The U.S. Department of Justice (DOJ) has filed a civil forfeiture complaint to seize cryptocurrency worth $16 million held in a Binance account. This action is a result of an ongoing investigation into alleged bribery schemes involving FTX founder Sam Bankman-Fried (SBF). The DOJ claims that SBF intended to pay Chinese officials a bribe of $40 million to facilitate the release of $1 billion worth of crypto belonging to FTX’s sister company, Alameda Research, which had been frozen on two China-based digital asset exchanges.

If convicted, SBF faces a 25-year prison sentence due to multiple fraud and conspiracy charges related to the collapse of FTX.

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The U.S. Department of Justice (DOJ) has filed a civil forfeiture complaint to seize cryptocurrency worth about $16 million held in a Binance account.

This action is the result of a years-long investigation into suspected illegal activities tied to alleged bribery schemes involving FTX founder Sam Bankman-Fried, also known as SBF.

The Alleged Bribery Scheme

The root of the DOJ’s case goes back to November 2021, when Bankman-Fried allegedly authorized a $40 million payment in Tether (USDT) through wallets belonging to FTX’s sister company, Alameda Research.

In documents it filed on November 12, the DOJ claimed that SBF intended the payments as a bribe to unnamed Chinese officials to facilitate the release of $1 billion worth of crypto belonging to Alameda, which had been frozen on two China-based digital asset exchanges.

Further, the documents allege that the money was funneled through several private wallets before landing in the Binance address now targeted by the Justice Department. The wallet was flagged for suspicious activity after authorities noted nearly daily deposits of Bitcoin (BTC) and stablecoins, which were then quickly converted into other cryptocurrencies through over-the-counter (OTC) trades.

Upon receipt of the bribe, U.S. authorities claim the Chinese officials unfroze the Alameda funds, with SBF apparently greenlighting additional payments in the tens of millions of dollars.

When testifying against SBF in 2023, Alameda’s former chief executive, Caroline Ellison, stated that the alleged bribe amounted to more than $100 million.

Bankman-Fried is currently serving a 25-year sentence after being found guilty by a New York grand jury on multiple counts of fraud and conspiracy charges related to the collapse of FTX.

Assets Doubled in Value Following Recent Market Recovery

Some of the deposits into the account involved huge sums, including nearly $78 million worth of crypto received on December 4, 2023. Subsequently, more than $59 million was withdrawn, leaving about $8.6 million in various cryptocurrencies, including Solana (SOL), Internet Computer (ICP), Avalanche (AVAX), Ripple (XRP), and Cardano (ADA).

Following the recent jump in the prices of various cryptocurrencies, including several held in the account in question, the overall value of the stash has jumped to more than $16 million, with SOL alone reportedly accounting for more than half of that amount, at about $8.5 million.

The post DOJ Seeks $16M in Crypto from Binance Over FTX Bribery Allegations Involving SBF appeared first on CryptoPotato.

The FTX bankruptcy estate is pursuing over $100 million from SkyBridge Capital and its founder, Anthony Scaramucci, to recover funds that former FTX CEO Sam Bankman-Fried (SBF) allocated toward sponsorships and investments with SkyBridge in 2022.

According to a legal filing on November 8, Bankman-Fried’s engagements with SkyBridge Capital and Scaramucci began with a $12 million sponsorship of Scaramucci’s SALT conference in January 2022.

Following this, in March 2022, SBF directed Alameda Research to invest $10 million in the SkyBridge Coin Fund.

Later, in September 2022, FTX purchased a 30% stake in the companies managing SkyBridge investment vehicles for $45 million.

FTX attorneys argue this investment was financially unsound, stating that “The FTX Group could have easily purchased, itself, less expensively” the cryptocurrencies that made up most of the $45 million.

They further noted, “Employees at the FTX Group noted internally at the time that it made no economic sense for Alameda Research Ventures, which was itself in the business of trading in cryptocurrency assets, to place so much money with a third-party manager that was less experienced.”

The filing also accuses SkyBridge of violating the agreement by selling some of these digital assets in 2023 without obtaining FTX’s permission—a requirement that FTX lawyers claim was crucial to the deal.

FTX attorneys estimate that the Bitcoin and Solana assets purchased as part of the deal with SkyBridge are currently worth $120 million, compared to $60 million when SkyBridge allegedly sold them in 2023.

The FTX bankruptcy estate has filed several lawsuits recently.

On October 28, FTX sued KuCoin to recover over $50 million in assets frozen by the exchange in 2022.

Additionally, on November 7, 2024, FTX filed a lawsuit against Crypto.com, seeking to reclaim more than $11 million in assets held since 2022.

