The attorney representing FTX US in its Chapter 11 bankruptcy case revealed in court yesterday that an FTX entity in the US bought almost $300 million in real estate in The Bahamas, mainly homes and vacation properties used by senior executives.
“There were substantial amounts of money spent on things that were not related to the business,” James Bromley, the proposed co-council for the debtors, said in a Delaware court.
FTX Trading and 134 affiliates (the debtors) filed for Chapter 11 bankruptcy in the US on November 11. FTX Digital Markets, which was incorporated and based in The Bahamas, was not a part of that filing. FTX is a cryptocurrency exchange with a presence in over 20 countries and employed more than 500 people. Over one million people were affected by its collapsed and it owes more than $3 billion to its top 50 creditors.
Bromley said, “For instance, one of the US debtors is an entity that purchased almost $300 million worth of real estate in The Bahamas. Based on preliminary investigations, most of those real estate purchases relate to homes and vacation properties that were used by its senior executives of the company.”
Bromley was speaking on asset recovery when he made mention of the properties purchased in The Bahamas.
The Nassau Guardian was able to track $130 million of those purchases.
A search of records at the Office of the Registrar General yesterday showed that Bahamas-headquartered FTX, its former CEO Sam Bankman-Fried and other company associates spent more than $130 million on real estate in The Bahamas since 2020.
More than $80 million was spent on 18 properties in the luxurious Albany community on western New Providence.
All of the conveyances seen by The Nassau Guardian for FTX Property Holdings were carried out by Clement Maynard & Co.
In court yesterday, Bromley said the collapse of FTX is “unprecedented”.
“As I mentioned earlier, unprecedented is the word of the day,” he said.
“The crypto crisis that we are facing in the US and around the world is well documented. But, the FTX situation is both the latest and the largest failure in this space.
“Beginning in the first week of November there was effectively a run on the bank with respect to FTX, both with respect to the international exchange, which was operated under the brand name FTX.com as well as the US exchange which was operated under the brand name FTX US.
“At the same time that the run on the bank occurred, there was a leadership crisis.
“As I will describe in a moment, the FTX companies were controlled by a very small group of people led by Mr. Sam Bankman-Fried. During the run on the bank, Mr. Fried’s leadership frayed and that lead to resignations throughout the ranks.”
He said FTX, which experienced a $400 million hack days after filing for bankruptcy, continues to be hacked.
“Those running FTX understand the concern and the outrage as to what has happened,” he said.
“We are working day and night to bring order to disorder.”
