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The Commodity Futures Trading Commission announced new charges against Bankman-Fried, FTX and Alameda Research, alleging that FTX commingled customer funds and that the onetime crypto billionaire violated the Commodities Exchange Act. From the founding of FTX in 2019, the CFTC alleged, Alameda "accessed and used FTX customer funds for Alameda's own operations and activities, including to fund its trading, investment, and borrowing/lending activities." The CFTC filing echoed charges that the SEC unveiled earlier Tuesday, which said Bankman-Fried operated his empire as a fraud "from the start." FTX allowed Alameda access to massive amounts of liquidity, backstopping risky bets on crypto assets and derivatives, the CFTC alleged. "At Bankman-Fried's direction, FTX executives created features in the underlying code for FTX that allowed Alameda to maintain an essentially unlimited line of credit on FTX," the CFTC alleged.

☆ Breakingviews: Sam Bankman-Fried lacks cover of systemic risk
▼ + stars: | 2022-12-13 | by ( Antony Currie | ) www.reuters.com time to read: +4 min

MELBOURNE, Dec 13 (Reuters Breakingviews) - Sam Bankman-Fried couldn’t be blamed for mulling over past financial scandals with a degree of envy. The former boss of bankrupt crypto exchange-cum-hedge-fund FTX was arrested on Monday in the Bahamas at the request of U.S. prosecutors. No senior executives ended up facing criminal charges, or were hauled off in handcuffs even, though several Libor traders went to jail. loadingCONTEXT NEWSSam Bankman-Fried, the former chief executive of now-bankrupt crypto firm FTX, was arrested in the Bahamas on Dec. 12. The attorney general’s office for the Caribbean state said it took Bankman-Fried into custody after receiving formal confirmation of criminal charges from U.S. prosecutors.

☆ Here's how to watch FTX's current CEO testify before Congress — the same hearing ex-CEO Sam Bankman-Fried was expected to speak at before his arrest
▼ + stars: | 2022-12-13 | by ( Sindhu Sundar | ) www.businessinsider.com time to read: +2 min

The hearing, which was expected to include Sam Bankman-Fried before his arrest, will stream live. FTX Group's current CEO John J. Ray III is scheduled to testify at the panel. The hearing, titled, "Investigating the Collapse of FTX, Part I" was originally expected to feature testimony by both FTX Group's current CEO, John J. Ray III, and its founder and former CEO, Sam Bankman-Fried, who has indicated plans to appear remotely. Ray III, FTX's current CEO, had some harsh words for Bankman-Fried in his prepared testimony. You can follow along with the House hearing below, which is expected to kick off at 10 a.m. Eastern.

☆ Bahamian officials asked Sam Bankman-Fried to mint new crypto coins after FTX had filed for bankruptcy, lawyers claim
▼ + stars: | 2022-12-13 | by ( Beatrice Nolan | ) www.businessinsider.com time to read: +2 min

Bahamian officials asked Sam Bankman-Fried to mint new crypto coins as FTX collapsed, US lawyers say. Bankman-Fried was arrested in the Bahamas on Monday after the US filed criminal charges. The court filing accused Bahamas officials of instructing Bankman-Fried and FTX cofounder Gary Wang to "mint a substantial amount of new tokens." FTX filed for Chapter 11 bankruptcy on November 11 and Bankman-Fried stepped down as CEO with immediate effect. Tensions between the US team and the Bahamian officials have been escalating in the court filings.

☆ Everything you need to know about the FTX saga that unfolded today
▼ + stars: | 2022-12-13 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

On Tuesday, Ray testified before the House Financial Services Committee, relaying what he could about the company he took over just four weeks ago. FTX, on the other hand, was “not sophisticated at all.”“This is really old-fashioned embezzlement,” Ray continued. They say he misappropriated FTX customers’ deposits by using those funds to pay expenses and debts of Alameda, his crypto hedge fund. (The SDNY are an aggressive people, but they are not sloppy, and they don’t indict without a solid case.) Several lawyers not involved in the case have told me that the speed of Bankman-Fried’s arrest signals that former FTX employees may be aiding prosecutors.

☆ FTX sins don’t absolve its big-money enablers
▼ + stars: | 2022-12-13 | by ( Lauren Silva Laughlin | ) www.reuters.com time to read: +4 min

NEW YORK, Dec 13 (Reuters Breakingviews) - The U.S. Securities and Exchange Commission wants everyone to know that Sam Bankman-Fried was a bad actor. The financial watchdog and the Commodity Futures Trading Commission on Tuesday alleged that the founder of bankrupt currency exchange FTX committed fraud, while federal prosecutors made a criminal case. The CFTC focused on customers, whose money it says FTX sent to Bankman-Fried’s hedge fund Alameda Research, which allegedly used it for venture investments and loans to FTX executives. loadingCONTEXT NEWSU.S. federal prosecutors filed a criminal lawsuit against Sam Bankman-Fried, alleging he committed fraud and violated campaign finance laws. The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission also alleged Bankman-Fried committed fraud in complaints filed on Dec. 13.

