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☆ Sam Bankman-Fried lied under oath to shape his story around ex-friends who testified against him, prosecutors say in scathing closing argument
▼ + stars: | 2023-11-01 | by ( Jacob Shamsian | Katie Balevic | ) www.businessinsider.com time to read: +6 min

Prosecutors say Sam Bankman-Fried lied under oath on the witness stand. AdvertisementAdvertisementIn closing arguments for Sam Bankman-Fried's criminal trial Wednesday, prosecutors say the disgraced cryptocurrency mogul repeatedly lied on the witness stand. Prosecutors allege Bankman-Fried defrauded millions of FTX customers by stealing their deposits and using them for Alameda. He used the money, prosecutors say, for personal investments, to repay loans, in extravagant advertising, to buy properties around the world, and for political donations. AdvertisementAdvertisementAlameda's account on FTX, Roos pointed out, did not even have the spot-margin trading option enabled.

Persons: Sam Bankman, Fried, —, he's, Nicholas Roos, Roos, Mark Cohen, Danielle Sassoon, — Caroline Ellison, Gary Wang, Nashad Singh —, Ryan Salame, Adam Yedidia, Sun Organizations: Service, MIT, Alameda Research, Miami Heat, Prosecutors Locations: Manhattan, Bankman, Alameda, FTX, Washington

Bankman-Fried testified that he wasn't aware of the amount Alameda was borrowing from FTX, or its theoretical max. Prosecutors entered corroborating materials, including encrypted Signal messages and other internal documents that appear to show Bankman-Fried orchestrating the spending of FTX customer money. Similarly, Bankman-Fried testified that he believed the lavish Bahamas properties were being paid for with FTX operating cash that came from revenue and venture investments. The market had already dropped 70% and if it fell another 50%, he was afraid the firm would be insolvent, Bankman-Fried told the jury. In September, he checked in again with Ellison about the hedging activity, Bankman-Fried testified.

Persons: Sam Bankman, Fried, Fatih Aktas, that's, Caroline Ellison, Mark Cohen's, Cohen, FTX, Danielle Sassoon, District Judge Lewis Kaplan, Jane Rosenberg, —, Ellison, Sam, Nishad Singh, Gary Wang, Prosecutors, who'd, Michael M, Bankman, wasn't, Alameda, Singh, Shorter, Dawn Giel Organizations: Federal Court, Anadolu Agency, Getty, Alameda Research, U.S, District, Reuters, Stanford University, Alameda, Facebook, Google, Santiago Locations: New York, United States, Manhattan, Bankman, Alameda, Bahamas, New York City, U.S

☆ Sam Bankman-Fried blames top lieutenants for FTX troubles in second day of testimony in criminal trial
▼ + stars: | 2023-10-30 | by ( Mackenzie Sigalos | ) www.cnbc.com time to read: +10 min

The market had already dropped 70% and if it fell another 50%, he was afraid the firm would be insolvent, Bankman-Fried told the jury. In describing the swift downfall of FTX, Bankman-Fried said that customer withdrawals had quickly increased from $50 million a day to $1 billion a day. For example, Sassoon asked Bankman-Fried if he assured people that Alameda played by the same rules as others on the FTX exchange. Sassoon asked Bankman Fried, "Would you agree you know how to tell a good story?" Sassoon asked.

Persons: Sam Bankman, Fried, Kyle Mazza, FTX, Mark Cohen, Caroline Ellison, Ellison, Gary Wang, Nishad Singh, Singh, Sun, Jane Rosenberg, Renato Mariotti, Bryan Cave Leighton Paisner, Mariotti, Danielle Sassoon, I'm, Sassoon, Bankman, Crypto, wasn't, Bankman Fried, Vox, he's, Alameda, —, Dawn Giel Organizations: Court, Anadolu Agency, Getty, Alameda Research, Alameda, Bloomberg, Apollo, Reuters, U.S . Justice Department's Securities, Commodities, CNBC, U.S, PR Locations: New York City, Alameda, New York, U.S, Chicago

☆ 11 of the biggest bombshells from Sam Bankman-Fried's FTX fraud trial
▼ + stars: | 2023-10-25 | by ( Katie Balevic | Jacob Shamsian | ) www.businessinsider.com time to read: +11 min

The stress of the scheme left a key executive 'suicidal for days'Nishad Singh testified against his former boss in court. Jane Rosenberg/ReutersNishad Singh, the head engineer at FTX, testified against Bankman-Fried and spoke to the intense pressure of the scheme. As customers began to withdraw their deposits, FTX didn't have enough liquid cash to actually give them their funds. Instead of working together to solve the issue, executives blamed each other, Singh testified. "In response, Sam said something like, 'We were bulletproof last year, but we're not bulletproof this year,'" Yedidia testified.

