FTX was run as ‘personal fiefdom’ of Sam Bankman-Fried, court hears

Bankrupt cryptocurrency exchange FTX was run as the "personal fiefdom" of founder Sam Bankman-Fried, with one of the company's units spending $300m on real estate in the Bahamas for the use of its executives, a court heard on Tuesday.

The hearing in Delaware's bankruptcy court is the first since FTX declared insolvency earlier this month.

A "substantial amount" of FTX Group's assets "have either been stolen or are missing", James Bromley, co-head of the restructuring practice at law firm Sullivan & Cromwell, told judge John Dorsey.

"FTX was in the control of inexperienced and unsophisticated individuals, and some or all of them were compromised individuals," said Bromley.

News of the Bahamas property spree follows a report from Reuters that Bankman-Fried's FTX, his parents and senior executives of the cryptocurrency exchange bought at least 19 properties worth nearly $121m in the Bahamas over the past two years, according to official property records.

Bromley told the court Congress had requested - "some would say demanded" - that FTX's new chief executive John Ray III appear before lawmakers in December. Any hearing is likely to be politically charged. FTX was a major donor to Democratic politicians.

"Will Joe Biden and Democrats who cashed Bankman-Fried's checks give that money to the people SBF [Sam Bankman-Fried] screwed?" the Republican senator Ted Cruz wrote on Twitter as the hearing took place.