Making Sense of Wall-String Crimes with WIRED: An Analysis of Silicon Valley Incidents During the 2016 Moscow Cyber Security Attacks

In order to find connections between the incidents, WIRED examined more than 90 of the cases and found correlations between many of them. In speaking to a number of people who experienced it, Klinger told WIRED that the anxiety and fear was real for 15 minutes. “There’s a period of time in these incidents where people are literally running for their lives, law enforcement is responding with their weapons, and people think it’s the real thing.”

Even after extensive sanctions meant to isolate Russia from the global economy amidst its ongoing war with Ukraine, investigators around the world are working to curb the ongoing influx of capital to Russian military and paramilitary groups. It is likely the first time a corporate executive has been charged with a criminal offense for a data breach because of the conviction this week of one of them, former CEO of uyburgers joe Sullivan. The Biden administration’s new executive order addressing privacy seems like more of a Band-Aid than a panacea, as it attempts to reassure Europeans that their data is safe when stored in the US, despite government surveillance.

Meta has found over 400 malicious apps that were harvesting Facebook credentials to take over users’ accounts. We looked at the toll that living your life online can have on your sense of self, the erosion of privacy that comes with consistency of social media posting, and the ways it can affect your sense of self.

There is more. Each week, we highlight the news we didn’t cover in-depth ourselves. Click on the headline to read the full story. And stay safe out there.

Source: https://www.wired.com/story/binance-hackers-minted-569-million/

The collapse of FTX, the biggest cryptocurrency exchange in the world, and the fate of the cryptocurrencies that traded away their BNB to make a profit

Unfortunately for those hackers, even they didn’t seem prepared for their sudden windfall. Cryptocurrency-tracing firm Elliptic found that they quickly traded away some fraction of their tokens for a variety of other cryptocurrencies. That gave them the ability to get about 53 million dollars in tokens. But other cryptocurrencies that they traded their BNB for, like Tether and USDC, are more centrally controlled, allowing the funds to be frozen. Binance, meanwhile, managed to temporarily shut down its BNB blockchain to prevent the hackers’ newly mined currency from moving further. “So we have a very sophisticated exploit, managing to mint yourself $569 million,” says Elliptic research lead Thibaud Madelin. To be honest, what followed was a complete mess.

FTX had become one of the biggest exchanges in the world, until a sudden wave of customer withdrawals left it unable to cover them. There are a number of questions that prosecutors are likely to investigate, one of which is whether FTX misappropriated customer funds.

FTX filed for bankruptcy proceedings in the United States on Friday, marking a stunning downfall for one of the biggest and most powerful players in the crypto industry. Bankman-Fried, the founder of the exchange, resigned.

“This was one of the most trusted entities in the crypto space, so it will take some time to recover,” said Jay Jog, co-founder of the blockchain startup Sei Labs, which is based in California.

The company was valued at $32 billion in its latest funding round, and recruited celebrities like Tom Brady, Gisele Bndchen and Naomi Osaka. The arena is where the Miami Heat play.

The situation is still developing quickly. One concern is how it would affect the entire sector, which was worth around $1 trillion in August.

What Did Bankman-Fried And Alameda Ever Tell Us Before FTX Collided? And Why Did They Suggest?

And as if all that weren’t enough, Bankman-Fried’s successor, Ray, spent the day calling out the colossal mismanagement that took place before FTX and Alameda collapsed. In addition to calling the previous leaders “a very small group of grossly inexperienced and unsophisticated individuals” — under oath, mind you — Ray also illustrated that mismanagement by revealing that FTX used QuickBooks to run its business, which was valued at more than $30 billion at its peak. Ray said: “There’s nothing against the program.” It is a good tool. Just not for a multibillion-dollar company.”)

The number of entities that can rescue people with low capital and high leverage is decreasing according to strategists at JPMorgan.

Traditional investors have also been burned, though they’re reassuring clients they can handle the fallout. The Ontario Teachers’ Pension Plan said that losses tied to its $95 million investment would have a limited impact even though it was uncertain.

Changpeng Zhao, the CEO of Binance, tweeted that he had been texting with Nayib Bukele, the president of El Salvador, which has gone all in on bitcoin. The person relayed from Bukele that the company did not have any business with them. “Thank God!”