Persons: Sam Bankman, —, Fried, Caroline Ellison, Gary Wang, Nashad Singh, SBF, Ellison, he'd, Nishad Singh, Jane Rosenberg, Reuters Nishad Singh, Singh, I'd, Wang, FTX's, Bankman, Sam, Adam Yedidia, Yedidia, FTX didn't, FTX, Michael M, Ellison Yedidia, Caroline, Getty, Alameda's, — Ellison, Christian Drappi, Drappi, Alameda — Ellison Organizations: Service, Prosecutors, Alameda Research, Street, Reuters, Bankman, NEW, Manhattan Federal Court, Getty, FTX, MIT, Alameda Locations: Manhattan, Brooklyn, FTX, Bankman, Alameda, United States, Bahamas, New York City, China, Alameda's Hong Kong

☆ 'I'd been suicidal for days': Sam Bankman-Fried lieutenant testifies about immense pressure to keep FTX crypto scam going — before it all crashed
▼ + stars: | 2023-10-17 | by ( Jacob Shamsian | ) www.businessinsider.com time to read: +13 min

He testified at the Sam Bankman-Fried trial that he was 'suicidal' over the crypto scam. AdvertisementAdvertisement"I've always been intimidated by Sam," Singh testified Monday. Before the September 2022 realization that Alameda was taking FTX customer money, Singh had participated in fraudulent activity in other ways. When he returned, the FTX CEO told Singh that he believed he could get $5 billion more in investments, Singh testified. As the chaos continued to roil FTX, Bankman-Fried, Ellison, and other executives pointed fingers at each other while employees and customers demanded answers, Singh said.

Persons: Nishad Singh, Sam Bankman, —, Singh, Gary Wang, Caroline Ellison, Wang, Fried, unsurprised, Ellison —, Ellison, FTX wouldn't, he'd, Gabe Bankman, Adam Yedidia, Singh —, Ryan Salame —, Singh's, Sam, FTX, Mary Altaffer, Anthony Scaramucci, Seth Wenig, Salame —, funneling, Coindesk, FTX —, Binance, Jane Rosenberg Bankman, Bankman, I'd, roil Organizations: Service, Alameda Research, Bankman, Alameda, AP, Democratic, Prosecutors, REUTERS Locations: Alameda, FTX, Bahamas, Manhattan, New York, Bankman

☆ Sam Bankman-Fried was a horrible manager, says 'Big Short' author Michael Lewis
▼ + stars: | 2023-10-02 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

Sam Bankman-Fried was a "horrible" manager, Michael Lewis told "60 Minutes." Lewis is the author of "Going Infinite," a new book about Bankman-Fried, which is set for release on Tuesday. AdvertisementAdvertisementSam Bankman-Fried was a "horrible" manager, according to author Michael Lewis, who has written a new book about the cofounder of failed crypto exchange FTX. He told Lewis FTX didn't really have a board. And there was nobody there to say, like, 'Don't, don't do that,'" the author added.

Persons: Sam Bankman, Fried, Michael Lewis, Lewis, SBF's, —, Bankman, Lewis FTX didn't, it's, FTX, George Stephanopoulos Organizations: Service, CBS, ABC News, Bankman

☆ Sam Bankman-Fried is paying his defense lawyers with $10 million of misappropriated FTX funds, lawsuit says
▼ + stars: | 2023-07-21 | by ( Pete Syme | ) www.businessinsider.com time to read: +2 min

But the FTX founder has lost much of his fortune, once worth billions of dollars. Lawyers say he has funded his defense with $10 million of company funds he previously gave to his dad. Sam Bankman-Fried is paying for his criminal defense lawyers with millions of dollars misappropriated from FTX, according to a complaint filed by the company. Since the FTX founder has lost much of his fortune, questions have been raised as to how he's been funding his defense. "On information and belief, Bankman-Fried's father has been using this "gift" to finance Bankman-Fried's criminal defense," the court document says.

