North Dimension Inc. maintained a modest profile among the 130 or so businesses that make up Sam Bankman-expansive Fried’s crypto empire. In contrast to FTX, it did not advertise on billboards, in sports venues, or through celebrity endorsements.
Regulators now claim that North Dimension was still a significant factor in the FTX problem. In reality, they assert, the obscure business played a crucial role in the covert misuse of FTX clients’ monies.
The Securities and Exchange Commission has filed a lawsuit alleging that FTX clients were instructed to transmit funds to North Dimension, a division of Alameda Research, the cryptocurrency hedge fund and trading company that Bankman-Fried also established.
However, an investigation by NBC News revealed that North Dimension Inc. seems to have been a phoney online electronics company. On the internet, there are archives of its deactivated website.
In that SEC lawsuit, Caroline Ellison, a former CEO of Alameda, and Gary Wang, a former co-founder of FTX, were named as defendants.
It claimed that funds transmitted to North Dimension by FTX clients for their own purposes ended up subsidizing Alameda’s trading operations and Bankman-other Fried’s companies instead.
According to the SEC’s complaint, “Bankman-Fried had instructed FTX to have consumers submit money to North Dimension in an effort to conceal the fact that the money was being transmitted to an account controlled by Alameda.”
The regulator said there was no mention of any relationship to Alameda on the North Dimension website.
Additionally, the now-defunct North Dimension website did not refer to any connections to Bankman-Fried. Instead, the business asserted to be operating out of the same Berkeley, California, address as FTX US to offer mobile phones, computers, and other similar goods.
The archival North Dimension website claimed, “Our objective is to become the most popular website for acquiring mobile phones and gadgets by delivering complete product information and a clear purchasing experience.
North Dimension wasn’t the crypto equivalent of Crazy Eddie. The website is full of odd product pricing and misspellings; for instance, item listings occasionally displayed “sale” prices that were thousands of dollars more than the standard price.
Additionally, it’s possible that after buyers found the site, it was difficult for them to purchase any goods. For example, clicking a laptop would result in the pop-up message “Feel free to send a message. We work with ambitious businesses and people, and we want to create something amazing.
It was unclear why FTX or Bankman-Fried appeared to have developed a fictitious North Dimension Inc. online electronics business where FTX customers were instructed to deposit money. A Bankman-Fried spokesman declined to comment.
The Bahamas, where Bankman-Fried had been hiding out since his business failed in early November, was where he was taken into custody last week after being indicted earlier this month.
Following the bail payment, he is arrested at his Californian parents’ house. Ellison and Wang, two of his former coworkers, admitted guilt on Wednesday to federal fraud charges in the Southern District of New York.