Alex Saunders, an Australian crypto/finance influencer and founder of Facebook group Nugget’s News, is revealed to have collected AU$17.5 million (US$13.2 million) in loans from FTX. The now-defunct exchange wanted to evade bad press because of the scheme it was involved in with Saunders.
Saunders had lured innocent investors into providing him with funds by sending it to his crypto wallets. He claimed that he would direct toward developing multiple crypto protocols. In return, he would share profits with his investors. However, he utilized the funds to trade on FTX and managed to squander them away. Some investors filed charges against him because they did not see any returns and could not get back their investments.
He then apologized to the investors and claimed he was in the process of making them whole – something that he had begun when issuing his apology. He maintained that retail investors, family, and friends offered him crypto so he could pay back his creditors. However, the funds he used to pay them were financed by FTX as a loan.
FTX wanted to save face and avoid public scrutiny if news got out about Saunders being linked with FTX and trading investor funds illegally on the exchange. So, it used its shell company registered in the Cayman Islands, 707,016 Ltd, to loan Saunders the millions. He has yet to pay FTX back.
These revelations come from the FTX bankruptcy proceedings, with a report detailing this scheme. It goes even deeper as the report talks about an unnamed Australian law firm, referred to as “Law Firm-5,” for helping FTX create the offshore entity in the Cayman Islands to loan funds to Saunders.
The law firm even went as far as helping FTX acquire and control financial businesses in Australia, bypassing the need to obtain a financial services license from the relevant Australian financial regulatory agency. An unnamed partner of the law firm was paid $US727,402 in finder’s fees for making the acquisition deals possible.
Image Source: @FTX_Official on X[Twitter]