Changpeng Zhao, better known as CZ, the man who built Binance from the ground up, doesn’t want his name anywhere near Sam Bankman-Fried’s.

In his own words, comparing him to SBF, the convicted founder of FTX, is like “comparing somebody who’s stealing money versus somebody who failed to register a company.” 

CZ, blunt as always, says he’s got no interest in SBF’s brand of downfall. At the Coca-Cola Arena in Dubai, he made a high-profile appearance a few days after his release from prison, greeted like a rockstar with fans lining up for selfies, one fan shouting, “he’s a martyr,” and another declaring, “the king is back!”

But CZ isn’t picking up the reins at Binance, a move that’s part of a plea deal with the U.S. Department of Justice. Now he’s a “passive investor,” content to watch from the sidelines while Binance moves into a new era.

Binance under DOJ scrutiny and CZ’s plea deal

CZ’s exit from Binance didn’t come easy. After years of building Binance into a global crypto powerhouse, he was forced out due to legal trouble with the U.S. government. Earlier this year, CZ pled guilty to failing to implement an adequate anti-money laundering (AML) program at Binance, leading to the four-month stint at a minimum-security prison in California.

The U.S. government slapped a $4.3 billion fine on Binance, demanding accountability from one of the most prominent crypto leaders. It was a clear message: play by the rules, or face the consequences.

CZ’s time in prison made him the wealthiest U.S. inmate in history. Prosecutors originally pushed for a three-year sentence, hoping to set an example, but CZ’s cooperation earned him a shorter term. Though his days in lockup were no luxury retreat.

CZ kept a low profile, armed with advice from a prison consultant to stick to a modest commissary budget and keep his head down. He filled his time with workouts, writing a book, and connecting with fellow inmates interested in crypto.

Some inmates soon recognized CZ as the “big Bitcoin guy” and started asking him for investment advice. “Many of them asked, like, which coins should they buy?” he said, laughing. Guards even wanted tips, but CZ claimed he was out of the loop. He had no access to market updates and was as blind to crypto trends as anyone else inside.

One particular inmate, a bank robber serving 25 years, stood out as a crypto enthusiast and became CZ’s workout buddy. Together, they spent 90 minutes a day in the open-air gym, pushing through a routine that helped CZ stay grounded.

Since his release, CZ’s been working to connect this inmate with pro-bono lawyers to reduce his sentence, using his influence for a cause he says he believes in.

Binance moves on without CZ

Meanwhile, Binance had to adjust. With CZ stepping down, the DOJ wanted a clean break between him and Binance, leading to the appointment of Richard Teng, a former Abu Dhabi regulator, as the new CEO.

But CZ still casts a big shadow. As the largest shareholder, he’s not entirely out of the picture, though he claims Binance’s leadership consults him “very rarely.” He’s still a co-defendant in ongoing civil cases, including one filed by the Securities and Exchange Commission.

Binance’s co-founder, Yi He, with whom CZ has children, is still deeply involved, ensuring some continuity despite CZ’s absence. And she has been doing a remarkable job so far.

Even before his legal troubles, CZ made major moves, like investing $500 million in Elon Musk’s Twitter takeover, now called X. That hasn’t aged well though, from a financial perspective, as Twitter’s valuation plummeted after Musk’s chaotic revamp.

But CZ’s unbothered, saying that, “We’re very long-term investors.” Musk’s Twitter, in line with his political leanings, became a significant platform for Trump’s reelection efforts.

Trump’s win, widely seen as positive for crypto due to his skepticism of regulation, coincidentally gave CZ’s net worth a $12.1 billion boost, taking it to nearly $53 billion, according to Bloomberg.

While CZ declined to weigh in on Trump’s victory, he did comment on Musk’s overhaul of Twitter, now X. “I think after Elon took over, things have moved a lot faster,” he said. “There’s new features, change happens at a much faster pace.”

The crypto community, like CZ, is keeping an eye on how Musk’s platform could change under Trump 2.0, especially with the promise of more crypto-friendly policies.

A different life behind bars

Before he made his triumphant return to Dubai, CZ spent his sentence at Lompoc II, a low-security prison in California’s Santa Barbara County, notorious for its bland meals and strict racial segregation, a system meant to minimize violence. It was a far cry from his usual lifestyle.

CZ, known for his paleo diet of proteins and vegetables, had to settle for a high-starch, low-protein diet heavy on Spam-like meat and occasionally fried fish. “I usually stick to a paleo diet, just proteins and veggies. That’s not possible there,” CZ said, underscoring the stark contrast to his previous life.

