A major Democrat donor is facing criminal charges after blowing billions of dollars in clients’ money.
Sam Bankman-Fried, one of the year’s biggest Democratic Party donors, imploded after Election Day and has been accused of losing his client money by blasting it on risky bets.
He is now in a rush to raise money to avoid bankruptcy and possible criminal charges.
Bankman-Fried’s cryptocurrency exchange FTX was valued at $32 billion in January.
Now it is worth next to nothing.
However, Democrats massively benefited from Bankman-Fried’s illegal mishandling of client money.
The 30-year-old donated over $5 million to Joe Biden’s campaign in 2020.
During this year’s midterms elections cycle, Bankman-Fried was the second-largest Democratic Party donor behind George Soros.
“Some Democrats see Bankman-Fried’s investments and engagement as the thing that could help them hold back a red midterm wave,” Politico said in August about the Dem’s new hero.
According to The Wall Street Journal:
“Crypto exchange FTX lent billions of dollars worth of customer assets to fund risky bets by its affiliated trading firm, Alameda Research, setting the stage for the exchange’s implosion, a person familiar with the matter said.
“FTX Chief Executive Sam Bankman-Fried told an investor this week that Alameda owes FTX about $10 billion, the person said.
“FTX extended loans to Alameda using money that customers had deposited on the exchange for trading purposes, a decision that Mr. Bankman-Fried described as a poor judgment call, according to the person.”
Crypto exchange FTX lent billions of dollars worth of customer assets to fund bets by its affiliated trading firm, according to a person familiar with the matter https://t.co/p75H9EOySa
— Whole Mars Catalog (@WholeMarsBlog) November 10, 2022
Bankman-Fried came clean today on Twitter:
“I’m sorry. That’s the biggest thing.
“I f*cked up, and should have done better.
“FTX International currently has a total market value of assets/collateral higher than client deposits (moves with prices!).
“But that’s different from liquidity for delivery–as you can tell from the state of withdrawals.
“The liquidity varies widely, from very to very little.
“The full story here is one I’m still fleshing out every detail of, but as a very high level, I f*cked up twice.
“The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users’ margin.
“I thought it was way lower.
“So, right now, we’re spending the week doing everything we can to raise liquidity.
“I can’t make any promises about that.
“But I’m going to try,” he said.
“And give anything I have to if that will make it work.
“There are a number of players who we are in talks with, LOIs, term sheets, etc.
“We’ll see how that ends up.
“Every penny of that–and of the existing collateral–will go straight to users, unless or until we’ve done right by them.
“After that, investors–old and new–and employees who have fought for what’s right for their career, and who weren’t responsible for any of the f*ck ups.”
Crypto exchange FTX lent billions of dollars worth of customer assets to fund bets by its affiliated trading firm, according to a person familiar with the matter https://t.co/p75H9EOySa
— Whole Mars Catalog (@WholeMarsBlog) November 10, 2022
10) So, right now, we’re spending the week doing everything we can to raise liquidity.
I can’t make any promises about that. But I’m going to try. And give anything I have to if that will make it work.
— SBF (@SBF_FTX) November 10, 2022
