Before the collapse of his crypto empire, Sam Bankman-Fried, the disgraced former boss of FTX, enjoyed a lavish lifestyle on a Bahamas property alongside his close friends, accomplices, and fellow executives. Among them were FTX co-founder Gary Wang and Bankman-Fried’s ex-girlfriend, Caroline Ellison, who was appointed to lead FTX’s sister hedge fund, Alameda Research.
Today, both Wang and Ellison testify against Bankman-Fried in court, as they have pled guilty to their own acts of fraud. During the first week of the ex-billionaire’s trial, prosecutors focused on how the group afforded their luxurious 11,500-square-foot home.
Government lawyers presented a series of photos showcasing the “Orchid,” a penthouse condo where the co-workers resided, overlooking the Atlantic Ocean. The Orchid is considered the crown jewel of the 600-acre Albany oceanside resort and has backing from wealthy celebrities like Tiger Woods and Justin Timberlake.
In court, FTX senior developer Adam Yedidia testified that Alameda was responsible for purchasing the $35 million penthouse. A text exchange from Bankman-Fried was entered into evidence, in which he admitted that he assumed Alameda would be paying for it in the end.
“At night its penthouse was lit purple, and the purple light made it seem glamorous, and elicited envy even from those accustomed to being envied.” – Michael Lewis
Yedidia also revealed that Bankman-Fried expressed concerns about FTX’s business outside the resort, specifically near a group of stadium-lit padel courts. Yedidia discovered an $8 billion debt that Alameda owed FTX in the summer of 2022, which aligned with the shortfall FTX faced on customer deposits when it eventually collapsed.
“Because if they spend the money that belongs to the FTX customers, then it’s not there to give the FTX customers should they withdraw,” Yedidia testified. He further testified that he resigned from FTX after learning that customer deposits were used to pay off Alameda’s creditors.
According to Ellison’s testimony, Alameda had taken over $10 billion from FTX customers to settle its debts, all under Bankman-Fried’s instructions.