His cellmate, the bank robber-turned-crypto lover, was just one of many connections CZ made in prison. With the monotony of prison life setting in, CZ found purpose in helping his friend fight for a reduced sentence. His experience behind bars seems to have given him a new perspective on the world, especially as he plots his next moves.

His interests are changing too. He’s eyeing investments in artificial intelligence and biotechnology, as well as launching Giggle Academy, a nonprofit educational app aimed at making learning accessible.

While he says his “emotional attachment” to Binance remains, he’s clear that his direct involvement has come to an end. “It’s like a kid, right?” he says of Binance. “Once it grows up, it doesn’t need to be attached to me.”

As he steps back, Binance is still one of the largest crypto exchanges globally, but Teng and the leadership team now bear the weight of the company’s direction.

CZ’s image in the crypto community is unlikely to vanish, even if he’s no longer on the front lines. He’s left a mark, built a legacy, and whether from behind bars or from a distance, CZ’s influence on crypto is undeniable.

FTX co-founder requests to avoid his prison sentence in the fraud case involving SBF.

Wang’s lawyer highlights the defendant’s minimal role in the fraud scheme compared to others.

The lawyer argues that Wang was instructed by Bankman-Fried to alter FTX’s code.

In a novel development in the FTX lawsuit, Gary Wang, the co-founder of the defunct exchange, has requested the court to avoid his prison sentence. Being a key witness for FTX founder Sam Bankman-Fried’s fraud trial, Wang pleaded for a non-custodial sentence. In a sentencing memo filed in a Manhattan district court on November 6, his lawyer, Ilan Graff, highlighted his “most limited role” in the $10 billion FTX case.

In November 2022, the then-prominent FTX exchange fell, severely impacting the entire crypto industry. After one year, its founder, SBF, was found guilty of seven charges, including fraud and conspiracy. Soon, ex-FTX executive Nishad Singh and FTX’s sister firm Alameda Research’s former CEO Caroline Ellison were convicted of being involved in the fraud scheme. Meanwhile, Wang reached a plea agreement with prosecutors on charges of fraud and criminal conspiracy and is scheduled for prison sentence on November 20.

Wang’s lawyer urged the court to consider his request for the defendant’s non-custodial sentence. Graff pointed out that Wang’s role in the scheme was minimal compared to the other crime partners. He argued that Bankman-Fried forced him to modify FTX’s code to help allow Alameda Research to accumulate the exchange’s customer funds.

Further, the lawyer asserted that Wang was unaware of the conspiration and the execution of the scheme. He stated, “Gary was unaware of the scheme when it started, never informed of its particulars, and unlike Bankman-Fried, Ellison, and Singh, never once took an affirmative step to deceive anyone.” He added that it would “create an unwarranted sentencing disparity” if Wang is sentenced to jail time while Singh was freed of additional imprisonment. The lawyer also included statements regarding the potential hardships of Wang’s 9-month pregnant wife if he is imprisoned.

However, the defendant’s fate remains unclear as the court’s decision is unpredictable. The judge may opt for a stringent sentence, similar to those of Bankman-Fried and Ellison, or show leniency, as seen in Singh’s sentencing.

The post FTX Co-Founder Gary Wang Seeks No Prison Time appeared first on CryptoTale.

Coinspeaker FTX Co-Founder Gary Wang Seeks No Jail Time for Cooperation in SBF Case

Gary Wang, the co-founder and former Chief Technology Officer of the defunct cryptocurrency exchange FTX, is appealing for leniency as his sentencing approaches. In a detailed memo filed on November 6 in Manhattan district court, Wang’s legal team argued that his significant cooperation with authorities was critical in securing the conviction of Sam Bankman-Fried (SBF), the face of FTX’s notorious collapse.

Wang, who pleaded guilty to charges of fraud and conspiracy in December 2022, said his testimony was pivotal to the government’s case against Bankman-Fried. According to the filing, his disclosures helped put the disgraced FTX founder behind bars.

Wang Appeals for No Jail Time to Avoid Disparity

Recall that SBF was sentenced to 25 years in prison in March 2024 for fraud in one of the most watched financial trials in recent years. His conviction centered on allegations that he had orchestrated a scheme to misappropriate billions in customer funds to cover risky bets made by Alameda Research, FTX’s affiliated trading arm.

In the memo, Wang argued that his cooperation with the United States Department of Justice (DOJ) provided essential evidence, revealing how Bankman-Fried directed code changes that allowed Alameda Research to siphon customer funds, an estimated $10 billion over several years, before the platform’s collapse in November 2022.

