On one hand, FTX is looking for potential funders to resolve its liquidity crisis. On the other, the exchange is under regulatory scrutiny. As of now, more than six agencies have FTX on their radar, including ones from the Bahamas and Japan.
In fact, the Bahamas Securities Commission also froze the assets of FTX Digital Markets [FDM] and suspended FTX’s registration in the country. Alongside, a lawyer has been appointed as provisional liquidator. The exchange is, notably, headquartered in the Bahamas and FDM is the Bahamian subsidiary of the exchange.
Most FTX employees lose their “life savings”
A few hours back, a source “close to the FTX situation” allegedly revealed that the company’s employees were all kept in the dark about the whole situation and only Samuel Bankman-Fried’s inner circle knew what was happening.
“Sam ruined the lives of many of his current and former employees. Everyone at FTX is shocked and disappointed. They were all fighting for Sam until they found out what happened on Twitter. Sam’s inner circle are the only people who knew what was going on.”
Many employees allegedly had their life savings in the exchange. Per the source, SBF promoted FTX as a “trusted bank” internally and externally. Bonuses to employees typically consisted of the company’s stock and FTT tokens. Most of the employees kept their funds on the platform. In fact, the moment they used to receive their salary also, they either directly deposited it or transferred it onto FTX.COM.
Furthermore, top executives also heavily marketed a particular deal to employees. Shedding light on the same, the source said,
“In October 2021 FTX bought out Binance’s shares, which was promoted as a big win internally by Sam and others. Sam and Ramnik gave employees the opportunity to invest in FTX.COM for the first time at a 50% discount.”
Most of them saw the same as an “amazing opportunity” and the majority of the people invested “more than they should.” However now, it seems like they’ve all lost their life savings. The source contended,
“Everyone believed in Sam. Many have now lost their entire life savings because they saw Sam and FTX as a safe bet and they believed in him. Employees now fear their money has all been sent to Alameda.”
SBF, nonetheless, issued a public apology recently and admitted that he should have done better.