30 Burst results for "John Ray"
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"Was the big takeaway of what we should have learned from collapse as far as how this moves forward? Were you ever asked to be a custodian for them? So we were not a custodian for FTX prior to their bankruptcy. We actually are the custodian under the new management. So John ray has taken over as CEO at FTX. The first thing that he did was he installed a custodian to take care of the assets prior to that, the assets were held by the internal people working at FTX. And of course, it allowed them to perpetrate crimes that we only learn about later. Look, the thing to learn about FTX is simple. And again, we should point out as we've been doing on Bloomberg as they're still figuring it all out in terms of what actually happened and what criminal charges are accurate. So we just want to put that out. Go ahead. Sure. Look, the basic thing we need is we need checks and balance and market structure. FTX had two roles. It owned a company called Alameda research, which was a prop trading firm. Some people call it a hedge fund. At the end of the day, that's proprietary money. It's investor money. It's high net worth people. Like they can do what they want, they can take crazy risks, they want to lose all their money, no problem. The second part of FTX, of course, was the exchange. The exchange is part of market infrastructure. So when it comes to market infrastructure, where you're talking about the CFTC and derivatives, or whether you're talking about the equities world, you will see a series of companies exchanges, broker dealers, clearing houses, transfer agents, custodians, and banks. And these come together to provide checks and balances and robustness, which prevent the types of failures that we had at FTX. Unfortunately, without those in place, Sam bankman fried took the money out of the exchange, which was supposed to be known quantified risks and infrastructure and he took it and he put it in his prop trading firm. Again, they're just figuring out all the details, but I hear you. I hear you. Mike, we've run out of time, but I know we'll continue this conversation again in the future. Good to check in with you again, Mike belshe. His chief executive officer, Bitcoin. He's also cofounder, I should point out a bit go. Joining us via Zoom from Washington, D.C.. But yeah, this is going to be a conversation. He's in D.C. and we know lawmakers are on it. They've got a lot to kind of figure out. Yeah, this isn't going away anytime soon. So this conversation is going to continue for a while. All right, let's get to Washington
Thinking Crypto News & Interviews
"john ray" Discussed on Thinking Crypto News & Interviews
"To be slow, steady, keep it safe, make it safe or de risk it and all that. Yeah, and Mike, I want to make sure the audience knows the credibility and the great partnerships and use cases and things that you guys currently have. You know, you are the custodian for the FTX creditors. I believe mount gox as well. I read that Nike swoosh. I think you're also supporting the wallet there, even El Salvador's chivo wallet. It's pretty amazing the business you build and the credibility, you have all these great partnerships and folks you're working with. Well, thank you. I mean, I think when people are looking for the utmost and trust, they do look for a level of security controls. It's a software and technology at the bottom. They're looking for regulatory controls above that and then they're looking for financial controls beyond that. Overall, it's about how do you de risk the space. And without having any of the underpinnings to start from, everybody that's been in crypto for the last ten years has been helping pull it all together. So we feel blessed to have the clients that we do have. We take their trust in us very seriously. I mean, just as a clarification real quick on FTX, we weren't a custodian to FTX prior to the bankruptcy. And today we handle custody for the assets which the new ownership led by John ray, you know, he was the guy that helped lead enron through its bankruptcy as well. They took a look at what was going on inside of FTX before they took over. And he's publicly said that the security and operational financial controls were the literally the worst he's ever seen. And he's been in a lot of bad businesses. So of course they look for how are they going to take custody of that in a way that they can be safe in a way that they can provide business continuity. You know, they have a fiduciary duty now to the creditors to help recoup what's been lost as best as they can and by the way guys a machine. He's pretty good at it. But obviously they needed institutional players like bico in order to help make that happen. Yeah, it's amazing. And I read also that there's a recent partnership if I'm saying this right, the Sioux foundation, I can tell us about that. Right, so that's missed in labs and sui. So this is a new blockchain that's coming up. We have two hats at Bitcoin. So I'm a technologist by background. I haven't been in the financial world. I haven't been a banker my entire life, but that's what we focus on now. As a trust and custodian, our main job is about financial security, safekeeping,
Live Bitcoin News
New FTX CEO John Ray III Says Exchange Could Be Up and Running Again Soon
"1 p.m. Sunday, February 12th, 2023. New FTX CEO John ray three says exchange could be up and running again soon. FTX may restart that's the crazy news for today that one of the biggest crypto debacles could eventually turn itself around. The news has been greeted with positivity given that FTT the native token of the now defunct crypto exchange has risen by more than 35% at the time of writing. Could the post new FTX CEO John ray three says exchange could be up and running again soon appeared first on live Bitcoin news.
New FTX Chief Mulls Reviving the Exchange
"4 p.m. Wednesday, January 25th, 2023. New FTX chief malls reviving the exchange. The current chief executive of the bankrupt FTX exchange, John ray, is looking into bringing back the defunct crypto platform. He spoke to The Wall Street Journal Wall Street Journal, saying he intends to set up a task force to explore reviving FTX dot com. FTX was valued at 32 billion before it went belly up and filed for continue reading new FTX chief moles reviving the exchange. The post new FTX chief malls reviving the exchange appeared first on cryptocurrency wire.
FTX Wants to Subpoena BankmanFrieds Inner Circle
"4 p.m. Friday January 27th, 2023. FTX wants to subpoena bankman fried's inner circle. FTX under John ray is seeking court approval to subpoena Sam bankman fried's immediate family. Joseph bankman, Barbara fried, and Gabriel bankman fried, as well as the exchanges former executives. A list
New FTX Management Has Located Over 5B in Liquid Assets
"3 p.m. Wednesday, January 11th, 2023 new FTX management has located over 5 B in liquid assets. Under John ray, FTX has located over 5 billion of company related liquid assets including cash, liquid cryptocurrencies, and liquid stocks. Locating the funds the new management team at FTX has been
Management Failures At FTX Not Specific To Crypto
"7 p.m. Sunday January 1st, 2023. Management failures at FTX not specific to crypto. On December 13th, 2022, John ray three, the new CEO of FTX group overseeing its bankruptcy, testified before Congress on the collapse of FTX. Raise testimony highlighted a number of corporate failures at the now defunct FTX and the efforts underway by his new management team to identify and recover the company's assets of them.
