Showing posts with label ftx. Show all posts
Showing posts with label ftx. Show all posts

Sam Bankman-Fried Pleads 'NOT Guilty' - The Twisted Way He May ACTUALLY Be Found INNOCENT...

Sam Bankman-Fried, the former CEO of cryptocurrency exchange FTX, pleaded not guilty to charges of fraud and money laundering on Tuesday. From what you hear in the press, you would reasonably assume there is a mountain of evidence against him - so is Sam crazy? 

Well, he may not be as crazy as it sounds. 

Why Risk More Years in Prison Instead of Negotiating? To Get ZERO Years in Prison...

Approximately 97% of cases are resolved with a plea deal. Sam, like most defendants, had the option to negotiate how long he would stay in prison, in exchange for pleading guilty. 

We don't know what that deal would have been, but with the charges against him, it's reasonable to think he could have reduced his time behind bars by 10+ years. Turning this down is not a decision someone takes lightly. 

If you choose to be among the 3% of people to go to trial, you must be confident that you can win.

Why Sam Believes the Jury Will find Him INNOCENT...

What Sam and his legal team believe they can prove to a jury revolves around the fact that there is no FTX'- there's two of them, completely separate companies, functioning independently. 

No country in the world charges people with crimes committed in foreign nations with foreign victims.  Bankman-Fried can only be charged with crimes he committed while in the US or against US citizens.

This also reminds me of when after his arrest in the Bahamas, he said he planned on fighting being extradited to the United States, then suddenly reversed this and fully cooperated to insure his trial would take place in the US.

Bankman-Fried's Defense is NOT that He Did Not Break The Law, But Rather that Any Alleged Wrongdoing Occurred Outside the US and Involved Foreign Victims...

Meaning that the alleged crimes were committed by a separate, foreign entity and involved funds belonging to users of FTX International. 

Structurally, the companies remained separate, there were no (known) shared accounts, no fiat or crypto spilling from one to the other. The company/exchange for US citizens had its own website at www.FTX.us - then there was FTX International at www.FTX.com.

If someone from the US attempted to sign up on the FTX international site, they would simply get an error message redirecting them to the US site.

With everything separate, it would have been easy for Sam to simply leave all funds related to FTX US alone, and this is exactly what Sam claims happened. 

So Far, There's No Evidence Saying Otherwise...

In every interview, Sam said that 'all funds in FTX US  were "never touched" and they could give users access to it right now if they wanted to.  This statement is included in the testimony he was planning to give Congress, under oath, but he was arrested the day before that was set to happen. 

But let's forget what Sam has to say, he's a proven liar on other related matters. -  what's been found since he lost control of the company? 

John J. Ray is the acting CEO of FTX appointed to oversee the company being dismantled in the bankruptcy process, and he is no fan of Bankman-Fried.

When testifying to Congress a couple weeks ago, he shared in his opening statements his belief that FTX US funds were involved, but later, during the portion where he takes questions from lawmakers, he was asked what they had found so far - and so far, nothing. 

In a previous report, an insider at the company shared that the new CEO believes they just need to dig deeper to find proof that Bankman-Fried did misuse FTX US funds - he just did a better job at hiding it compared to FTX International. It's reasonable to assume that, and the investigation isn't over - but Sam, the one person who would know, just pleaded innocent in court. 

Sam May Have Viewed US Funds as 'Off Limits' From The Start...

Ryan Miller, a member of FTX US's legal team used to work for the person in charge of regulating FTX, the current head of the SEC, Chairman Gary Gensler.  By the time this all happened, he had been with FTX for nearly a year, tasked with being the contact between the company and regulators. 

Sam's mom was a lawyer at one of the top firms in the US with clients like Exxon, JPMorgan, Citigroup, Universal Pictures, Sony and more. His father is considered one of the leading experts in tax law, tax shelters, and tax compliance, and teaches law at Stanford.

Between Miller, someone from the world of financial regulation, and his parents, who would surely advise him of the additional rules and risks attached to US investor funds, it's believable that Sam may have just considered this portion of his businesses off-limits. 