As a result, he is asking the government to spare him and consider his cooperation as time served. He also emphasized that his role in the fraud was more limited than that of other high-ranking FTX figures, such as Caroline Ellison, former CEO of Alameda, and Nishad Singh, FTX’s former engineering director.

Both Ellison and Singh reached plea deals with the government. Still, they received differing sentences: Ellison was sentenced to two years in prison for her role in the FTX-Alameda fiasco, while Singh was only served time.

Wang’s defense argued that a jail sentence for him would create an unfair disparity, particularly considering Singh’s lighter penalty despite a comparable level of involvement.

The lawyers further highlighted that his proactive and early cooperation with prosecutors, aiding FTX’s bankruptcy estate, and contributing to class-action lawsuits show he is committed to justice and to assisting victims.

Wang Could Miss Raising First Child if Sentenced

The sentencing memo also cited Wang’s personal circumstances as part of his reasons for requesting no jail time. His legal team revealed that Wang is currently employed as a software engineer at an undisclosed firm and is expecting his first child with his wife later this month.

His defense noted that a custodial sentence would disrupt his ability to support his family financially and continue contributing to anti-fraud initiatives. According to the filing, Wang has been involved in developing software tools for government use designed to identify fraudulent activity in crypto markets.

“Gary wants nothing more than to be a good husband and father and continue his work with the Government and other stakeholders to facilitate FTX victims’ recovery and mitigate the risk of future frauds,” reads the memo.

Judge Lewis Kaplan, who presided over Bankman-Fried’s trial, is set to decide Wang’s fate on November 20. The outcome of Wang’s sentencing could set a significant precedent in how individuals who cooperate extensively with authorities are treated in high-profile financial crime cases.

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FTX Co-Founder Gary Wang Seeks No Jail Time for Cooperation in SBF Case

Key Points:

SBF prison life is currently in the Metropolitan Detention Center in Brooklyn.

SBF shares a dormitory with former Honduran President Juan Orlando Hernández and Genaro García Luna.

According to WSJ, SBF prison life was with former Honduran president and former Mexican police chief, who were involved in drugs. The SBF also provided crypto advice to the guards.

Sam Bankman-Fried (SBF), the co-founder and ex-CEO of FTX, is currently serving time in the Metropolitan Detention Center in Brooklyn. He shares a dormitory with former Honduran President Juan Orlando Hernández, who is awaiting trial for accepting bribes from drug traffickers, and Genaro García Luna, a former Mexican police chief convicted of aiding drug cartels.

Despite the circumstances, SBF seems to have cordial conversations with his fellow inmates. He faced difficulties in accessing vegetarian meals and ADHD medication initially, but those issues have been resolved.

SBF is allowed non-attorney visitors once a week and has a special laptop to review legal documents, albeit only in a dedicated room. He has been involved in the prison economy, trading mackerel packets for services.

SBF Prison Life: From Crypto-Billionaire to Fish Trader

Additionally, SBF has transitioned from trading digital assets to becoming a mackerel trader, the prison currency. Mackerel, known as "macks," has replaced traditional money. Despite inflationary pressures, a pouch of mackerel filets costs $1.30. The mack currency system is considered more stable than crypto.

Mackerel packets have become a prison currency since cigarettes were banned. Besides, SBF has also provided cryptocurrency investment advice to prison guards, according to sources.

After his sentencing on March 28, 2024, SBF will be transferred to a federal prison, which is expected to offer better living conditions, educational and recreational resources, and a less violent prison population.

Currently, SBF faces a maximum sentence of 115 years in prison, but experts predict he may serve 25 years or less. Despite the challenges, SBF is reportedly doing his best under the circumstances.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Sam “SBF” Bankman-Fried’s defense attorney Mark Cohen heard testimony from the former FTX CEO on his relationship with Caroline Ellison and political donations from the crypto exchange.

According to reports from the courtroom on Oct. 27, Bankman-Fried claimed not to have discussed donations to U.S. politicians with former FTX engineering director Nishad Singh and former FTX Digital Markets co-CEO Ryan Salame. SBF reportedly said the donations made in his name came from “loans from Alameda Research” as part of efforts to influence U.S. government’s policies on regulating crypto.

“[...] I thought policy was important. Congress and the executive branch… Some were [supportive of] FTX for cryptocurrency lobbying. Some, not most.”

Cohen also posed more personal questions seemingly unrelated to the allegations SBF was facing in court. The defense lawyer asked Bankman-Fried what led to the end of his relationship with Ellison.

