A Swatting spree, Facebook attacks, and a new FBI investigation of alleged stalking of a Russian student with a fake ID
As A Swatting spree spreads across the US, in which false reports of active shooters send police charging into schools, WIRED investigated more than 90 of the incidents and found potential connections between many of them. In speaking to a number of people who had experienced it, Klinger said that the anxiety and fear were real to them 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 though Russia is being punished for its actions in the Ukraine war, investigators around the world are still trying to stop the influx of money to Russia’s military and paramilitary groups. The conviction of Joe Sullivan this week for obstruction of a FTC investigation and failure to report a felony, a development that is being watched closely by the tech industry, is likely the first criminal charge related to a data breach by a corporate executive. 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.
Meanwhile, Meta released findings on more than 400 malicious Android and iOS apps that it says were harvesting Facebook credentials to take over users’ accounts. We took a look at the toll living online can have on your physical and mental health, the impact that social media can have on your sense of self, and the ways you can protect your privacy.
There is more. We highlight the news we didn’t cover in-depth. Click on the headlines to read the full story. And stay safe out there.
Source: https://www.wired.com/story/binance-hackers-minted-569-million/
The collapse of the crypto-currency-tracing firm Elliptic: Cazes, Binance, and the all-hadronic Binance
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. They were able to obtain about 53 million dollars in ether-based token. 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. But what followed was a complete mess.
It took several weeks for that legal request to bear fruit. Finally, one evening in the early weeks of January 2017, Ali was in the middle of a law school night class when she got a call from the Sacramento-based FBI agent with the news: The subpoena results had come back.
The synopsis of this story can be found in the upcoming book “tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrencies”, which is available November 15, 2022, from Doubleday.
“When we saw millions of dollars in crypto flowing to him from what appeared to be AlphaBay-associated wallets, I was fairly confident that we had the right person,” Rabenn says. “You then start to indict when you hit that point.”
When investigators uncover Cazes’ online alter ego on a pickup artist forum they find a new challenge to catching him red-handed, and hatch a plan for the most ambitious sting in dark-web history.
At the end of the ad, David learns about FTX, “a safe and easy way to get into crypto.” David says he does not think so. And I’m never wrong about this stuff — never.”
What led to FTX’s collapse? Mr. Zhao’s announcement drove down the price and spooked investors. Traders rushed to withdraw from FTX, causing the company to have a $8 billion shortfall. Binance, FTX’s main rival, offered a loan to save the company but later pulled out, forcing FTX to file for bankruptcy on Nov. 11.
Rival Binance had said it would explore an FTX bailout earlier this week but almost immediately backtracked after the company said FTX was essentially beyond saving.
Despite its reputation as a dependable, low-risk investment portal, FTX’s business appears to have been built on a complex, extremely risky kind of leveraged trading.
The 30-year-old entrepreneur’s net worth, which was largely tied up in digital assets, peaked at around $26 billion this spring. Over the summer, as crypto prices plummeted, Bankman-Fried emerged as a white knight for the sector, using his FTX exchange and its sister hedge fund, Alameda, to secure lines of credit to crypto companies like BlockFi and Voyager that were at risk of collapsing.
It’s not clear from the court filings whether the $546 million used to purchase the stake included funds that prosecutors allege were stolen from customer deposits in FTX.
The Fate of Philanthropic Initiatives: Timing the FTX “Fiat @ftx.com” Account
As a follower of “effective altruism,” Bankman-Fried has sought to make as much money as possible in order to give it away. But the fate of his philanthropic endeavors is now in doubt.
A large portion of the total is gone, they said. One source put the missing amount at about $1.7 billion. The other said it was between $1 billion and $2 billion.
Bankman-Fried, prior to his arrest in the Bahamas earlier this month, had sought to portray himself as a hapless entrepreneur who got out over his skis. He apologized to his customers and staff but denied that he cheated anyone.