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"Say at trial. So what strikes me is that prosecutors have said this was one of the biggest financial frauds in American history. Billions of dollars disappearing. Yet as you said in as John ray, who has taken over FTX said, this is just plain old embezzlement. So why did it take so long then for it to be discovered for it to fall apart? That's a great question. I think there's a number of reasons why. One is that SBS was able to successfully convince not only the customers of FBX and its investors, but also the public at large that he was some sort of visionary, you know, potentially the world's first trillionaire because he had this large personality. And I think that that caused many people not to exercise the appropriate judgment and conduct the appropriate due diligence. I think another factor is that it's fair to say that there has been a lot of excitement about crypto and enthusiasm that has caused many who are not sophisticated in that space to put money into digital assets without carefully considering that investment. And I think it's also fair to say that he's really good at fooling people and that it's not entirely unusual for fraudsters to get away with their fraudulent activity for years. I mean, Bernie Madoff got away with it for years and pretty may not have had obviously a lot of institutional validation. They came from his prior position. But as the app over time was heralded by many people and some sort of visionary, you know, his photo on the covers of major magazines. He was seen as some larger than life entrepreneur and I think that contributed to the trust that people had for. Now, as far as the evidence at trial, John ray said, we're dealing with a literal paperless bankruptcy. It makes it difficult to track. They didn't put things in writing, communications that disappeared, et cetera, will that also make it more difficult to prosecute. When I was a prosecutor, I used to always say that emails are a prosecutor's best friend. And it's certainly a white collar prosecutor. Typically, email, text messages, I am the other types of communication, usually are what you rely on to establish intense at the fraud. In addition, other types of documents whether they're ledgers or other types of financial records are really important to provide a snapshot. Not only of what the companies books look like in a certain time, but also what people like SPF new at particular point. That doesn't exist here. I do think that in a different kind of case it might matter more. The beauty of the government's case from their perspective is that they're not really claiming anything that relies too much in the detail. I think at its core, the fraud case, the main focus is the number of different draws that are really set of charge. I never seems that are charged. But I would say the main theme is that FTX was taking customer money, promised customers that their money would remain at FBI that wouldn't be used by FDX for different purpose. That can't be disputed. And the money went elsewhere. And so given that the government can prove that he signed off on those money transfers, I think between that and its public statement, that he appear confident. And so I think that will mitigate the lack of paper and the disappearing chance and all the other things in this array mentioned, which otherwise might prove fatal to a criminal case. Of course, the first task for federal prosecutors is to extradite bankman freed from The Bahamas, which he's fighting. Thanks so much Renato. That's former federal prosecutor Renato mariotti. Up next, the SEC sues over what it calls bankman freed's House of Cards. This is Bloomberg
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"American history. Billions of dollars disappearing. Yet, as you said, and as John ray, who has taken over FTX said, this is just plain old embezzlement. So why did it take so long then for it to be discovered for it to fall apart? That's a great question. I think there's a number of reasons why. One is that SBS was able to successfully convince not only the customers of STX and its investors, but also the public at large that he was some sort of visionary, you know, potentially the world's first trillionaire because he had this large personality. And I think that that caused many people not to exercise the appropriate judgment and conduct the appropriate due diligence. I think another factor is that it's fair to say that there has been a lot of excitement about crypto and enthusiasm that it caused many who are not sophisticated in that space to put money into digital assets without carefully considering that investment. And I think it's also fair to say that he's really good at fooling people and that it's not entirely unusual for fraudsters to get away with their fraudulent activity for years. I mean, Bernie Madoff got away with it for years and he may not have had obviously a lot of institutional validation. They came from his prior position. But SPF over time was heralded by many people and some sort of visionary. You know, he is photo on the covers of major magazines. He was seen as some larger than life entrepreneur and I think that contributed to the trust that people have for. Now, as far as the evidence it trial, John ray said, we're dealing with a literal paperless bankruptcy. It makes it difficult to track. They didn't put things in writing, communications that disappeared, et cetera. Well, that also make it more difficult to prosecute. When I was about to say that emails are prosecutors best Friends. And it's certainly a white collar prosecutor. Typically, email, text messages, I am the other types of communications, usually are what you rely on to establish intensive defraud. In addition, other types of documents whether they're ledgers or other types of financial records are really important to provide a snapshot. Not only of what the companies, books look like at a certain time, but also what people like SPF new at particular point. Time. That doesn't exist here. I do think that in a different kind of case it might matter more. The beauty of the government's case from their perspective is that they're not really claiming anything that relies too much in the detail. I think at its core, the fraud case, the main focus is the number of different draws that are really set of charge. I remember different themes that are charged. But I would say the main theme is that FBX was taking customer money, promised customers that their money would remain at FBI that wouldn't be used by FDX for different purpose. That can't be disputed. And the money went elsewhere. And so given that the government can prove that he signed off on those money transfers, I think between that and its public statement, that he appear confident. And so I think that will mitigate the lack of paper and the disappearing chats and all the other things in this deray mention, which otherwise might prove fatal to a criminal case. Of course, the first task for federal prosecutors is to extradite bankman freed from The Bahamas, which he's fighting. Thanks so much Renato. That's former federal prosecutor Renato mariotti. Up next, the SEC sues over what it calls bankment freed's House of Cards. This is Bloomberg. On
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"To compare these things, but I think it's fair to say that by any one's life, this is one of the biggest financial frauds in American history. Federal prosecutors moved at warp speed to charge FTX founder Sam bankman freed in a sweeping 8 count indictment for allegedly misappropriating billions of dollars in customer funds for his personal use and risky bets by sister trading house Alameda. Manhattan U.S. attorney Damian Williams said bankman freed scammed FTX customers and venture capital backers out of billions, even though the crypto Maven might not fit the typical profile of a fraudster. Well, you can commit fraud in shorts and t-shirts in the sun. That's possible too. Just a few weeks ago, bankman freed was on ABC TV, denying any comparison to Bernie Madoff when you look at the classic Bernie Madoff story, there was no real business. There, the whole thing, as I understand it, I think, was just one big Ponzi scheme, right? That was a real business. What prosecutors say FTX was just a scam from day one, or as John ray, its new CEO put it. This is really old fashioned and embezzlement. This is just taking money from customers and using it for your own purpose. Not sophisticated at all. My guess is former federal prosecutor Renato mariotti, a partner at Bryan cave Leighton paisner. With complex financial crimes it usually takes prosecutors a while to bring charges, it took the feds more than two years to charge Jeff skilling after the enron collapse, so what do you make of the speed with which these charges were brought? It's remarkable. Absolutely remarkable. I have never seen a case in this scope brought within weeks of the precipitating event before. In other words, I used to investigate when I was a federal prosecutor, complex financial crime. Those investigations would typically take years a fast investigation with a month and now we're seeing a case that was brought a little over a month after the collapse of FTX. So that's just absolutely astounding. And I think what it speaks to when you look at that and the breadth of the charges that are brought against the mister bank and free, it really suggests to me a confidence that prosecutors have in this case, that's remarkable to I haven't seen before. This is a sweeping indictment charging conspiracy fraud, money laundering, among other things. What struck you most about it? A couple things make this stand out. One is the sheer breath and brazen nature of the alleged fraud. This is not a fraud scene related to a very particular portion of FTX business, not related to a specific deal or a specific customer. What the feds have alleged is that effectively all of FTX was a giant fraud on its customers that all Alameda was the product of customers and investors. Very wide scale fraud, very simple straightforward garden variety fraud. To that, I think certainly contributes to the confidence that another thing that's unusual here is that mister bankman agreed, he took it upon himself to answer everyone's question about this and really a lot himself into a story more than I've ever seen before. We're not talking about one low in the interview. Mister bankman freed both in many reporters. He spoke on Twitter spaces really answered very insightful questions for hours making it very difficult for his defense counsel to weave a story that isn't already locked in. So prosecutors know that they can contradict the story that he's already locked in self into. I think that could explain a lot of their confidence. Yeah, surprising because I'm sure his lawyers told him to be quiet, but do you think he was trying to set up a defense, basically saying, I made mistakes, I may have commingled funds, whatever. But I didn't mean to defraud anyone. I think that's right. To be fair, that is not an uncommon defense in a fraud case. In fact, I would say that that is, in many ways, does typical defense that you would see in a project. In other words, I may have been inattentive or an app or a bad businessman. But I'm not a fraudster, and I wasn't intending to do that because the prosecution has to prove beyond a reasonable doubt that the defendant has the intent to defraud. But that said, the problem for mister bankman free is really without this is going to play out of the trial. This is why he really did himself a disservice by concluding that he didn't need lawyers, you know, he said at one point that he understood the law better than lawyers did and that sort of thing. And I think he did himself a disservice because under the federal rules of evidence. He can not introduce his out of court statements in his defense. They are inadmissible hearsay. But if the government wants to pick and choose and find bits of those interviews that are incriminating, they can introduce those specific pieces of the dinner views as admissions by a party opponent. And so he put himself in a situation with a lot of downside and no upside. He is going to be facing in a criminal case a lot of negative statements that the beds are going to be playing his way. And he can't play any positive statements. His response has to be to take the stand and if he does that, he's going to be facing a barrage of his own prior statements. He's effectively locked himself in regarding his own testimony and put himself in a situation where he's got to remember and be consistent with all the things he said in the past, even if his lawyers later realize that some of the things you said previously were not the smart thing for him to say at trial. So what strikes me is that prosecutors have said this was one of the biggest financial frauds in
