The Democratic darling whose FTX crypto currency exchange collapsed this week amid reports of up to $2 billion in missing customer funds, was spotted Saturday in the Bahamas.
FTX underwent a $16 billion implosion amid reports that co-founder Sam Bankman-Fried had been funneling money to a sister trading company run by his girlfriend.
Bankman-Fried, 30, who has donated a reported $50 million to Democrats since 2020, told Reuters he was in the Caribbean, where FTX is headquartered — while a source said the disgraced CEO and his father were spotted hunkering down with cops and federal regulators Saturday.
Crypto experts on Twitter Saturday warned FTX account holders who have linked their FTX accounts to their bank accounts to change their bank account passwords immediately because the accounts may be vulnerable to hacking.
Bankman-Fried, known in the industry as “SBF,” secretly funneled $10 billion of customer funds into his trading company, Alameda Research, it was revealed Friday. Alameda Research is run by Bankman-Fried’s girlfriend, Caroline Ellison.
Two senior FTX officials claimed they saw the evidence that the money was missing in copies of financial records Bankman-Fried shared with company executives last week, according to Reuters.
FTX officials have claimed $473 million of its funds were stolen in a hack Friday night, and that they are working with regulators to find out what happened.
Bankman-Fried lives in a high-rise apartment in Nassau with about 12 other roommates who Coindesk reported Friday were more than instrumental in his business.
“The whole operation was run by a gang of kids in the Bahamas,” a source told the outlet.
“We’re on the edge of our seats, it seems like there’s a new bombshell dropping every hour,” cryptocurrency pioneer and billionaire Brock Pierce told The Post from his home in Puerto Rico.
“I don’t know if he’s the Madoff of this generation or the Enron of this generation but a ton of people are very shocked and upset and didn’t see this coming. It’s going to have a terrible impact on the market as well as for customers of FTX who probably will be lucky to get even a small portion of their money back — and that won’t be for another four or five years at best.”
Bankman-Fried was the second biggest donor to the Democratic party last year. He is the son of two well-connected professors at Stanford University School of Law.
His mother, Barbara Fried, and two Stanford colleagues are the co-founders of “Mind the Gap,” which Vox called a “secretive Silicon Valley PAC” known for its stealth-style of quickly gathering donations over a short period of time “to prevent Republicans from mobilizing their own donors in response.” She also co-founded the controversial get-out-the-vote organization the Center for Voter Information.
But Bankman-Fried may not have been motivated by politics.
“At this point it looks like Sam was doing all this virtue signaling to hide what he was really up to,” Pierce said. “His political contributions to the Democratic Party and all his philanthropy were about making himself look good and buying protection for what looks to pretty much everyone as a clear-cut case of fraud.”
Vivek Ramaswamy, the entrepreneur and author of “Woke Inc.: Inside Corporate America’s Social Justice Scam,” said nothing about the demise of FTX and Bankman-Fried’s alleged skulduggery was a shock to him.
“Everything that everyone finds surprising about this situation is not surprising at all, and dates back to the 2008 financial crisis,” he told The Post on Saturday. “This is another case of self-interested actors using the appearance of virtue to deflect from things they’d rather not be questioned about. It’s about masquerading as this great moral person being a large donor to the so-called good guys and calling for greater regulation in the industry at the same time. It’s like tampering with the smoke detector in the airplane lavatory so you can still smoke.”
The FTX fiasco comes less than two weeks after the mysterious death of pioneering cryptocurrency developer Nikolai Mushegian, who apparently drowned in the surf near his San Juan, Puerto Rico home on Oct. 28.
Mushegian’s body was spotted by surfers a few hours after he tweeted that the “CIA and Mossad” planned to murder him. Mushegian was a leader in so-called “DeFi” or decentralized finance, which has safeguards in place to prevent fraud. FTX was a centralized financial exchange.