Former FTX CEO Bankman-Fried hit with eight count indictment

The Lobby
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You also have this going on.

SEC reportedly probes due diligence of FTX investors, as role of VC firms and funds prior to crypto exchange’s collapse comes under scrutiny.

The Securities and Exchange Commission is investigating the due diligence of FTX investors, according to Reuters.

The probe doesn’t indicate wrongdoing, and the report did not specify which firms were in question.

The issue for regulators is whether venture capital firms and investment funds were acting responsibly on behalf of their own clients.

The US Securities and Exchange Commission is probing the due diligence of FTX investors in the latest wave of scrutiny over cryptos, according to Reuters.

The probe doesn’t indicate wrongdoing, and the report did not specify which firms were in question.

But the issue for regulators is whether venture capital firms and investment funds were acting responsibly on behalf of their own clients when they poured money into FTX, sources told Reuters.

https://www.yahoo.com/finance/news/sec-reportedly-probes-due-diligence-165605194.html

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Ponzi: The Financial Idiot Who Scammed the World

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Take note of the bold letters

U.S. arrests Bitzlato cofounder, alleges $700 million of illicit funds processed

WASHINGTON (Reuters) - U.S. authorities said on Wednesday they have arrested the majority shareholder and cofounder of Hong Kong-registered virtual currency exchange Bitzlato Ltd for allegedly processing $700 million in illicit funds.

Anatoly Legkodymov, a Russian national living in China, was arrested in Miami on Tuesday on charges that he operated the exchange as an unlicensed money exchange business that “in his own words, catered to ‘known crooks’”, a top Justice Department official said.

Prosecutors said Bitzlato exchanged more than $700 million in cryptocurrency with Hydra Market, which they described as an illicit online marketplace for narcotics, stolen financial information, fraudulent identification documents and money laundering services that U.S. and German law enforcement shut down in April 2022.

"Whether you break our laws from China or Europe or abuse our financial system from a tropical island — you can expect to answer for your crimes inside a United States courtroom," Deputy Attorney General Lisa Monaco told reporters at a news conference at the Justice Department.

https://www.yahoo.com/finance/news/u-treasury-dept-says-identified-172102065.html

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At this point, all these crypto service businesses are playing games, from exchanges to lenders, and everything in between.

Bankrupt crypto lender BlockFi accidentally reveals it had over $1.2 billion in assets tied up with FTX

Bankrupt crypto lender BlockFi’s secret financials revealed linkages of over $1.2 billion to FTX.

The disclosure was accidentally revealed in unredacted financial documents, per CNBC.

BlockFi filed for bankruptcy last November, citing heavy exposure to Sam Bankman-Fried’s collapsed exchange.

https://www.yahoo.com/finance/news/bankrupt-crypto-lender-blockfi-accidentally-111733176.html

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Crypto exchanges are not the right place to store your money at the moment

Exclusive-Crypto giant Binance moved $400 million from U.S. partner to firm managed by CEO Zhao

Global cryptocurrency exchange Binance had secret access to a bank account belonging to its purportedly independent U.S. partner and transferred large sums of money from the account to a trading firm managed by Binance CEO Changpeng Zhao, banking records and company messages show.

Over the first three months of 2021, more than $400 million flowed from the Binance.US account at California-based Silvergate Bank to this trading firm, Merit Peak Ltd, according to records for the quarter, which were reviewed by Reuters. The Binance.US account was registered under the name of BAM Trading, the U.S. exchange’s operating company, according to the records. Company messages show the transfers to Merit Peak began in late 2020.

Reuters couldn’t determine the reason for the transfers or whether any of the money belonged to Binance.US customers. The exchange’s public terms of use at the time said its customers’ dollar deposits were held at Silvergate and a Nevada-based custodian firm called Prime Trust LLC. Prime Trust made $650 million in wire transfer deposits into the Binance.US account during the quarter, the bank records show.

https://www.yahoo.com/finance/news/exclusive-crypto-giant-binance-moved-193359724.html.

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Binance Considers Severing US Ties in Face of Crypto Crackdown: Bloomberg

Binance Holdings, the world’s largest crypto exchange by trading volume, is considering severing its ties with U.S. business partners as various government agencies and regulators continue to investigate the company, according to a report from Bloomberg, citing a personal familiar with the issue.