“In 2022, FTX began trying to separate Alameda’s portion of the liability in the “fiat @ftx.com” account from the portion that was attributable to FTX (i.e., to separate out customer deposits sent to Alameda-controlled bank accounts from deposits sent to FTX-controlled bank accounts). Alameda moved its portion of the FTX customer assets to a different account in the FTX database. The Alameda liability was moved to an account that would not be charged interest as a result of the change in FTX internal systems.
Two people with knowledge of FTX’s finances said Bankman-Fried met several executives in Nassau to calculate how much outside 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 sources said that the spreadsheets did not indicate where this money was moved, and that they didn’t know what happened to it.
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. Ray called the previous leaders a small group of grossly inexperienced and unsophisticated individuals, as well as revealing that FTX used a software program to run its business, which was valued at $30 billion at its peak. Ray stated that there was nothing against the accounting program. It is a nice tool. Just not for a multibillion-dollar company.”)
A team of financial investigators from the Financial Crimes Investigation Branch are looking into if there was criminal conduct after the collapse of FTX Digital Markets.
The collapse of a well-known firm quickly turned into a legal battle between its former executives and romantic partners.
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 is the author of “Now I Know Who? People are voices from the internet underground. Her own opinions are included in this commentary. Read more opinion at CNN.
The Rise and Fall of Bankman-Fried and Its Implications for Cryptocurrencies, and When Does SBF Come Into Being?
The answer is no one, because we do not need a savior. The whole point of th coin is that it is transparent and incorruptible. Bankman-Fried’s rise and fall shows how far the industry has strayed from that ideal. One of the most mysterious entities in the world today is the crypto world. The leader and FTX are perhaps the best example of this.
It wasn’t supposed to be this way. After the financial crisis of 2008, bankers and politicians were a little disappointed, but that was not due to the fact that Bitcoin came into the world on the same day. In light of the distrust in financial institutions, the basic idea was that this new system didn’t require you to trust anyone at all. Bitcoin transactions are recorded on a decentralized ledger known as a blockchain, which everyone can see and no bad actor should be able to fraudulently alter.
The entire fiasco is completely unsurprising, and in many ways could have been foreseen — as indeed some did. After all, this is hardly the first case of alleged fraud we’ve seen from a figure like Bankman-Fried. It is no surprise that SBF, as opposed to what any lawyer would advise, didn’t stay silent. He went on a apology tour and talked to reporters and even participated in the yearly DealBook Summit in New York where he said he didn’t ever try to commit fraud on anyone.
CoinDesk Observations of the Bankman-Fried Co-Broker, Ether, is Not Far From the Lehman Moment
The cult of personality problem can be found in other areas. We can see this technology in social media as well. The owner of the richest man in the world, Musk, is making decisions about the future of the site.
Bankman-Fried may be similar to his predecessors. Bankman-Fried is not only a new version of an old story, but it is also the start of long-awaited change in the industry due to the lack of transparency and regulation.
FTX General Counsel Ryne Miller said Saturday the company “initiated precautionary steps” on Friday and moved all its digital assets offline. The process was expedited Friday evening “to mitigate damage upon observing unauthorized transactions.”
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 are falling, and the price of Bitcoins has doubled this year.
Ether, the world’s second most valuable cryptocurrency, isn’t faring much better. It was trading at about $1,230 on Monday, having sunk over 20% over the last week, CoinDesk data showed.
Some industry insiders have said the company’s downfall had triggered a “Lehman moment,” referring to the 2008 collapse of the investment bank that sent shockwaves around the world.
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.
Changpeng Zhao, who runs Binance, the biggest scurvy exchange, has said there is a lot of risk. Things have gone crazy in the industry over the past week and we need some regulations to make sure.
The First Twelfth Coin To Be Earned: Bankman-Fried in a Wall-Crystal Scenario
Bankman-Fried was arrested last month in the Bahamas, where FTX is headquartered, at the request of the United States government. He initially stated he would not fight extradition, but after a few days in a Nassau prison, he changed his mind.
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.