Sam Bankman-Fried and the CFTC: Stop looking for saviors in the crypto-currency industry, and don’t forget to take care of yourself

The crisis afflicting the market worsened over the weekend, with the prices of digital currencies falling again. About 65% of the way into the year, the world’s biggest dgt has fallen. On Monday it was at $16,500, according to coinDesk. Analysts believe that it could fall below $10,000.

In that climate, the “crypto winter” is poised to get even worse, especially as fears about the broader economic backdrop continue to erode the appetite for risky assets.

The episode has caused a great deal of damage to the confidence in the industry. 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.

“We’ve been set back a few years,” he said. “Regulators rightfully will scrutinize this industry much, much harder, which is probably a good thing, to be honest.”

The CFTC claims that Bankman-Fried, his parents, and his employees at FTX and Alameda used customers’ funds for personal benefit: luxury real estate, private jets, personal loans, and political donations. Customer funds were used for a Super Bowl commercial starring Larry David and the FTX Arena in Miami. These advertisements, which the CFTC says were paid for by customers’ funds, said that FTX was “the safest and easiest way to buy and sell crypto.”

Approximately $1.14 billion was withdrawn from Binance on Tuesday, as the crypto world digested news that FTX’s founder, Sam Bankman-Fried, had been arrested in the Bahamas, along with a report about government scrutiny of Binance.

The Securities and Exchange Commission allege that Ellison and Wang actively participated in a “scheme to defraud” the investors. Between 2019 and 2022, Ellison manipulated the price of FTT, FTX’s security token, “at the direction of” Bankman-Fried, regulators alleged. The SEC said that the manipulation was done by buying large quantities of FTT on the open market.

For the crypto industry, the lesson here is to stop looking for saviors. Bankman-Fried’s meteoric rise was not simply based on his own doing – he was buoyed by many others. He raised millions of dollars from high-profile investors, was showered with media attention, and with few exceptions just wasn’t questioned all that much. The bottom line is that so much hope and responsibility should not rest in one individual. It doesn’t conform with everything that the coin is supposed to represent.

Bankman-Fried has been trying to make as much money as possible in order to give it away. The fate of his endeavors is now in doubt.

Samuel asked to be referred to only by first name to protect his anonymity, because money is tight in Southeast Asia and he is currently between jobs. The cryptocurrency in his FTX account was his nest egg.

Samuel is the owner of a majority of XRP, a virtual currency that has been depressed by an ongoing lawsuit between it and the US Securities and Exchange Commission. Samuel had been carefully watching for signs that a favorable ruling could send the price of wdvu skyward, and he had been sitting tight hoping for a favorable ruling. But now, with his tokens locked up in FTX, he won’t be able to reap the rewards for his patience. “I could see the finish line, but this latest drama has me hanged by the balls,” he says. “It’s just so much hardship.”

There are many FTX customers with stories like this one. One FTX trader, who asked to remain anonymous, was in the US when they first heard of trouble at the exchange, which meant it was not possible to immediately withdraw their funds (FTX International, not to be confused with FTX US, is 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 too late.

The collapse of FTX and the investigation of the criminal malfeasance on its assets by Ray and Bankman-Fried

A large portion of that total has since disappeared, they said. It is believed that the missing amount is at least 1.7 billion. The other said the gap was between $1 billion and $2 billion.

Two people with knowledge of FTX’s finances said that Bankman-Fried held a meeting in Nassau with several executives to figure out how much outside funding he needed to cover the shortfall.

Ellison, acting on Bankman-Fried’s orders, borrowed billions of dollars from lenders, according to the SEC suit. The loans were backed by a token called the FTT that was given to Alameda for free, according to the SEC. The goal of Ellison’s job was to buyFTT token on different platforms in order to increase the price of the token, and thus make it more valuable. That allowed for Alameda to borrow even more.

The Royal Bahamas Police Force said that they are working with the Securities Commission of the Bahamas to investigate any criminal malfeasance that occurred after the collapse of FTX.

On Friday, FTX said it had turned over control of the company to John J. Ray III, the restructuring specialist who handled the liquidation of Enron Corp – one of the largest bankruptcies in history.

