Jeffrey T. Bankman-Fried, a 30-year-old investor who backed FTX and Binance to raise money for the SEC

Larry David predicted in the FTX’s Super Bowl ad that it wouldn’t make it. The ad shows David as a man who believes in the greatest inventions of mankind, including the wheel, the lightbulb, coffee and democracy.

The SEC alleges that Bankman-Fried, 30, duped those investors who backed FTX by promoting it as a “safe, responsible” crypto trading firm that used “sophisticated, automated” risk measures to protect customer funds.

After an article in CoinDesk earlier this month raised questions about FTX’s financials, Changing Zhao, the CEO of Binance, decided to offload his company’s sizable FTT holdings. The token’s value cratered as investors were spooked by that.

Money was deposited by customers to engage in trading. It appears that FTX borrowed a lot of money from its sister firm, Alameda, so they could fund their high-risk bets.

The net worth of the 30-year-oldentrepreneur was nearly $26 billion this spring, which was tied up in digital assets. Bankman-Fried used his FTX exchange and his sister hedge fund, the Alameda fund, to provide lines of credit to companies like BlockFi that were at risk of collapsing due to the plunge in prices.

FTX’s customers’ funds were diverted to a private hedge fund by Bankman- Fried and he had a special treatment for Alameda.

As a follower of “effective altruism,” Bankman-Fried has sought to make as much money as possible in order to give it away. His philanthropic endeavors are now in question.

Samuel, who wanted to be referred to only as “Samuel”, says he lives in Southeast Asia and is currently between jobs, which means money is hard to come by. His nest egg was in his FTX account.

The price of a type of virtual currency called XRP has been depressed due to an ongoing lawsuit between its issuer, Ripple Labs, and the US Securities and Exchange Commission. Recently, there have been signs the two-year legal battle may be coming to a close—and Samuel had been sitting tight in the hope that a favorable ruling might send the price of XRP skyward. With his token locked up in FTX he won’t be able to take advantage of hispatience. He said he could see the finish line but this latest drama was keeping him up at night. It is so much hardship.

There are many stories like that of FTX customers. When FTX trader were in the US, they were not able to immediately withdraw their funds due to the exchange being unavailable in the country. When the FTX trader eventually used a VPN service to bypass the geo-restrictions, they found their withdrawal password needed to be reset, a process that for security reasons prevents money from being taken out of an account for 24 hours. By that time, it was already too late.

Neal won’t be taking over. He doesn’t want to serve in that position because he has nothing to do with FTX or its former CEO.

The Blockfi Deficit after the Bitcoin Decay: A Comment on John Ray III’s Board of Governor John Bankman-Fried

Blockfi froze customer withdrawals last night because of the FTX problems, causing a domino effect across the industry. After the announcement, the price of Bitcoin dropped sharply before recovering slightly and remains under the $17,000 mark.

In a thread posted today, SBF said, “I was shocked to see things unravel the way they did earlier this week. I will, soon, write up a more complete post on the play by play, but I want to make sure that I get it right when I do.”

The FTX Group has valuable assets that can only be efficiently administered in an organized, joint process, says newly-appointed CEO John J. Ray III. I wanted to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency.”

The update was delivered November 11th at 10:55AM. Sir Lewis Hamilton’s F1 car won’t have the FTX branding at the upcoming race according to a bankruptcy filing by Sam Bankman-Fried.

A lot of the total has since vanished, they said. One source put the missing amount at about $1.7 billion. The other said the gap was between $1 billion and $2 billion.

Earlier Tuesday, Binance had already seen its “highest daily withdrawals since June,” according to Nansen’s analysis. The rate of withdrawals has since stabilized to approximately $79 million in net outflows, the firm’s data showed as of Tuesday evening ET.

The regulator regulator is looking at FTX.com, according to the two people who knew about the money-flow from Alameda

The two people with knowledge of FTX’s finances said that Bankman-Fried met with several executives in Nassau to decide how much funding he needed to cover the shortfall.

