Disgraced former FTX CEO Sam Bankman-Fried’s lawyers claimed on Tuesday that the failed digital currency exchange’s investments were not “reckless” even as FTX employees expressed concerns about buying a $30 million penthouse in the Bahamas.
Nishad Singh, a former FTX employee, testified that he was worried that the company’s deal with K5, a company dedicated to promoting relationships with celebrities, would prove “toxic” to FTX’s culture.
Bankman-Fried’s lawyers said, “Yesterday (Monday) we were told these were all reckless and frivolous investments, and I’m entitled to show that there was way more to it than we were told yesterday.”
Caroline Ellison, former chief executive officer of Alameda Research LLC, exits court in New York, US, on Tuesday, Oct. 10, 2023. Former FTX Co-Founder Sam Bankman-Fried is charged with seven counts of fraud and money laundering following the collapse of his cryptocurrency empire last year. Photographer: Yuki Iwamura/Bloomberg
Singh said that K5 had helped Bankman-Fried use $214 million in FTX funds to buy a stake in Kendall Jenner’s 818 Tequila brand when the alocholic beverage company’s assets were valued at just $2.94 million.
After FTX relocated to the Bahamas, a “substantial disagreement” occurred over where to live:
Some were opposed to the penthouse, which occupied the top floor of the Orchid building of the Albany, a luxury resort in a secluded corner of the Bahamas. As adherents to effective altruism—which espouses maximizing a person’s impact, often through charitable giving—they were concerned about the penthouse’s extravagant price tag and “ostentatious” appearance, according to Singh.Bankman-Fried, however, was a fan. “Sam is a fan of views,” Singh testified. “He said he would pay $100 million for the drama to be done with.” Ten of them ended up moving into the apartment, with its panoramic vistas of the Albany’s marina. Bankman-Fried ultimately moved out after breaking up with one of the housemates, Caroline Ellison—also the CEO of his trading firm, Alameda Research. [Emphasis added]
Bankman-Fried stands accused of seven counts of fraud, conspiracy, and money laundering on his alleged use of FTX customer funds to cover the losses of his hedge fund, Alameda Research. He also allegedly used those funds to purchase real estate and cover other personal expenses. Bankman-Fried pled not guilty to all counts and faces up to 110 years in prison.
Sean Moran is a policy reporter for Breitbart News. Follow him on Twitter @SeanMoran3.