The Dark Side of Bitcoin: A Commentary on the Rise and Fall of Bankman- Fried, Bitcoin, and Other Cryptocurrencies in the Age of Technology

Emily was an editor in The Wall Street Journal and a former policy advisor to the US State Department. She is the author of “Now I Know Who is this person? The Internet Underground is what my Comrades are. Her opinions in this commentary are her own. CNN has more opinion.

The answer isn’t anyone, because there shouldn’t be anyone else. It is supposed to be transparent, and it is the main point of the entire thing. The rise and fall of Bankman- Fried shows how far away the industry has gone from that ideal. TheCryptocurrencies are run by larger-than-life personalities. FTX’s leader is perhaps the best example there is.

The way was supposed to be different. Bitcoin, the world’s first major cryptocurrency, came into the world on the heels of the 2008 financial crisis, which led to a deep disappointment in bankers and politicians. The new system was supposed to make you happy by not requiring you to trust anyone at all. Everyone is able to see transactions on the digital ledger, which means no bad actor should be able to alter them.

The Clump of Personality: The Case of Bankman-Fried in Digital Assets and Crypto-Monetary Networks

Bankman-Fried has denied knowingly commingling funds and sought to distance himself from the day-to-day management of Alameda, which made a number of high-risk trading strategies such as arbitrage and “yield farming,” aka investing in digital tokens that pay interest-rate-like rewards, according to reporting from The Wall Street Journal.

The entire fiasco is unsurprising, even if certain people thought it would be this way. This is not the first case of fraud we have seen from Bankman-Fried. SBF, as he is often referred to, did not stay silent and instead offered what any lawyer would advise. He went on an apology tour and even spoke to reporters about his innocence at the DealBook Summit in New York last month.

The cult of personality problem is not limited to crypto. We see it in social media as well, another supposedly leaderless and decentralized technology. Twitter is now subject to the whims of owner Elon Musk, the richest man in the world.

A FTX Account and a Bank Robbery: Where are the thieves? What can they do with the stolen cash? An analysis by Elliptic

FTX has been hacked. All funds seem to be gone,” an admin on FTX’s official Telegram channel writes, while also instructing users to delete FTX’s apps and warning against going on the platform’s websites due to the presence of malware. FTX.com At this time, FTX.us is down.

“We’re definitely watching the movements of these funds,” says Chris Janczewski, the head of investigations at TRM Labs and a former special agent at the IRS’s criminal investigations division. “This potential thief has hundreds of millions of dollars. They went into the bank and took all the cash they could carry, and then the dye packs went off. They’ve got all this money, but now everyone knows it’s connected to this bank robbery. What can you do with it?

According to the analysis by Elliptic, a lot of the funds stolen in the form of Cryptocurrencies were quickly traded on exchanges that allow you to swap coins without giving any personal information. But cashing out those coins and the rest of the stolen loot will likely require trading it on a centralized exchange, which almost always requires users to hand over identifying information. The thieves can try to put the money through a service that mixes them with other people’s money, so they won’t see the difference. When users feed much larger sums into them, the analysts can easily defeat those mixers. The US Treasury in August sanctioned the Tornado Cash service, making it vulnerable to seizure for many exchanges.

It is not faring much better than the second most valuable currency, ether. It was trading around $1,230 on Monday, having lost over 20% in the last week.

The Cryptoworld: A “swamp review” of the FTX, CoinDesk, Coindesk and Gate.io

According to an e-mail, regulators are doing a “swamp review” of every crypto company. There has been a growth in the industry and that’s why the company has shown its commitment to security and compliance.

The CEO of the company was known as Changpeng Zhao and he downplayed the out rush of cash as normal.

FTX moved its headquarters from Hong Kong to The Bahamas last year, with former CEO Sam Bankman-Fried hailing it as “one of the few places to set up a comprehensive framework for crypto” at the time.

Miller said that FTX was “investigating abnormalities” regarding movements in crypto wallets “related to consolidation of FTX balances across exchanges.”

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, the CEO, said that the 320,000 ETH transfer was made to a corporate account at Gate.io, instead of a cold wallet, three weeks ago.

