The mysterious source of $17.5 million given to an Australian cryptocurrency influencer who owed millions of dollars to investors has been quietly revealed in a report filed to a Delaware court.
The report states Saunders was loaned US$13.2 million (A$17.5 million at the time) through a Cayman Islands company, 707,016 Ltd., which was set up on behalf of FTX in July 2021. The loan was “to pay off the creditors of Alex Saunders” after he “used borrowed funds to trade on FTX.com, but lost the funds that he traded”. FTX had loaned this significant sum to “avoid negative publicity”, “mitigate reputation harm” and “avoid potential litigation”, Cleary wrote.
Saunders has yet to pay back this loan, according to the report. Saunders wrote on X in 2023 that he was “still waiting on emails from a couple more” but otherwise had paid everyone back.
The report states Saunders was loaned US$13.2 million (A$17.5 million at the time) through a Cayman Islands company, 707,016 Ltd., which was set up on behalf of FTX in July 2021. The loan was “to pay off the creditors of Alex Saunders” after he “used borrowed funds to trade on FTX.com, but lost the funds that he traded”. FTX had loaned this significant sum to “avoid negative publicity”, “mitigate reputation harm” and “avoid potential litigation”, Cleary wrote.
Eh? I don't get why FTX would intervene to save someone's reputation and help payoff his creditors. Anyway, it's a stupid decision unless Saunders has some real dirt on FTX or SBF during that time and he used it to blackmail them.
This story is another clear indication of how bad was the management of funds in FTX under the helm of Sam Bankman-Fried. How can you loan to just another because the guy happened to be an influencer who had proven himself to be another bad fund manager? Surely, just because Sam or someone in his management just like Alex Saunders and the many things he was then doing, he was then granted such millions of money and now that this already exposed then the guy has to get the money back to where they belong so the money can then be distributed to FTX victims. Now, am sure there will be more details of revelations coming on how Sam squandered the money in FTX and how he was then operating like without a rudder while pretending to the world that he was the next big thing in the world of cryptocurrency business. We were then fooled but sadly this is not going to be the last story along this line as there can be more coming in the years ahead.So to avoid a bad reputation they gave a loan to a person who took a loan from a company that was in control of FTX and the influencer lost all the funds on the FTX exchange via trading or via that fud. And to give the creditor's debt back FTX gave him more money! It's really confusing to understand like first you said he (the influencer) took a loan via a company owned by FTX and then lost those funds and to pay the creditors back FTX gave him more money.
Quote from: https://www.crikey.com.au/2024/06/05/ftx-secret-payment-alex-saunders-australia-cryptocurrency-17-5m/The report states Saunders was loaned US$13.2 million (A$17.5 million at the time) through a Cayman Islands company, 707,016 Ltd., which was set up on behalf of FTX in July 2021. The loan was “to pay off the creditors of Alex Saunders” after he “used borrowed funds to trade on FTX.com, but lost the funds that he traded”. FTX had loaned this significant sum to “avoid negative publicity”, “mitigate reputation harm” and “avoid potential litigation”, Cleary wrote.
Interesting, FTX used to care about reputation so much that $13.2 million seen as acceptable cost. Although i wonder whether FTX asked for high rate back then.
So to avoid a bad reputation they gave a loan to a person who took a loan from a company that was in control of FTX and the influencer lost all the funds on the FTX exchange via trading or via that fud. And to give the creditor's debt back FTX gave him more money! It's really confusing to understand like first you said he (the influencer) took a loan via a company owned by FTX and then lost those funds and to pay the creditors back FTX gave him more money.
Aren't the creditors were FTX itself?
Interesting, FTX used to care about reputation so much that $13.2 million seen as acceptable cost. Although i wonder whether FTX asked for high rate back then.
So to avoid a bad reputation they gave a loan to a person who took a loan from a company that was in control of FTX and the influencer lost all the funds on the FTX exchange via trading or via that fud. And to give the creditor's debt back FTX gave him more money! It's really confusing to understand like first you said he (the influencer) took a loan via a company owned by FTX and then lost those funds and to pay the creditors back FTX gave him more money.
Aren't the creditors were FTX itself?
No!
Alex Saunders used borrowed money from his own investors to trade on FTX and lost it all.
FTX through a subsidiary loaned Alex Saunders the money to pay back his investors to avoid the bad publicity that would label them as an exchange where investors lost millions.
Interesting, FTX used to care about reputation so much that $13.2 million seen as acceptable cost. Although i wonder whether FTX asked for high rate back then.
Let's not forget that FTX made that money from this guy's stupidity first as he lost those millions on trading on FTX ;)
No!Okay, this is easy to understand, Thanks. I also understood this way but due to some words, I got confused. Well, if FTX loaned Alex so he could give the money back to his investors that he rekt on FTX exchange, is a bit odd. I mean what about other users who lost their funds due to FTX mismanagement. BTW I came to remember they can't even able to suppress this info.
Alex Saunders used borrowed money from his own investors to trade on FTX and lost it all.
FTX through a subsidiary loaned Alex Saunders the money to pay back his investors to avoid the bad publicity that would label them as an exchange where investors lost millions.
~
Despite my comment above, I don't see how journalists would be stupid enough to label it as FTX's fault that some crypto bro lost all his money trading other people's money. Wouldn't they all roast the guy instead?
I mean if they wanted to save themselves from a bad reputation by giving a loan to Alex so he would return his investors back, they are still failed to do that. This should be done under the table that no one would have known but now the whole world knows. Haha, They really bad at managing things, they need some good managerial experts.
I disagree, they paid him in 2021, it's 2024 and we have heard this only because their papers are under examination from the bankruptcy court, so they did manage to hide it pretty well.Oh okay, I did not check the dates of the loan taken, I thought it occurred recently, as according to my knowledge FTX went bankrupt in 2022 then how can FTX pay/borrow Aussie (the crypto influencer) money before 2022. I checked the data it was almost in November I think. I think Aussie took the loan in 2021 and after the exchange went bankrupt in 2022, then after that event.
They really bad at managing things, they need some good managerial experts.Quick question, can Sam's sentencing worsen if more dirts on his activities in FTX are uncovered?
Quick question, can Sam's sentencing worsen if more dirts on his activities in FTX are uncovered?
They really bad at managing things, they need some good managerial experts.Quick question, can Sam's sentencing worsen if more dirts on his activities in FTX are uncovered?
No, the decision has been handed already, not sure about it what you call that, but it could be "double jeopardy".
Conspiracy to commit wire fraud on customers
Wire fraud on customers
Conspiracy to commit wire fraud on lenders
Wire fraud on lenders
Conspiracy to commit commodities fraud
Conspiracy to commit securities fraud
Conspiracy to commit money laundering
You are right, the sentence has already been given and I also don't think they will add more just because he tried to solve the case under the table. I don't have much knowledge of law but I think it's not a big violation that needs to be punished. So I think the judges will pass it, but these types of acts can be useful for other parties to use it against him.They really bad at managing things, they need some good managerial experts.Quick question, can Sam's sentencing worsen if more dirts on his activities in FTX are uncovered?
No, the decision has been handed already, not sure about it what you call that, but it could be "double jeopardy". So he has to suffer what the judges gave to him. And it could be good if they unravel who's who in SBF payroll like this influencer and maybe someone will go after him because of this but who knows.
And the victims are waiting to be compensated with what the prosecutor can liquidate from SBF.