The exemption allowed Alameda to keep borrowing funds from FTX irrespective of the value of the collateral securing those loans. The other was a mechanism whereby FTX customers deposited over $8 billion in traditional currency into bank accounts secretly controlled by Alameda. Indeed, he told investors that Alameda received no preferential treatment from FTX, the SEC complaint said. This would allow Alameda to keep borrowing more FTX funds without the need to provide more collateral. Bankman-Fried's house of cards "began to crumble" in May 2022, the SEC complaint said.

☆ FTX founder Sam Bankman-Fried made political contributions under other people's names, US authorities allege
▼ + stars: | 2022-12-13 | by ( Madison Hall | ) www.businessinsider.com time to read: +3 min

A federal indictment alleges FTX CEO and founder Sam Bankman-Fried committed several campaign finance violations. Bankman-Fried is accused of donating to politicians under others' names, wire fraud, money laundering, and more. And among the litany of charges levied against Bankman-Fried, he's accused of committing several campaign finance violations. One way that Bankman-Fried defrauded the US, the indictment alleges, is by donating to candidates and political action committees using other people's names. Using these methods, the indictment alleges Bankman-Fried and unnamed others donated more than $25,000 in total in a calendar year, in violation of campaign finance regulations.

☆ Congress considers crypto consumer protection bill that Sam Bankman-Fried backed before FTX collapse
▼ + stars: | 2022-12-13 | by ( Chelsey Cox | ) www.cnbc.com time to read: +3 min

The shocking collapse of cryptocurrency exchange FTX has increased the urgency in Congress to understand what went wrong and pass legislation to try to prevent another debacle that would affect hundreds of thousands of investors. One bill, the Digital Commodities Consumer Protection Act, introduced in August, gives the Commodity Futures Trading Commission more authority to regulate digital commodities like FTX. The bill arrived before FTX's collapse ignited fresh debate over how to protect consumers in the relatively young and untamed crypto industry. Bankman-Fried was charged in a U.S. indictment with eight criminal counts: conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering and conspiracy to avoid campaign finance regulations. Nor does it make the CFTC the 'primary' crypto regulator," Stabenow said during an agriculture committee hearing Dec. 1.

New York CNN —FTX founder Sam Bankman-Fried was indicted on eight criminal charges including wire fraud and conspiracy by misusing customer funds, according to an indictment from the US Attorney of the Southern District of New York. Separately Tuesday, US markets regulators charged Bankman-Fried with defrauding investors and customers in his failed crypto exchange FTX. The Securities and Exchange Commission said Bankman-Fried, “orchestrated a years-long fraud” to conceal from FTX investors the diversion of customer funds to Alameda Research, his crypto-trading hedge fund. Star athletes and celebrities who backed FTX also reportedly received a stake in the company, including Tom Brady and Gisele. That meant there was no meaningful distinction between FTX customer funds and Alameda’s funds that Bankman-Fried used as his “personal piggy bank,” the complaint says.

☆ Sam Bankman-Fried denied bail in Bahamas on FTX fraud charges, judge cites flight risk
▼ + stars: | 2022-12-13 | by ( Rohan Goswami | ) www.cnbc.com time to read: +2 min

A magistrate judge in the Bahamas on Tuesday denied bail to FTX co-founder Sam Bankman-Fried, citing heightened flight risk, and said he should be remanded to Bahamian custody until February 8, 2023, hours after a U.S. federal criminal indictment against Bankman-Fried alleging a massive fraud at FTX was unsealed in New York City. Bankman-Fried was arrested Monday evening by Bahamas law enforcement acting on a request from the United States Attorney for the Southern District of New York. Bankman-Fried was charged with several counts in federal court, including wire fraud, securities fraud, money laundering, and campaign finance violations. Reuters reported that Bankman-Fried lowered his head and hugged his parents, who are both Stanford Law professors. Bankman-Fried's parents were animated during the proceeding, at times laughing or putting their fingers in their ears, according to CoinDesk.