“We have since strengthened our process and systems to better manage these internal transfers,” Marszalek tweeted Sunday. 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.”

An Indictment of Bankman-Fried and Sequoia Capital involving a T Tachyon, the First Tilted Millionaire

“It is very, very normal for a bank to move user assets for investments and try to make returns,” he explained. He said it is almost certain that the exchange will go down if it operates that way. There is a role for the industry to play in protecting consumers.

Contributions made to Democrats and progressive groups were the main reason for Bankman-Fried’s reputation as a do-gooder. The indictment was published on Tuesday by the Southern District Court of New York.

“It’s retail investors who suffer the most, and since too many people still wrongly associate it with the scammy ‘cryptocurrencies’ area, I care,” he said. Although he is enthusiastic about digital money, Klippsten has long been skeptical of other parts of the universe.

Sequoia Capital, which invested in Apple, Cisco, Google, Airbnb and YouTube, described their meeting with Bankman-Fried as likely “talking to the world’s first trillionaire.” Several of Sequoia’s partners became enthusiastic about Bankman-Fried following a Zoom meeting in 2021. After more meetings, Sequoia decided to invest in the company.

I just do, I don’t know. Adam Fisher, a journalist who wrote a profile about Bankman-Fried for the firm, referred to the firm as SBF and that it was a winner. The article, published in late September, was removed from Sequoia’s website.

Bernie Madoff-like when Voyager Digital went bankrupt: Floating the bankrupt FTX to make a big profit

In a terse statement, the Ontario Teachers’ Pension Fund said, “Naturally, not all of the investments in this early-stage asset class perform to expectations.”

When Bankman-Fried bought up the assets of bankrupt crypto firm Voyager Digital for $1.4 billion this summer, it brought a sense of relief to Voyager account holders, whose assets has been frozen since its own failure. That rescue is now in question.

FTX achieved a $32 billion valuation by raising more than $1.8 billion since launching in May 2019, including from sophisticated investors such as BlackRock, Sequoia Capital and the Ontario Teachers’ Pension Plan. Gislee and Tom Brady were both owners of FTX, according to reports.

“Charming regulators and investors can distract [them] from digging in and seeing what’s really going on,” Bair, who chaired the Federal Deposit Insurance Corp. from 2006 to 2011, said in a phone interview on Monday. “It felt very Bernie Madoff-like in that way.”

Bair notes that 30-year-old Bankman-Fried, like Madoff, proved adept at using his pedigree and connections to seduce sophisticated investors and regulators into missing “red flags” hiding in plain sight.

Long before his Ponzi scheme collapsed, Madoff was known as a wizard on Wall Street. He was a former member of the Securities and Exchange Commission and managed money for the rich and famous.

Better Markets: The Emerging Cryptocurrency Problem in the Spacetime of Large-Scale Structure and the Demise of FTX

Better Markets CEO Dennis Kelleher said in a statement on Monday that FTX had a strategy of “revolving door hires” from the Commodities Futures Trading Commission (CFTC) and elsewhere “to use their knowledge, influence and access at the agency and in Washington to move FTX’s agenda.”

You get the herd mentality where if all your peers and marquee names are investing, you have to as well. 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).

A scheme that involved repaying existing clients with new client deposits eventually proved to be the key to making up for the huge returns that had been offered to investors.

Given the speed of its demise and media reports, serious questions have been raised about the accuracy and strength of FTX’s balance sheet. FTX had up to 50 billion dollars in debts at the time of the filing.

Hilary Allen, a professor at American University Washington College of Law, believes there’s absolutely no reason to not create token if you are in cryptocurrencies. You can make a token out of thin air.

Two years after it debut, the FTX token was valued at a high of nearly 80 dollars. There are over 200 million FTX Tokens in circulation.

FTT and Bankman-Fried Trades in the Wild West: “The Case for Coins is Against Coins”, SEC Chair Gary Gensler says

“I think of it as airline miles,” says the economics professor at Carnegie Mellon University. “Like loyalty points for using the exchange.”

Customers who bought the product were able to execute trades on the exchange at a discount. They could also use the tokens as collateral. The company thought token holders were special.

