“Digital Currency”

The parents and brother of alleged crypto fraudster Sam Bankman-Fried should be forced to answer questions and provide financial documents about their personal wealth and any money they may have gotten from FTX, the bankrupt firm he founded, lawyers said in a court filing.

FTX asked a judge for permission to question, under oath, Bankman-Fried’s family and a handful of the company’s former top executives as part of a hunt for hidden assets that could be used to repay creditors owed billions of dollars.

Federal prosecutors in the United States have seized almost $700 million in cash and assets linked to Sam Bankman-Fried, founder of the FTX cryptocurrency exchange.

The former billionaire, accused of orchestrating one of America’s largest ever financial frauds, is due to face trial in October.

Prosecutors have laid claim to funds and assets connected to Bankman-Fried, including a vast stake in Robinhood Markets, the digital trading platform, worth more than $520 million.

Sam Bankman-Fried cultivated ties with A-list celebrities, politicians and investors alike — but one power couple in particular was key to boosting his profile in influential and moneyed circles.

Bill Clinton was paid north of $250,000 when he spoke at the disgraced FTX CEO’s Crypto Bahamas Conference in April, sources told The Post. At the over-the-top tropical shindig, the ex-US president along with former UK Prime Minister Tony Blair were famously photographed onstage next to Bankman-Fried, who appeared wearing shorts and a T-shirt.

Sam Bankman-Fried found ways to control the prices of digital coins to benefit his companies, FTX and Alameda, according to cryptocurrency investors.

In Sam Bankman-Fried’s quest to keep his cryptocurrency empire looking profitable, the disgraced founder of FTX often promoted newfangled digital currencies that crypto aficionados came to call “Samcoins.”

Mr. Bankman-Fried wooed the developers of these new coins with names like Serum and Maps, insisting that they make their trading debuts on the FTX exchange. Then his hedge fund, Alameda Research, would buy some of these newly listed Samcoins to prop up their value, while Mr. Bankman-Fried used FTX’s influence in the crypto industry to drum up interest in those coins and convince other investors to also buy significant amounts.

Mr. Bankman-Fried was thus able to inflate the coins’ value artificially, making Alameda look healthier than it was and papering over problems at his companies until they imploded in November.

Sam Bankman-Fried ordered the co-founder of his cryptocurrency exchange FTX to create a “secret” backdoor that allowed his hedge fund Alameda Research to borrow $65 billion of clients’ money without their permission, according to testimony over the firm’s implosion.

Gary Wang was told to create a secret line of credit using customer funds from FTX to Alameda, said Andrew Dietderich, an attorney for FTX, in Delaware bankruptcy court on Wednesday.

“Mr. Wang created this backdoor by inserting a single number into millions of lines of code for the exchange, creating a line of credit from FTX to Alameda, to which customers did not consent,” Dietderich testified.

Bankruptcy courts are not built for Sam Bankman-Fried’s mess

On january 5th Sam Bankman-Fried turned up at the funeral of his own crypto empire. He lodged a complaint against ftx’s bankruptcy proceedings, demanding $500m in frozen assets earmarked for creditors. Mr Bankman-Fried wants the money in order to pay legal fees for his criminal trial, in which he is accused of sucking billions of dollars of customer deposits from the crypto exchange for his own use (he has pled not guilty).

The demand is an opening salvo in what will be a long, chaotic battle. America’s bankruptcy laws have evolved over centuries to pick apart regular businesses. Now, on the fly, lawyers must work out how to apply them to crypto companies. In November ftx filed for bankruptcy under Chapter 11, which allows a bankrupt firm to re-organise rather than liquidate. The process usually plays out as a legally refereed tussle between a company and its creditors. The firm, told by a court what it owes, tries to convince lenders to accept stakes in the business rather than cash. If successful, it emerges with less borrowing and a shiny new growth plan. If unsuccessful, it shuts up shop. A big restructuring might have 100 creditors. A long one lasts a year. A complex one takes at least a couple.