“She wanted more than I could give,” the former FTX CEO reportedly said, referring to Ellison. “It wasn’t the first time with me.”

During her testimony, Ellison said the relationship ended as SBF “wasn’t spending much time” with her. Cohen asked the former FTX CEO the reasons behind his style, with SBF replying his hair was the result of him being “lazy” while he found wearing shorts and T-shirts on most occasions “comfortable.”

In earlier testimony on Oct. 27, the former CEO reportedly denied defrauding FTX users by directing efforts at Alameda allowing the firm to use customer funds. Former FTX chief technology officer Gary Wang and others offered testimony claiming SBF had given Alameda the ability to trade more funds than it had available.

Bankman-Fried's testimony will likely end by early next week following cross-examination by attorneys with the U.S. Department of Justice. Barring addressing any motions or legal hiccups, the court will then likely instruct the jury to deliberate on the seven criminal charges.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Bankrupt cryptocurrency exchange FTX has secured court approval to sell its equity stake in the AI startup Anthropic, valued at over $1 billion. This move comes after the latest valuation of Anthropic at $15 billion, meaning FTX's nearly 8% stake now equals over $1 billion - funds that could be used to settle with creditors.
FTX Receives Court Approval for Anthropic Stake Sale
The bankruptcy court in Delaware, led by Judge John Dorsey, approved on February 22 the sale of FTX shares in the AI startup Anthropic. The decision was made after FTX addressed objections from some customers who opposed the sale. These customers argued that Anthropic shares were purchased unlawfully with their funds but agreed to the sale on the condition of future reimbursement.
FTX Plans to Settle Debts from Share Sale
According to FTX's legal representative from Sullivan & Cromwell, Andrew Dietderich, the aim of selling Anthropic shares is to obtain funds to settle with exchange users. FTX has committed to adding the proceeds from the sale to the existing $6.4 billion, which should be sufficient to cover all creditor claims.

FTX's Investment History in Anthropic
FTX originally invested around $530 million in Anthropic in April 2022, several months before its collapse and subsequent Chapter 11 bankruptcy filing in November of the same year. Following further investment rounds, FTX's stake in Anthropic was diluted to over 13.5%, but the recent valuation of the company at $15 billion increased the value of their stake to over $1.1 billion.
FTX's Plans and Future Creditor Repayments
Dietderich informed the court that FTX does not intend to resume its operations but plans to fully settle with its creditors. However, repayments will depend on cryptocurrency prices at the time of bankruptcy, which could mean significant differences given the current surge in bitcoin value.
Legal Proceedings Against Sam Bankman-Fried
Sam Bankman-Fried, co-founder of FTX, will be sentenced on March 28 after being found guilty of embezzling over $8 billion from customer funds. Despite maintaining his innocence, he has announced plans to appeal the verdict.
#FTX #SBF #crypto  
 
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“
 

Sam Bankman-Fried, known as “SBF” in the crypto world, found himself at the center of the storm this week, as he faced a barrage of questions in his ongoing criminal trial at the United States District Court for the Southern District of New York.

Boldly denying any corrupt entanglements between FTX and Alameda Research, SBF admitted to making “grand blunders” during the meteoric rise of his company, yet stood his ground against allegations of deliberate mismanagement.

The beginning of his official testimony on October 27 marked a stark contrast to the previous day’s proceedings, where he seemed to falter under the intense scrutiny of government attorneys.

However, he bounced back, presenting a more composed and prepared demeanor when addressing the jury.

SBF dove into the murky waters of FTX’s past operations, refuting claims of orchestrating millionaire political donations in 2021 and arguing that FTX’s terms of use sufficiently covered transactions between Alameda and the crypto exchange.

He acknowledged his request for more robust hedging strategies for Alameda during 2021 and 2022, yet lamented their lack of implementation.

The Turning Tide: SBF’s Political and Corporate Entanglements

SBF found himself in hot water as he vehemently denied having played puppet master to Ryan Salame and Nishad Singh, former top brass at FTX, steering them to pour millions into political campaigns.

OpenSecret’s data spills the beans with Singh contributing $8 million and Salame parting with $10 million through loans from Alameda Research in the 2022 election cycle.

Though he washed his hands of these transactions, SBF couldn’t deny the vital role of political lobbying in pushing for a favorable regulatory crypto framework in the U.S. during 2021.

Prosecutors threw a curveball, accusing SBF of dipping into customer deposits at FTX to fund over $100 million in political campaign contributions ahead of the 2022 U.S. midterm elections.

SBF stood his ground, arguing that FTX was swimming in over $1 billion in revenue in 2021, and political donations were made from the exchange’s own coffers, not customers’ funds.

