Cashing out at high points, avoiding bankruptcy...the biggest beneficiary of FTX's collapse turned out to be a jiu-jitsu champion
Source: Wall Street Journal
Compiled by: BitpushNews Mary Liu
The collapse of Sam Bankman-Fried's (SBF) crypto empire FTX caused billions of dollars to evaporate, leaving many investors in tears, but the one who managed to escape and enjoy huge wealth was a jiu-jitsu champion from Kazakhstan –Rashit Makhat.
A few months before FTX collapsed, Rashit Makhat received nearly $500 million in compensation for selling a majority of his stake in Bitcoin mining company Genesis Digital Assets to SBF's hedge fund. Lawyers representing Makhat in London said he still owns the proceeds.
The trade at the height of the market made Makhat one of the biggest personal beneficiaries, what U.S. prosecutors described at trial as Bankman-Fried's "failure to profit" from FTX clients.stealCrazy "buy, buy, buy" behavior after withdrawing funds.
During the prosecution, prosecutors used details such as bank account data and insider testimony to show how much of the $8 billion in customer funds flowed into startups and other investments. SBF was convicted and detained pending sentencing.
The Genesis Digital trade in early 2022 was one of the largest focused on by prosecutors, who showed jurors a chart showing how more than $1 billion was transferred from clients to accounts owned by the Bankman-Fried hedge fund , and then transferred into Genesis Digital stock. Prosecutors did not mention Makhat, who has not been accused of wrongdoing.
Prosecutors also singled out transactions led by Bankman-Fried, including the purchase of property in the Bahamas and $1.2 billion used to acquire rivals.cryptocurrencyexchangeBinance (Binance), whileBinanceWas a shareholder of FTX.
The new management formed after FTX went bankrupt is fighting in court to recover money from some of SBF's recipients, including SBF's parents and a Hollywood agent-turned-venture capitalist. To win back money, attorneys often need to prove that the recipient was overpaid before the bankruptcy. Bankman-Fried's parents and attorneys dismissed FTX's claims in court.
Recovering all client funds is no easy task. Startups that receive the majority of funding are likely to use the funds for their own operations. FTX could also sell shares Bankman-Fried bought in startups, but the value of many of those shares, including Genesis Digital, has increasedcryptocurrencyPrices fell sharply.
Documents filed by attorneys and consultants in the early 2023 bankruptcy case said FTX's new managers were investigating Genesis Digital, similar to what they used to describe its handling of other large FTX assets.
A spokesman for FTX management declined to comment.
All told, Bankman-Fried's hedge fund Alameda Research invested a total of $1.15 billion in Genesis Digital between mid-2021 and mid-2022, the largest investment to date in its more than $4 billion portfolio of startups and venture capital investments an investment.
A spokesperson for Genesis Digital said the deal with Bankman-Fried was "an outright secondary sale of the company's stock - which is common across many industries during strong markets."
Makhat's lawyers said the sale "was conducted in compliance with all applicable market rules and regulations" and that both parties to the transaction had retained reputable law firms. They said his "shares were acquired along with a number of other company founders."
Makhat, 47, does not work for Genesis Digital, his lawyer at London law firm Mishcon de Reya said. He runs a venture capital firm in Dubai and posts on LinkedIn about the prospects of artificial intelligence.
In an interview with a Kazakh journalist in 2022, Makhat said that early in his career he worked for a number of small Kazakh companies while also playing sports.
In 2011, he won the 200-pound world championship at the 2011 World Jiu-Jitsu Championships in Lima, Peru.
In an interview with a Kazakh journalist in 2022, Makhat said that Mkhat began entering the encryption industry around 2016, when two German Bitcoin mining companies were looking for partners in Kazakhstan. Bitcoin mining requires massive amounts of energy-intensive computing power, and Kazakhstan’s coal-fired electricity is cheap. Makhat and two other Kazakhstani entrepreneurs saw an opportunity and joined forces with the German duo.
Makhat told reporters at the time: Yescryptocurrency, "I don't need a bank or an intermediary, I can trade with you directly."
Rashit Makhat (top) won the 200-pound world title at the 2011 World Jiu-Jitsu Championships in Lima, Peru. He said he took up sports for a career.
The new company, then called Powerry, looked for sources of electricity and began mining, said Yermek Alimov, a former business partner at Genesis Digital.
Alimov, who previously worked with Makhat on a gold mining venture, claimed in a UK lawsuit against Genesis Digital, Makhat and two other co-founders that he should own a stake in the company because he helped it obtain electricity, It cited text messages and other evidence of communications.
A spokesman for Genesis Digital, where the other two co-founders still work, said Alimov's claims that he was owed money were false and said his only relationship with the company was the sale and renovation of a power station.
