FTX lawsuit alleges big bonuses, abuse of power, and a private island

investmentnews.com:

Bankrupt FTX Trading Ltd.’s latest lawsuit against co-founder Sam Bankman-Fried and his former top executives revealed new details about the allegations of massive fraud at the fallen crypto conglomerate. 

The complaint Thursday showed FTX Trading is seeking to claw back millions of dollars in cash and unwind over $1 billion in questionable transactions. 

The lawsuit revealed Caroline Ellison, former co-chief executive officer at affiliated hedge fund Alameda Research, estimated a more than $10 billion cash deficit at FTX.com about eight months before the crypto exchange fell apart.

The document also claims that Bankman-Fried and former FTX Chief Technology Officer Gary Wang took $546 million from Alameda in May 2022 to acquire shares in Robinhood Markets Inc.

Here are some other accusations in the complaint:

The lawsuit said the FTX Foundation — FTX’s nonprofit arm — pursued projects that were “frequently misguided and sometimes dystopian.” It alleged that a memo exchanged between a foundation officer and Bankman-Fried’s brother, Gabriel Bankman-Fried, laid out a plan to purchase the tiny island nation of Nauru and build a bunker there. 

In the event that half or more of the global population perished, the island would then be used to ensure the survival of members of the effective altruism movement — a philosophy that Sam Bankman-Fried publicly ascribed to. The memo noted that “probably there are other things it’s useful to do with a sovereign country, too,” according to the complaint.

Ellison gave herself a $22.5 million bonus around the time in March 2022 when she estimated a more than $10 billion cash shortfall at FTX.com, according to the lawsuit. Through a series of convoluted transfers, Ellison allegedly