This inappropriate and unseemly practice evaded scrutiny in the largely unregulated world of crypto, which Securities and Exchange Commission Chair Gary Gensler, the top cop of Wall Street, has compared to the “Wild West.”

“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 moment there is the slightest whiff of concern about the token, the value of that token can vanish to practically nothing a flash,” Prasad said. “Which is what happened here?”

Even though FTX and Bankman-Fried are under scrutiny in the US and around the world, FTT is still trading on some exchanges.

Source: https://www.npr.org/2022/11/15/1136641651/ftx-bankruptcy-sam-bankman-fried-ftt-crypto-cryptocurrency-binance

Timing the Delays in the FTT Commission: Why Do We Need You to Pay Attention? Why Do Bankman-Fried and FTX Misappropriate Client Funds?

“I think there is the expectation that once one sifts away all the embers from this conflagration, there will be some value left in the exchange,” Prasad says. “There will be some assets that will still be left over that will have marginal value, and the token can be used in order to derive value from those assets.”

He expects the value of FTT to fall more as we learn how a company that was valued at more than $30 billion collapsed in spectacular fashion.

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

After his arrest, Rep. Maxine Waters, chairwoman of the committee, said Bankman-Fried would no longer give testimony as scheduled Tuesday. 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.

You must answer for the failure of both entities that resulted from the misuse of client funds and wiped out billions of dollars of debt, according to a letter written by senators.

The arrest took many by surprise. On Tuesday, S.B.F. was slated to testify before the committee. The public has been waiting to get these answers under oath, and the timing of this arrest denies the public this opportunity, according to the chair of the committee. (S.B.F. himself also 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,” Brown said in a public letter to Bankman-Fried on Wednesday.

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 collapse of FTX, according to James J. Bankman-Fried: A new spin on a big problem, but where do you stand?

“Based on your role as CEO and your media interviews over the past few weeks, it’s clear to us that the information you have thus far is sufficient for testimony,” Waters replied to Bankman-Fried earlier this week.

Bankman-Fried remains in the Bahamas, where FTX was based, and was arrested Monday night. He was refused bail by a judge in the country, who said that he was a flight risk. (His extradition to the United States is in the works, but that process can take weeks.)

Bankman-Fried, was arrested without incident at his apartment complex shortly after 6 pm ET Monday in Nassau, and is set to appear in court Tuesday, the Royal Bahamas Police Force said in a statement.

If the charges against the defendants are deemed serious enough to warrant imprisonment in both the US and the Bahamas, the United States can return them to America.

He told the radio station he did not knowingly commit fraud. I didn’t want that to happen. I was certainly not nearly as competent as I thought I was.”

“While I am disappointed that we will not be able to hear from Mr. Bankman-Fried tomorrow, we remain committed to getting to the bottom of what happened,” Waters said in a statement Monday night.

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. That feels pretty embarrassing to me now.

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.

Bankman-Fried might be no different than his predecessors. Bankman-Fried is a new version of an old story and hopefully the start of a long-awaited change in the industry with the kind of regulations and transparency needed to prevent other scam artists and criminals from taking over the industry.

Bankman- Fried said that he screwed up during his virtual appearance at the New York Times DealBook Summit. I would do anything I could to get the job done.

A Brief Look at Bankman-Fried, the CEO of FTX, before the SEC, and the US Securities and Exchange Commission

Alameda isn’t just accused of using money sent to its own bank accounts. According to the SEC, it had the ability to make unlimited withdrawals from its FTX trading account and could tap digital assets there, too.

The allegations against SBF also focus on his statements to investors that FTX was a safe place to invest because of an automated “risk engine” that would sell off a customer’s assets to make sure their collateral stayed at the required levels.

Other charges are being filed today, but the ones that he is facing right now are by the Securities and Exchange Commission.

Prior to his arrest, SBF had continued an ongoing post-bankruptcy-filing media tour of Twitter Spaces chats and Zoom calls, with at least two live appearances on Monday, and he was expected to appear remotely today to testify before the House Financial Services Committee. The hearing will start at 10 AM with testimony from the new CEO of FTX, John J. Ray III.