CEO Kris Marszalek said Sunday that the transfer of 320,000 ETH was made three weeks ago to a corporate account at competing exchange Gate.io, instead of to one of its offline, or “cold,” wallets.
We have strengthened our processes and systems to better manage internal transfers. The platform’s native token has fallen in value.
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 there may be closer ties between the banking system and the voguish firms. “Banks’ relationships with crypto firms raise questions about the safety and soundness of our banking system and highlight potential loopholes that crypto firms may try to exploit to gain further access.”
Prosecutors allege that Bankman-Fried orchestrated “one of the biggest financial frauds in American history,” stealing billions of dollars from FTX customers to cover losses at Alameda and to enrich himself. He could be sentenced to life in prison if he is convicted.
“I care because it is retail investors who are most harmed, and because too many people still wrongly associate the coin with a scam,” said Schuppsten, who for months raised concerns about FTX’s business model. The enthusiastic Klippsten has doubts about the other parts of the universe.
The world’s first trillionaire was likely going to be talked to by the people at Sequoia Capital, they said. Several of Sequoia’s partners became enthusiastic about Bankman-Fried following a Zoom meeting in 2021. After several more meetings, Sequoia decided to invest in the company.
“I don’t know how I know, I just do. 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.
What Bankman-Fried did for Ontario Teachers’ Pension Fund and how he made his contribution to the Real Estate and Social Welfare Funds of Ontario
The Ontario Teachers’ Pension Fund said that not all of the investments in this early-stage asset class perform to expectations.
When Bankman- Fried bought up the assets of the company that went down, it gave a sense of relief to the account holders. There is now a question about that rescue.
His influence was starting to become more prominent in politics and popular culture. FTX bought the naming rights to a arena in Miami and also bought prominent sports sponsorships. 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. Tom Brady invested in FTX.
“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 like a person like Ponzi schemer, Bernie Madoff.
Bair notes that Bankman-Fried was skilled at using his connections to seduce sophisticated investors and regulators into missing red flags.
He was known as a wizard on Wall Street before his Ponzi scheme collapsed. 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.
How FTX Found It: Revolving Door Hires from the Commodities Futures Trading Commission to Feed on its Own Agenda
DennisKelley said in a statement on Monday that FTX had a plan to “Revolving door hires” from the Commodities Futures Trading Commission to use their knowledge and influence in Washington to move their agenda.
“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).
Madoff offered investors marvelous returns that were remarkably consistent and an improbable track record that later proved to be made possible by an elaborate scheme that involved repaying existing clients with new client deposits.
The former FDIC chair is not very concerned about the FTX implosion because they did not have Lehman Brothers to worry about. As far as the economy and financial market goes, scurvy is still a small part.
The misuse of client funds and the wipe out of billions of dollars owed to over a million customers led to the failure of both entities.
It wasn’t clear whether Bankman-Fried would comply. A representative for his attorney referred to Bankman-Fried’s tweet on Sunday in which he told Rep. Maxine Waters, a California Democrat, that he couldn’t commit to testifying at a hearing scheduled for December 13, one day before the Senate committee’s hearing. “Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain,” Bankman-Fried wrote. I am not sure if that will happen by the 13th.
Sam Bankman-Fried was arrested in Nassau on Dec. 12 after his first day in the Bahamas with a treaty with the Bahamas
There are still many unanswered questions about how client money was 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.
He was extradited from the Bahamas, where FTX was based, on Wednesday after his arrest there on Dec. 12. A federal magistrate judge in Manhattan approved Mr. Bankman-Fried’s release on Thursday after prosecutors and his legal team negotiated a restrictive bail package that requires him to be confined to his parents’ home in Northern California and to wear an electronic monitoring bracelet.
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.
The United States has a treaty with the Bahamas that makes it possible for US prosecutors to return defendants to the U.S. if they are accused of a crime that can be punished with up to one year in both countries.
“I didn’t knowingly commit fraud,” he told the BBC over the weekend. I didn’t want this to happen. I was not 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.