Binance founder and CEO Changpeng Zhao is looking to end relationships with U.S. banks and service firms, and is also re-evaluating its U.S. venture capital investments, according to Bloomberg’s source. Binance is also considering delisting tokens issued by U.S.-based projects, including Circle’s USDC stablecoin, Bloomberg wrote.

Shortly after the report was published on Friday, Zhao denied the exchange was considering delisting tokens attached to U.S.-based projects on Twitter, adding blockchain “has no borders.”

“We pulled back on some potential investments, or bids on bankrupt companies in the U.S. for now. Seek permission first,” Zhao said in another tweet.

The New York Department of Financial Services earlier this week took action against Binance-branded stablecoin Binance BUSD, which is issued by Paxos, and Binance has also been scrutinized for its transactions with crypto bank Silvergate. The crypto exchange has been investigated by the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission, Justice Department and the Internal Revenue Service.

https://www.yahoo.com/finance/news/binance-considers-severing-u-ties-155807410.html

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I wonder if this guy will make it to trial.

Bankman-Fried, others made more than 300 illegal political donations, new indictment says

NEW YORK (Reuters) - Sam Bankman-Fried and his co-conspirators made more than 300 illegal political donations in the United States, according to a new indictment against the FTX cryptocurrency exchange founder unsealed on Thursday in Manhattan federal court.

The donations, totaling tens of millions of dollars, were unlawful because they were attributed to a “straw donor” or made using corporate funds, often allowing Bankman-Fried to evade contribution limits on individual contributions to candidates, prosecutors said.

Overall, the new indictment contains four fraud charges and eight conspiracy charges.

https://www.yahoo.com/news/indictment-unsealed-against-bankman-fried-141735318.html

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I think it’s technically legal, I’m not sure. If a corporation has a limit, why not just make contributions thru different corporations?

If it’s legal on paper, the courts shouldn’t be mad someone exploited it.

But, I don’t know the law. They should have looked at how others do it without getting into litigation.

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There might be other people / corporations doing the same thing, but since he has been charged in a crime, they will punish him in every way possible

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Right. When the cops arrest you, they charge you with everything possible just to see what sticks.

If they charge you with one crime, you might go free. But if they charge you with five crimes, at least two of them will get you.

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Sam Bankman-Fried was supposed to be a billionaire genius who ran one of the world’s largest Crypto exchanges: FTX. In only a few weeks, his $32B empire crumbled, and he was later arrested. This is how it happened.

The Fake Genius: a $30 BILLION Fraud.

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That’s a wild story. Maybe I’m wrong, but money doesn’t just disappear. It just changes hands.

No?

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There is a good chance that most of this money will go to the big creditors, leaving the customers with pennies on the dollar.

FTX Files Plan to End Bankruptcy, Pay Crypto Creditors Billions

FTX Trading Ltd. unveiled its latest proposal for returning billions of dollars to customers and creditors, kicking off a final round of potential squabbles about how best to end the bankruptcy case of the fraud-tainted crypto firm.

The reorganization plan left some of the most important questions unanswered, including whether FTX will restart its defunct crypto exchange, how the company will estimate the value of some digital tokens and how much creditors can expect to get back.

Next year, the plan will be sent to creditors for a vote — likely with key details added — before it goes to US Bankruptcy Judge John Dorsey for final approval. The major creditor and customer groups that have been involved in the Chapter 11 case have agreed to the broad outlines of the plan.

The payout plan calls for billions of dollars to be distributed as cash after much of the firm’s cryptocurrencies have been liquidated.

Last month, FTX founder Sam Bankman-Fried was convicted of orchestrating a massive fraud that led to the collapse of his FTX exchange.

https://www.yahoo.com/finance/news/ftx-files-plan-end-bankruptcy-021449836.html

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Fallen crypto mogul Sam Bankman-Fried sentenced to 25 years in prison

NEW YORK (AP) — Crypto entrepreneur Sam Bankman-Fried was sentenced Thursday to 25 years in prison for a massive fraud that unraveled with the collapse of FTX, once one of the world’s most popular platforms for exchanging digital currency.