Persons: Sam Bankman, Fried, FTX, John J, Ray III, he's, Forbes, Stanford, Joe Bankman Locations: FTX, California

☆ Prosecutors say Sam Bankman-Fried helped create a new company with no employees to get round FTX being rejected for a bank account in California
▼ + stars: | 2023-02-24 | by ( Pete Syme | ) www.businessinsider.com time to read: +4 min

Prosecutors say FTX.US was denied opening a California bank account as it wasn't a licensed money services business. The low-profile company, called North Dimension, was founded in August 2020 and was previously revealed in other complaints against Bankman-Fried. Thursday's indictment says it also had no employees or business operations other than its bank account. Now, prosecutors say this was an elaborate scheme to defraud a bank and operate an unlicensed money business. "Under Bankman Fried's supervision, employees of Alameda completed an account application that falsely stated that the purpose of the North Dimension bank account was for 'trading' and 'market making,'" the indictment unsealed on Thursday reads.

☆ 2 firms helping with FTX's bankruptcy are seeking $13 million of payment for under 3 weeks of work, including nearly $20,000 for food
▼ + stars: | 2023-02-08 | by ( Pete Syme | ) www.businessinsider.com time to read: +3 min

Two of those deal with less than three weeks of work, and seek a total of $13 million. Law firm Sullivan & Cromwell charges $2,165 an hour for the time of its partners, who did 2,267 hours of work. Partners did a total of 2,267 hours work on the case in the 19 days between November 12 and 30. Alvarez and Marshal, a management consulting firm, is also charging for its first 20 days of work, seeking $5.2 million for a total of 7,925 hours work. Landis Rath & Cobb and AlixPartners are both asking for over $900,000, and Quinn Emanuel Urquhart & Sullivan is seeking $1.2 million.

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☆ FTX's new boss says security was so weak that founders could 'download half a billion dollars' of crypto without detection, report says
▼ + stars: | 2023-02-07 | by ( Pete Syme | ) www.businessinsider.com time to read: +3 min

John J. Ray III, the current FTX CEO, berated the crypto exchange's security. He told a Monday court hearing that an exec could download $500m of crypto and walk away unchecked. FTX filed for bankruptcy on November 11, weeks after its then-CEO Sam Bankman-Fried insulted rival crypto CEO Changpeng Zhao. Hours after the exchange filed for bankruptcy, more than $370 million of crypto disappeared from FTX. Ray also described a "massive scramble for information" as liquidators looked to secure customers' passwords and crypto wallets.

☆ Binance boss says Sam Bankman-Fried's trading firm tried to undermine key token Tether — risking a crypto rout
▼ + stars: | 2022-12-09 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

Binance boss Changpeng Zhao accused Sam Bankman-Fried's Alameda Research of trying to drive down the price of Tether, according to the New York Times. The stablecoin’s collapse would likely trigger a crypto crash, analysts have warned. US federal prosecutors are already investigating Bankman-Fried for manipulating the price of both of those cryptocurrencies, the New York Times reported Wednesday. Having reached $1 again in July, Tether slipped away to fall to $0.9963 on November 10 as FTX's bankruptcy sent ripples through the crypto sector. Analysts have repeatedly warned that the stablecoin's collapse would cause a wider crypto crash — and argued that Tether poses a systemic risk to the crypto sector.

☆ Lawyers for FTX customers accuse debtors of failing to file full financial disclosures
▼ + stars: | 2022-12-07 | by ( Pete Syme | ) www.businessinsider.com time to read: +3 min

Lawyers at Eversheds Sutherland represent FTX's non-US customers – 98% of its 1.2 million users. The lawyers say that Chapter 11 debtors should file full financial disclosures. The law firm Eversheds Sutherland represents the Ad Hoc Committee of Non-US Customers of FTX.com, established to protect users outside the US. Erin Broderick, an attorney at Evershed Sutherland, said "Chapter 11 debtors are typically required to file full financial disclosures shortly after the bankruptcy filing." Adam Landis, the lawyer representing FTX and its entities, did not immediately respond to Insider's request for comment.

