Accused FTX founder Sam Bankman-Fried used cash from clients of sister company Alameda Research to invest $200 million in two separate companies, the report said.
One of Bankman-Fried’s investments went to the banking app Dave, which disclosed a $100 million windfall last March, allegedly from FTX Ventures, CNBC reported Wednesday.
The other $100 million investment came from Mysten Labs, a Web3 company focused on digital infrastructure, according to the business network.
The $100 million investment is cited in a U.S. Securities and Exchange Commission complaint detailing allegations against Bankman-Fried, who is accused of defrauding FTX clients of billions of dollars.
The two $100 million deals are the only deals of their size disclosed by FTX, the paper said. The feds accuse Bankman-Fried and other former FTX executives of using client funds as their personal piggy banks and stealing the money to cover risky bets made by Alameda, his cryptocurrency hedge fund, to pay their for a luxurious lifestyle.
In its complaint, the SEC cited the two investments to support its allegation that Bankman-Fried hid the truth about FTX’s “weak financial condition” and “continued to present investors with a false and misleading positive account of the company.”
In a meeting with investors in FTX’s US operations, the feds said FTX inaccurately claimed that “certain investments are not related to the assets of FTX or its clients.”
“Contrary to that representation, two of the $100 million investments made by FTX Ventures Ltd., an investment vehicle affiliated with FTX, were funded with funds from FTX clients directed to Alameda,” the complaint states.
Mysten Labs and Dave have not been accused of any wrongdoing in connection with the FTX case. Bankman-Freed faces eight federal charges that could carry a maximum of 115 years in prison.
Dave’s CEO Jason Wilk told CNBC that “it’s important to note that we were not aware of FTX or Alameda using client assets to invest.”
The $100 million came in the form of a short-term loan, which FTX can later convert into shares in the company.
“The note to FTX is due in March 2026,” the company said in a statement. “Nothing contained in the Note creates any continuing obligation on the part of Dave to repay at maturity.”
Meanwhile, FTX acquired a stake in Mysten with its $100 million investment. Misten declined CNBC’s request for comment.
Earlier this month, current FTX CEO John Ray said the company would seek to recoup Bankman-Fried’s investments and political donations that used client funds as part of the ongoing bankruptcy effort.
A group of four FTX customers filed a class action lawsuit against the company and its affiliates this week, The Post reported. The suit asked the bankruptcy judge to declare FTX’s remaining assets owned by defrauded customers rather than the firm.