Did Sam Plead Innocent Because he Knows They Won't Find Records of Him Misusing US Funds?

This is the big question. 

Keep in mind, however, that Sam's original lawyers dropped him shortly after FTX's collapse due to his "incessant and disruptive tweeting" when he kept ignoring their advice to stop publicly speaking about the matter. 

Sam clearly believes he has a talent for persuading people, and maybe he once did, but the more he spoke publicly to audiences already suspicious of him, the more hated he became. I'm not sure if Sam ever really accepted that this tactic was a failure and he should have listened to his lawyers. 

So is Sam continuing to be a nightmare client for any legal team to represent? He may be pleading innocent because he believes he's so smart, he can just confuse a jury into thinking he's innocent. 

Or, does he know prosecutors will fail to find the evidence they need to prove the charges against him?


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Author: Ross Davis
Silicon Valley Newsroom
GCP Breaking Crypto News


Sam Bankman-Fried REALLY Could Get LIFE IN PRISON... Unless he 'Leaves Early' to Join McAfee and Epstein...

FTX Sam Bankman-Fried

There's only two ways this can turn out, both bad, but one massively worse than the other.

Prosecutors from New York have unsealed the indictment against him, charging Bankman-Fried with wire fraud, conspiracy, committing fraud against investors, lenders, and the United States, securities fraud, money laundering, and violation of campaign finance laws.

But things aren't as straightforward as it sounds - there's a real possibility some, maybe even most of these charges, get dropped.

It All Comes Down to This: Did Sam Misuse of Funds Include Those from FTX US - a Separate Company and Website from FTX International?

This could be the difference between life in prison, or 10 years with a chance to get out early with good behavior.

The US will only charge him with crimes he committed while in the US, or against US citizens.

For example, US law enforcement cannot pursue a case where investors from France were victims of fraud committed by a company in the Bahamas.  Actually, no country on earth prosecutes cases under those circumstances.

As covered in previous articles, if someone from the United States visited FTX International (ftx.com) they would find themselves unable to get past the home page, they were blocked from joining, only able to view a message re-directing them to FTX's platform for US citizens (ftx.us).

The platforms did not share storage of funds with FTX International either, separate wallets for crypto, separate banks for fiat currency.

In other words, it would be extremely easy for Sam to exclude US funds from his alleged scheme, which would be the smartest thing someone in his position could do (besides leave everyone's funds alone).

So, are there any signs indicating FTX US funds were left untouched?

While Sam's word means very little and I'm not suggesting you put any trust into him, for some reason in every interview he's done following the FTX collapse, he made sure to tell the audience that the US site was not effected, everyone's funds are still there, and he believes 'it could open to let people withdraw today'.

If that is true, Sam committed no crime while in the US, and committed no crimes against US citizens, and suddenly this becomes a very different thing.

Sam Bankman Fried Arrest
Sam Bankman-Fried Being Taken Into Custody by Police in the Bahamas.

As predicted in previous articles, we see Sam being charged with additional crimes like wire fraud, this so they can still lock him up for something even if the charges directly related to him losing billions don't hold up in court.

Similar to how the FBI lacked evidence against Mafia leaders for murders they knew they had committed, so they started digging through their tax history and locked them up for tax violations.

Are There any Signs Sam Mismanaged Funds Belonging to Both FTX International and FTX US Users?

The acting CEO, John J. Ray, appointed to oversee the company's bankruptcy testified with Congress yesterday, Sam was scheduled to appear but that was canceled with his arrest. 

Ray stated they had "NOT found evidence (that Sam made unauthorized withdraws from US customer funds) of that yet"

This is a HUGE - It means if what Ray said is True, Prosecutors do Not Have Evidence for Several of the Charges Against Him! 

If Sam really did leave US funds alone, several charges get dropped before he ever sets foot in a courtroom.

However, a source on the 'inside' at FTX told me that the new CEO "thinks Sam was so reckless with funds from FTX International he's assuming Sam did the same at FTX US and just hid it better" adding that this was "just a personal opinion, but it's a fact that they're looking into where every dollar or token went, so if Sam did anything he shouldn't have they will find it'.