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"In American history. Billions of dollars disappearing. Yet as you said in as John ray, who has taken over FTX said, this is just plain old embezzlement. So why did it take so long then for it to be discovered for it to fall apart? That's a great question. I think there's a number of reasons why. One is that SBS was able to successfully convince not only the customers of STX and its investors, but also the public at large that he was some sort of visionary, you know, potentially the world's first trillionaire because he had this large personality. And I think that that caused many people not to exercise the appropriate judgment and conduct the appropriate due diligence. I think another factor is that it's fair to say that there has been a lot of excitement about crypto and enthusiasm that has caused many who are not sophisticated in that space to put money into digital assets without carefully considering that investment. And I think it's also fair to say that he's really good at fooling people and that it's not entirely unusual for fraudsters to get away with their fraudulent activity for years. I mean, Bernie Madoff got away with it for years and pretty may not have had obviously a lot of institutional validation. They came from his prior position. But SPF over time was heralded by many people and some sort of visionary. You know, he is photo on the covers of major magazines. He was seen as some larger than life entrepreneur and I think that contributed to the trust that people have for. Now as far as the evidence it trial, John ray said, we're dealing with a literal paperless bankruptcy. It makes it difficult to track. They didn't put things in writing, communications that disappeared, et cetera, will that also make it more difficult to prosecute. When I was a prosecutor, I used to always say that emails are a prosecutor's best friend. And it's certainly a white collar prosecutor. Typically, email, text messages, I am the other types of communication, usually are what you rely on to establish intended to fraud. In addition, other types of documents whether their ledgers or other types of financial records are really important to provide a snapshot. Not only of what the companies, books look like at a certain time, but also what people like SPF new at particular point. That doesn't exist here. I do think that in a different kind of case it might matter more. The beauty of the government's case from their perspective is that they're not really claiming anything that relies too much in the detail. I think at its core, the fraud case, the main focus is the number of different straws that are really better. So number different themes that are charged. But I would say the main team is that FBX was taking customer money, promised customers that their money would remain at FBI that wouldn't be used by FDX for different purpose. That can't be disputed. And the money went elsewhere. And so given that the government can prove that he signed off on those money transfers, I think between that and its public statement, they appear confident. And so I think that will mitigate the lack of paper and the disappearing chance and all the other things in this array mentioned, which otherwise might prove fatal to a criminal case. Of course, the first task for federal prosecutors is to extradite bankman freed from The Bahamas, which he's fighting. Thanks so much Renato. That's former federal prosecutor Renato mariotti. Up next, the SEC sues over what it calls bankman freed's House of Cards. This is Bloomberg
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"We have are where are the assets? How are we locate those assets? It's a mining exercise at this point. And look, at the end of the day, we're not going to be able to recover all the losses here Money was spent that will never get back. John ray, who's guided dozens of companies, including enron through bankruptcy, called FTX collapse one of the worst business failures he's ever seen, saying it was run by a small group of grossly inexperienced people with a complete lack of oversight and financial controls and an unprecedented lack of documentation. You know, even in the most failed companies, you have a fair road map of what happened, we're dealing with literally a sort of a paperless bankruptcy in terms of how they created this company. It makes it very difficult to trace and track assets. Currently, FDX is founder, Sam bankman fried is sitting in a Bahamas prison, fighting almost certain extradition to the U.S. to face criminal charges and civil lawsuits by the Securities and Exchange Commission and the commodities futures exchange commission. Joining me is securities law expert Robert heim, a partner at tartar krinsky and drogon. How would you describe generally the SEC's complaint? The SEC's complaint in this matter is very interesting because it really spells out a very basic fraud in the sense of misusing customer deposits at BFT exchange and using those for personal purposes by bank and freed and others to post to what some people thought might be a very complex fraud. It turns out to be very garden variety except just on a very massive scale. The SEC's jurisdiction is limited to fraud and security sales. And there's ambiguity about whether crypto is a security. So how did the SEC steer clear of that in its complaint? The FTC has brought security fraud charges in this complaint and the way they have done that is that they have alleged that starting in 2019, the way back to the very beginning of when FTX was founded at misrepresentations were made to investors, including U.S. investors to induce them to invest in the equity of FTX. These are separate in the customers who traded crypto. They were institutional investors who invested billions of dollars into FTX and CSEC said that that was done through misrepresentations and omissions and that's how the SEC has crafted its security scrolling planes in this matter. Tell us a little about the SEC's allegations that bankman freed concealed his relationship with Alameda research and used commingled customer funds. One of the key allegations in the SEC complaint has been that there is an affiliated hedge fund called almeida research, which essentially traded crypto made markets and crypto and was supposed to have been a separate company, but the SEC is alleged there was significant amount of commingling of assets specifically customer assets of FTX that was used to fund down meters operations and that was contrary to the representation that FTX was making to customers as well as to its lenders and investors. What would the SEC have to prove? Were the basics of what the SEC would have to prove if this went to trial. In addition to having to prove that the representations to investors were material, the key thing that the SEC has to prove is what's called the enter, which is either intent or recklessness on the part of bank. And in white collar cases like this one, a defendant's intent is always a contested issue. And I think we've seen a preview of bank and freed defense and prior public statements that he's given, where he says that he wasn't aware that FTX is customer deposits were being used to cover elite as debts and liabilities. So he's trying to step up as a defense that the underlings at the two companies were doing this and he wasn't aware of it. And that can be a tough defense to really be successful on. What kind of things would the SEC point to to show the enter? In order to show the answer, the SEC could prove a few different things. Number one is the personal benefits financially to banks and freed as a result of these transactions and courts have held that when a person is getting personal benefits and money that that could be an indication of motive and an opportunity to engage in securities fraud. But even beyond that, the SEC is going to have to look and prove the corporate structure and show how banks and free to prove transactions like money being moved from FTX customer town to almeida, they're going to look at email correspondence between the other employees at MTX that may have updated banking freed about what was happening. And I think importantly, there's been a lot of speculation and rightfully so. As to whether they'll be cooperators in this case, other employees, like Carolyn Ellison, who was the CEO of Alameda, who made me wanting to cut deals with the SEC and the prosecutors in exchange for their testimony against bank and freed. SEC chair Gary gensler said, we allege that Sam bankman freed built a House of Cards on a foundation of deception, while telling investors that it was one of the safest buildings in crypto. Does the SEC have to prove that investors relied on his alleged misrepresentations? The SEC itself does not have to prove reliant as part of its case to the extent that this is going to be private lawsuits and class actions. Those private lawsuits and the investors will have to prove the lion. So the SEC is set up in a way by statute that they have a lower burden in order to prove their case. So reliance is not part of the SEC's claims here. John ray spoke about this unprecedented lack of documentation, the paperless bankruptcy, is that going to make it much harder for the SEC. There is his view of very shocking lack of any sort of paper or documentation to support loans and why and how money would move from FTX to el nido research and where the money went from there. However, with digital assets and then crypto, there is going to be a record on the blockchain of a lot of these transactions and while it may take more work for the investigators to comb through all of those transactions for the last three years, I think ultimately they're going to be able to put together a pretty complete picture of what happened, even though FTX records themselves don't appear to be very good. Is prosecuting a case with crypto is that a challenge for the SEC? At this stage, I don't think that prosecuting a crypto based case like this is going to present any significant challenges. The SEC has been studying the market for years. They have a market abuse team that brought other cases in crypto. So there's a lot of institutional knowledge about the market and I think one thing that's going to help is the fact that this appears to be more or less garden variety type of fraud and embezzlement granted that it involved billions of dollars of customer assets, but at the same time, I think that's what the transactions being publicly available on the blockchain and even having potential cooperators is going to make the SEC's job a lot of easier. One nagging question I've had throughout these revelations about what gensler called a House of Cards is looking at the allegations, especially for example something like the $1 billion loan to himself. By a man who basked in publicity and self promotion, the Super Bowl ads, the deals with sports teams, the political contributions on and on, how did bankman freed ever expect to get away with this? I mean, the House of Cards was bound to collapse at some point. Yeah, absolutely. It's really shocking and the SEC actually also discusses this in their complaint where they say for the past three years bank and freed has been out self promoting himself as a responsible businessman and wanting to have regulation in the crypto industry and ethical practices. But meanwhile, he used his reputation as a person who was running legitimate crypto exchange to help convince investors to put more and more money into FTX and all the while according to the SEC, bank and freed knew that it was setting up to be a very risky investment and then also misusing customer deposits. So all his public statements now can potentially be used against him in this SEC case. Thanks, bob. That's Robert heim, a partner, a tartar Kristen drogon, coming up next. The FTC tries to stop meta from buying another startup. This is Bloomberg. Mister favorite Bloomberg radio show, Bloomberg businessweek, masters in business, Bloomberg intelligence, and more are also available as podcasts. Listen today on Apple Spotify and anywhere else you get your podcasts