Bankman-Fried, 32, was convicted in November of fraud and conspiracy — a dramatic fall from a crest of success that included a Super Bowl advertisement and celebrity endorsements from stars like quarterback Tom Brady, basketball star Stephen Curry and comedian Larry David.

U.S. District Judge Lewis A. Kaplan imposed the sentence in the same Manhattan courtroom where, four months ago, Bankman-Fried testified that his intention had been to revolutionize the emerging cryptocurrency market with his innovative and altruistic ideas, not to steal.

Kaplan said the sentence reflected “that there is a risk that this man will be in position to do something very bad in the future. And it’s not a trivial risk at all.” He added that it was “for the purpose of disabling him to the extent that can appropriately be done for a significant period of time.”

Kaplan further ordered Bankman-Fried to forfeit over $11 billion. He also he would advise the Federal Bureau of Prisons to send him to a medium-security prison or less near the San Francisco area because he’s unlikely to be a physical threat to other inmates or prison staff, and his autism and social awkwardness would make him vulnerable to other inmates in a high-security location.

Prosecutors had recommended a prison sentence of 40 to 50 years.

“The defendant victimized tens of thousands of people and companies, across several continents, over a period of multiple years. He stole money from customers who entrusted it to him; he lied to investors; he sent fabricated documents to lenders; he pumped millions of dollars in illegal donations into our political system; and he bribed foreign officials. Each of these crimes is worthy of a lengthy sentence,” prosecutors said in a court filing.

Prosecutors said Bankman-Fried had cost customers, investors and lenders over $10 billion by misappropriating billions of dollars to fuel his quest for influence and dominance in the new industry, and had i llegally used money from FTX depositors to cover his expenses, which included purchasing luxury properties in the Caribbean, alleged bribes to Chinese officials and private planes.

Fallen crypto mogul Sam Bankman-Fried sentenced to 25 years in prison

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RUIN is a feature documentary about Sam Bankman-Fried and the stunning collapse of his cryptocurrency exchange, FTX, as narrated by Bloomberg journalists and some of the central players in the rise of digital assets.

On Nov. 2, 2023, Sam Bankman-Fried was found guilty in Manhattan federal court of seven counts of fraud and conspiracy.

On March 28, 2024, Bankman-Fried was sentenced to 25 years in prison. He plans to appeal.

RUIN: Money, Ego and Deception at FTX

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Nice find. I’m gonna check it out!

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It’s amazing what happens to the human ego, especially the male ego, when money becomes no object.

If people have self-control AND big money, they can make some wonderful things happen.

When people don’t have their inner demons in check, and they get a lot money, that inner demon has both hands on the steering wheel, and the ride ends in a wreck.

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There is something I notice about financial crimes around the world, the majority of them involve people having access to other people’s money / client’s money.

You get a company like a money manager, hedge fund, mutual fund, investment company or a company like FTX where their customers deposit money into FTX account. When people have access to customer accounts that total millions or billions, no matter how much the owner or worker makes in salary, it’s hard to look at such a large amount of money and not think about taking a few millions or a few billions.

Even though I can say I wouldn’t do such a thing because I’m not a thief, I have never been in a position where I had access to millions or billions of dollars, so I cannot say for sure, At that point I must check my inner demons.

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Power corrupts, and absolute power corrupts absolutely. I think everyone dreams of mysteriously finding a bag of money.

If my bank account suddenly had $500k, assuming that I would never get caught in this scenario, would I tell the bank anything?

However, if I was placed in charge of a huge pile of cash, I’m confident I would refrain from pocketing any of it.

The difference is that in the first scenario, it’s not my fault. Someone made an error to my benefit. In the second scenario, I’m directly stealing.

@SmallPaul However, is there really a difference?

This starts to open the Robin Hood argument. Is it morally justifiable to steal from the wealthy if you plan to do good with it?

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she does what is right and doesn’t get rewarded

Woman Withdrawing $20 From ATM Finds $1 Billion Balance

Dallas Woman Discovers $37M Deposited In Her Personal Bank Account

Despite her initial hopes, it was not a Christmas miracle. It was a banking error.