Untangling the knotty empire of Bankman-Fried and FTX

With crypto alternate FTX quick $8bn and hurtling in direction of chapter, please take a second to survey the duty that could be awaiting liquidators and regulation enforcement companies.

Beneath we reproduce two barely completely different makes an attempt to map FTX’s company construction as of March 2022. (H/T Dan McCrum.)

(Enlarge)

(Zoom)

(Crude spot-the-difference video)

There’s lots occurring there so essentially the most we are able to do in a rush is to select a number of landmarks. Please be at liberty so as to add your personal observations within the remark field.

FTX Buying and selling Ltd, integrated in Antigua and Barbuda, is the muse firm recognized in FTX’s authorized disclaimers. West Realm Shires Inc is the US-facing offshoot, generally known as FTX US, which was excluded from Binance’s quickly-abandoned rescue proposal. The US firm seemed to be Delaware ringfenced past its mental property relationships (with BVI-based Alameda Analysis Ltd and Cottonwood Grove Ltd of Hong Kong) whereas the rest was a multijurisdictional internet of wholly owned subsidiaries and inter-company loans.

The schematic additionally signifies that FTX Ventures Ltd, the group’s Bahamas-incorporated VC fund, was wholly owned by just a little recognized Delaware holding firm Paper Fowl Inc, which in flip was wholly owned by Sam Bankman-Fried. Paper Fowl additionally seems to have owned 89 per cent of FTX Buying and selling Ltd in addition to having intercompany loans with Alameda autos.

The US- and Cayman Islands-based LedgerPrime entities, within the bottom-left of the schematics, stem from FTX’s acquisition final 12 months of hedge fund Ledger Holdings. FTX rebranded LedgerPrime’s crypto futures platform as FTX US Derivatives LLC and mentioned the remaining enterprise would develop into a household workplace making investments solely for Alameda Analysis.

Salameda Ltd (Hong Kong), owned 100 per cent by Bankman-Fried’s chief of workers Jen Chan, offers the looks of being a bunch outrider with hyperlinks to Alameda and FTX US entities by service agreements.

Due to the piecemeal nature of public disclosures we are able to’t assure that the above diagrams precisely characterize FTX’s present or historic construction. An entire image would possibly solely emerge from the examiner’s report in Chapter 11 proceedings, which within the case of Lehman Brothers took 18 months to ship.

The SEC’s autopsy diagram of Lehman’s company construction appears to be like a mannequin of simplicity compared . . .

…so we could possibly be in for a really lengthy wait.