“There was no person who was chiefly in charge of positional risk of customers on FTX,” Bankman-Fried told DealBook. It feels pretty embarrassed in retrospect.
Bankman- Fried has not been aware of any such back door. “I don’t even know how to code,” he told cryptocurrency vlogger Tiffany Fong in an interview last month.
The SEC claims 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 the world.
Bankman- Fried appeared at the New York Times DealBook Summit and admitted he had made a mistake. There are a number of things that I would do.
John J. Bankman-Fried and the Investigation of an Alameda-controlled Bankruptcy-Filing Cooperative, FTX
The S.E.C. believes that S.B.F. was more involved in the affairs of Alameda than he had claimed. 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 the ones he has already been charged with, are the ones from the SEC. The US attorney’s office for the southern District of New York will also be filing charges today.
Before his arrest, SBF had continued an ongoing post-bankruptcy-filing media tour of at least two live appearances on Monday and was set to testify 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.
After some nail-biting about his treatment by the “mainstream media” and the fact that he may have received preferential treatment from US law enforcement, the arrest has given rise to jubilation on the part of the community.
Against the wishes of his lawyers, Bankman-Fried gave a series of interviews after the collapse but none of them have been particularly illuminating. He has been evasive, evasive, and inscrutable and he played video games during the interview.
Ray testified before the House Financial Services Committee about the company he took over just four weeks ago. Ray quickly made a distinction when a congressman asked how his experience was with FTX compared to Enron.
“Ellison and Wang were active participants in the scheme to deceive FTX’s investors and engaged in conduct that was critical to its success,” the SEC said in a release.
A New Look at the Bankman-Fried Charged In New York: How the US Created the Greatest Money Laundering Scheme in History
A federal judge in New York released a $250 million bond on Bankman- Fried, who appeared Thursday in a US courtroom. He needs to give up his passport and remain under house arrest at his parents home.
Several lawyers who didn’t take part in the case told me that Bankman-Fried’s arrest signaled that former FTX employees were 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. The fact that only one person has been charged would suggest that as well.
A writer and investigative journalist covering dark money and pedagogic activities around the globe, CASEY MITCHELL. He is at work on a book about lobbying in Washington, DC and is the author of “American Kleptocracy: How the US Created the World’s Greatest Money Laundering Scheme in History.” The opinions expressed in this article are his own. Read more opinion at CNN.
These types of cases are just as old as the American capitalism that they are related to. They usually pair a lack of regulation and oversight with promises of easy wealth schemes based on proprietary technology that seems to generate returns out of thin air.
Just look through American history, and the same story repeats itself, over and over. In America’s initial Great Depression, the Panic of 1873, speculative investors with no oversight in the railroad industry wrecked the American economy, leading to hundreds of bank failures.
Changpeng Zhao, CEO of Bankman-Fried, and Genesis in FTX’s Bankruptcy Case, are still cooperating
Changpeng Zhao, better known as “CZ,” was the CEO of the company and said that the outrush of cash was business as usual.
There were signs that there was uneasiness when the withdrawal of a stable coin was stopped for eight hours on Tuesday.
But in a memo to employees, obtained by NPR, CZ also indicated that Tuesday was not a one-off, with the industry where he also reigns as a celebrity and influencer going through an “historic moment.”
He said they will get through the next several months, while expecting it to be bumpy. “And we’ll be stronger for having been through it.”
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.
It was named to a creditor committee in FTX’s bankruptcy case, giving it power over the payment of 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.”
According to a recent report, prosecutors are still delaying the conclusion of a investigation that is related to Binance.
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.
Wang pleaded guilty during a hearing that started at 11 am on December 19 and Ellison did the same later that day, beginning around 4:30 pm as SBF remained in the Bahamas, according to court transcripts.
Prosecutors asked the presiding judge for a new bail condition that would block Mr. Bankman-Fried from transferring any funds from FTX or its trading affiliate, Alameda Research. The judge okayed the request.
According to the SEC, Wang created the source code that allowed Alameda to divert customer funds and Ellison to use misappropriated funds.