The new CEO and his team have been digging through the records for nearly a month, and their failure to find anything showing Sam's abuse of funds included the FTX US has me prepared for the possibility Sam told the here.

Remember, FTX US staff included former government regulators - would you hire former IRS tax auditors to work for your company if you were secretly committing tax fraud? Probably not.

It's starting to look like Sam followed the rules when it came to FTX US, all high-profile employees specifically worked for FTX US, and saw no red flags that would stop them from vouching for Sam as a legitimate business person.

Where they went wrong is assuming FTX International was operating similarly to FTX US - when in reality Sam saw FTX International as the place where the rules no longer applied.

Life in Prison?

Yes, really.  Many think life-sentences aren't given for financial crimes, and that's true for the average case of someone stealing thousands or even low-millions from a company they work for.

But when someone defrauds investors at a total cost in the billions, everyone involved is willing to punish  them as severely as legally allowed. Prosecutors seek the maximum sentence, and if guilty, the jury will agree. 

Looking at the other high-profile multi-billion dollar scandals, one thing that immediately stands out is how we refer to them by the company name, 'Enron scandal' or 'Worldcom scandal' for example. With the focus on the companies involved, the names of the actual people behind those scandals are generally forgotten. 

A multi-billion dollar loss with all the blame focused on 1 individual, the only other name that comes to mind is Bernie Madoff, the former head of the NASDAQ stock exchange, who lost billions of investors funds when his investment firm was exposed for not investing in anyone, it was actually the largest Ponzi scheme in history.

If Sam truly belongs in the same category as Madoff, he should expect a similar fate. Madoff received a sentence of 150 years in prison in 2009 - he died there last year.

If found guilty on all charges, Sam could be sentenced for a maximum of 115 years under current law.



An Unplanned, Early Exit?

Sam was politically connected, and many FTX members with empty accounts are wondering how their money is gone, but Sam had millions in 'profits' to donate to politicians.

Sam Bankman Fried and Bill Clinton
Sam and Bill Clinton shared the stage at a conference in the Bahamas.

Sam leveraged his political donations for meetings with lawmakers and other VIPS, he was becoming well-connected in Washington DC - many believe Sam may "know too much" and that worries powerful people.

Take this with a huge grain of salt since it is both a conspiracy theory and prediction - but the idea that Sam's former friends may now want him eliminated was on enough people's minds that both 'Sam Bankman-Fried' and 'Epstein' began trending on twitter with hundreds of tweets like:

"Does anyone else wonder if Bankman Fried will meet the same fate as Epstein? After all, how many will he expose if he testifies?"

'Let’s hope they don’t Epstein his a** before he really breaks into full choral singing. Just think what he knows."

"He either gets Epstein treatment or sentenced 2 weeks in a luxurious resort jail, no in between."

While this is one of the more extreme possibilities, one thing is clear - there's no 'good outcome' for him from here.

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Author: Ross Davis
Silicon Valley Newsroom
GCP Breaking Crypto News

MAJOR FALLOUT: Congressman Wants SEC Head Gary Gensler UNDER INVESTIGATION + Review of Actions Leading up to FTX Collapse...

Gary Gensler SEC

In a sign of how seriously this is being taken, the investigation into Biden's appointed head of the SEC comes from a member of his own party, Representative Ritchie Torres (D-NY) is requesting the Government Accountability Office (GAO) to conduct review of the SEC’s actions leading up to FTX’s collapse last month.

The letter largely focuses on SEC chair Gary Gensler for exclusively claiming regulatory powers over crypto exchanges, but failing to properly regulate them...

“If the SEC has the authority Mr. Gensler claims, why did he fail to uncover the largest crypto Ponzi scheme in US history?” Torres wrote. “One cannot have it both ways, asserting authority while avoiding accountability.”

Torres continues to drill into the Chairman "The operating principle of the SEC must be protection for the investing public, rather than publicity for the political appointee in charge" a reminder of Gensler's investigation into Kim Kardashian's tweet promoting a cryptocurrency, concerned that Gensler was preoccupied with inconsequential but high-profile acts while ignoring less glamorous but necessary responsibilities.

