The complaint, which was filed with the United States Bankruptcy Court on Thursday, named Bankman-Fried, FTX co-founder Gary Wang, former engineering director Nishad Singh as defendants, along with Caroline Ellison, former CEO of Alameda Research.
It alleges that SBF and his inner circle “abused their control over the FTX Group to commit one of the largest financial frauds in history,” and says they “misappropriated Debtor funds on a continuous basis to finance luxury condominiums, political and ‘charitable’ contributions, speculative investments and other pet projects that inured to the benefit of Defendants rather than the Debtor entities that paid for them.
The filing also alleges that the defendants gave themselves over $725 million in equity “without [debtors] receiving any value in exchange,” and claims that Bankman-Fried and Wang misappropriated an additional $546 million in customer funds to purchase Robinhood shares, which have been the subject of separate legal wranglings.
In April, the new FTX management team led by John Ray issued their long-awaited interim report on the state of the exchange and Alameda Research, describing failures in critical areas including “management and governance, finance and accounting, as well as digital asset management, information security and cybersecurity.”
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