Ellison pleaded guilty to several counts including wire fraud, conspiracy to commit money laundering, securities fraud, conspiracy to commit commodities fraud and conspiracy to commit wire fraud. She is charged with the same crimes as Bankman-Fried, except for the campaign finance charges.
Sam Bankman-Fried, Ms Ellison, and Mr. Wang: The Fall of the Crypto-Cryptactic-Experiment and the Failure of the SEC
The investigation is ongoing and moving very quickly, as I said last week. “I also said last week’s announcement would not be our last and let me be clear, once again, neither is today’s.”
Regulators say this alleged manipulation inflated the holdings of Alameda, overstated the hedge fund’s balance sheet and “misled” investors about FTX’s risk exposure.
Mr Bankman- Fried, Ms Ellison, and Mr.Wang left investors holding the bag when the rest of the house of cards failed, says the chairman of the SEC.
Two executives of the fallen Sam Bankman-Fried’s Crypto empire have pleaded guilty to federal charges and are cooperating with prosecutors. The news was made public by Damian Williams, the US Attorney for the Southern District of New York.
Ellison, acting on Bankman-Fried’s orders, borrowed billions of dollars from lenders, according to the SEC suit. Those loans were backed “in significant part” by the FTT token, which was issued by FTX and given to Alameda for free, the SEC wrote. Ellison bought FTT token on various platforms to increase its price and make it worth more in comparison to Alameda’s loans. That made it possible for Alameda to borrow more.
Ellison admitted in response to a staff question that her November 6 announcement on her website that she would buy his token for $22 per token was a misrepresentation, according to the complaint. Most of the staff resigned after that.
The Plight of a Private Investment Manager: Alameda Bankman-Fried and His Founders Robbed from the Trading Affiliate of FTX
That made Alameda Bankman-Fried’s ”personal piggy bank to buy luxury condominiums, support political campaigns, and make private investments, among other uses.“
Ms. Ellison and Mr. Wang disagreed with Mr. Bankman-Fried. At the DealBook Summit last month, Mr. Bankman-Fried said that he didn’t know what was going on at the exchange’s trading affiliate, but documents filed yesterday by the authorities claim otherwise.
Bankman-Fried spoke once during the hearing when Magistrate Judge Gabriel Gorenstein asked him if he understood the consequences he would face if he skipped out on bail, saying, “Yes, I do.”
Other bail conditions include mental health treatment, surrender of any firearms, and prohibitions against opening any new lines of credit, businesses, or engaging in transactions over $1,000 without the government approval.
Roos said evidence against Bankman-Fried includes multiple cooperating witnesses, the testimony of other employees of the companies and encrypted messages.
For now, the 30-year-old, whose net worth had been calculated to be in the billions until recently, will live in San Francisco with his parents, well-known law professors at Stanford, while wearing an electronic monitoring device. On the afternoon of January 3rd, SBF is expected to appear in person at his next hearing.
It would be even more shocking now that charges have been filed because we didn’t see any restriction on using computers or the internet.
Ms. Ellison said she agreed to borrow billions from FTX to repay the loans.
Caroline Ellison, the 28-year-old former CEO of the crypto hedge fund Alameda, apologized before a federal judge in New York, saying that she and her former associates knowingly stole billions of dollars from customers of Bankman-Fried’s FTX exchange and sought to cover it up, according to court transcripts.
From July through October, she told the court, Ellison agreed with Bankman-Fried and others to provide “materially misleading financial statements to Alameda’s lenders,” and prepared balance sheets that concealed the extent of Alameda’s borrowing, according to transcripts from plea hearings held on December 19 and recently unsealed.
There are federal sentencing guidelines mentioned in the court and Wang is facing up to 50 years in prison. According to federal sentencing guidelines, Ellison faces up to 112 years in prison for the seven counts she has pleaded guilty to.
Ellison and Wang are cooperating with federal prosecutors and could be witnesses against Bankman- Fried, who has denied defrauding customers and investors.