The letter goes as far as basically accusing Gensler of causing the SEC to fall apart under his leadership...

"Mr. Gensler's leadership has discouraged the SEC's professional personnel to an unprecedented degree, with the SEC Inspector General reporting the greatest turnover rate in a decade... to what extent has Mr. Gensler’s demoralization of his own personnel hamstrung the Commission in the fulfillment of its obligation to protect investors?” Torres asks in his request to the GAO.

One of those demoralized colleagues is SEC Commissioner Hester Peirce, who has remarked in interviews that Gensler's approach to regulation is "not a good way to regulate" and is not surprised to hear that many have "given up on us."

When it comes to crypto, Gensler has consistently avoided explaining the rules or sharing concerns - organizations only discover they violated regulations when enforcement actions are taken against them.

The SEC has the ability to issue a company an 'exceptive order' which basically results from the company's leaders being able to come in and address concerns with SEC officials. If the SEC believes they are operating outside of the rules unintentionally, this exceptive order serves as an agreement that allows the company to fix what is wrong within a limited timeframe, and the SEC agrees to hold off any enforcement actions against them during that timeframe. 

Zero exceptive orders have been issued since Gensler took over, which shows how badly he destroyed what should be a healthy relationship between regulators and the companies they regulate.

Legitimate businesses should never fear requesting the SEC review their plans or practices, to verify they are in compliance with all relevant regulations. Under Gensler, companies fear they'll leave the meeting with an enforcement action against them.

SEC agents who previously believed their role involved providing assistance and guidance, backed by the ability to enforce the rules, have quit in record numbers as their job changed to simply 'punishing people'.

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Author: Oliver Redding
Seattle Newsdesk  / Breaking Crypto News

What Took so Long for Sam Bankman-Fried to Face CRIMINAL CHARGES?

While watching Sam Bankman-Fried's recent media appearances, a theory entered my head - a gut feeling, but a strong one saying "He's been told he has nothing to worry about" and the more I listened with this theory in mind, the more convinced I became. 

Take a look for yourself and tell me if you see a man in fear of spending years in a federal prison - I don't think anyone could hide how stressful that possibility would be, but at no point did Sam show he was feeling any significant amount of stress. Not in some delusional way either - I don't believe his lack of stress comes from him being detached from reality, pretending everything is fine.

What I do see, is someone who believes the worst case scenario isn't going to happen...


These interviews seem like nothing more than an attempt to salvage his public image.   His strategy is more obvious than he seems to be aware of, as uses a classic pity-educing method of 'beating himself up', expressing regret, and taking some blame... but not too much. 

When it comes to blame, he seems to think he found the magic ratio of blame to excuses, as anytime he takes responsibility for doing something wrong, it comes with a reminder that he would never had made these mistakes if he knew the details of Alameda Research's trading positions at the time.

Even if we were to believe he wasn't pro-actively staying up-to-date on the business of Alameda Research, staying completely in the dark would actually be hard to do as the people operating Alameda literally live with him.

While it was met with disbelief every time he said it, he remained firm on not knowing vital details about Alameda Research, even though it is a company he created, that he has majority ownership of, and is holding a massive amount of the funds from investors he brought in.  I doubt his pitch to investors was 'put a few million in to this company, which I have nothing to do with'. 

My point is, he isn't making these public appearances to claim innocence, or even explain what happened. He's making them with the goal of getting people to say "Sam's a good guy who just made some mistakes".

I can't help but think that the only way being liked becomes more important than being free, is if he's already convinced his freedom isn't at risk.

But in order to objective, i'm open to the possibility that I'm just misreading him.  So I set aside any of my own opinions and 'gut feelings' and re-examined the situation strictly looking at the facts to see if I come to the same conclusion in the end.

Starting with some things worth a deeper look.

Sam's parents are not typical lawyers, and after learning more about them I think it's time to question how involved in FTX Sam's parents may be... 

Those who graduate from Stanford law school are considered among the top of the legal field - so you can imagine what it takes to be hired to teach those students - both of Sam's parents worked as Stanford Law professors. 