☆ Sam Bankman-Fried apologized to an FTX customer who said he lost his life savings of $2 million, and accused the former CEO of stealing it
▼ + stars: | 2022-12-01 | by ( Pete Syme | ) www.businessinsider.com time to read: +3 min

An FTX user wrote to the host interviewing Sam Bankman-Fried at a New York Times summit. He said he lost $2 million and accused SBF of stealing it. Andrew Ross Sorkin – the journalist hosting the summit – shared the email "from a gentleman who said he lost his life savings." It had the subject line: "Sam Bankman-Fried stole $2 million from me." The user wrote: "Andrew, can you please ask SBF why he decided to steal my life savings and the $10 billion more from customers to give to his hedge fund, Alameda?"

☆ Sam Bankman-Fried says he 'didn't ever try to commit fraud'
▼ + stars: | 2022-11-30 | by ( ) www.reuters.com time to read: +4 min

"I didn't ever try to commit fraud," Bankman-Fried said in the hour-long interview, adding that he doesn't personally think he has any criminal liability. The liquidity crunch at FTX came after Bankman-Fried secretly moved $10 billion of FTX customer funds to Alameda Research, Reuters reported, citing two people familiar with the matter. At least $1 billion in customer funds had vanished, the people said. Bankman-Fried told Reuters in November the company did not "secretly transfer" but rather misread its "confusing internal labeling." Bankman-Fried said he was speaking from the Bahamas and that the interview was against the advice of his lawyers.

☆ Sam Bankman-Fried says he's the Republicans' third-biggest donor, but used 'dark money' to avoid media criticism
▼ + stars: | 2022-11-30 | by ( Pete Syme | ) www.businessinsider.com time to read: +3 min

But the FTX founder said he gave just as much to Republicans using "dark money." He said he did so to avoid media criticism from "liberal" reporters who would "freak the f*** out." "I've been their third-biggest Republican donor this year as well," he said. "They're all secretly liberal and I didn't want to have that fight, so I made all the Republican ones dark." Once the richest person under 30 with a net worth of $26 billion, Bankman-Fried told Axios on Monday that he's now down to his last $100,000.

"I've had a bad month," Bankman-Fried added later. Sorkin asked Bankman-Fried what motivated his acquisitions in the crypto industry, given the size of Alameda's borrowing from companies Bankman-Fried intended to acquire. Bankman-Fried claimed that he believed that by the middle of 2022, Alameda had repaid all lines of credit to various borrowing desks. Sorkin asked Bankman-Fried why FTX and Bankman-Fried even had access to customer money. By 2022, Bankman-Fried claimed, that number was down to 2%, which led him to believe that FTX's exposure was lessened.

Nov 22 (Reuters) - As the crypto castle crumbles, some true believers say the answer is to double down on DEX. Decentralized exchanges, that is. "It is now clear that there can be risk associated with holding assets in a centralized entity," said Varun Kumar, CEO of decentralized crypto exchange Hashflow. "Data is showing that users are turning to decentralized trading solutions." Many market participants see both centralized and decentralized exchanges coexisting.

☆ FTX's bankruptcy filings show the situations is much worse than anyone thought. From a million creditors to a stunning lack of oversight, here are the craziest details.
▼ + stars: | 2022-11-19 | by ( Matthew Fox | ) www.businessinsider.com time to read: +6 min

The downfall of crypto exchange FTX has led to a bankruptcy filing that is full of crazy details. From billion dollar loans to accountants in the metaverse, these are the craziest details of the FTX bankruptcy filing. In reality, according to the bankruptcy filing, FTX's crypto holdings have a fair value of just $659,000 as of September 30. FTX didn't have an accounting departmentRay said in the bankruptcy filing that FTX had compromised internal systems, faulty regulatory oversight, and inexperienced and unsophisticated people in charge of the company's finances. "In fact, there could be more than one million creditors in these Chapter 11 Cases," the bankruptcy filing said.

☆ Sam Bankman-Fried says filing for bankruptcy at FTX was his 'biggest' mistake and the people now running the company are 'trying to burn it all to the ground out of shame'
▼ + stars: | 2022-11-17 | by ( Beatrice Nolan | ) www.businessinsider.com time to read: +2 min

Sam Bankman-Fried has said his "biggest single " mistake at FTX was filing for bankruptcy. Bankman-Fried said those now in charge of the company were "trying to burn it all to the ground." "You know what was maybe my single biggest fuckup?" Bankman-Fried suggested to Vox that "everything would be ~70% fixed right now" if FTX hadn't filed for bankruptcy. FTX has been accused of misusing customer funds to prop up another company owned by Bankman-Fried, the trading firm Alameda Research.