(Reuters) – A U.S. Trustee filed an objection on Saturday to plans by bankrupt crypto exchange FTX to sell its digital currency futures and clearinghouse LedgerX, as well as units in Japan and Europe, according to a court filing.

FTX filed for bankruptcy protection in November and said last month it planned to sell its LedgerX, Embed, FTX Japan and FTX Europe businesses. On Tuesday, FTX founder Sam Bankman-Fried pleaded not guilty to criminal charges that he cheated investors and caused billions of dollars in losses, in what prosecutors have called an “epic” fraud.

Disgraced FTX founder Sam Bankman-Fried asks court to let him access his Robinhood shares worth $465M to pay for his criminal defense

Disgraced FTX founder Sam Bankman-Fried has asked a federal judge to allow him access to some $465 million worth of shares in Robinhood, saying he needs cash to pay his legal fees.

Attorneys for Bankman-Fried made the request in a motion filed on Thursday night with the judge overseeing FTX’s bankruptcy, arguing that the 56.3 million shares of Robinhood are owned by an entity that is not party to the proceedings.

Bankman-Fried, whose net worth was once estimated at $15.6 billion, has said that he has about $100,000 in cash reserves remaining after his cryptocurrency exchange collapsed and he was charged with fraud.

FTX and Alameda Research founder Sam Bankman-Fried was arraigned Tuesday in a Manhattan courtroom. Now attention turns to the legal process leading to an epic trial scheduled to start in October.

Understandably, the press focused on the big headline – that SBF had been accused of committing one of the largest financial frauds in U.S. history. But is there a time bomb ticking away in the indictment?

Far less attention was paid to the last count in the indictment: The allegation that SBF conspired with others to violate campaign finance laws. It was well-documented that SBF had been a major contributor to mostly Democratic candidates (while his colleague, Ryan Salame, was a major Republican donor).

h/t DM

US authorities are ratcheting up pressure on Sam Bankman-Fried’s inner circle as they scrutinize former close FTX associate Nishad Singh, according to people familiar with the matter.

If federal prosecutors in Manhattan find Singh had a role in the alleged multiyear scheme at FTX and trading firm Alameda Research to defraud investors and clients, he could be charged as soon as this month, said one of the people. The Securities and Exchange Commission and the Commodity Futures Trading Commission are also probing Singh, said the person, who asked not to be identified discussing the matter.

Not lookin good, on paper at least.

Daniel Friedberg — the former FTX “chief regulatory officer” who was tied to a notorious online poker cheating scandal — has reportedly flipped on Sam Bankman-Fried and has been cooperating with the feds in the epic crypto fraud case.

Friedberg, a member of Bankman-Fried’s inner circle and key legal adviser at FTX, met with investigators on Nov. 22 and detailed how the disgraced founder used customer funds “to finance his business empire,” Reuters reported on Thursday, citing a source with knowledge of the matter.

An 8 billion dollar fraud demands jail time, but Sam’s parents have the Democrat card to play. I expect a fairly quick pardon will be arranged once the dust has settled.

Accused cryptocurrency fraudster Sam Bankman-Fried entered a not-guilty plea at his arraignment in Manhattan federal court Tuesday.

Judge Lewis Kaplan set a tentative trial date of Oct. 2, 2023, for the 30-year-old fallen wunderkind.

It was Bankman-Fried’s second appearance in Manhattan federal court since his extradition from the Bahamas.

He’s got about 10 months to ponder his non-existent defense.

Federal Sentencing Guidelines Spell Deep Trouble for Sam Bankman-Fried

Sam Bankman-Fried is expected to be arraigned in a federal district court in lower Manhattan today, on the indictment obtained by prosecutors in the Southern District of New York in December.

SBF is in deep, deep trouble. The main reason for that, besides what appears to be weighty evidence against him — including the prospective testimony of two close (alleged) accomplices who are cooperating with SDNY prosecutors — is found in the federal sentencing guidelines.