The Wall Street Journal reports that during a funding round that raised $420 million for the cryptocurrency exchange FTX, almost three-quarters of the money went directly to founder and Democrat super donor Sam Bankman-Fried.
The Wall Street Journal reports that in October 2018, FTX raised $420 million from a range of well-known investors in order to improve user experience, increase the firm’s reach, and establish a better relationship with regulators.
The Wall Street Journal reviewed FTX financial records and spoke with people familiar with the transaction to learn that nearly three-quarters of the money raised, $300 million, went to Sam Bankman-Fried, the founder of the exchange.
According to people familiar with the matter, Mr. Bankman-Fried’s cashout was large even by Silicon Valley startup-world standards, where such sales were historically considered unacceptable as they allowed founders to profit before investors. According to Bankman-Fried, he bought out rival Binance’s stake in FTX a few months prior to the transaction and reimbursed investors part of the money he had spent.
The agreement provides an insight into how funds were transferred between Bankman-Fried and the numerous companies he oversaw while the cryptocurrency exchange grew. Bankman-Fried used his various companies as a funding stream that provided the money for a number of philanthropic donations and political donations to democrats as well as the purchase of shares in the stock trading platform Robinhood Markets Inc.
Now, Bankman-Fried’s business dealings are under scrutiny as part of the bankruptcy of FTX and his investment firm Alameda Research. FTX, which allegedly lent customer funds to Alameda, is now facing a funding gap of approximately $8 billion according to FTX’s new CEO John Ray.
Ray said that the process would involve the “comprehensive, transparent and deliberate investigation into claims against Mr. Samuel Bankman-Fried” and other cofounders of his companies.
Ray said that the bankruptcy filing highlighted “the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals.”
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan
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