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"Obviously a famous story, but when you're young, your youthful exuberance can sometimes lead you to believe that the rules don't necessarily apply to people in the same way when they're young. There's a certain sense of invincibility. I think the inexperience is part of it. And then the concentration of so much power in so few people without those checks and balances is a huge problem. And again, power corrupts absolute power corrupts absolutely. When you look at the way our country is set up with the three branches of government, it was specifically designed by the founding fathers so that there would be checks and balances. The corporate world really mirrors a lot of ways our government, their boards of directors. There are shareholders and there is a president. So think about that. The shareholders are essentially the voters in a republic. You've got the president of the company, which is like the chief executive officer. You have the board of directors, which really is kind of the oversight, like the legislative body, and that has to approve things. And so it was designed that way to create these checks and balances. Unfortunately, in the crypto space, especially in this specific situation, those checked and balances did not exist. There is in excess of $7 billion in losses. Ray's been able to secure 1 billion at this point. Does that sound hopeful to you? So I spent a lot of my time doing what John ray does, which is restructuring, overseeing bankruptcies, liquidating companies. We do a lot of work in this space called assignments for the benefit of creditors, which is a state alternative to federal bankruptcy. And so in these situations, one of the things you focus on is your job as a fiduciary is to maximize the value for creditors. And every situation is different. You have sometimes hard assets to recover. You could be working in a jewelry industry where you have diamonds that you can recover and sell off. Or you can be in a situation where the assets disappeared. The challenge in this situation is that we know there was a lot of commingling of money. We know that Alameda was a hedge fund. We know that there were investments being made loans that were being made, and many of those investments went bad. If the investments turned out to be profitable, you could actually pull back those investments or you have those investments and you could share that with the creditors. But when you're dealing with a situation where actually loans were made with no ability to pay them back, investments were made in the worthless companies or to bad investments. That money is gone forever. So then the question is, what do you look to for recovery? One is insurance. My understanding is there's very little insurance here. Another is you look to negligent people were there people on the board or other deep pockets with insurance that you might go after. My understanding is there's not a lot here in that situation. So one of the ways that you pull back money is you look at the people that did receive distributions in return of money and you pull that money back and then you share it in a more equitable pro route of fashion with the other creditors. And we just don't know at this point how much money that's going to be. But realistically, I think we're going to look at billions of dollars of losses here. Coming up. Why FTX is attorneys are fighting with bahamian officials. This
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"Being used to cover meat as debts and liabilities. So he's trying to set himself up as a defense that the underlings at the two companies were doing this and he wasn't aware of it. And that can be a tough defense to really be successful on. What kind of things would the SEC point to to show the center? In order to show the answer, the SEC is going to have to prove a few different things where they could prove a few different things. Number one is the personal benefits financially to banks and freed as a result of these transactions. And courts have held that when a person is getting personal benefits and money that that can be an indication of motive and an opportunity to engage in securities fraud. But even beyond that, it's really the SEC is going to have to look and prove the corporate structure and show how bank and free to prove transactions like money being moved from FTX customer town to almeida, they're going to look at email correspondence between the other employees at FTX that may have updated banking freed about what was happening. And I think importantly, there's been a lot of speculation and rightfully so as to whether they'll be cooperators in this case, other employees like Carolyn Ellison, who was the CEO of el Nida, who made me wanting to cut deals with the SEC and the prosecutors in exchange for their testimony against bank and freed. Does it make it harder for the SEC that so much of this appears to have been done without the normal control so you're not going to see, for example, there were loans that were made and no paper backing them up, I believe, and things were done by emoji basically sometimes. Yes, this is something that the new CEO John ray has pointed out is that there's, in his view, a very shocking lack of any sort of paper or documentation to support loans and why on how money was moved from FTX to el nido research and where the money went from there. However, with digital assets and crypto, there is going to be a record on the blockchain of a lot of these transactions and while it may take more work for the investigators to come through all of those transactions for the last three years. I think ultimately they're going to be able to put together a pretty complete picture of what happened, even though STX's records themselves don't appear to be very good. Coming up next on the Bloomberg law show, I'll continue this conversation with Robert heim, of tartar krinsky and drogon, and we'll talk about how equipped the SEC is to deal with a case like this, involving cryptocurrency. What is the agency asking for if it wins the case? And what about the complaint by the CFTC? I'm June Grasso and you're listening to Bloomberg. Now that so much
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"From Bloomberg radio. I've been talking to former federal prosecutor Renato mariotti about the criminal charges against FTX founder Sam bankman freed. John ray said that we're dealing with a literal paperless bankruptcy. It makes it difficult to track. They didn't put things in writing, communications that disappeared, et cetera, will that also make it more difficult to prosecute. Yeah, that's a great that's a great, great question because when I was a prosecutor, I used to say that emails are prosecutors best Friends. And it's really a white collar prosecutor investment. Typically, email, text messages, I am the other type of communication, usually are what you rely on to establish intensive defraud. In addition, you know, other types of documents, whether they're ledgers or other types of financial records, are really important to provide a snapshot. Not only would the companies books look like at a certain time, but also what people like SPF new at particular one. Time, that doesn't exist here. I do think that in a different kind of case it might matter more. In other words, the beauty of the government's case from their perspective is that they're not really claiming anything that relies too much in the detail. I think as core, the fraud case, the main focus is the number of different draws that are really better. Sorry. I remember there for teams that are charged. But I would say the main theme is that FTX was taking customer money, promised customers that their money would remain at FBI that wouldn't be used by FDX for different purpose. That can't be disputed. And the money went elsewhere. And so given that the government can prove that he signed off on those money transfers, I think between that and his public statement that he appeared confident. And so I think that will mitigate the lack of paper and the disappearing chance and all the other things in mister ray mentioned, which otherwise might prove fatal to a criminal case. So bank and freed has said that he had little involvement in the management of Alameda after he passed control of it to Caroline Ellison. And then statements that customer funds were passed to Alameda because of an accounting error. That might be part of his defense. Do you think it has any weight? It certainly may be part of this defense. What I would say is that it would have been a lot smarter for him to wait for his lawyers to get discovery from the government. The German weather and the evidence back those claims up. And then have his lawyers assert those planes rather than him. But now, yes, I do think he's got a hand in hand on those things and the question is whether or not it ends up being true. What I will say is if it turns out that those statements are not accurate, that's a major problem for him because it's going to be impossible for him to successfully pivot away from that. A trial given his prior statement. What I do is suspect is that the government, whether or not there's paper or not to get to the point you are raising earlier, they're going to be able to establish from a variety of different individuals and different documents. What exactly happened and what SPF do and it's worth noting that the other individuals involved have different interests than mister bank for free. They're not his servants and ultimately they have their own potential liability to consider and presumably, for example, that people at Alameda are not going to want to suggest that they were responsible for the misuse of customer funds, presumably what they're going to say is that mister bankman freed authorizes and told all of them that this was appropriate. I would assume I would anticipate that that their testimony would be something along those lines. What do you think the hardest part of the prosecution's case against him will be? At the very, very good question. I think that one thing that's really surprised me about the government's case is the breadth of the case that they brought. Now, part of that is because they're extraditing him. Once you extradite someone, you can not add charges. You can always dismiss sergeants if you can't add charges. And so I do think they were probably trying to be over inclusive. If I was the supervisor, looking at this indictment, I was sent to me for a review. I would really question why we're charging campaign finance case. It's part of the project. In other words, if he's going, if he's going to prison for fraud, what do we care? Tell the judge about the campaign finance stuff. She can consider that a certain thing, but like let's just charge our strong count and let's just argue the rest of it to the judge that doesn't think, you know, it's not like you need those cows. I think the similarly with money laundering that it has to complexity and a bunch of elements that you have to prove that makes your piece more complicated and I tend to believe that particularly in a white collar crime case, the simpler story usually wins. And so I would try to keep my prostitution case as simple and straightforward as possible. He said he's going to fight extradition. What grounds can he possibly offer? Not to be extradited. I don't know off the top of my head because I'm not an expert on bahamian law. Our bahamian law. But I would just say that generally speaking and this is I say that's in the perspective some are used to be on the federal prosecution side trying to extradite the defendant that is prosecuting. He generally the offense needs to be a crime in both the U.S. jurisdiction and the foreign jurisdiction. So he might try to argue that let's say the campaign finance fraud was conspiracy was not actually a crime and under bahamian law. That's possible. I mean, I don't really view that as an important part of this defense strategy. In other words, I view that as buying time. You know, he spoke during the Twitter space that I listened to about how he was completely broke. I was trying to figure out how to be his lawyer. He had left a $100,000 in his name. He was looking at the directors and officers insurance at some point to find a way to pay lawyers. So buying a little bit of time makes sense for someone in this position. So that may be part of it as well. Damien Williams also said, while this is our first public announcement, it will not be our last. So for a U.S. attorney to say that with such confidence and he sort of said it twice, do you think that they've already got more indictments ready to go? Yeah, I was surprised by that because you were certain that they're supposed to be very careful and they are generally very careful about their words when they make an announcement in the press release because what they say can be used by defendants in emotion to try to argue that they have been unfairly prejudice and so forth. So they're usually very, they're worth a very carefully orchestrated planned out. And I think he was trying to imply that charges against others were down the pike. He also appeared to be sending a message that anyone involved in the should cooperate. And so I think that that was definitely part of the point here. I think he was trying