The arrest has sparked jubilation in crypto circles, after some nail-biting over his ostensibly generous treatment by “mainstream media” and speculation (by Twitter CEO Elon Musk, no less) that his political donations may earn him a free pass of sorts with US law enforcement.

Against the advice of his lawyers, Bankman-Fried has given a series of interviews since the collapse, but none have been particularly illuminating (with the exception of a Vox report that caught him off-guard). He has largely avoided straightforward questions, given confusing responses, and played video games during the interview.

The first indication that Bankman-Fried was in for a rough ride came from a written preview of Ray’s testimony. “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.”

The SEC and CTFC have filed updated civil suits with more information on Wang and Ellison. “Wang, with Ellison’s knowledge and consent, exempted Alameda from the risk mitigation measures” FTX used, providing Alameda Research with a “virtually unlimited ‘line of credit,’” according to the updated SEC complaint.

Regulators say that the hedge fund overstated its balance sheet and lied to investors about its risk exposure.

Although Alameda CEO Caroline Ellison previously stated that she and Bankman-Fried keep the two companies “quite separate in terms of day-to-day operations,” the CFTC makes a pretty strong argument indicating that this, too, could be false.

Both teams shared office spaces, as well as technology and intellectual property, according to the complaint.

“The crimes that were committed [at Enron] were highly orchestrated financial machinations by highly sophisticated people to keep transactions off balance sheets,” Ray told lawmakers. FTX wasn’t sophisticated at all.

Investigation of a Class-action lawsuit against FTX CEO, Bankman-Fried, and former employees: The case of the Bored Ape Yacht Club

Bankman-Fried could face up to 115 years in prison if convicted on all eight counts against him in a federal indictment unsealed Tuesday morning, according to congressional statutory maximum sentencing guidelines.

Several lawyers not involved in the case told me that the swiftness of Bankman- Fried’s arrest signaled that former FTX employees may be helping prosecutors.

“The smart move by former employees would be to rush to become a cooperator in exchange for more lenient treatment, and it would not be surprising to learn that one or more of them had done so,” said Howard A. Fischer, a former SEC lawyer. He added: “The fact that only one person has been charged so far would seem to indicate this as well.”

According to a December lawsuit about Bored Apes, the SEC warned against celebrity endorsements of cryptocurrencies due to the problems they could cause. These endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement.”

The backlash started earlier this month, when a class-action suit was filed against celebrities, including Jimmy Fallon, Justin Bieber and Serena Williams for promoting Bored Ape Yacht Club NFTs.

NFTs are a crypto-related phenomenon that went mainstream, essentially transforming digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain. The Bored Ape Yacht Club is a collection of 10,000 pieces of digital NFT art living on the ethereum (eth) blockchain.

Charles Whitehead, professor at Cornell Law School, told CNN after the November FTX suit that it has different implications than endorsing a sports drink or athletic wear.

It is not the same as selling sneakers. All the celebrities who are doing suchSponsorships should stop and ask a securities lawyer

The former CEO is in jail and facing bankruptcy for his part in one of the biggest financial frauds in US history.

Keptocracy and dark money networks across the globe are covered by journalist and author, CASEY MICKEY. He is the author of American Kleptocracy:How the US Created the World’s Greatest Money Laundering scheme in History, and is currently researching a book on foreign lobbying in Washington, DC. His opinions are his own. Read more opinion at CNN.

These kind of cases are similar to traditional Ponzi schemes in a number of ways. They almost invariably combine a lack of regulation with promises of easy wealth schemes, all predicated on some kind of proprietary technology that seems to generate returns out of thin air.

The crash of the stock market in the late 1920s led to a series of bank runs, which eventually led to the Great Depression. The Great Recession was caused by faulty loans packaged into unique financial products, which regulators didn’t notice until it was too late.

An employee letter to BlockFi: “Coming through a hard times” before FTX, and the bankruptcy case of the Alameda Bitcoin

There were signs of worry when the withdrawals of the stable coin were halted for eight hours on Tuesday.

He indicated that Tuesday was not the last time he would be in the industry in a memo to employees obtained by NPR.

“We expect the next several months to be rough but we will get past this challenging period,” he wrote. “We will be stronger for having been through it.”

