FTX bitcoin scandal money ALL OVER North Carolina politics

The FTX bitcoin “Case of the disappearing $2 billion” is just the kind of scandal Thom Tillis likes: bipartisan.  

We’re finding that SIX of the sixteen members of our congressional delegation (2 senators, 14 congress-critters) took money from the scandal-plagued company currently under investigation by the Bahamian authorities and our Feds.   The multi-billion dollar bitcoin trading exchange, based in the Bahamas, declared bankruptcy recently.  During that mess, it was discovered that about TWO BILLION DOLLARS of customer money is missing. AWOL. Unaccounted for.

Conveniently, all kinds of PACS and DC politicians raked in tons of dinero from folks tied to the beleaguered bitcoin company.

Thom Tillis:   A PAC tied to him raked in $700,000 from an FTX executive. The PAC was meant, in 2022, to be a weapon against Madison Cawthorn.

Richard Burr:  He got money from the company founder, who is at the center of the scandal.

Ted Budd:  The congressman and incoming senator also got some money from this FTX crowd.

Let’s look at the House of Representatives now.  Two newly-elected Democrats, Jeff Jackson and Valerie Foushee, got money from FTX sources.

Nishar Singh is (or was) a senior executive with FTX.  Bankman-Fried, of course, is the founder of the company.

Chuck Edwards:  Besides getting some benefit from the major donation by FTX to Tillis’s PAC, he also got an individual contribution from FTX’s CEO Ryan Salame.

People in the know about this scandal are saying that FTX will possibly be bigger and uglier than the Bernie Madoff affair or Enron fiasco.

How shady was this FTX?  Listen to their new CEO:

FTX suffered an “unprecedented” failure of control over billions in cash and cryptocurrency assets that has left current management scrambling to establish just how much money the bankrupt crypto platform has today, its new chief executive said.

FTX didn’t keep reliable books or track its crypto dealings and seemingly allowed the company’s resources to be used as a personal slush fund for management under the leadership of co-founder Sam Bankman-Fried, according to a sworn declaration filed in bankruptcy court on Thursday by the new CEO John J. Ray.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Mr. Ray, who took over as the new CEO last Friday, said in the court filing. […]

[…] Mr. Ray, who led the liquidation of Enron Corp.’s assets in the years after the company collapsed, painted a dire picture of a cryptocurrency giant that until recent weeks was touted as a potential savior for other companies struggling in a brutal downturn of digital assets.

He cited compromised systems integrity and faulty regulatory oversight among many issues. He said the problem lay in “the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals.”

Under Mr. Bankman-Fried, the former CEO, corporate funds were used to buy homes for employees in the Bahamas without any form of internal documentation, and Mr. Bankman-Fried often communicated decisions to his employees through messaging applications that auto-deleted his statements, according to the court filing.

Mr. Ray said he has no confidence in FTX’s financial statements because many weren’t audited and said the court shouldn’t rely on them to be accurate.

For example, Alameda Research LLC, which acted as a “crypto hedge fund” inside of FTX, reported assets of over $13 billion and liabilities of over $5 billion, Mr. Ray said. Among its assets, Alameda also lists a $1 billion direct loan to Mr. Bankman-Fried and a $543 million loan to co-founder Nishad Singh, the court filing shows.  

Failure to keep a record of board meetings and inadequate internal controls over cash management were also among “unacceptable management practices,” according to Mr. Ray.

Mr. Ray said FTX didn’t have an accurate list of bank accounts holding its cash. The company has asked that the court give it until January to submit financial statements detailing assets and liabilities.

The lack of oversight helped “conceal the misuse of customer funds” and the company kept little record over internal decision making, Mr. Ray added.

FTX so far has only secured roughly $740 million in cryptocurrency that belongs to FTX entities including Alameda Research, which is only “a fraction” of FTX’s digital assets that the company hopes to recover.

FTX’s new management is endeavoring to protect and recover assets, “a substantial portion of which may be missing or stolen,” and investigate claims against the company’s founders and third parties. Moreover, it plans to implement oversight and audit controls over the company’s business, Mr. Ray said.

Mr. Ray said he has brought on new independent directors for various FTX entities that will help provide “appropriate corporate governance for the first time.”

He has been “working around the clock” alongside advisers including Alvarez & Marsal, Sullivan & Cromwell LLP, Nardello & Co. to answer questions from regulators including the Securities and Exchange Commission, the Commodity Futures Trading Commission and the U.S. attorney’s office in the Southern District of New York. 

In his statement to the court, Mr. Ray describes a race to a U.S. bankruptcy filing that was precipitated by insolvency proceedings commenced last week in the Bahamas, where FTX had its executive offices, and later in Australia, where the company has two operating subsidiaries.

The bankruptcy in Delaware was filed on an emergency basis due to a severe liquidity problem, Mr. Ray said. […]