FTX secretly gave $17.5m to Aussie crypto influencer

[TomPluz]

You can read more this another FTX saga story here.

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.

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.

[ABCbits]

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.

[hugeblack]

$13 million is not a small amount that is paid to try to avoid bad reputation, so I tried to search a little and discovered that the name of that influencer is Alex Saunders, and it seems that the goal is to settle debts with creditors, as Saunders squandered the creditors’ money in trading FTX.com, and there are also transactions in transactions. Acquisition.


Overall more details here ------> https://news.bitcoin.com/ftx-loaned-millions-to-australian-influencer-to-ward-off-potential-litigation-bankruptcy-report-reveals/

[Zed0X]

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.

[Captain Corporate]

Influencer as a job has always been a little confusing to me because it is usually not tangible. I get it when one person has a lot of followers and they use it for affiliate marketing, because that actually does provide a proof, you just provide a link, and if anyone buys anything from your link then you get a cut. But aside from that, just to share stuff and what not? Thats not really something we can calculate, and people end up paying THIS much money? That makes absolutely no sense to me at all, it is totally weird and definitely should be avoided at all costs, FTX was a mismanaged company, so I am not shocked by this news.

[hugeblack]

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.

From what I understand, this money was wasted in FTX and therefore FTX borrowed from itself to pay money to third parties to buy reputation or obtain more licenses.
In short, Saunders is part of FTX's involvement in the misuse of client funds, but those following the case may give you more precise details.

[Freemind]

And this is probably just one of the many cases that we still don't know about... In every new news related to FTX we see the “ways” to use the funds in different ways. Trying to buy a better reputation for a brand not only shows how little confidence the founders of fTX had in themselves, but also shows how easy it is with "a little" money to build a "tailored" reputation. After seeing things like this I remember those affected by the FTX drama, after seeing the disaster that FTX was from day one. I hope they are not forgotten and compensated as much as possible.

[Faisal2202]

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.

Aren't the creditors were FTX itself? Sorry if my question is dumb. Overall, as I heard FTX has announced that they are going to refund people's money back as they have enough funds to cover all of there losses. I don't know when but they said by themselves. Besides I hope we won't be seeing such events again as there are good exchanges in the market which have proved themselves worthy of trust.

[yhiaali3]

Why am I not surprised? Every day I expect to hear a new story about the ins and outs of FTX, this is certainly one of hundreds of stories that demonstrate the extent of the corruption that Sam Bankman was driving at a time when he seemed like a bright clean star in the Crypto sky.

It will certainly not be the last chapter of FTX's dirty, hidden secrets that will emerge successively as the days go by. There was someone trying to make a documentary about FTX, and I expect that if he is serious, he will achieve great success and get many exciting stories and hidden secrets with those close to Sam and his companions. .

[NotATether]

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.

It would not surprise me one bit if Sam Bankman-Fraud loaned millions of dollars more to other crypto influencers to mitigate negative press.

Well, in the end, the negative press was always going to bite them in the arse anyway. They went billions of dollars under and received an almighty fall from publicity.

Hope he is enjoying jail.

[Stompix]

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 

[NotATether]

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.

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?

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 

So FTX technically had not lost any money from loaning to this guy, but only future profit.

[Faisal2202]

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.

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.

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.

[Aanuoluwatofunmi]

Now they can call for the whales as lenders on top of their scam while others who have little deposits of their assets with them should be the ones to pay for the consequences all in the name of protecting the image of their affluence at the cause of the scam, this made me on the thinking of something else, whether some of these scams were even orchestrated by the political leaders or whales investors on their platform as things were going like this, we can't trust anyone regarding all these event than what we read on the news.

[Stompix]

~

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?

Since they didn't lose money on the move they received like this probably:
- loan the guy money, and maybe he will pay back so the balance will be positive again
- the news would not really damage FTX reputation, but it would hinder a lot of new customers from throwing money at it

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.