Alameda’s Curious Role and Missteps

Shedding light on Alameda’s peculiar relationship with FTX, SBF detailed how Alameda served multiple roles: a payment provider, primary liquidity provider, market maker, and a client.

Alameda’s lines of credit with FTX ballooned as the crypto industry rode the wave of a bull market. However, SBF underscored the need for these unique arrangements, as they prevented potential liquidations that could wreak havoc in the crypto markets.

Alameda’s failure to implement proper hedging strategies, despite SBF’s persistent requests, was laid bare.

SBF recounted his interactions with Caroline Ellison, then CEO of Alameda Research, emphasizing his push for a $2 billion Bitcoin hedge against a potential market downturn in 2021 – a strategy that was never realized.

By September 2022, the liability between FTX and Alameda had skyrocketed from $2 billion to a staggering $8 billion, catching SBF off guard and highlighting the perils of inadequate risk management.

Terms of Use and the Clawback Clause

In his defense, SBF pointed to FTX’s terms of use, highlighting a clawback provision that spread the losses among customers using margin trade and futures contracts in case the exchange’s risk engine failed.

Defense lawyers used this as a springboard to argue that customers trading on FTX were well aware of the associated risks, painting a picture of transparency and due diligence.

As SBF’s trial continues, with the defense expected to wrap up his examination by October 30, followed by the prosecution’s counter-arguments, the crypto world watches with bated breath.

The potential introduction of a rebuttal witness by the prosecutors could further turn the tides, as SBF faces the possibility of a 115-year jail sentence if convicted on all fraud and conspiracy charges.

In this high-stakes game of truth and consequence, FTX’s fall from grace under SBF’s watch has become a spectacle of epic proportions, leaving the crypto industry at a crossroads, and a man’s legacy hanging in the balance.

The former FTX CEO returned to the witness stand to present his testimony to a jury of 12 people as the criminal trial began to reach its final stages.

Defense attorneys representing Sam “SBF” Bankman-Fried questioned the former FTX CEO before a jury for the first time as they prepared to rest their case.

According to reports from the New York courtroom on Oct. 27, Bankman-Fried denied defrauding FTX customers and taking their funds while leading the crypto exchange. The former CEO reportedly said he knew “basically nothing” about digital assets when launching crypto hedge fund Alameda Research.

“FTX declared bankruptcy,” said SBF in response to a question from his lawyer, Mark Cohen. “A lot of people got hurt.”

Cohen questioned SBF about Alameda’s operations in Hong Kong, asking how he believed risk at FTX could have potentially affected the hedge fund. At the center of allegations against Bankman-Fried are claims he directed efforts that resulted in Alameda using FTX customer funds without their knowledge. He faces seven criminal charges in his current trial.

“Alameda was a market maker [for FTX],” said Bankman-Fried, according to reports from the courtroom. “If an account went negative, we’d start selling off, but if late, we had backstop liquidity.”

SBF added, over the objection of prosecutors:

“We increased the number of servers, for the risk engine. But we learned that if there was an erroneous liquidation of Alameda, or any other large account […] it would be catastrophic for FTX.”

According to Bankman-Fried, he told former FTX chief technology officer Gary Wang to “stop such liquidations of Alameda’s account,” also suggesting Wang implemented the “allow negative” feature without SBF’s prior knowledge. Wang testified on Oct. 6 that Bankman-Fried had ordered him and former FTX engineering director Nishad Singh to implement the feature in 2019.

At the time of publication, Bankman-Fried had yet to face cross-examination by the U.S. government for his testimony before a jury. Judge Lewis Kaplan had SBF “preview” his testimony before prosecutors and defense attorneys on Oct. 26 without the jury present. 

Before Oct. 25, it was uncertain whether Bankman-Fried would testify in the criminal trial. As prosecutors were preparing to finish questioning the last witness in their case, defense attorneys told Kaplan they were preparing to call only a handful of witnesses, including SBF.

The trial is expected to end within a few business days, with prosecutors and defense lawyers delivering closing arguments to the jury. Bankman-Fried is scheduled to face five more criminal counts in a second trial expected to start in March 2024. He has pleaded not guilty to all charges in both cases.

The post Sam Bankman-Testimony Fried: “A lot of people got hurt” is presented to the jury. appeared first on BitcoinWorld.

The drama in the courtroom hit a new peak on day 13 of Sam “SBF” Bankman-Fried’s trial, with attendees eagerly anticipating each development, only to find themselves caught in a monotonous loop of legal banter.

