It took FTX staff just over nine months to spend $40 million on luxury goods and services rather loosely related to the company's core activity. According to bankruptcy court documents reviewed by Business Insider, the money in question was used to pay for hotels, flights, entertainment, and food. Lawyers also pointed to the fact that lavish spending in no way translated to generating customer revenue.
The largest chunk of the money covered lodging expenses. From January to September 2022, luxury hotel and other accommodation bills totaled $15.4 million. $5.8 million was spent at the Albany Hotel, one of the world's most exclusive resorts with high-class amenities, a yacht marina, and a golf course. The high-season accommodation price at the hotel can reach as high as $60,000 per night, according to 2021's rates.
Another $3.6 million paid the FTX's bills at Grand Hyatt in the Bahamas. To give you a point of reference, the hotel hosted Prince William and his wife last year. FTX also enjoyed an $800,000 stay at the five-star Rosewood, where prices start at $1,100
The BI-reviewed filings also disclose $6.9 million's worth of "meals and entertainment" spending, with approximately half of that spent on catering services. $1.4 million of that amount paid for food at the Hyatt, and nearly $1 million for services delivered by Six Stars Catering, a catering company from Nassau.
Flight expenses totaled $3.9 million. The company also spent $500,000 on "postage and delivery." Obviously, those are not all hard-to-justify FTX's expenses. In November last year, Financial Times reported that the exchange struck a private deal with an air carrier to fly their Amazon orders to the Bahamas from a Miami depot. Also, the company provided their staff in the Bahamas with a "full suite of cars and gas covered for all employees," topping that with "unlimited, full expense covered trips to any office globally."
With such an approach to customers' money, no wonder there's little left to pay them back.