What kind of law do they specialize in? The kind that someone in Sam's position would be hiring right now.

The mother worked at Paul Weiss, one of the top firms in the US with clients like Exxon, JPMorgan, Citigroup, Universal Pictures, Sony and more. She is one of the founders of a "secretive Silicon Valley PAC that supports Democratic candidates" called Mind The Gap. 

Sam's father is considered one of the leading experts in tax law, tax shelters, and tax compliance, according to his Stanford bio page. I found this video uploaded by Stanford Law School featuring him speaking on the topic.

In other words, Sam Bankman-Fried was born with the perfect legal team already in the room.

If anyone could make sure Sam's actions stayed within legal grey areas or completely unenforceable by US regulators, it's them.

On this note, Sam has repeated in every interview that none of these questionable actions were done with funds from the US version of FTX. There indeed was a completely separate site for US investors, and if someone from the US tried to access the FTX for the rest of the world, they would find themselves blocked from signing up.

Sam remaining in the Bahamas doesn't help him avoid anything, the Bahamas does have an extradition treaty with the US, so if US regulators charged him with a crime, the government in the Bahamas would arrest Sam and put him on an airplane.  Most seem to believe he's 'obviously guilty' - so why hasn't he been extradited?

But his parents weren't his only source for guidance...


Gary Gensler is the head of the US Securities and Exchange Commission. A man named Ryne Miller was Gensler's lead counsel at his previous role as CFTC Chairman.

Ryne Miller has been working at FTX for a little over one year - now he's their general legal council.

"His industry expertise and leadership will be critical as we forge cooperative working relationships with U.S. regulators" FTX said in an official press release at the time. In that same statement, Ryne Miller confirms he will be "working alongside U.S. regulators" for FTX's benefit.


These are the people who helped make sure the US branch of FTX stayed completely separate from FTX International...


FTX international is registered in Antigua and Barbuda, a small island with no capital gains tax, no wealth or inheritance taxes, and no personal income tax.

In every interview Sam has stated that the US version of FTX could open up to users immediately, and they will find all of their funds there untouched. If true, it's likely Sam violated no US laws.

If only his non-US company broke any laws, and none of it's victims were US citizens - the US justice system isn't interested.

Innocent in the only jurisdiction that matters - and that is how Sam stays out of prison...

Unfortunately, internationally, anything goes.  There is no organization that would take the lead on a case like this. There is no International police force that investigates financial crimes, and no International court for white-collar criminals.

All Sam has to do is not set foot in any of the countries with laws he violated, with citizens who had funds in FTX international, and Sam remains a free man... probably.

One Remaining Risk...


One thing Sam and those advising him may have not planned for was how big of a story this has become, and the pressure this could put on people, including those he thought were on his side. 

It's important to keep in mind how past high-profile villains who managed to anger the public were eventually taken down.

Mafia leaders were often arrested for tax violations.  More recently, disgraced Therenos CEO Elizabeth Holmes, who raised billions for a 'revolutionary' blood testing device that never worked wasn't arrested for spending years promoting her fake invention - she's in prison for wire fraud.


When powerful people in government really want to lock someone up, they find a way...


Someone like Sam, whos legitimate business involves international transactions, seeking investors, receiving investments, operating websites, etc, has probably violated the law. 

It could have been done unknowingly, or by mistake - but that doesn't matter when investigators with warrants giving them access to everything are digging for anything they can use. 


Are there any signs that the US government is attempting to build a case against Sam?


There may be, but note that the following is pure speculation.   Sam's former girlfriend, Caroline Ellison, who he appointed Alameda Research CEO has reportedly left Hong Kong for the US, and was  spotted yesterday in New York City.

A twitter user recognized her and snapped a picture of her inside a coffee shop.

This coffee shop is a short walk from the FBI's New York office - causing some to speculate if those around Sam are being offered immunity from any potential future charges, in exchange for sharing what they know as they attempt to find something to charge him with.

While it does appear to be Caroline, she may be in NYC for some other reason. Or she could be there to speak to the FBI and still have nothing to offer them.