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☆ Criminal defense attorney Michael Zweiback weighs in on the changes against Sam Bankman-Fried
▼ + stars: | 2022-12-13 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailCriminal defense attorney Michael Zweiback weighs in on the changes against Sam Bankman-FriedCNBC's Kate Rooney and Michael Zweiback, criminal defense attorney at ZFZ Law and former federal prosecutor, join 'Power Lunch' to discuss the indictment against Sam Bankman-Fried, the timeline of extradition, and the battle between Bahamas courts and U.S courts over FTX's bankruptcy.

☆ The SEC has charged Sam Bankman-Fried and accused him of 'orchestrating a massive, years-long fraud'
▼ + stars: | 2022-12-13 | by ( Kate Duffy | ) www.businessinsider.com time to read: +2 min

The SEC on Tuesday said in a complaint it charged Samuel Bankman-Fried with defrauding investors. The SEC accused Bankman-Fried of "orchestrating a massive, years-long fraud." "Sam Bankman-Fried built a house of cards on a foundation of deception," SEC boss Gary Gensler said. In its complaint, the SEC accuses Bankman-Fried of "orchestrating a massive, years-long fraud" by diverting "billions of dollars" of FTX's customer funds for "his own personal benefit and to help grow his crypto empire." The SEC said in its complaint that Bankman-Fried hid this information from equity investors of FTX.

The filing also alleges that customers "believed his lies" and believed the platform was secure — and subsequently sent billions of dollars to FTX. But from the start, the SEC claims, Bankman-Fried improperly diverted customer assets to his privately held crypto hedge fund, Alameda Research. The SEC said Bankman-Fried hid those actions from FTX's equity investors, including American investors, "from whom he sought to raise billions of dollars in additional funds." "He repeatedly cast FTX as an innovative and conservative trailblazer in the crypto markets," the complaint said. Neither the SEC nor Emmer were immediately available to provide further comment.

☆ Sam Bankman-Fried criminal charges unsealed: Conspiracy to defraud the U.S., wire fraud, securities fraud, and money laundering
▼ + stars: | 2022-12-13 | by ( Rohan Goswami Mackenzie Sigalos | Rohan Goswami | Mackenzie Sigalos | ) www.cnbc.com time to read: +1 min

A federal indictment was unsealed Tuesday alleging widespread fraud by FTX co-founder Sam Bankman-Fried, a day after the fallen crypto exchange operator was arrested in the Bahamas in connection with the charges. The indictment in U.S. District Court in Manhattan charges Bankman-Fried with eight criminal counts: conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering, and conspiracy to avoid campaign finance regulations. Follow CNBC's live blog covering Tuesday's hearing on the collapse of cryptocurrency exchange FTX before the House Financial Services Committee. It also accuses Bankman-Fried of conspiring with others to defraud FTX's lenders "by providing false and misleading information to those lenders regarding Alameda Research's financial condition." Prosecutors also allege he conspired with others to make illegal donations to political candidates, using the names of other persons to mask and augment political giving.

Companies Ledgerx LLC FollowDec 12 (Reuters) - Sam Bankman-Fried, the founder and former CEO of now-bankrupt crypto exchange FTX, said on Monday he would testify remotely at Tuesday's U.S. House Financial Services Committee hearing to examine the collapse of the company. Tuesday's hearing will be the first time Bankman-Fried appears publicly before U.S. lawmakers. In a Twitter Spaces event on Monday with Twitter account Unusual Whales, Bankman-Fried said he would be "calling in" to the hearing from the Bahamas. A spokesperson for Bankman-Fried confirmed that he would not be testifying at the hearing in person. The Senate Banking Committee will also hold a hearing on FTX's collapse on Wednesday, Dec. 14, in which Bankman-Fried says he is not scheduled to appear.

CNBC's Andrew Ross Sorkin reported that the charges against Bankman-Fried include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. Bahamas Attorney General Ryan Pinder said the United States was "likely to request his extradition." "While the United States is pursuing criminal charges against SBF individually, The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere," the statement said. The Bahamas and the United States have had an extradition treaty in place since the early 20th century, when the Bahamas was still under British control. Legal experts told CNBC that if the federal government pursues wire or bank fraud charges, Bankman-Fried could face life in prison without the possibility of supervised release.

CNBC's Andrew Ross Sorkin reported that the charges against Bankman-Fried include wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. Neither the Attorney General of the Bahamas nor the Royal Bahamas Police Force would confirm the nature of the charges against Bankman-Fried. "I didn't ever try to commit fraud," Bankman-Fried said. The CFTC and lawmakers have begun their probes into FTX and Bankman-Fried, who told Sorkin he was down to his last $100,000. Failed lender BlockFi sued Bankman-Fried in November, seeking unnamed collateral that the FTX founder provided for the crypto lending firm.

