Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
One of the great mysteries surrounding collapsed crypto exchange FTX is a step closer to being solved: where is the other Sam?
We know where the main Sam (Bankman-Fried) is — in Brooklyn’s Metropolitan Detention Center (reportedly sleeping in the same part of the jail as Diddy), nearly twelve months into a 25-year sentence for fraud.
But the location of Sam Trabucco have been an even greater mystery than why Michael Lewis can’t take criticism.
Let’s refresh our memories on Trabucco’s role in the FTX mess. You’d be forgiven for having forgotten, since he’s virtually disappeared since the Bankman-Fried empire collapsed.
Trabucco worked at Alameda Research from the beginning, sitting in Bankman-Fried’s inner circle. He became co-chief executive and ran the hedge-fund-cum-venture-capital-firm-cum-private-credit-unit alongside Caroline Ellison, but left the company in August 2022 — just a few months before it all blew up.
Unlike Ellison, and other key executives including Gary Wang and Nishad Singh, Trabucco has escaped almost any scrutiny of his role in FTX’s collapse. He wasn’t arrested, didn’t take the stand against his former boss and has said nothing publicly about the matter.
But thanks to a filing made on Monday, we can now see what he’s spent at least some of his time doing: settling privately with US authorities.
“Following extensive, arm’s length negotiations”, Trabucco has agreed to hand over the keys to two San Francisco apartments worth $8.7mn that he bought in June 2021, according to documents filed at Delaware’s bankruptcy court (available via administrator Kroll’s site, ctrl-F “Trabucco” here).
Trabucco also agreed to transfer the rights to $70mn worth of claims filed against FTX to the debtors, which include balances on FTX’s international and US exchanges, and is “including compensation” that he received from Alameda.
He also agreed to give up his 53-foot yacht, ‘Soak My Deck’, which he bought in March 2022 for $2.51mn. Trabucco appears to still be in San Francisco from the filing signature.
In total, the debtors will receive from Trabucco “approximately $80mn in value without the need for potentially costly and time-consuming litigation”, according to the document.
It also sheds light on Trabucco’s role at Alameda — and his rewards. He was paid $20mn in cash during his time there, as well as receiving FTT and SRM tokens, and company equity. In a lawsuit also launched yesterday, in which the FTX administrators are suing Binance, they claim the exchange and its sister trading house “may have been insolvent from inception and certainly were balance-sheet insolvent by early 2021 “.
No problem though!
Between July 2020 and October 2021, Trabucco sold some of his FTT for about $30mn, with the filing saying that from his salary, withdrawals from his FTX.com accounts and, “other transfers made . . . for his benefit”, Trabucco totted up a tasty $40mn.
The purchase of the yacht points to more mixing of business with pleasure, as we now know FTX executives were wont to do: Trabucco transferred 2.51mn USDC from his FTX account to one of Alameda’s FTX accounts, and then Alameda wired the seller of the yacht $2.51mn, according to the filing.
Trabucco has until 26 November to appeal against the terms of the settlement.
Compared to the fate of his colleagues, many of whom will be eating prison food for a while, waving bye-bye to the boat isn’t a bad outcome.
Read the full article here