Makhat's lawyer said the court "has not determined whether it has jurisdiction to hear the claim" and therefore the defendants have not yet entered a defense to Alimov's claim.
When Bitcoin prices soared in 2021, Bankman-Fried committed an initial investment of $100 million to Genesis Digital and later joined the company's board of directors. Anthony Scaramucci's SkyBridge Capital, venture capital fund Paradigm and others also injected capital into the company.
The SBF flew on a private jet in December 2021 to meet with the President of Kazakhstan, who held a roundtable discussion with a group of foreign investors holding shares in Kazakhstan companies.
SBF (third from left) meets with Kazakh President Kassym-Jomart Tokayev (fourth from right) in December 2021
Soon after, Bankman-Fried's Alameda bought most of Makhat's Genesis stock and some from another co-founder for $80 million.
Makhat received more than $470 million in shares from Alameda in the deal, according to Cyprus company filings and a person familiar with the matter. In mid-2022, Bankman-Fried invested another $500 million directly in the company. The deal values Genesis Digital at approximately $5 billion.
Alameda is a veteran of Kazakh business circles. He has served on the boards of several high-profile companies, including one of the country's largest banks, the large state-owned defense company Kazakh Engineering Company and telecommunications company Kcell, as well as on the advisory board of payments newcomer Kaspi.
Kazakhstan securities filings and information on the company's website said Makhat worked for a company owned by Kairat Satybaldy, a nephew of former Kazakh president Nursultan Nazarbayev, and represented Kairat Satybaldy at another company's shareholder meeting. Kairat Satybaldy, a well-known figure in Kazakh business circles, is currently serving a six-year prison sentence for embezzlement of state assets. Kazakhstan officials said this month that about $1.5 billion in assets linked to Satybaldy had been returned to the government since his arrest in March 2022.
Biographical information published by the two companies where Makhat serves as a director shows that from 2006 to 2009, he served as an advisor to the chairman of the management committee of Dunie Corp., a small company in which Satybaldy holds shares in 70%.
The material appears on Kazakhstan Engineering's archived website as well as in publicly traded Kazkommertsbank's 2015 and 2016 annual reports, April 2016 board meeting minutes and press releases. Information on the website of a third company, Real Estate Management, shows he once worked for Dunie.
Makhat's lawyers said the biographical material's references to Makhat's role at Dunie were false and that he did not work for the company.
"Our client has not and has never worked for Mr. Satybaldy, either as a consultant or in any other capacity for Dunie or any other company," they said.
Satybaldy said through his lawyer that he did not have any advisers at Dunie and that he and Makhat were friends but Makhat did not work for him.
Rashit Makhat (left) and Kairat Satybaldy had lunch with their wives in 2018
According to Kaspi's board meeting minutes, Makhat served as Satybaldy's representative at the 2017 Kaspi shareholder meeting. Satybaldy, one of Kaspi's largest shareholders, gave Makhat a power of attorney so he could vote on his behalf, according to board meeting minutes.
Makhat's lawyer said Satybaldy was unable to attend in person, so he asked Makhat - a member of Kaspi's advisory board - to attend the meeting as his attorney. They said the power was limited to that purpose and no general power of attorney was granted to Makhat. Satybaldy also granted the same authority to others in other Kaspi meetings.
In his testimony, SBF stated that he investedXiaobai Navigation Genesis Digital, because the company can produce Bitcoin cheaply. He said it could be a good investment if properly hedged against falling Bitcoin prices, although FTX did not do so.
Since Bankman-Fried’s investment, Genesis has expanded into the United States, opening massive new data centers for Bitcoin mining in Texas and South Carolina.
The company has told investors it intends to conduct an initial public offering in the United States, according to people familiar with the plans.
The company's CEO and co-founder Marco Streng resigned from the board of directors last fall, and another co-founder, Andrey Kim, took over as CEO. Previously, the company's chairman and co-founder Abdumalik Mirakhmedov left the board of directors in 2022 and currently serves as executive chairman, and his son took over his position.
Genesis Digital's value has plummeted, according to SkyBridge Capital. In September, the company estimated that the value of its Genesis Digital stake had fallen by 86% since its peak in early 2022.
Bitcoin prices have risen by more than 50% since September, boosting the share prices of some listed Bitcoin miners, but are still less than half of their historical peaks.
The article comes from the Internet:Cashing out at high points, avoiding bankruptcy...the biggest beneficiary of FTX's collapse turned out to be a jiu-jitsu champion
This week's market hot spots revolve around the BTC ecosystem, Solana ecosystem, Cosmos ecosystem and games. Written by: Mike, Foresight Ventures Market View Macro Liquidity Currency liquidity improves. The Federal Reserve issued a dovish signal and did not raise interest rates for the third consecutive meeting as expected by the market. The dot plot shows at least three interest rate cuts next year, which is about...
相关文章
