Untangle the tangled empire of Bankman-Fried and FTX

With crypto exchange FTX close to $8B and heading for bankruptcy, please take a moment to review the task that liquidators and law enforcement may face.

Below we reproduce two slightly different attempts to depict the corporate structure of FTX as of March 2022. (H/T Dan McCrum.)

(Enlarge)

(zoom)

(Rough spot the difference video)

There is a lot going on there, so the best we can do is pick a few sights in a hurry. Please do not hesitate to add your own observations in the comments box.

FTX Trading Ltdincorporated in Antigua and Barbuda, is the incorporated company identified in FTX Legal Notice. West Realm Shires Inc is the US-focused offshoot, commonly referred to as FTX US, that was left out of Binance’s quickly abandoned bailout proposal. The US company appeared in Delaware beyond its intellectual property relationships (with BVI-based Alameda Research Ltd and Cottonwood Grove Ltd of Hong Kong), while the rest was a multi-jurisdictional web of wholly owned subsidiaries and intercompany loans.

The wiring diagram also shows this FTX Ventures Ltdthe group’s Bahamas-incorporated VC fund was wholly owned by a little-known Delaware holding company paper bird incwhich again was hundred percent by Bankman Fried. Paper Bird seems to have owned 89 percent of it, too FTX Trading Ltd and intercompany loans involving Alameda vehicles.

Those based in the US and Cayman Islands LedgerPrime Units on the bottom left of the chart are from last year’s FTX acquisition of hedge fund Ledger Holdings. FTX has rebranded LedgerPrime’s crypto futures platform to FTX US Derivatives LLC and said the rest of the business would be a family office Make investments solely for Alameda Research.

Salameda Ltd (Hong Kong), which is 100 percent owned by SBF Chief of Staff Jen Chan, appears to be a forerunner of the group with ties to Alameda and FTX US entities through service contracts.

Due to the piecemeal nature of public disclosures We cannot guarantee that the charts above accurately represent the current or historical structure of FTX. A complete picture should only emerge from the Examiner’s Report in the Chapter 11 proceedings, which was included in the Lehman Brothers case 18 months delivery time.

That SEC Post-Mortem Chart Lehman’s corporate structure looks exemplary in comparison. . .

… so we could wait a very long time.

https://www.ft.com/content/c28e0570-d4c4-433c-b0a0-c99fba613822 Untangle the tangled empire of Bankman-Fried and FTX

Adam Bradshaw

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