SBF defends real estate spree

Says Bahamas properties were for top Silicon Valley employees

FTX’s reported $300 million investment in Bahamian real estate was the company’s bid to attract top talent from Silicon Valley to The Bahamas, former FTX CEO Sam Bankman-Fried said yesterday.

Bankman-Fried, who lost his multibillion-dollar fortune last month after his company was put into liquidation and later filed for bankruptcy in the US, gave a wide-ranging interview with the New York Times’ DealBook Summit with Andrew Ross Sorkin.

Sorkin asked Bankman-Fried, also known as SBF, about properties purchased in The Bahamas by FTX and by his parents.

FTX, which established its headquarters in The Bahamas last September, purchased over $300 million in property in The Bahamas, according to reports.

“I don’t know the details about the house for my parents but I know that it was not intended to be their long-term property,” Bankman-Fried said over video.

“I know it was intended to be the company’s property. I don’t know how that was papered in. I think that was where it was and will end up. I think they may have stayed there while working with the company sometime over the last year.

“When you look at the rest of it, there were a lot of property purchases in The Bahamas.

“The reason for that is we had basically 100 top Silicon Valley employees come down here to work for FTX and we were trying to incentivize that to make sure they had an easy way to find a comfortable life, so that they would be willing to move and help build out the product.

“So, those hundred people put together here did end up buying a substantial amount of property. I feel bad about how those investments may turn out for them.”

During the first-day hearing for FTX’s Chapter 11 bankruptcy case in Delaware last week, James Bromley, co-council for the debtors, said, “… 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.”

The Nassau Guardian was able to track $130 million of those purchases.

A search of records at the Office of the Registrar General showed that FTX, 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 in western New Providence.

All of the conveyances seen by The Nassau Guardian for FTX Property Holdings were carried out by Clement Maynard & Co.

Sorkin also asked Bankman-Fried, “The Bahamian authorities have now admitted that they ordered the transfer of certain FTX assets to wallets under their control after the US bankruptcy was filed. Did you help them with that? Did you discuss that with them?”

Bankman-Fried said, “So, I can’t discuss specifics.

“I will note that prior to Chapter 11 being filed, the Bahamian authorities had placed FTX Digital Markets (FDM), the Bahamian entity, which is the primary operating entity of FTX International, under supervision of a JPL [joint provisional liquidator] system in The Bahamas with oversight of the Securities Commission of The Bahamas and were to my knowledge taking actions to protect FDM’s clients and customers there.”

On November 10, the SCB froze FDM’s assets and applied to the Supreme Court to have the company put into liquidation and the appointment of joint provisional liquidators.

Bankman-Fried, 30, who said he is down to one working credit card and about $100,000 in his bank account, said he is still in The Bahamas.

Asked if he feels he can’t leave the country, Bankman-Fried said, “No.

“I’m in The Bahamas and I have been in The Bahamas for the last year.

“I’ve been running FTX from The Bahamas. I’ve been running FDM, our primary operating entity down here, with Bahamian regulators and others in contact. Right now, I’m looking to be helpful with any of the global entities that would want my help.”

FTX, which has over 100 companies in over 20 countries, collapsed following a “run on the bank”.

Binance CEO Changpeng Zhao, who heads the world’s largest crypto exchange, tweeted earlier last month that he was pulling out of FTX due to recent revelations that came to light.

Questions began circulating in early November over whether FTX improperly used customer funds to prop up Alameda Research, a hedge fund owned by Bankman-Fried.

Bankman-Fried said that he did not “knowingly” co-mingle funds between FTX and Alameda.

Officials said the impact of Zhao’s announcement was swift and more than $5 billion of withdrawal requests were made to FTX.

FTX was unable to process the requests because it did not have the money.

Officials have said in court documents that there is evidence of fraud and mismanagement at FTX. FTX has over 100 companies in over 20 countries.

It lost between $10 billion and $50 billion, court documents show.

Bankman-Fried also said yesterday that as far as he knows, FTX’s US entities are solvent and can make those customers whole.

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Travis Cartwright-Carroll

Travis Cartwright-Carroll is the assistant editor. He covers a wide range of national issues. He joined The Nassau Guardian in 2011 as a copy editor before shifting to reporting. He was promoted to assistant news editor in December 2018.

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