The documents showed that between $1 billion and $2 billion of these funds were not accounted for among Alameda’s assets, the sources said. The spreadsheets did not indicate where this money was moved, and the sources said they don’t know what became of it.

In a subsequent examination, FTX legal and finance teams also learned that Bankman-Fried implemented what the two people described as a “backdoor” in FTX’s book-keeping system, which was built using bespoke software.

A source with knowledge of the inquiry told us that the SEC is looking at FTX.com’s handling of customer funds as well as its activities in the digital space. The Department of Justice and Commodity Futures Trading Commission are looking into it.

CZ was speaking at a conference in Indonesia on Monday. He said last week that comparing the current crypto turmoil to the 2008 global financial crisis is “probably an accurate analogy.”

Editor’s Note: Emily Parker is executive director of global content at CoinDesk, a media, event, indices and data company, and a former policy advisor at the US State Department and writer/editor at The Wall Street Journal. She wrote the book “Now I Know.” Who? They are voices from the internet underground. The opinions in this commentary are her own. Read more opinion at CNN.

The Bankman-Fried fiasco and why he didn’t try to commit a single-currency charge on anyone

The answer is no one, because crypto shouldn’t need a savior. The whole thing is that it’s supposed to be transparent. Bankman-Fried’s rise and fall shows how far the industry has strayed from that ideal. One of the most secretive entities in the world is the crypto world. There is perhaps no better example than FTX and its leader.

It wasn’t supposed to be this way. The financial crisis that struck in 2008 caused a lot of disappointment in bankers and politicians. The new system didn’t require you to trust anyone at all because of the distrust in financial institutions. Everyone can see that no bad actors should be able to change the underlying ledger of Bitcoin transactions, which is known as the blockchain.

The entire fiasco is unsurprising, and in many ways could have been foreseen. This is not the first case of alleged fraud we have seen from Bankman-Fried. As opposed to what a lawyer would advise, SBC, as he is affectionately known, did not stay silent. He went on an apology tour, tweeting, speaking to reporters and even virtually participating in the yearly DealBook Summit in New York last month where he said he “didn’t ever try to commit fraud on anyone.”

What Bankman-Fried and Twitter Think about the Cryptocurrency Market: A Lehman Moment for the Valuable Company Ether

The cult of personality problem is not limited to just one area. We see it in other media as well, such as social media. Twitter is now subject to the whims of owner Elon Musk, the richest man in the world.

In that sense, Bankman-Fried may be no different than his predecessors. Given the continued lack of regulation and oversight in the crypto industry, Bankman-Fried is not only a new version of an old story, but hopefully the start of long-overdue change in the industry, with the kinds of regulations and transparency needed to prevent other scammers, fraudsters and criminals from simply stepping in to replace Bankman-Fried.

As the Federal Reserve has raised interest rates to fight high inflation, investors have lost their appetite for risk and for almost anything tech. The price of cryptocurrencies is falling, with the price of Bitcoins down more than 60% this year.

Ether, the world’s second most valuable cryptocurrency, isn’t faring much better. It was trading about $1,230 on Monday, down more than 20% in the last week.

The company’s downfall has been referred to as a Lehman moment by some industry insiders, similar to the collapse of the investment bank in 2008.

The episode has not just destroyed confidence in the crypto industry, but will also embolden global regulators to tighten the screws. Some of the biggest names in the business said they will welcome the scrutiny, if it helps restore faith in the industry.

Authorities’ “natural response is to borrow regulations from traditional banking systems … but crypto exchanges operate very, very differently from banks,” he said.

An Investigation into Bankman-Fried’s Inaccuracy in the Exchange of Crypto.io, Crypto.com and CoinDesk

FTX moved its headquarters from Hong Kong to The Bahamas last year, and former CEO Sam Bankman-Fried said it was one of the few places in the world where a comprehensive framework for Crypto could be found.