Justice Department regulations say that money laundering charges against a financial institution must be approved by the MLARS chief. Binance's defense attorneys at U.S. law firm Gibson Dunn have held meetings in recent months with Justice Department officials, the four people said. Faced with the Justice Department investigation, Binance hired an external lawyer from U.S. law firm Paul Weiss, Roberto Gonzalez, who was previously Treasury's deputy general counsel. MLARS has a reputation in the Justice Department for moving slowly in reaching prosecution decisions, people familiar with its activities said. Day met with Justice officials in Washington in recent months, three of the people said.

☆ U.S. Justice Department reportedly split over charging Binance as crypto world falters
▼ + stars: | 2022-12-12 | by ( ) www.cnbc.com time to read: +15 min

Justice Department regulations say that money laundering charges against a financial institution must be approved by the MLARS chief. Binance's defense attorneys at U.S. law firm Gibson Dunn have held meetings in recent months with Justice Department officials, the four people said. Faced with the Justice Department investigation, Binance hired an external lawyer from U.S. law firm Paul Weiss, Roberto Gonzalez, who was previously Treasury's deputy general counsel. The Justice Department appointed Eun Young Choi, previously Monaco's senior counsel, as NCET's first director. MLARS has a reputation in the Justice Department for moving slowly in reaching prosecution decisions, people familiar with its activities said.

The Bahamas has more than 700 islands and cays; remote workers and students can live on 16 of them, including Eleuthera (shown here). Sylvain Sonnet | The Image Bank | Getty ImagesBahamian lawyers say FTX executives Sam Bankman-Fried and Ryan Salame spent $256.3 million to buy and maintain 35 different properties across New Providence, Bahamas. watch nowIt is the first true look behind the curtain at FTX's mammoth real estate spending. Now, Bahamian regulators are fighting to get those assets back from FTX's U.S. leadership. In a Monday night filing, the Bahamian lawyers asked a U.S. judge to dismiss the Chapter 11 proceedings for FTX's property subsidiary.

☆ Former FTX CEO Sam Bankman-Fried refuses to testify before Senate, committee says
▼ + stars: | 2022-12-12 | by ( Brian Schwartz | ) www.cnbc.com time to read: +1 min

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during a Senate Agriculture, Nutrition and Forestry Committee hearing in Washington, D.C., on Wednesday, Feb. 9, 2022. Former FTX CEO Sam Bankman-Fried is refusing to testify at a hearing this week about his company's implosion, the Senate Banking Committee said Monday. Attorneys for the crypto platform's founder have also said Bankman-Fried, who is based in the Bahamas, will not accept service of a subpoena to compel his testimony before the panel, senators said. Bankman-Fried is scheduled to appear at a House Financial Services Committee hearing on Tuesday that will focus on his company's collapse. In a joint statement, Senate Banking Chair Sen. Sherrod Brown, D-Ohio and ranking member Pat Toomey, R-Pa., said they have "offered Sam Bankman-Fried two different dates for providing testimony before the Senate Banking, Housing, and Urban Affairs Committee, and are willing to accommodate virtual testimony."

Companies Ledgerx LLC FollowWASHINGTON, Dec 9 (Reuters) - FTX's Sam Bankman-Fried is set to testify before a U.S. House committee on Tuesday, the cryptocurrency exchange's founder and the congressional panel said on Friday, as regulators investigate his role in the wake of its collapse. In a statement late on Friday, the panel said it would hear from newly appointed FTX CEO John Ray and from Bankman-Fried, FTX's founder and former CEO, on Tuesday. "But as the committee still thinks it would be useful, I am willing to testify on the 13th," he added. loadingZhao said that after Binance, an early investor in FTX, sought to exit its stake over one-and-a-half years ago, Bankman-Fried made "offensive tirades" against Binance team members. Binance sold back to FTX its stake in the company last year.

☆ Convicted Fyre Festival cofounder Billy McFarland says the Netflix and Hulu shows about his disastrous party were screened in his prison — but he was 'too scared' to watch
▼ + stars: | 2022-12-10 | by ( Kate Duffy | ) www.businessinsider.com time to read: +4 min

Convicted Fyre Festival cofounder Billy McFarland was interviewed by British entrepreneur Steven Bartlett. McFarland said he still hadn't seen the Netflix and Hulu shows about his disastrous party. He told Bartlett he was still not ready to watch the documentaries. Fyre Festival was touted as a luxurious music fiesta in the Bahamas and was promoted by influencers and models such as Kendall Jenner and Bella Hadid. He told Bartlett he'd chosen the latter.

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