Just saying - don't get your hopes up.

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Author: Ross Davis
Silicon Valley Newsroom
GCP Breaking Crypto News

Against Lawyer's Advice, Sam Bankman-Fried is Talking Again - It Isn't Going Well...

Sam is doing interviews again - which is something no CEO in his position has done before.

Sam's decision to continue speaking publicly has already caused his original lawyer quit,

What Sam doesn't seem to understand is there is no valid reason/excuse for what happened - it's that simple.  Therefore, nothing he says can make it better.

Reaction to his latest interviews have been predictable.

"[Sam is] Either the STUPlDEST man alive, or all those funds donated to lawmaker’s political campaigns is paying off… He’s acting like he’s been told ‘you have nothing to worry about’" Tweeted Crypto Press Association Editor in Chief, Ross Davis.

In this video, Michael Novogratz, Billionare CEO of Galaxy Digital reacts to Sam Bankman-Fried's interview yesterday at The New York Times' DealBook Summit.  Novogratz calls Sam as 'delusional' and believes he "needs to prosecuted".

Video courtesy of CNBC

Binance backs out of buying FTX - So When Will the Bleeding Stop?

Popular exchange FTX and their collapsing token FTT spreads gloom throughout the crypto market.

It appeared they had a savior, the top exchange globally, Binance and it's CEO CZ, were rumored to be buying all non-US assets of FTX, providing them with the cash flow and liquidity they need to stabilize.

Now that's not happening - so when will the pain end?

Video Courtesy of CBS News

Binance CEO ANGRY at Rival Exchange FTX, Announces Sell-Off Of OVER $2 BILLION USD Worth of Holdings of FTX's Native Token FTT...

FTT FTX Binance CZ

"Regarding any speculation as to whether this is a move against a competitor, it is not" said Binance CEO 'CZ' on Twitter, while confirming "recent revelations that have come to light" are behind a decision to sell-off $2.1 billion USD worth of FTT, the native token of rival exchange FTX.

Binance first obtained the tokens last year, as part of their payment from a pre-planned exit from investment in FTX equity.

Can't Have it Both Ways...

CZ first attempts to include the FTT sell-off as part of everyday 'business-as-usual' saying:

"Liquidating our FTT is just post-exit risk management, learning from LUNA."

That sounds like he's saying it's a purely strategic move, like the reasoning behind it could be something as simple as not believing the bear market has hit bottom - until in his next sentence where he immediately makes it clear - there's more to this story.

"We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards."

FTX is accused as a company, or perhaps CEO Sam Bankman-Fried himself of doing something behind the scenes, with at least the goal of hurting a competing crypto company...

At least that seems to be the accusation CZ, the Binance CEO, is making, although vaguely, and because of their mention of LUNA (which famously crashed, then crashed the market, and never recovered) and FTT together - the FTX CEO has been trying to assure customers that their token has none of the same risk factors (and from what we can see, that's true).

Any comparison of FTT with LUNA is a bit unfair...

There's no reason for CZ to bring back memories of the LUNA disaster when mentioning FTT - none of LUNA's risk factors can be applied to FTT.

"A competitor is trying to go after us with false rumors. FTX is fine. Assets are fine" said CEO Sam Bankman-Fried his first public response.

However - Binance CEO CZ has proven to be a level-headed voice of reason in the industry, and seems to have a reasonable outlook on the 'big picture' of cryptos future - so if he's accusing FTX or their CEO of crossing a line, it's probably true. 

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Author: Oliver Redding
Seattle Newsdesk  / Breaking Crypto News







Sam Bankman-Fried on Becoming one Of The Youngest Crypto Billionares in the World...

Five years ago Sam Bankman-Fried didn't own any Bitcoin, but now, he’s one of the youngest billionaires in the world thanks to the cryptocurrency. 

As the founder of FTX, he's become and one of the most powerful people in the young and fast-growing crypto industry.

Bankman-Fried, who has been touted by some as the next Warren Buffett, even still drives his old Toyota Corolla. 

Here he tells his journey to $1 billion, and his plans to give it all away. 

Video courtesy of CNBC