A little more than two weeks after FTX fell, crypto lender BlockFi filed for bankruptcy, after halting withdrawals and asking customers not to make deposits. FTX had rescued a few companies when the “crypto winter” began around a few months ago.

The Fed raised interest rates to fight inflation and investors lost interest in risk and tech. The value of cryptocurrencies is falling and it is down more than 50% this year.

Genesis, part of the tangle is facing the possibility of bankruptcy. It claimed in a statement last month that it had $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.

Source: https://www.npr.org/2022/12/16/1143086648/binance-cz-ftx-crypto-bankruptcy-fallout-alameda-bitcoin

Expulsion from the Metropolitan Detention Center after his arrest in the Bahamas: A case study on a failed entrepreneur who is currently in an overcrowded prison

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.”

The Department of Justice is investigating Binance, and prosecutors are delaying the conclusion of that investigation, according to a recent report.

Bankman-Fried will be extradited after the Foreign Minister of the Bahamas signed a warrant of surrender allowing his extradition to the United States, the Ministry of Foreign Affairs in the Bahamas confirmed in a statement.

Earlier, lawyers for Bankman-Fried were negotiating with federal prosecutors in New York on a bail arrangement that would enable him to avoid detention, people familiar with the matter told CNN.

FTX crypto exchange founder Bankman-Fried, who oversaw his now-bankrupt empire from a luxury compound in the Bahamas, is expected to return as early as Wednesday to the United States.

A person is holding a bag of things during a hearing. Bankman-Fried gave his occupation as an “entrepreneur” and told the judge he was not sure where he was.

In the week and a half since his arrest in the Bahamas, the Bankman-Fried has been held in a prison that US officials have described overcrowded, dirty and lacking medical care. Its cells are often overcrowded and have rats, bugs and vermin in them.

Prosecutors and attorneys for Bankman-Fried are discussing an arrangement for his release, with conditions, that would enable the failed crypto entrepreneur to avoid spending time at the Metropolitan Detention Center. The MDC is a pre-trial holding facility that former inmates and rights advocates have described as inhumane, citing frequent lockdowns, overcrowding and power outages that have left it without heat in the middle of winter.

Investigation into Sam Bankman-Fried’s Falling Cryptocurrency Enterprises Revisited Using a Cooperating Witness

Damian Williams, the US attorney for the Southern District of New York, announced the charges in a video message Wednesday night. In a brief statement, he reiterated that the investigation is still ongoing, noting specifically that these new charges in the case are not the last.

Gary takes his obligations as a cooperating witness very seriously, according to an attorney for Wang. Wang appeared in court for the guilty plea.

The Washington Post said Ellison pleaded guilty to seven counts. She could face between 120 and110 years in prison, WaPo says. Wang pleaded guilty to four counts and faces up to 50 years in prison.

Last week, Williams said that the investigation was very much ongoing and moving very quickly. I also said that last week’s announcement wouldn’t be our last, and that isn’t true today.

Two executives in Sam Bankman- Fried’s fallen crypto empire have pleaded guilty and are cooperating with prosecutors. The news was announced late Wednesday by Damian Williams, the US Attorney for the Southern District of New York.

Ellison admitted in her response to a staff question that she had made a mistake by suggesting that the CEO of the world’s biggest coin exchange could buy his holdings for $22 a token, according to the complaint. After that, most of the staff quit.

In May, when the price of crypto began to crater, the lenders wanted their money back. To keep them happy, Bankman-Fried directed that customer deposits be sent to the lenders. Ellison used the money to pay Alameda’s debts.

These uses were not authorized by customers, according to the suit. The SEC suit claims that customer funds were used in a way they shouldn’t have. Indeed, FTX’s terms of service explicitly forbid this kind of thing, the CFTC suit says. The executives were aware that keeping customer assets safe and splitting them up from other funds was important in proving fraud charges.

That made Alameda Bankman-Fried’s ”personal piggy bank to buy luxury condominiums, support political campaigns, and make private investments, among other uses.“

Mr. Bankman-Fried had a conflict of view with Ms. Ellison and Mr. Wang. The documents filed yesterday by the authorities claim that Mr Bankman-Fried was aware of what was happening at Alameda, the exchange’s trading affiliate.