FTX managed to get $400 million in funding after Sam Bankman-Fried and an attorney invented a 'sham' agreement to explain close ties with Alameda, new CEO says
"In January 2021 as FTX prepared for an audit, Attorney-1 asked an outside law firm to prepare a 'cash management' agreement that could provide an 'explanation' for why Alameda held 'FTX cash . . . for the benefit of the FTX customers,'" the document says.
Basically, this"Payment Agent Agreement" made it seem to auditors that there was nothing wrong with the close ties between the two companies. Bankman-Fried also didn't use DocuSign — which records the date and time of a signature — as he usually did, and it was backdated by nearly two years, Ray said.
"The FTX Group proceeded to share the false and misleading audited financials with potential investors in connection with its $400 million Series C financing that closed in January 2022," he added.Sign up for notifications from Insider! Stay up to date with what you want to know.NOW WATCH: Why Sam Bankman-Fried is charged with perpetuating one of the biggest frauds in US history
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