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Sam Bankman-Fried Cashed Out $300M in Previous Funding Round: Report
In a previously undisclosed detail, most of the $420 million raised in October 2021 went directly to Bankman-Fried, according to the Wall Street Journal.
By Nelson Wang
Updated May 9, 2023, 4:03 a.m. Published Nov 18, 2022, 8:38 p.m.
Former FTX CEO Sam Bankman-Fried personally received $300 million from a $420 million funding round for the company in October 2021, according to a Wall Street Journal report that cited FTX financial records it had reviewed, as well as people familiar with the transaction.
The arrangement was previously undisclosed, with Bankman-Fried telling investors at the time it was partially to reimburse him for money he’d spent to buy out Binance’s stake in FTX a few months earlier, the Journal reported.
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In July 2021, Bankman-Fried bought out the approximately 15% of FTX owned by Binance, which was FTX’s first investor. Binance CEO Changpeng “CZ” Zhao tweeted this month that the amount of the buyout was $2.1 billion in Binance’s stablecoin BUSD and FTX’s exchange token FTT.
The October 2021 funding round valued FTX at $25 billion and raised money from financial heavyweights such as BlackRock, Tiger Global, Singapore’s sovereign wealth fund Temasek and Sequoia Capital. A few months later, some of those same investors helped raise $400 million for FTX's U.S. subsidiary at an $8 billion valuation.
According to the Journal, it was unclear what Bankman-Fried did with the $300 million, while FTX's 2021 audited financial statements said the money was being kept by the company for "operational expediency" on behalf of a "related party."
Read more: Temasek Says Its FTX Investment Is Now Worth Zero
UPDATE (Nov. 18, 20:58 UTC): Added information about FTX US fundraise.
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