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"That's a question that I have not been asking for with very smart questions. I think there's a number of reasons why. One is that, you know, I think that SBS was able to successfully convince not only the customers of STX and its investors, but also the public at large that he was some sort of visionary, you know, potentially the world's first trillionaire because he had this large personality. And I think that that caused many people to not exercise the appropriate judgment and conduct the appropriate due diligence. I think that's one factor. I think another factor is that it's fair to say that there has been a lot of excitement about crypto and enthusiasm that has caused many who are not sophisticated in that space to put money into digital assets without carefully considering that investment. And I think it's also fair to say that he's really good at fooling people and that it's not entirely unusual. For fraudsters to get away with their fraudulent activity for years. I mean, Bernie Madoff got away with it for years and there are plenty of other fraud cases and fraudsters who are less well-known who are able to fool people for years. Yeah, Damian Williams said, well, you can commit fraud in shorts and a T-shirt in the sun, and maybe that helped him to disarm people, that he wasn't like a Bernie Madoff or a Jeffrey skilling. I think that's right, although at the end, you don't buy a certain point. You know, one thing that there's a similarity. The reason I mentioned burning me up is that really may not have had obviously a lot of institutional validation. They came from his prior position. But as the app over time was heralded by many people and some sort of visionary, I went to conferences where he was a featured speaker. And these weren't crypto conferences. Also, you know, you know, would you see his photo on the covers of major magazines, right? Like four, so on. He was somebody who was seen as some larger than life entrepreneur and I think that contributed to the trust that people have for. Thumbing up next on the Bloomberg law show, I'll continue this conversation with former federal prosecutor where NATO mariachi, John ray, who has taken over FTX as CEO, said miss testimony before Congress that we're dealing with a literal paperless bankruptcy, it makes it difficult to track. Will it also make it difficult to prosecute? I'm June grosso and you're listening to Bloomberg
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"Reasons, including it's when Bloomberg business week comes out with the Bloomberg 50 a list of those who define business in 2022. It's a list where both the real and the reality world can coexist. So that puts both the president of Ukraine and Kim Kardashian on the list. It's one where a Bad Bunny and the James Webb Space Telescope make the cut as do Tom Cruise and John ray the third both in storing roles this year. So let's get into it. It is really a list. I love to go over. We got with us Bloomberg businessweek senior editor Brett beegan and Bloomberg business, we got our Joel Weber, both joining us this afternoon from Brooklyn. Joel, I want to start with you and give us the overarching theme for the year that was 2022. If we can say this two weeks before the end of the year, when you look back on the year and putting together this list, what was top of mind for you? Well, gee, that's a big question. Hard not to talk about crypto right now, I think, and we have a certain someone on the left has really emerged as a dominant figure in sort of the FDX follow-up, the new CEO of FDX. But of course, the beauty of this list is that you have to kind of rewind the clock and start from the beginning of the year. And I don't think that there's any more dominant theme across this list than Russia's invasion of Ukraine. And again and again and again, people emerged from that situation one being zelensky and how could you not talk about zelensky when you talk about 2022, but there are many, many more and Brett vegan is passed with a business between those canvassing the newsroom to help put spotlights on important people. Some of which you probably know and then a lot of people, the special part of this list like Carol said is like this little cross section that happens when you bring together a lot of various people and themes and there's just these gyms that sort of emerge that are not household names. And that's what I love is like you take zelensky and you put them next to Brett, take your pick. Who's an unheralded name that people will surprise people? Let's see. Someone like pinky Cole is probably someone that will have listeners haven't heard of. So pinky is the founder of a vegan fast food restaurant chain called, I think I'm allowed to say this on the air, slutty vegan. She started the year with four restaurants and by the end of next year, we'll have more than 20. These are vegan fast food burger chains. And she's just a great story, basically raised $25 million this year with the help of Danny Meyer. Famous, of course, for many reasons, including Shake Shack. And valuing the company now at about a $100 million. She's undergoing a massive expansion. I don't know, and then another name is someone like Tom oxley, who founded synchron, Tom is both an entrepreneur, but also someone with a deep medical background. And they did something kind of crazy this year where they were able to implant something in someone's brain that allowed them essentially to communicate via Bluetooth and share their thoughts. This is a patient who was suffering from Lou Gehrig's disease. Hey Brett, you know, I want to know about how you put the list together. And I know a lot goes into this and I know you reach across the newsroom. My experience with sending you names over the last few months is like, thanks, but no thanks. Because and there's always a great reason why somebody I spent hours thinking about and I write you up this little bio and I get this email back that's a gentle sort of let down. It's pretty incredible though to see this list and how it comes together. How many people do you think you consider before you coming up with getting it down to 50? Well, I just want to say thank you, of course, for your contribution. I'll try again next year, okay. We really appreciate it. We are always looking for people next year. I don't know. I would say that probably we wind up giving about a 150 or so people a look. And the thing that really separates those who wind up on the list from those who don't, is data. We look for a hard data point. We look for a metric. We look for something that underpins the nomination, something that we can point to and say, in 2022, this is a fact that really deserves recognition and merit. There are a lot of people that we consider who had good years, maybe last year or expected to have good years next year, but we don't have that sort of hard metric. And without that, it is really hard to get on a list, but now you know, right? So we know for next year. Thank you. Well, you know, and sometimes it's Popeyes, chicken sandwich, or something that makes the list. You always have something that's not quite human. And it is the work that thank you, Joel Weber. I kind of always love Joel that you can include these kind of things on the list. I think it makes it charming, but Brett, how did we approach the inanimate objects in the wake of meme stock last year? You know, you would think that this would be the hardest one to find every year and for some reason, it's always one of the first things that I think of every year and
The Dan Bongino Show
Sam Bankman-Fried Arrested in the Bahamas, Close to Congress Hearing
"So the FTX Samuel bankman freed hearing was going on yesterday He wasn't there of course but it was about allegations that he defrauded this company The crypto guy you know what I'm talking about So the new CEO of the company the new CEO of the company a guy by the name of John ray the third He goes up there yesterday and the scandals enormous again and the media's kind of downplaying a lot of it because Samuel bankman freed was a very large donor to Democrat party Now if he was a large donor to the Republican Party the story would be all over the front page of The New York Times and Washington Post and elsewhere but because he was a large donor the Democrat party all of a sudden the story gets sidelined and buried on page 672 But something really strange has been going on In this case over and over and over again One of the strange things that's happened in this case is Samuel bankman fried was going to testify yesterday in front of Congress and was probably about to spill the beans on a lot of this stuff he was up to And then all of a sudden boom he gets pitched in The Bahamas Thrown in the lockup in the clink So all of a sudden he can't talk
It Finally Happened: Sam Bankman-Fried Was Arrested
"All right, friends will last night 31 days after putting the company into bankruptcy, 40 days after coin desk published Alameda's balance sheet, it finally happened. Sam bankman freed was arrested in The Bahamas. Now until the news broke, everyone had been gearing up for today's house hearing. Remember, Sam was due to testify after John J ray. Who is of course the new CEO of FTX overseeing the bankruptcy? As it always is, John ray's advanced testimony was published and good God was its savage. In it he repeats a line that he said frequently. Never in my career have I seen such an utter failure of corporate controls at every level of an organization, although our investigation is ongoing in detailed findings will have to await its conclusion, the FTX group's collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who fail to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people's money or assets. Ray goes on to identify some of what he calls the unacceptable management practices, including quote the use of computer infrastructure that gave individuals and senior management access to systems that stored customer assets without security controls to prevent them from redirecting those assets. The storing of certain private keyed sacks has hundreds of millions of dollars in crypto assets without effective security controls or encryption. The ability of Alameda, the crypto hedge fund within the FTX group to borrow funds held at FTX dot com to be utilized for its own trading or investments without any effective limits. The commingling of assets, the lack of complete documentation for transactions, involving nearly 500 investments made with FTX group funds and assets. Et cetera, et cetera, et cetera. Now, one of the big things that people honed in on came a little later when he wrote, questions have been raised as to why all of the FTX group companies were included in the chapter 11 filing, particularly FTX U.S.. The answer is because FTX two S was not operated independently of FTX dot com. Chapter 11 protection was necessary both to avoid a run on the bank at FTX U.S. and to allow our team to identify and protect its assets.
