Before the epic downfall of his crypto empire, FTX CEO Sam Bankman-Fried (SBF) boasted huge profits. However, new findings reveal that his companies may have lost a lot of money.
According to a petition filed in a Delaware district bankruptcy court this week, the group may have incurred a net loss.
The firm managing the receivership proceedings, Kroll, reviewed the group’s 2021 tax returns. Apparently, they collectively showed a net operating loss carry forward of $3.7 billion.
This means that Alameda and FTX, founded in 2017 and 2019 respectively, have posted a net loss of $3.7 billion since their inception.
“The Debtors believe, based on tax returns filed in 2021, that as of December 31, 2021, the Debtors collectively had a Federal NOL [net operating loss] deferrals of at least about $3.7 billion,”
FTX Profits: Fact or Fiction
Moreover, this revelation goes against SBF’s claims of its epic profits. Nor does it make sense to lose money in the biggest bull market the crypto industry has ever seen.
According to a CNBC article in August, FTX’s revenue grew 1,000% during the 2021 bull market. Additionally, SBF told Forbes last year that Alameda made $1 billion in profits in 2020. At one point, his wealth was estimated at $26 billion, making him one of the richest people in crypto (and the world).
Alameda undoubtedly lost money in the bear market of 2022. Moreover, those losses would have been compounded by its questionable accounting practices, which ultimately led to its collapse.
However, it seems unfathomable that a crypto company made a net loss in 2021. Tax attorney Steve Rosenthal told Forbes that it was unclear whether NOLs were made or snapshots of values. business and assets. “Perhaps his entire profitability was fiction,” he speculated.
Crypto market drops to new lows
The total crypto market cap fell to a new cycle low today. In the late hours of Nov. 21, crypto markets fell to a two-year low of $813 billion, according to CoinGecko. That marks a 73.6% drop from their peak of just over $3 trillion this month last year. The crypto market capitalization is also now below its 2018 cycle peak of $830 billion.
It looks like the fallout from the FTX collapse isn’t over yet, as FUD and selling continues, leading to another red week.
All information contained on our website is published in good faith and for general information purposes only. Any action the reader takes on the information found on our website is strictly at their own risk.