FTX General Counsel Ryne Miller said Saturday that the company moved its digital assets offline. The process was expedited Friday evening “to mitigate damage upon observing unauthorized transactions.”

As scrutiny of big players in the crypto world increases, Singapore-based Crypto.com admitted to accidentally sending more than $400 million in ether to the wrong account.

Kris Marszalek said that the transfer of 320,000 ether was made three weeks ago to an account at Gate.io instead of its offline wallet.

We have stronger our processes and systems to better manage internal transfers. The platform’s native token has fallen over 20% in the last 24 hours, according to CoinDesk.

Marszalek said Monday that his firm has acted as a “responsible, regulated player since inception” and will soon “prove all the naysayers …wrong with our actions.”

Warren and Smith wrote that the banking system may have closer ties to the bicyle firms. Concerns about the safety and soundness of our banking system are brought up by the relationships that banks have with CRYPTO firms.

The Securities and Exchange Commission said it was going to file separate charges relating to Bankman- Fried’s violations of securities laws on Tuesday after the SDNY confirmed his arrest.

The First Twelfth Anomaly: Investing in Swan Bitcoin and the World’s First Trillionaire by Sequoia Capital

“I care about retail investors the most, because they suffer the most and many people still think of bitcoin as a scam,” said Mr. Klippsten, CEO of SwanBitcoin, who raised concerns about FTX’s business model. Klippsten is publicly enthusiastic about bitcoin but has long had deep skepticism about other parts of the crypto universe.

The meeting with Bankman- Fried is likely to be called “the world’s first trillionaire” by Sequoia Capital. A group of partners became enthusiastic about Bankman-Fried at a meeting. After several more meetings, Sequoia decided to invest in the company.

I just do and I don’t have a clue. SBF is a winner,” wrote Adam Fisher, a business journalist who wrote a profile of Bankman-Fried for the firm, referring to Bankman-Fried by his popular online moniker. The article was taken down from the website.

The Ontario Teachers’ Pension Fund said, “Not all of the investments in this early stage asset class perform to expectations.”

It brought a smile to the faces of the account holders of Voyager Digital when Bankman-Fried bought the company’s assets for more than $1 billion. That rescue is now in question.

He had started to influence political and popular culture. FTX bought prominent sports sponsorships with Formula Racing and bought the naming rights to an arena in Miami. He pledged to donate $1 billion toward Democrats this election cycle — his actual donations were in the tens of millions — and prominent politicians like Bill Clinton were invited to speak at FTX conferences. Football star Tom Brady invested in FTX.

Sheila Bair, a top regulator during the 2008 financial crisis, told CNN there are eerie similarities between the dramatic rise and fall of Bankman-Fried and FTX and that of infamous Ponzi scheme mastermind Bernie Madoff.

Bair said that Bankman- Fried used his connections and fame to seduce sophisticated investors and regulators into missing red flags.

He was known as a wizard on Wall Street. He was the former chairman of the Nasdaq Stock Market, served on Securities and Exchange Commission advisory panels and managed money for the rich and the famous.

“You get this herd mentality where if all your peers and marquee names in venture capital are investing, you’ve got to, too. And that adds credibility with Washington policymakers. It all feeds on itself,” said Bair, who sits on the board of directors at Paxos, a blockchain infrastructure company (Bair said she was speaking for herself, not Paxos).

Introducing Cryptocurrencies in the Financial System: A Simple Scheme to Encourage Investors to Acquire More Benefits from the Coincillation

It was possible thanks to an elaborate scheme that involved repaying existing clients with new client deposits, that the amazing returns that were offered to investors were eventually made possible.

The former FDIC chair is not worried that the FTX implosion endangers the financial system the way Lehman Brothers did in 2008. In terms of the economy and financial market, the is not a large part.

“There’s no reason, if you’re in crypto, not to create tokens,” says Hilary Allen, a professor at American University Washington College of Law. “You can create tokens out of thin air.”

“I use it as an analogy to airline miles,” says Zetlin-Jones, a professor at Carnegie Mellon University. It was like loyalty points for using the exchange.

