Last year, Goldman Sachs’ chief executive David Solomon and crypto exchange FTX’s founder Sam Bankman-Fried met in the Caribbean to discuss the bank advising the crypto firm. After that, in mid-2022, the investment bank was reportedly in talks with the exchange to integrate some aspects of its derivatives businesses.
Now, the tables have completely turned and the partnership talks are non-existent. The crypto exchange collapsed in Q4 2022, mishandling billions worth of user funds. Apart from customers, a host of other entities have been affected too. Just a day back, the FTX creditor list was made public. According to the same, Goldman Sachs was a part of the creditor list to which FTX owed money.
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Goldman denies claims
The industry has been trying to distance itself from FTX for quite some time. A spokesperson for the investment bank recently told Blockworks via mail that Goldman Sachs was not an FTX creditor. Further elaborating on the same, the representative added,
“This type of creditor matrix is prepared by the debtors for the purpose of providing notice to interested parties in a bankruptcy proceeding and is not necessarily evidence of a creditor relationship.”
Apart from listing out creditor names, the matrix usually encapsulates names of entities that could be vendors who have already been paid. Dov Kleiner, a partner at the law firm Kleinberg Kaplan told Blockworks,
“The idea is to include anyone who might have a claim so that the notice of the filing is as broad as possible… Goldman is just trying to reassure people that the fact that it shows up on the FTX creditor matrix does not mean that Goldman’s balance sheet is exposed to FTX losses.”
Leaving aside this development, a host of companies wrote down their FTX stake to $0 in Q4 2022. Sequoia Capital and Singapore’s Temasek were two such entities.
Fox Business’ Charlie Gasparino revealed that “at least half the money” lost during FTX’s implosion could be recovered. It would, however, take a year or two to do so.
Gasparino added that the new CEO must initially find all the recoverable money. After that, he’ll have to determine the distribution channel and finalize the amount before starting to disburse the funds.
Other victims
FTX advisers are looking to recover funds that Bankman-Fried inappropriately handed out. The firm is tracing down hidden assets that could potentially be used to repay creditors. Taking a step in that direction, lawyers have asked for permission to question Bankman-Fried’s family and other former top executives.
Read More: SBF’s Brother Founded an Organization to Lobby Congress Members
Via FTX, SBF sponsored a charity hackathon for high school students that took place in South Florida in March 2022. Around 20 high school students received $15,000 each in college scholarship money from the FTX Foundation. Additionally, they got to work with business leaders to create a plan to turn an idea into a viable business.
The school district, however, denies such claims. It reportedly told FOX Business that it played no role in the hackathon event and received no funds from FTX.
Meanwhile, students are “growing anxious” because their funds could be clawed back by John Ray III, the new CEO, who is looking to repay FTX customers. A bankruptcy lawyer not involved in the case told FOX Business,
“Coming after the kids for the $15,000 scholarships becomes a moral issue and would be at the discretion of the bankruptcy lawyers to decide whether or not it’s worth it to do so. But the prize money that was donated to the mentor organizations could certainly be up for grabs if lawyers are struggling to come up with the funds elsewhere.”