Bloomberg Radio New York
"john ray" Discussed on Bloomberg Radio New York
"Colleagues on the committee believe it is the future of commerce, the standard of currency. I'm not sure where we fold yet in that process, but crypto is not going away, but it's taken a big old hit. Thanks to the folks at FTX. And congressman Jim heins says a venture capitalist getting caught is horrifying. Look, it wasn't just those individual investors. I just ran through a list of venture capitalists who get paid a ton of money to make investments and what we heard John ray say is that he had never seen more catastrophic governance total absence of internal controls, no financial statements, and you got to really scratch your head and say, what in the world were these very highly paid premium blue ribbon venture capitalists doing sending money to this entity? I'm John Bloomberg as well. Now freed, as we've said, has been denied bail extradition hearing is set for February 8th. A Chinese startup is seeking to be the country's answer to SpaceX. It's preparing a satellite launch that could beat Elon Musk and relying on the next generation of rocket fuel, liquid methane and liquid oxygen, payload has into orbit today. And still science, scientists here in California at the Lawrence Livermore lab have managed for the first time to use a produce nuclear fusion results using less energy to produce than generate a major milestone energy secretary Jennifer Granholm calls it definitely major. This milestone moves us one significant step closer to the possibility of zero carbon abundant fusion energy powering our society. Ran home says one of the most impressive scientific feats in the 21st century. In San Francisco, I'm Ed Baxter, this is Bloomberg, right, Brian. Eduardo, thank you very much. The time here is 9 and a half minutes past the hour, and let's get to our guest. Catherine kaminski is with this chief research strategist and portfolio manager at alpha simplex group. Catherine, do you like the go slow approach that we saw in the second half of the trading day today, or the off to the races approach that we saw right after the CPI? Oh, wow. Yeah, today was definitely shocking. I mean, just how big the numbers were and how much they just receded was kind of a sign that there's not as much air in the tires as people thought. In the sense that people have already been pricing in this move before today. So I think that was shown by how quickly we saw that enthusiasm retreat. Also, Catherine, given that a lot of commentators out there are suggesting that it just by its self we'd have inflation slowing down in the early part of next year because of base effects and more. Do you think that this print that we did have is setting up the Federal Reserve for a policy mistake? I think it's going to take a longer time to tell. I mean, I think the mistake would be to jump and change your policy overnight in such a way that they would sort of rapidly change. And I just don't think they're going to do that. But on the other hand, the policy mistake is going to be much more hard to see until we have much more clarity. And it's going to be like this mistake of saying transitory. We will know it when it's too late to do something about it. Well, there's addressing inflation and then there's also addressing the easing of financial conditions that the fed has seen. They seem not so comfortable with that. So I guess the question as soon as tomorrow do you think the fed will push back on that easing of financial conditions that went along with the risk rally? Yes, I mean, I think the challenge is for them that they just really, you know, I feel like tomorrow everyone already feels that this is baked in. I think the challenge for them is much more that they actually need to decide what the plan is. I mean, if you look where we are, we're much better off than where we were a couple of months ago, but we're still really far from where we need to be so that we have inflation low enough that it's not a problem. And so I think that's where it's still really unclear to a lot of us. Is the Federal Reserve's monetary policy tightening HTC any results on the ground in your view, Catherine? I would say yes, but it's not clear because inflation might just debate somewhat on its own, at least tighter monetary conditions has calmed things down a little bit. The question is more how far does it have to go for it to calm enough to actually get inflation down to real targets that they had prior to this environment. And I think that's where people don't really know. So what's the next phase? Can we run on hot inflation or at least higher than average inflation for a longer period of time? If we stop hiking rates, I don't know. And what are the ramifications of that? That's where I'm more confused about where things will go. It seems like caution is as smart approach if you listen to what a lot of people say on this program. From the standpoint that the fed has made it very clear, it wants to err on the side of tackling inflation first and maybe second is trying to achieve some sort of soft landing and protecting the economy from falling into recession. Is that a good guy then? Just stay cautious. As long as you get these inflation numbers moving down, you can kind of incrementally move in. Yes, and I think from our side as a cross asset trader, what we have seen is that short bond signals are still persistent despite the fact that we've seen a little bit more bullish moves in equities in terms of technical signals. So I'd say that it's better to err on the side of caution that they won't move quickly and that the market wants things faster than they're willing to do it. Okay, Katie, you know, what about looking at the markets themselves and where does one put the money? I mean, what have you been doing? How's your investment strategy evolving? I was interested to see that and he just alluded to it that the short bonds is one of your contrarian views. Yes, I mean, this year has been phenomenal for a cross asset traders and anyone who's really ridden this inflation wave. We have to say though that there has been a dissipation of those signals of particularly recently and risk consolidation in the sense that the current trend positioning is very mixed. Equity signals have moved a little more positive. The long Bond view is definitely not there yet, which suggests that the market is still holding on or there's still a chance for higher rates before or higher rates than we would like. Or that we think is fun. In that sense, and what I would say also is that it's really an inflection point. So we're going to have to see what the next big trend is. We've definitely seen consolidation to the point that it's very unclear. And anything could be the next big trend going into 2023. Yeah, one big trend might be the reopening of the Chinese economy, so if we could pivot, talk a little bit about Asia. There are some conflicting views out there about how easy it's going to be. We're already seeing some of the trials and tribulations of all these cases mounting and the hospital is getting overwhelmed. How do you feel about the input from China in 2023? So we're still seeing sort of more less bullish signals in Asia due to some of the complexities of how this can be resolved. I think that there's been some positive signs, but we definitely aren't out of the Woods in terms of seeing that the Chinese economy
AP News Radio
New FTX CEO says lax oversight, bad decisions caused failure
"The new CEO of bankrupt cryptocurrency group FTX testifies before the House financial services committee as the government charged former CEO and founder, Sam bankman fried with a host of crimes, the one time poster boy for cryptocurrency, Sam beckman freed, was supposed to testify before he was arrested in The Bahamas, the Justice Department and the SEC say he deceived investors to enrich himself, bankrupting the company. New CEO John ray told lawmakers it's an old crime embezzlement applied to a new asset. This is really old fashioned and embezzlement. This is just taking money from customers and using it for your own purpose. At its peak, FTX is market value top $30 billion, ray says in excess of 7 billion was lost, and that there was no real record keeping. They used QuickBooks, multi-billion dollar company using QuickBooks. In interviews, bankman free denied any fraud. I'm Julie Walker.
Bahamas AG Defends Its Crypto Savvy in Wake of FTX Crash
"To sum up where we left off, the last non interview show was Saturday November 19th. At that point, we had discussed how the $420 million meme raise went directly into Sam's pockets, how Sam's white collar crime lawyers had fired him as a client, how the SEC, the CFTC, and the DoJ all said their investigating, and how new CEO chief overseeing the restructuring John ray claimed that the bahamian bankruptcy was at odds with the U.S. process and further that given that The Bahamas asked for FTX to transfer some assets to them after the chapter 11 bankruptcy was declared that they might actively be compromised as well. And this gets us to one of the stranger dimensions of this whole conflict, which is the international dimension. On Sunday Night, Ryan pinder, who's The Bahamas attorney general, as well as the senator and the minister for legal affairs, made a national address detailing the nation's view of the FTX collapse. One might hope that he would use this as a chance to denounce the fraudulent practices that the company perpetuated. But, alas. That is not what we saw. Instead, pinder characterized the collapse as a quote insolvency crisis, which has been, quote, experienced around the world in practically every sector. He claimed the case should be properly understood as a quote very large business failure as a result of questionable internal management practices and corporate governance. He viewed the catalyst of the FTX collapse as the exchange suffering a liquidity crunch or a run on the bank. And of course, we've seen this framing in media sources as well. Basically blaming binance CEO CZ for instigating a bank run on a competitor and treating the collapse as a normal corporate failure rather than asking why FTX failed to be able to service customer withdrawals, especially given that their terms of service laid out the customer funds were held on trust rather than used for other purposes. Now, sidebar, this is one of the most important things to be paying attention to right now. As relating this entire situation. It is extremely clear that Sam is trying to turn this story his FTX story into one of managerial and competence rather than fraud and deception. This is to be clear another lie.