Customers who bought FTT were able to execute trades on the company’s exchange at a discount. The token could be used as security. The company saw token holders as elite.

The value of Cryptocurrencies: How far will FTT go? An update from the Cornell University suppressing S&EC Chair David Prasad

This practice made it hard for the Securities and Exchange Commission Chair to scrutinize the world ofCryptocurrencies, which is largely unregulated.

“It was a very murky set of financial practices with no transparency, no investor protection, and no financial guardrails of any sort,” says Prasad, who is also a professor of economics at Cornell University.

“The value of the token can be lost in a flash if there’s a whiff of concern about it,” he said. “Which is what happened here?”

There is an expectation that once one sifts away the ashes of the conflagration, there will be some value left in the exchange. Some assets that will not be sold will still have marginal value, so the token can be used to derive value from them.

He expects FTT’s value will fall even more in the coming days as we learn more about how a company that was worth more than $30 billion collapsed to smithereens.

“People buy Zimbabwean trillion-dollar bills because it’s an anecdote, and they may like these as collectibles,” said Cynthia Zeitland-Jones. “Perhaps FTT is the new collectible that we’ll marvel at 100 years from now.”

Surprising the FBI: Samuel Bankman-Fried is charged with a criminal mismanagement and money laundering in a cryptocurrency-related banking transaction

Bankman-Fried’s testimony would no longer be given on Tuesday after he was arrested. The hearing was set to move ahead, however, beginning with testimony from FTX’s new CEO, John J. Ray III, who took over for Bankman-Fried on November 11 and is tasked with shepherding it through the bankruptcy process.

The failure of both entities was caused by clear misuse of client funds, and wiped out billions of dollars owed to over one million clients, according to a letter from the senators.

The arrest surprised many. The House Financial Services Committee had planned on having S.B.F testify on Tuesday. The committee’s Democratic chair, Representative Maxine Waters of California, didn’t see this coming: “The public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity,” she said. S.B.F. said he did not expect to be arrested.

“There are still significant unanswered questions about how client funds were misappropriated, how clients were blocked from withdrawing their own money, and how you orchestrated a cover up.”

Separately, Sens. Elizabeth Warren of Massachusetts and Tina Smith of Minnesota, both Democrats, sent letters to three regulators – the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency – asking them to assess the traditional banking system’s exposure to turmoil in the crypto space, a largely unregulated, parallel financial system.

The Southern District of New York confirmed his arrest on the social networking site.

“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US government, based on a sealed indictment filed by the SDNY,” wrote US attorney Damian Williams. “We expect to move to unseal the indictment in the morning and will have more to say at that time.”

The United States’ extradition treaty with the Bahamas allows US prosecutors to return defendants to American soil if the charges would be considered punishable by imprisonment of at least a year in both jurisdictions.

Sam Bankman-Fried is a House of Cards on a foundation of deception, and he allegedly did not know he was committing fraud

At the weekend, he told thebbc he didn’t know he was committing fraud. “I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”

Waters said in a statement Monday night that he was disappointed, but remained committed to getting to the bottom of what happened.

While the probe isn’t completed, Ray said, FTX’s collapse appears to stem from the concentration of power “in the hands of a very small group of grossly inexperienced and unsophisticated individuals” who failed to implement virtually any corporate controls.

“There was no person who was chiefly in charge of positional risk of customers on FTX,” Bankman-Fried told DealBook. “And that feels pretty embarrassing in retrospect.”

Bankman-Fried has denied knowledge of any such backdoor. “I don’t even know how to code,” he told cryptocurrency vlogger Tiffany Fong in an interview last month.

SEC Chair Gary Gensler is quoted in the statement saying, “We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.”

“Look, I screwed up,” Bankman-Fried said during a virtual appearance at the New York Times’ DealBook Summit. There are things I would do to get something done.

