Saturday, December 3, 2022
HomeCrypto NewsMike Novogratz Calls SBF's Misappropriation of User Funds "Fraud"

Mike Novogratz Calls SBF’s Misappropriation of User Funds “Fraud”

- Advertisement -
Follow-Us-On-Google-News

Mike Novogratz has branded Sam Bankman-Fried’s actions with user funds as “fraud.”

Mike Novogratz, CEO of Galaxy Digital, has described Sam Bankman-Fried’s practice of lending user funds to Alameda Research as fraud, saying SBF should face the law.

Novogratz, who had some exposure to FTX, seized an opportunity on CNBC’s Squawk Box today to express his grievances regarding the misappropriation of users’ funds by FTX and Alameda Research. According to Novogratz, no portion of the user agreement gave SBF the legal right to use clients’ funds the way he did, indicating that his dealings were illegal.

Mike Novogratz mentioned that he is somewhat surprised that SBF is still allowed to “run around” in the Bahamas following the revelations of how he handled clients’ funds which led to the eventual implosion of FTX.

Recall that Novogratz’s Galaxy Digital disclosed a $76.8 million FTX exposure in its Q3 2022 report. Novogratz noted on November 10 that he does not expect to recover the funds. 

“Sam Bankman-Fried […] certainly did things with our coins that were illegal, and he’s running around the Bahamas, giving press conferences, going on TV,” said Novogratz. “That whole thing kind of surprises me. I think his day will come. I’m shocked that his father who’s supposed to be a lawyer is letting him talk, or that anyone is actually listening to him.” 

He added that the FTX contract agreement with clients never permitted SBF to lend clients’ funds to his “family office.” Speaking further, Novogratz noted that no FTX customer signed a contract that allowed SBF to use their funds to run a hedge fund. 

FTX Seeking to Sell Off or Reorganize Business Units

Meanwhile, an attorney from the FTX bankruptcy hearing held on Tuesday mentioned that SBF ran the company like his “personal fiefdom,” spending up to $300M on real estate and luxury items for senior staff, amongst other imprudent decisions that demonstrated a misappropriation of user funds. In addition, attorneys from the bankruptcy hearing have disclosed that FTX plans to sell off operational units.

Earlier reports also revealed that SBF’s parents and some top executives of FTX procured 19 properties in the Bahamas valued at $121 million in the past two years. Furthermore, a Reuters report disclosed that SBF put $10B of users’ funds in his trading venture in secret, with $1B unaccounted for as of press time. 

Following disclosure of intentions to reorganize or sell off business units on Saturday, FTX revealed Tuesday that several potential purchasers had indicated an interest in buying its assets. As a result, the exchange, now led by new CEO John Ray, noted that it plans to set up a process to sell or reorganize them.

- Advertisement -
Ammara
Ammarahttps://thecryptobasic.com/
Ammara Mubin is a cryptocurrency reporter and trader with vast experience in the industry. Mubin has written several news stories related to the crypto industry, including non-fungible tokens (NFTs), decentralized finance (DeFi), fundraising, mining, etc. Her major focus is covering regulatory events that are capable of shaping the entire crypto ecosystem.

Disclaimer: The content is for informational purposes only, may include the author's personal opinion, and does not necessarily reflect the opinion of TheCryptoBasic. All Financial investments, including crypto, carry significant risk, so always do your complete research before investing. Never invest money you cannot afford to lose; the author or the publication does not hold any responsibility for your financial loss or gains.

- Advertisment -

Recent News & Articles

Subscribe To Our Newsletter

Get Updated with All The latest Crypto News, Articles, Reviews, Analysis and much more. Delivered Every Monday.