and lodgings. The story says that Sam Bankman-Fried was living in the $30 million penthouse of this five-star resort before he was caught.
The Grand Hyatt, a four-star hotel, cost almost $3.6 million to decorate for a visit by the British monarchy in March 2022. The five-star Rosewood resort was also a major expense, accounting for $800,000.
There was also about $7 million spent on food and entertainment, with catering accounting for roughly half of the total. Flights cost about $4 million, while shipping and mailing cost over $500,000 combined.
Since the big online store wouldn't deliver to the Bahamas, FTX is said to have made a deal with a private airline to send packages from a Miami depot.
The company also "offered a full suite of automobiles and gas covered for all employees [and] unlimited, full expense-covered journeys to any office abroad," according to the Financial Times.
A worker who left the company in December 2022 and told others about the wasteful spending said it was "cult-like." She remarked at the time, "The whole operation was iconically and mononically inept."
FTX has also generously supported many Bahamian non-profits through monetary and in-kind contributions.
Local news sources said on January 8 that there has been talk about returning some of these donations as the Caribbean island nation tries to move forward.
On January 3 in the U.S. District Court for the Southern District of New York, Bankman-Fried pleaded not guilty to eight felony allegations.