The FTX CEO, John J. Ray III, is a mess. After his death, S.E.C. revealed he directed $8 billion of customer deposits into a separate account

The S.E.C asserts that S.B.F was more involved in the operations than he had said. In a major revelation, the agency says he directed $8 billion worth of customer deposits from an Alameda-controlled bank into a separate account, labeled “fiat @ftx.com,” in part to avoid getting charged interest, a move that could suggest intent. From the complaint:

Other charges may follow, but these are the ones he’s facing so far, and that’s just from the SEC — its announcement notes other charges are being filed today by the US Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission (CFTC).

Prior to his arrest, SBF had continued an ongoing postbankruptcy-filing media tour of a variety of social media sites with at least two live appearances on Monday and a planned testimony before the House Financial Services Committee. That hearing will go forward and is scheduled to begin at 10AM ET, with testimony from FTX’s new CEO, John J. Ray III.

The arrest has sparked a lot of jubilation in the crowd after it was noted that his generous treatment by the mainstream media and speculation that his political donations may earn him a free pass from US law enforcement.

The interviews Bankman-Fried gave were against his lawyers’ advise, and they weren’t particularly illuminating. He has largely evaded straightforward questions, given tangential responses, and been generally inattentive—he played video games during at least one interview.

The preview written in advance of Ray’s testimony was the first sign that Bankman- Fried was going to get a rough ride. “Never in my career have I seen such an utter failure of corporate controls at every level of an organization,” wrote Ray, before describing Bankman-Fried and his inner circle as “grossly inexperienced and unsophisticated.”

How the US Created the World’s Greatest Laundering Scheme in History: A Comment on the Outflows from Binance and the Decline of the Wall Street Platform

According to Andrew, at its peak, the platform saw $3 billion in net outflows over a 24 hour period. A report about an ongoing investigation by the US Justice Department into the exchange was a factor in investors’ nervousness, he said.

But Binance is being investigating by the Department of Justice, and Reuters recently reported prosecutors are “delaying the conclusion” of that investigation.

The billionaire believed it was a good idea for each exchange to face stress test withdrawals. He later added that Tuesday’s outflows were not among the highest the company had processed.

Editor’s Note: Casey Michel is a writer and investigative journalist covering kleptocracy and dark money networks across the globe. He is the author of “American Kleptocracy: How the US Created the World’s Greatest Money Laundering Scheme in History,” and is at work on a book investigating foreign lobbying in Washington, DC. The opinions expressed in this article are his own. Read more opinion at CNN.

In some ways, these kinds of cases, many of which resemble traditional Ponzi schemes, are as old as American capitalism itself. They almost always use a lack of regulation and oversight, along with a promise of easy wealth schemes, to make up for the fact that there isn’t much oversight.

The same story repeats itself over and over, just look through American history. The American economy was badly hit in the initial Great Depression of 1873, when speculative investors operating without oversight in the railroad industry caused the country to go into a deep recession.

Changpeng Zhao, the Crypto Currencies and Genesis: A “Memory of a Coin” and a “Stable Coin”

The company’s CEO, Changpeng Zhao, who is better known as “CZ,” dismissed the outrush of cash as “business as usual” for the world’s largest crypto exchange.

There were also signs, though, of uneasiness, when Binance halted withdrawals of a so-called “stable coin” called USDC, for about eight hours on Tuesday.

The industry where he also reigns as a celebrity and speaker is going through a historic moment, as shown in a memo obtained by NPR.

We will get through the next few months despite expectations of being bumpy, he wrote. “For having been through it, we will be stronger.”

Another part of the crypto tangle is Genesis, which is facing the possibility of bankruptcy. It said in a tweet last month its derivatives business had about $175 million locked in an FTX account.

One of its units was named on Thursday to a creditors committee in the FTX bankruptcy case by the Department of Justice’s U.S. Trustee, giving it power in shaping how FTX will pay off its debts.

The company hired the accounting form Mazars to review its numbers, and it provided an assessment of its finances to customers, which it is characterizing as a “proof of reserves.”