"john ray" Discussed on Unchained
"I like to eat the ultimate pocket. DeFi protocols are the antidote to this problem. Hello, everybody. Welcome to chopping block. Every couple of weeks, the four of us get together and give the industry insider's perspective on the crypto topics of the day. So quick intros, first up, we got Tom, the DeFi Maven, and master of memes. Next up, we've got Robert, crypto connoisseur, and captain compound. Then we've got to run the Giga brain and grand poobah at gauntlet. And finally, we got myself a seed, the head hype man, a dragonfly. The all four of us are early stage investors in crypto, but I want to caveat. Nothing we say here is investment advice, legal advice, or even life advice. Robert tarun, you guys are at a brick wall. I take it, you guys are trying to hide your location during the same elementary school, gymnasium. That's what the going live front right now. This is a metaphor about the state of the industry is what it is. That is true. It's been a pretty dark, pretty dark and depressing couple of weeks. Normally we run the show a couple of weeks. We're doing another show on basically one week after we did our previous show just because the amount of news and craziness was going on with this FTX fallout has been just absolutely incredible. Let me go ahead and get into it and kind of walk through what's happened since last Monday. If you recall last Monday, FTX had already entered a bankruptcy proceedings on that Friday night before last week. Friday for last, there was this midnight massacre when FTX got hacked. And we've learned much more about each of these things to understand exactly what took place in this quote unquote, unauthorized access to FTX accounts. So the first thing that first and most important thing that happened was that there was an affidavit released by the new CEO John ray, who is the basically the liquidator who liquidated enron. And he essentially described the absolute pandemonium that was the books and records and corporate controls at FTX. And so what he stated in the filing and it's absolutely incredibly incredible filing. I recommend you read it. It's pretty light reading if you can skim through the perfunctory stuff. But the choice quote at the beginning of this filing. He says, never in my career, have I seen such a complete failure of corporate controls in such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals. This situation is unprecedented. So there's all these revelations that we're now getting of just how horribly managed and horribly run, FTX was, to having all of the private keys in one shared Google spreadsheet that apparently everybody in the core team had access to. Private loans being given from the company to Sam personally as well as to buy bahamian property for employees. Almost negative accounting. Just absolutely incredible oversights in just understanding where the money was going and keeping things running. Of course, I think we alluded last time to the Mickey Mouse accounting firm that actually did their audits for 2021. And John ray basically stated in the affidavit, look, I do not believe that these audits should be considered to be reliable because these auditors are just not serious people. I don't know. The way he called them out was pretty hilarious. He was like, he was like, FTX U.S. was audited by our menino for my have heard of. FTX international was all dead by whatever that even that firm was affirmed I've never heard of it whose only claim to fame is to have opened the first CPA in the metaverse. Something like that was amazing.
CoinDesk Podcast Network
"john ray" Discussed on CoinDesk Podcast Network
"We did not suspect that Sam was stealing money from FTX to go put it in the pocket of Alameda. Now, almost everybody who looked at FTX, especially in the beginning, assumed that there was a special and unfair relationship between elevator and FTX. And that's now been confirmed by John ray in that affidavit that Alameda had a special relationship with FGS. And everybody was really obvious. If a market making firm starts in exchange, probably there's something special going on there. But the extent of malfeasance, I think, surprised everybody. So for the most part, I think that the core of this story, why did all of these venture capitalists invest without doing more due diligence? The answer was that Sam was the guy. And when Sam was the guy and he wanted a piece of Sam and the perception was that this was the safest investment in crypto. A lot of the investors who invested into this thing, they don't do tokens. They don't invest into real crypto native projects. And so they perceived as FTX being the safest thing they could invest into because it's an exchange rather than being a token. And Sam was just like really impressive guy and he's on the cover of Forbes and he's getting on TV and he's bought the way we can stadium. Naming rights, blah, blah, blah, blah. And this is how that turns out. And so I don't know that the lesson is so much for consumers. Because at the end of the day, consumers, like there's no real way as a consumer for you to be able to diligence any centralization. You just don't have the tools available to you. And to the extent that you can diligence them, it's like look up their financials, which is that, okay, they have a hundred, $1.7 billion that they've raised in total capital. And they announced having over a $1 billion just sitting on the balance sheet. That's as much diligence as you can expect for a consumer to do on an exchange. I think the responsibility here lies on the venture capitalists that enable this whole thing and legitimize them. Thank you all for joining. Thank you, chango for getting this group together originally. I thought this was an awesome conversation. And yeah, I appreciate our audience. Sorry we didn't bring speakers on. But we appreciate it all your questions. I pulled from them over the course of the evening. Yeah, thanks everybody. Hope to do this again soon. Thanks, Sam. Thank you. Thank you.
AP News Radio
New CEO Calls FTX 'Unprecedented' Mess in Filing
"The executive who cleaned up enron says FTX is even worse John ray the third has experienced dealing with corporate meltdowns He had to sort out the mess at enron when it failed Ray was named the new CEO at FTX following the dramatic collapse of the cryptocurrency exchange earlier this month In the filing he describes a complete failure of a multi-billion dollar business with compromise integrity with control concentrated quote in the hands of a very small group of inexperienced unsophisticated and potentially compromised individuals Ray says after the company's short billions of dollars was hit with the digital equivalent of a bank run only $740 million in cryptocurrency has
"john ray" Discussed on Crypto Banter
"Be more careful, plus off board animator from FTX once FTX could live on its own. So it doesn't mention not digging into customer funds again. This guy is absolutely absolutely delusional. So he says that you kind of don't believe in doing unethical shit as anyone, then a judgment upon the losers. He said a month ago, Caesar is walking around a walk example of don't do an ethical shit. Now he's a hero. It's because he's virtuous, or because he had a bigger balance sheet. And so you won. And so this discussion continues to go and he says, do you know what's actually up with the money that mysteriously got moved off the FTX off the bankruptcy? That's the other thing people are speaking about. He goes, heck, either it's employees malware or X employees computer, a few 100 million. And then lastly, he says, a factor big multiple times, you know that maybe that was my biggest single fuck up. Oh, so you know what was maybe my single biggest fuck up. Oh, the first thing, the one thing everyone told me to do. Everything would be 70% fixed right now if I hadn't, and that is, what is it? Filing for chapter 11. No, I don't know about this. I don't know if FTX would be better in SPF's hands or in the regular in the unknowledgeable liquidator hands. But either way, that's where it is not. And now the liquidator has walked in. So both liquidators have walked in. Remember that FTX got liquidated in the U.S. and is being liquidated in Bahamas. International company has the jurisdiction to be limited liquidated in The Bahamas. And the American company has the jurisdiction to be liquidated in the United States. And so what happened is the bomb is liquidated, which is information that we got yesterday. Say that they don't even know where to start looking. Because the books of FTX are such a miss that they actually have no idea where to start looking. And so they're like almost like we've got a job to liquidate FDX, but we don't know where anything is. There's just terrible records. And that's not the only thing. The liquidator that was appointed by the United States has got John ray who is the same guy that went into other big liquidations. I think he was, I think it was part of enron's liquidation and many others. So he walks in to it to FDX. And he says, read this is, I've had over 40 years of legal and restarting experience. I've been the chief restructuring officer and chief executive officer in several of the largest corporate failures in history. I have supervised situations involving allegations of criminal activity and male fees like enron. I have supervised men, malfeasance. I have supervised situations involving novel financial structures like enron and residential capital and cross border asset recovery. Nearly every situation where I've been involved in has been characterized by defects of some sort of internal controls regulatory compliance human resources and symptoms and systems integrity. But get this, okay? Get us, get this get this. Never in my career have I seen a complete failure of corporate controls and such a complete absence of trustworthy financial information as has occurred here from compromised systems and faulty regularly oversight abroad to the concentration of control in their hands of a very small group of inexperienced, unsophisticated,