Both the defense and prosecution seemed to be stuck in a relentless cycle of objections, queries, and side conversations, prompting District Court Judge Kaplan to intervene, urging the lawyers to cut to the chase and keep the ball rolling.

The prosecution wrapped up their case in the early hours, presenting FBI Agent Mark Troiano as their final witness.

His testimony shed light on the extensive communication networks involving SBF, exposing over 300 Signal groups with the auto-delete feature turned on, a detail that raised eyebrows and left a lingering sense of intrigue.

Delving into the Details: Witnesses Take the Stand

The defense’s response was swift and strategic, calling upon Bahamas attorney Krystal Rolle to the witness stand.

Rolle, who had represented both SBF and FTX in November 2022, recounted her involvement in crucial meetings with the Securities Commission of the Bahamas following the collapse of FTX.

Her revelation that all digital assets under FTX’s control were transferred to the Bahamas regulator on the day a court order was issued added a new layer to the unfolding saga.

Joseph Pimbley, a financial consultant boasting a Ph.D. in physics, was next to testify, bringing his analytical prowess to dissect FTX’s code and database.

His findings highlighted that FTX held assets exceeding $5.8 billion in November of the previous year, excluding balances from FTX entities or Alameda Research.

However, the prosecution was quick to point out that FTX’s database did not accurately reflect its bank accounts, casting a shadow of doubt and raising more questions than answers.

SBF Under Oath: A Tense Testimony

With the jury momentarily excused, SBF took the stand, delivering a testimony that was both anticipated and peculiar.

The former FTX CEO addressed questions regarding his use of Signal and the retention of communications data at the crypto exchange, asserting that he adhered to company policies and that the auto-delete feature was not a conduit for major decisions.

The focus then shifted to North Dimension, an alleged “shadow entity” supposedly used for laundering customer funds.

SBF admitted to signing the papers for its establishment, though he claimed to have done so without scrutinizing the details, placing his trust in Dan Friedberg, the former chief regulatory officer.

“Was it legal to channel FTX deposits through Alameda?” defense attorney Mark Cohen inquired, to which SBF confidently replied, “I believed it was.”

As the session progressed, the courtroom dynamics took an unexpected turn. Instead of the usual direct and cross-examination, Judge Kaplan initiated a hearing to resolve the disputes over parts of SBF’s testimony that the prosecution had objected to but the defense wished to retain.

The judge declared that his final ruling on what the jury would be allowed to hear would be made the following morning.

In a day filled with legal jargon, technical financial analyses, and a labyrinth of communications details, the courtroom drama surrounding SBF’s trial intensified.

With the former CEO’s fate hanging in the balance, the proceedings left an indelible mark, serving as a stark reminder that the road to truth and justice is anything but straightforward.

The courtroom buzzes with anticipation as SBF’s high-profile criminal trial enters its third week. Eager eyes are locked on, and the whispers of the masses have found their way outside the four walls of justice.

While the prosecution gears up to wind down its side, the defense seizes a momentary reprieve to prepare for what’s to come. Yet, as is often the case in such trials, it’s the unpredictable moments that steal the show.

A Judge’s Frustration and Questionable Witnesses

A hushed courtroom watched as Judge Kaplan’s face contorted into a mix of frustration and disbelief. The prosecution’s decision to call upon certain witnesses clearly didn’t sit well with him.

Take, for instance, the ex-policy director from FTX, whose tenure barely overlapped with the drafting of the company’s policy statements.

Her presence seemed more ceremonial than functional, reminiscent of a pawn in a chess game, merely to play snippets of SBF’s testimonies.

Then there was the Google worker from DC, an episode that seemed more a test of taxpayer money than anything of substance. His cameo lasted less than a half-hour, a blink of an eye in court proceedings.

Beyond this, one can’t help but wonder if the prosecution is overplaying its hand. In their eagerness to paint a guilty picture, are they just wasting the jury’s time?

After all, the onus is on them to establish beyond reasonable doubt that the crimes were indeed committed by Bankman-Fried.

Star Witness Breakdown: Caroline Ellison’s Emotional Rollercoaster

Amidst the mundane and often tedious testimonies, Caroline Ellison’s moments on the stand were the ones that sent ripples across the courtroom. As the star witness, the weight on her shoulders was palpable.

Facing a mind-boggling 110 years for fraud and conspiracy, every word she spoke echoed with gravity. Her tears, real or rehearsed, underscored the emotional burden she shouldered.

With every revelation about her knowledge of FTX’s questionable dealings and her own participation in creating doctored financial statements (allegedly under SBF’s guidance), she further complicated the narrative.

