According to the most recent hearing in the criminal prosecution of SBF, the spending habits of the bankrupt crypto exchange’s CEO have come under scrutiny, with Nishad Singh expressing his opinion that these expenditures were needless.
Sam Bankman-Fried’s (SBF) criminal trial goes forward. On October 17th, Nishad Singh, FTX’s former Chief Engineer, testified under cross-examination. Details concerning SBF’s obsession with famous people continue to emerge in the hearing, with Singh revealing that the company has invested in a “tequila brand owned by a famous celebrity.”
The famous person in question is Kendall Jenner, who is both a supermodel and a star of the reality show Keeping Up with the Kardashians. Bankman-Fried, according to Reuters, invested $216 million of FTX’s client money in Jenner’s 818 tequila brand. The previous CEO invested via a front company at a time when 818 was worth $2.94 million.
Notably, Singh said that SBF’s spending pattern was “excessive” after FTX spent over $1 billion on celebrity endorsements and marketing. Meanwhile, the defense attorney countered that these investments were neither “reckless and frivolous” in a letter published today, October 17th.
Mark Cohen, the defense attorney, directly questioned Singh whether he felt these endorsements may have helped FTX’s brand. Singh replied that he “knew it had the costs and benefits of doing business.”
Singh further said that, at first, he thought that Alameda Research’s power to backstop certain transactions was for the safety of client assets. This is what he told Financial Times: “At the time, I thought it would be good for customers.”
Bankruptcy processes are moving along as the criminal case against SBF remains in the forefront. Customers may get “90% of distributable value worldwide” under the new ‘Alameda Plan,’ as stated in a 16 October statement. If the bankruptcy court allows it, that is.
According to the plan, assets should be segmented into three groups: FTX.US clients, FTX.com customers, and a third group for everything else. Customers at both the main office and the US branch may submit claims to the appropriate exchange.
In addition, FTX creditors warned that consumers of both exchanges may not be paid in full. Moreover, FTX.com customers might be hurt worse. The document also included the remark:
“Future recoveries for customers and non-customers will depend on many factors, such as how tax and government claims are settled, the FTX team’s ongoing asset recovery efforts, the outcomes of avoidance actions and other lawsuits, the claims allowance process, and how much following Know-Your-Customer procedures cuts down on the number of claims filed or accepted…”
Also Read: New Exchange Regulations Are Being Proposed by the Australian Government