Over a shot of Bankman-Fried trotting through a parking lot in the Bahamas, a reporter repeated facts I have come to think of as the Precrash Litany of Sam Bankman-Fried: He lives in the Dominican Republic with nine roommates and a golden retriever, he is 30 years old and has a billion dollar fortune. He started his best known company in 2019: he has gotten richer quickly. In an interview, he perched on a stool and talked about the moves that drew the Morgan comparison: self-sacrificing investments his firm made in the interest of saving, in his words, the larger crypto “ecosystem.”
Since stepping down from FTX, he has repeatedly denied knowingly committing fraud; his arraignment date hasn’t been set. He was arrested earlier this month in the Bahamas, where FTX was based, and extradited to the US last week. He is under house arrest at his parents’ home in California, and scheduled to enter a plea in a federal court in Manhattan on January 3. If convicted, he could be sentenced to life in prison.
Because the competing claims, FTX filed a motion earlier this month to the Delaware bankruptcy court to keep the assets frozen until the court “can resolve the issues in a manner that is fair to all creditors of the Debtors.”
Bankman-Fried is sued by BlockFi for the Robinhood shares because they claim to be owed hundreds of million of dollars.
Sam Bankman-Fried: The Long Road to Bankruptcy and Where Do We Stand in the Lambda-Contribution of Robinhood
We don’t have a lot of details for you guys. We are just watching the situation and it is likely to be locked up in bankruptcy proceedings for a long time.
Meanwhile, the recent implosion of cryptocurrencies has been disastrous for Robinhood. The company laid off 23% of its staff in August after cutting 9% of its employees in April. The stock of the online broker has plummeted as trading dried up.
The two law professors who co-signed Bankman-Fried’s bond, have become the target of intense media scrutiny, harassment and threats, while asking to redact their names from the court document.
Ray described the situation at the two companies as “old-fashioned embezzlement” at the hands of a small group of “grossly inexperienced and unsophisticated individuals.”
Sam Bankman-Fried, the disgraced co-founder and former CEO of the cryptocurrency exchange FTX, pleaded not guilty to eight criminal charges at his arraignment on Tuesday.
An attorney entered the not guilty plea on his behalf as Bankman-Fried’s mother, a professor at Stanford Law School, sat two rows behind him with other family and friends at the packed courtroom. His trial is going to start in October.
“It is common for defendants to do this,” said Christine Chung, a professor at Albany Law School. “If a not guilty plea is entered, it opens the door for the discovery process, which can allow Sam Bankman- Fried to learn more about the evidence the government has collected so far in its investigation.”
James Park, a securities fraud expert at UCA Law, stated that Bankman- Fried didn’t have many options going into Tuesday’s hearing because of Wang’s and Ellison’s plea deals.
“Gemini Earn” and its Debt: The Winklevoss-Silicon vs. Silbert-Formation Case
Prosecutors also described what they said was a growing body of evidence, including documents provided by banks, employees, political campaigns, internet service providers and FTX’s new leaders.
“This mess is entirely of your own making,” Mr. Winklevoss wrote in an open letter published on Twitter. He stated that about 340,000 customers were owed a total of almost a billion dollars due to the product known as “Gemini Earn.” Customers could get up to eight percent interest on their digital coins by lending them to Genesis Global Capital, a DCG subsidiary. After FTX collapsed, Genesis stopped withdrawing money from the account, which resulted in the Earn users out of pocket.
Mr. Winklevoss said that Mr. Silbert had borrowed from customers. “You hide behind lawyers, investment bankers and process,” he wrote, and accused him of “bad faith stalling tactics.” Mr. Silbert said that the latest resolution offer from Gemini had not been responded to.
One of the biggest issues in the field ofcryptocurrencies is when a product is a security. The suit states that the company didn’t reveal any material information to investors. (In previous cases, BlockFi, the bankrupt crypto lender, settled charges with the regulator last year after failing to register a similar product, and the agency blocked a proposed interest offering from the crypto exchange Coinbase in 2021.)