However, her motivations could easily be questioned. Was she merely attempting to negotiate a lighter sentence by providing the prosecution with what they wanted to hear?

Defense’s Fleeting Moments of Triumph

The defense, thus far, seems to be clutching at straws. Yet, when they tackled the testimony of former FTX co-lead engineer Nishad Singh, a glimmer of hope emerged.

Singh’s accounts of his personal ethics clashing with FTX’s operations were compelling, but the defense was quick to point out the holes in his moral compass.

Singh’s acceptance of a generous loan from Alameda, especially after being aware of the company’s financial discrepancies, highlighted a significant contradiction in his statements.

SBF: The Alleged Puppet Master

The crux of the prosecution’s narrative is clear: they want the jury to believe that SBF was the mastermind. Yet, in a trial of conspiracy, it’s essential to prove collaboration.

If SBF acted alone, the conspiracy charges would simply dissipate. With the trial’s intensity ramping up, one can’t ignore the fact that some jurors seem disengaged.

Perhaps it’s the inundation of expert witnesses, or the endless parade of spreadsheets and documents. Yet, if they’re disinterested, can they truly deliver a verdict rooted in justice?

As the trial unfolds, it’s clear that the line between guilt and innocence is blurred, and only time will tell where SBF stands. The courtroom drama, with its share of theatrics and unexpected twists, serves as a potent reminder: in the world of justice, there’s never a dull moment.

The FTX legal battle representing SBF has been in the spotlight amid new developments in the case that have set the crypto world in awe. In a dramatic turn, the SBF legal defense team has made its intentions clear on claiming ‘inconsistent statements’ made by the prosecution witnesses who took the stand last week. 

Among them are FTX ex-officials Nishad Singh and Gary Wang. Bankman-Fried is currently facing allegations, including regulatory compliance issues and market manipulation. However, his defense team has taken to discredit the witness’s credibility. 

The ‘inconsistent statement’ claim by SBF defense 

Sam Bankman-Fried’s defense team tried to plead with the presiding Judge Lewis Kaplan to provide proof of an ‘inconsistent statement’ from the former FTX executives. The defense team has zeroed in on the witnesses who said concerning the financial situation of FTX and their comments on stablecoins. 

The defense also sought to decipher info on how SBF’s Alameda Research was allowed to borrow unlimited funds from the FTX crypto exchange. 

They also zoomed in on Signh’s haziness between June and July last year before his testimony. SBF’s team highlighted his initial testimony with the federal official before he took the stand. 

Two FBI agents are also set to take the stand as part of the defense witnesses to discuss their notes on the FTX investigation on conversations with Singh and Wang during their arrest.

As such, the defense seeks to present notes on these conversations by including the agents involved, noting that their testimonies do not coincide. According to the defense filing:

On October 21, Mr. Bankman-Fried’s counsel advised the Government that it would seek to introduce evidence of Mr. Wang’s and Mr. Singh’s prior inconsistent statements.

SBF’s Defense filing

Wang had also testified that he couldn’t recall whether he talked about his market maker role in Alameda Research, and this did not align with his conversation in November 2022. In his discussion with law enforcement last year, he also spoke about stablecoins being part of the market-making function. However, he says he does not recall this conversation. 

Singh also made inconsistent statements on how well he recalled the events in July 2022 from June, and the filing highlights this. The filing states that he did not remember telling investigators if he felt OK about purchasing a house after the collapse of FTX in January. 

The filing details

However, one question remains: Will Sam Bankman-Fried take the stand? The former FTX CEO will be part of the witnesses to testify against the criminal fraud case. Following the intended presentation of its case on October 26, Cohen stated that SBF lawyers, Judge Lewis Kaplan, and the prosecution talked about SBF’s take to the stand in a telephone call on October 25. 

Based on Judge Kaplan’s comments on allowing the case to go straight through and move from the prosecution’s final witness to the defense’s first one. 

Also, according to Cohen, the defense team will not take more than 72 hours to question the three witnesses named as their witnesses. These would include Joseph Pimbley, who would testify on the responsibilities of former FTX employees. 

Judge Kaplan hinted that the witness’s testimony would take less than 30 minutes, excluding Sam Bankman-Fried’s testimony. Assistant US Attorney Nicolas Roos made other comments on the recent developments. He was quoted saying:

 The government has a single substantive wire fraud count related to customers, and the theory is that the defendant [SBF] made false representations and was in a trust relationship with depositors and took money. I think there is certainly an element to which these are very intertwined to the extent that the false representations created an impression of trust and confidence amongst the victims of the crime.

US Attorney Nicolas Roos