FTX CEO reportedly cashed out $300 million in the previous funding round

    20 Nov 2022

    In a previously undisclosed detail, former FTX CEO Sam Bankman-Fried personally received $300 million from a $420 million funding round for the company in October 2021, Wall Street Journal reported. Meanwhile, major companies and funds are losing millions of investments stuck in FTX after the troubled crypto exchange filed for bankruptcy protection.

    According to the WSJ report, the arrangement was previously undisclosed, with Bankman-Fried telling investors at the time it was partially to reimburse him for money he’d spent to buy out Binance’s stake in FTX a few months earlier.

    In July 2021, Bankman-Fried bought out about 15% of FTX owned by Binance, which was FTX’s first investor. Binance CEO Changpeng “CZ” Zhao tweeted this month that the amount of the buyout was $2.1 billion in Binance’s stablecoin BUSD and FTX’s exchange token FTT.

    The October 2021 funding round valued FTX at $25 billion and raised money from financial heavyweights such as BlackRock, Tiger Global, Singapore’s sovereign wealth fund Temasek and Sequoia Capital. A few months later, some of those same investors helped raise $400 million for FTX’s US subsidiary at an $8 billion valuation.

    Meanwhile, Genesis Block HK, a crypto over-the-counter (OTC) trading firm based in Hong Kong, has funds stuck in the now-bankrupt FTX, two sources familiar with the matter told The Block.

    The exposure is worth more than $50 million, the sources said. The impact is significant enough that Genesis Block is shutting down its OTC business on Dec. 10, according to an email from Genesis Block sent to its customers.

    Also, Ontario Teachers’, one of Canada’s largest pension funds with nearly $250 billion in assets under management, will write down the entirety of its $95 million investment in FTX after the troubled crypto exchange filed for bankruptcy protection. However, the investment in FTX represented less than 0.05% of the fund’s total net assets.

    According to a statement, the fund said it invested $75 million in FTX International and its American entity FTX.US in October 2021, and then another $20 million in FTX.US in January 2022. The investments were made through Teachers’ Venture Growth (TVG) platform and represented less than 0.05% of the fund’s total net assets, the statement added.

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