Former FTX Employees Lose Billions Due to Bankruptcy: An Inside Look
In a sudden turn of events, FTX, the cryptocurrency exchange where Natalie Tien once dedicated 16-hour workdays, collapsed, leaving her devastated. The idealistic team of young employees in the Bahamas disbanded, and the former CEO, Sam Bankman-Fried, faced criminal charges.
Tien’s net worth, mostly tied to FTX stocks worth at least $500,000 (over 12 billion Vietnamese Dong), vanished overnight. Frustrated and desperate, she demanded accountability from Bankman-Fried but to no avail.
“His talent should have been utilized elsewhere,” Tien said.
Mixed Emotions from Former FTX Employees
Like Tien, former FTX employees had mixed feelings. Some sympathized with the former CEO, while others were angry at the damage he caused.
The US Department of Justice deemed FTX as one of the largest financial fraud cases in American history, with Bankman-Fried facing allegations of customer deception and misappropriation of funds. He was sentenced to 25 years in prison, ordered to surrender $11 billion in assets, and expressed deep remorse.
“Many people feel genuinely disappointed. I apologize for that. I apologize for what happened. There are things I should and shouldn’t have done,” said Sam.
Betrayed Trust and Unexpected Testimonies
Can Sun, a former advisor at FTX, admitted he had no knowledge of any illicit activities within the company. He felt deceived as Bankman-Fried never acknowledged his deliberate misappropriation, nor did he consider FTX’s collapse as a risk management failure.
“When all of this happened, Sam never spoke candidly to me or anyone else,” said Sun.
Weeks after FTX’s downfall, Sun phoned federal prosecutors and agreed to testify against Bankman-Fried. He claimed he didn’t purposefully do anything wrong but may have inadvertently approved credit-related transactions. Sun believed Bankman-Fried should pay for his wrongdoing, which caused him to lose around $4 million.
Andrew Croghan, former CEO at Alameda Research, still couldn’t fathom how his startup company was labeled a fraud. He found it strange that his former colleagues had taken the stand against Bankman-Fried.
Croghan joined Alameda in 2018 and became the first business development head at FTX. He left in 2020 but maintained a close relationship with Bankman-Fried. Upon hearing of FTX’s bankruptcy, he was in shock.
“This was someone I trusted. There was a significant loss of collateralized assets,” said Croghan, who opposed media portrayal of Bankman-Fried as greedy. “People think he’s a villain. I don’t think so. If he really wanted to, he could have stolen more money for himself.”
Natalie Tien’s Letter and Lessons Learned
As for Tien, she has since returned to her homeland, Taiwan, taking on the role of Communications Director at a digital investment firm. In February, she wrote a letter to Judge Kaplan expressing her desire for leniency towards Bankman-Fried.
“The Sam I know has never acted out of greed or self-interest,” she wrote, emphasizing that FTX’s downfall was primarily due to Bankman-Fried’s management style. He no longer paid attention to others’ advice, leading to poor decisions.
“It was almost like a cult. People were afraid to go against Sam. They bowed their heads and obeyed every order. It was toxic. If I could turn back time, this advice would have been good for Bankman-Fried: Don’t think you’re the smartest person in the world,” Tien said.
FTX had previously hired many Bahamian employees, mainly for logistical purposes. These individuals believed they were contributing to a promising new industry on the island. Some even spent thousands of dollars on FTX shares.
Ryan Salame, co-CEO of FTX Digital Markets, confessed to being shocked and anxious upon learning about internal issues. Many employees left, including Product Director Rammik Arora, Legal Director Dan Friedberg, and Head of Institutional Brokerage Zane Tackett.
Bankman-Fried’s repercussions not only affected employees but also disrupted an industry striving for order amidst chaos. Numerous pieces of evidence and interviews with insiders revealed that Bankman-Fried’s rise seemed solely based on deceiving customers. The frenzy surrounding cryptocurrencies helped him bypass regulations.
According to 27-year-old professional investor Calvin Tsai from Hong Kong, Bankman-Fried’s arrest didn’t bring him much relief. Tsai was once an FTX VIP customer, depositing $1.3 million to earn profits.
“I was a bit surprised that it took so long for Sam to be arrested. I was afraid he wouldn’t be held accountable seriously,” said 37-year-old digital marketing strategist Darragh Grove-White, stating that Bankman-Fried’s arrest did not ease his concerns. He knew all the money he sent to FTX was gone.
Sources: [WSJ](https://biztoday.us), [Bloomberg](https://biztoday.us)