FTX: Former CEO Bankman-Fried faces grilling by lawmakers he backed as bankruptcy advisers struggle to find cash, crypto

Democratic lawmakers who received millions of dollars in campaign donations from Sam Bankman-Fried say they are ready to grill the former FTX CEO about the exchange’s collapse, as a court filing reveals he and other FTX executives received massive loans from affiliated trading arm Alameda Research.

Before the collapse, Bankman-Fried donated tens of millions of dollars from his crypto-empire fortune to benefit Democrats, making him the second-largest donor to the party in the recent midterm elections. But the recipients of those political contributions say are prepared to probe the sudden crash of FTX, which has potentially caused billions in losses for millions of FTX account holders.

Meanwhile, advisers now overseeing the carcass of FTX Group are struggling to locate the company’s cash and cryptocurrency, citing poor internal controls and record keeping.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information,” John Ray III, the group’s new CEO, who formerly oversaw the liquidation of Enron, said in a sworn declaration submitted in bankruptcy court.

A bankruptcy court filing on Thursday revealed that Bankman-Fried, one of his related companies, and two other top executives at the collapsed cryptocurrency exchange received massive loans from affiliated trading arm Alameda Research.

Alameda’s receivables included US$4.1 billion in combined loans to “related parties,” according to a footnote in a document filed by Ray. That includes US$1 billion to Bankman-Fried, US$2.3 billion to Paper Bird, an entity majority owned by Bankman-Fried, US$543 million to Nishad Singh, head of engineering at FTX, and US$55 million to Ryan Salame, head of FTX Digital Markets.