"It was like a bomb went off in that place," Patrick Hillmann, Binance CSO, told CNBC on Thursday. It was money that FTX didn't have, because it was using client deposits for other purposes. "Somehow they were always spending more and more and more and more money," Hillmann said. Hillmann said that early on there were some concerns with FTX and its unsavory relationship with Alameda Research, Bankman-Fried's hedge fund. WATCH: Binance decided FTX was beyond saving after two-hour review of balance sheet

☆ Authorities may reportedly bring Sam Bankman-Fried in for questioning as FTX Bahamas files for bankruptcy
▼ + stars: | 2022-11-16 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

US and Bahamian authorities are in talks to potentially bring Sam Bankman-Fried to the US for questioning, Bloomberg reported Tuesday. Bankman-Fried has been cooperating with Bahamian authorities, per the report. On Wednesday, the Bahamas branch of FTX filed for Chapter 15 bankruptcy, days after FTX Group filed Chapter 11. Sources told Bloomberg that 30-year-old Bankman-Fried, who resigned from his position as FTX Group CEO when the company filed for Chapter 11 bankruptcy on Friday, has so far been cooperating with Bahamian authorities. Meanwhile, the Bahamas branch of FTX filed for Chapter 15 bankruptcy in New York on Wednesday.

☆ Sam Bankman-Fried wanted to let retail investors borrow money to trade crypto derivatives: CFTC head
▼ + stars: | 2022-11-16 | by ( Mackenzie Sigalos | ) www.cnbc.com time to read: +4 min

He also wanted to offer the contracts directly to users, without having to go through a futures commission merchant. Prior to its bankruptcy filing last week, FTX had a registered derivatives platform with the CFTC called FTX US Derivatives. FTX US Derivatives is one of the few FTX-related properties that's not a part of its bankruptcy proceedings and remains operational today. And Zach Dexter, who was CEO of FTX US Derivatives, says on his LinkedIn profile that he's CEO at LedgerX. Since then, LedgerX has reportedly withdrawn its application for leveraged derivatives trading.

related investing news Cathie Wood's ARK Invest keeps buying more crypto assets despite FTX bankruptcy Crypto.com is smaller than FTX but still ranks among the top 15 global exchanges, according to CoinGecko. Kris Marszalek, CEO of Crypto.com, speaking at a 2018 Bloomberg event in Hong Kong, China. Marszalek has spent the early part of the week trying to reassure users and regulators that the business is fine. FTX CEO Sam Bankman-Fried said his company's assets were "fine" two days before he was desperate for a rescue because of a liquidity crunch. Marszalek said on Monday that this was just a reflection of the assets Crypto.com customers were buying.

☆ The fall of crypto exchange FTX is 'worse than Theranos, worse than Madoff' as federal probes mount, former SEC official says
▼ + stars: | 2022-11-12 | by ( Brian Evans | ) www.businessinsider.com time to read: +3 min

The fall of cryptocurrency exchange FTX has drawn numerous comparisons to the collapse of Lehman Brothers. But a former Securities and Exchange Commission official likened FTX to the Theranos and Bernie Madoff debacles. "This is worse than Theranos, this is worse than Madoff," John Reed Stark told Yahoo Finance. But a former Securities and Exchange Commission official likened FTX to the Theranos and Bernie Madoff debacles. Stark noted "sophisticated" FTX investors have had to write down their holdings, even after performing due diligence on its financials.

☆ The collapse of crypto firm FTX and its superstar founder explained: Here's what happened and what it all means
▼ + stars: | 2022-11-12 | by ( Avery Hartmans | ) www.businessinsider.com time to read: +6 min

Two years later, Bankman-Fried and his team launched FTX, a crypto exchange platform with perks like low trading fees and advanced options for traders. At his peak, Bankman-Fried was worth $26 billion, though his net worth had dropped to $16 billion before this week. In early November, crypto publication CoinDesk released a bombshell report that called into question just how stable Bankman-Fried's empire really was. Now, the FTX drama is creating a ripple effect throughout the crypto industry. Industry experts told Insider that the saga might encourage regulators to try to crack down on the crypto industry, or make big banks wary of letting customers trade crypto.

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