The Bitboy Crypto Podcast
"john ray" Discussed on The Bitboy Crypto Podcast
"Great cheeseburger place. Great burger. I loved you. Solid, what do they call it custard or whatever? Oh yeah, yeah. That ice cream stuff is good. They're good fries. They got lots of dipping sauces. Love that. Underrated liberal with your dipping sauces. Not with your politics with your dipping sauce. Yeah. Okay, I mean, unless you want. That's right. You want to do Twitter buzz? Those are short of butts. What? There it is. There it is. What? We just did that one. We just did that one. He sucks. Justin, FTX CEO, John ray, was the lawyer who cleaned up the enron. Yes, so member last week we were talking about like who takes this job? Yeah. It's the same guy that took up took over enron in there. I saw that was one of those theories of like, yeah, this new CEO came in and started looking at everything over and then just told him torch this place to the ground. Well, there's way too much here for me to walk us through this. And they had a fail safe, a back end built in to destroy everything to the ground, which what they did. That's what that hack was about. It was not about stealing funds. That's what was crazy to me when all that started going down is this was clearly a day one. All of this stuff is set up from day one. A 100%. That's what I was just on Yahoo finance. And I was explaining to them like, no, we can not think Sam started off good. That's what people are, that's the narrative people are telling. Sam started off good with great intention because it's so hard in your mind as a reconcile the idea that this man's out there telling you philanthropy, helping people don't care about money. I drive a corolla that that's equates to evil. And there was a lot of people may or may not like Andrew Tate on him, but I see entertained when I go out to Dubai, by the way. But the idea is he had a video where he said, I never trust this guy at all. You can't trust someone who says they don't care about money in their billionaire. That makes no sense. He said, he said, I like to spend my money that you can tell. I like to spend it. Like, yeah, that's what someone with money does. They spend it. Yes, at some point, you spend everything you can spend. You bought everything you can buy. And yes, we are big proponents of helping people, philanthropy. We've given away tons of used cars to single families this year, single parent families. We are huge on that. Giving back, we pound that into you guys, right? But that's not like you can't operate a business and not care about profits. You can't operate a business that has employees that have to get paid without a business plan, right? You can't give away every single dime that you have. You can't trust people that say that,
Fantasy, Meet Reality: A Running Back Breaks Out, Then Disappears
"Liz Merrill is a senior writer for ESPN. So we're doing a package on one one hit wonders. And he editors thought who'd be better to sort of headline this but Jonas Gray story it's been about five five years. Since his breakout game. It was November sixteenth. Two thousand fourteen. What happened on that day? New England would've gone through one of those September's which everyone in Britain them off. You know they've lost that Miami in the opening game and then they went to Kansas City and just got clobbered and then to patriots form. They rattled off five wins. And they're back to their dominating cells. Broody leads US Patriots into town to the Andrew Luck and the Indianapolis Colts on Sunday night. Football how Michael Smith game was a Sunday night football game and it was a highly anticipated anticipated game because it was a rematch of that year's divisional round game tonight. It's Andrew Lock Against Tom. Brady get your calculators out. There should be really default to rescue teams. Both come off by weeks. There's a cave named Jewish graves is making star back to the ground. This this is Jonas Gray Gray to the thirty yard line. You know. It's amazing what nobody knew was except for people in very inner struggles of New England And he actually had a really impressive training camp and Bella check had told him. You know you're so close to making the roster oster but they didn't activate them until mid October when Steven Ridley towards ACL this guy he wasn't uh-huh regular starter at Notre Dame. He was on the practice squad until three weeks ago. So his mom and his brother drove about three hundred miles from mm-hmm where they lived outside of Detroit. The Game Jonas at the time was living in a one bedroom apartment and this modest area outside of Boston Austin on the very bare bones and the only tickets. He could really sport. His family. Were in the nosebleed seats. They're ZEHR watching the game. There's all this anticipation there's nerve block white with Michelle. Give the gray runs. Between Guard and center white. He pushes to the end zone. Owed go to spray has a touchdown patriots. He's scores his first touchdown and his mom is like okay. I'll clap. I'm I'm pretty exciting. This is so awesome. So she's Kinda cool about it in cash and then you know he's course again and then we. He scores his third touchdown. I get the great lowers the coders running. It was more a touchdown his she drops to a knee in like complete. You know amazement and just so older well that you know for kids. It's finally getting a chance. And then Jonas Gray Mix Histories Iowa thing for two hundred one yards and four touchdowns give give the pig right. He runs a lot he for the Patriots. Schoolyard can't stop. Stop it so Jonas Gray erupts. He has this once in a lifetime. Performance how does he react. After the game he'd reaction was pretty wide. I I mean I think that's one of the things that made the story so endearing it because he was just like holy cow. Here's Glock like celebrating Alabama with me. Here's Tom Brady headbutting. Me All the stuff that you see in the movies really you know the thing you know. act like he's been there I mean and he did act like you've been there but inside he was completely awash. You know in all of the surprise and the joy and there was sort of that moment where from Michelle Foia talks to him. They had the traditional interview with the Star of the game. Let's turn to John Ray. Yeah Guy who didn't hear his name before you're going to be hearing it a lot. We heard it many times tonight and he's doing nervous. I mean there's a guy who graduated with a degree in English and he did stand up comedy already in college. So you know. She knew his way around the microphone but she didn't know what he's GonNa say touchdowns the first four of your NFL career on at this stage had explain this performance. I'm just blessed. Blessed beyond belief we put together a great game plan. They hammered in all week. She watched this for so long. Keep Watch Tom Brady. And GRONK and company and Julia Nettleton on TV. It was just one of those things where you just couldn't believe all this is happening. Someone one of those guys men are probably go home tonight and get back. I'll probably just lay in bed. Look up in the ceiling. Just just astonished man. What's going on? Aw Right in a great story man. God's helping
KQED Radio Show
Teheran, British Royal Marines And Iran discussed on KQED Radio Show
"It is the latest ratcheting up of tensions just last month the Iranians shot down a U. S. drone over the same stretch of sea the US said blame Teheran for attacking six oil tank is in may and June and last week British Royal Marines stormed an Iranian ten can nature brought to suspected of breaching Syrian sanctions Monday and give you see on the gun shop all an act that is this latest drama unfolded yesterday Iran's president Hassan Rouhani will that Britain would pay full from Washington tonight where hostility to Tehran the scene Donald Trump threatened and then cooled off military action in recent weeks the president tweeted it seems the Brits some the French and the Germans are coming around to the idea that the Iranians are up to no good the US is not planning a multinational force to monitor the Gulf Britain must decide what role it might play in an escalating crisis that report from John ray of independent television news Iran has denied the British allegations and says it made no attempt to interfere with the
Counting underway in Zimbabwe's historic vote
"He is open to meeting with no preconditions supreme court nominee Brett cavenaugh Juan over one over an undecided Republican today Kentucky Senator rand. Paul said that, he will vote to confirm that's a key endorsement in, this closely divided Senate meanwhile Cavanaugh had his first meeting with a democrat West Virginia Senator Joe. Manchin he is seen as a. Potential swing vote supreme court. Justice Ruth. Bader Ginsburg says she, hopes to. Serve until she's ninety Ginsburg is now eighty-five she told an interviewer on Sunday that quote I think. I have at least five more years on the court. He cited former Justice John Paul Stevens who served. Until he was ninety in Zimbabwe they have begun counting votes after a largely. Peaceful election day it's the country's first presidential election since Robert Mugabe. Was ousted in may he had rule for thirty seven years His former deputy Emmerson Mnangagwa faced opposition leader Nelson Chamisa who. Complained to voting delays designed to undermine his support John Ray of Independent. Television News reports from Harare the capital It Bob wait a historic day worth the early start sunrise and already thousands of queuing patiently many here have waited a lifetime for this moment where we've only known one you now So I think this demonstrates change That has been a joyous energy about. The campaign generated by one man Nelson Chamisa has vowed to. End forty years of one-party rule One. But hopes dashed by defeats might yet be a combustible combination Mistake kingdom confidence all the excitement around Nelson to me he says he. Will, not accept defeat makes this a dangerous moment has in Bob we if you do not win this election trouble.