17 Burst results for "Mister Bankman"
Crypto News Alerts | Daily Bitcoin (BTC) & Cryptocurrency News
"mister bankman" Discussed on Crypto News Alerts | Daily Bitcoin (BTC) & Cryptocurrency News
"The federal judge has allowed the identities of the guarantees who signed on the securities for former FTX SPF 250 million bond to be made public, following a request from several news outlets, court documents released February 15th, show that the two previously unidentified individuals are Andreas pop peck and senior research scientist at Stanford University, Larry Kramer, a former dean of Stanford law school, interesting, right? The two signed on a series of bankman freed's bail January 25th for 200,500 $1000, respectively that Joseph bankman and Barbara fried SBS parents were the other two parties who signed off on their son's bond in December of 2022, following his arrangement, the two were law professors at Stanford prior to their son's arrest with bankman seemingly becoming more of a target and the FTX bankruptcy case company debtors issued subpoenas on him his son and other insiders February 14th, happy Valentine's Day. And according to a February 15th report from Business Insider, Kramer said he has been friends with bankman and freed since the 1990s and his 500,000 contribution was based on that relationship. It is unclear at the time of publication what connection he may have to bankman fried or his parents, meanwhile, bankman freed's bail conditions restricted him to home arrest at his parents California home, but he has been permitted to leave for court appearances and other allowances, judge Lewis coplin, has amended the SPF bail conditions to include restrictions on accessing certain messaging apps using virtual private networks, VPS, and contacting current and former FTX and Alameda, research employees, 8 major news outlets, petition the judge on January 12th and a letter requesting the court to disclose these names the two individuals that provided mister bankman freed with financial backing, the judge initially granted the petition, but said the release of the guarantees are identified until February 7th to allow time for the SPF legal team to appear. Now, what are your thoughts surrounding this? Let me know in the comments below as SBS criminal trial is scheduled to begin in October while FTX bankruptcy cases ongoing. FTX cofounder Gary Wang and former Alameda research CEO, Caroline Ellison, have already pleaded guilty to certain charges on a reportedly cooperating with authorities, nothing with this SPF case really makes sense because if you think about it, $250 million bail, and these people only paid 500,200 thousand. Was that collectively 700 and something $1000? Where's the rest of the money? Did he even have to come up with the 10% or did they just give him a little slap on the wrist and say, pay what you can? It just makes you wonder, how do you think this is likely to play out for the criminal bank min free? Do you think he will get away with this or it's only a matter of time before he is in prison? Let me know your honest thoughts in the comments right down below, which leads us to our next story of the day, let's discuss Charlie Munger, the official cock blocker for the king crypto. Yeah, he just recently came out with some more nonsense. Berkshire Hathaway vice chairman Charlie Munger continued his insults against crypto and its supporters on Wednesday and during a live stream interview with CNBC at the daily journal's annual shareholder meetings, referencing his recent opinion piece in The Wall Street Journal, stating that crypto should be banned, the 99 year old executive insisted there is no rational argument against his position of banning crypto.
Bloomberg Radio New York
"mister bankman" Discussed on Bloomberg Radio New York
"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? Fgx, that was a real business. But 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 Brian 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 of 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 end, the breadth of the charts that are brought against mister banker and free, it really suggests to me a confidence that prosecutors have in this case. That's remarkable. 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 breadth 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 is a giant fraud on a customer that all Alameda with the product customers and investors. Very wide scale fraud, very simple straightforward garden variety fries. 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. It really locked himself into a story more than I've ever seen before. We're not talking about one loan interview. Mister bankman freed both the 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 a prosecutors know that they can contradict the story that he's already locked himself 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 fraud case. In other words, I may have been inattentive or an app or a bad businessman. But I'm not a fraudster. I wasn't intending to do that because the prosecution has to prove beyond a reasonable doubt that the defendant has the intent to defrost. But that said, the problem for mister bank is 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 rule of the government. 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 interviews 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 feds 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 thinking 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 he said previously were not the smart thing for him to
Bloomberg Radio New York
"mister bankman" Discussed on Bloomberg Radio New York
"This is Bloomberg law. A divided Supreme Court rejects a religious challenge. Tell us a little about the facts of the case. Peter views with prominent attorneys in Bloomberg legal experts. My guest is former federal prosecutor Jimmy Carroll joining me as Bloomberg long reporter Jordan Rubin. And analysis of important legal issues, cases in headlines. The Supreme Court takes on state secrets multiple lawsuits were filed against the emergency rule. Is this lawsuit for real? Bloomberg law with June Grasso. From Bloomberg radio. Welcome to the Bloomberg law show, I'm June glossop ahead in this hour. A close up on the criminal charges against FTX founder Sam bankman freed, plus the fraud charges from the SEC and the CFTC. We unsealed an 8 count indictment charging Samuel bankman freed, FTX founder. With a series of interrelated fraud schemes that contributed to FTX collapse. Federal prosecutors moved at warp speed to charge FTX founder Sam bankman freed in what Manhattan U.S. attorney Damian Williams called one of the biggest financial frauds in American history that destroyed billions of dollars in customer value overnight. The charges include conspiracy fraud and money laundering for allegedly misappropriating billions of dollars in FTX customers funds for personal use and risky bets by sister trading house Alameda, just a few weeks ago, bankman freed was on ABC TV, denying any comparison to Bernie Madoff, who bilked investors out of some $20 billion. 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? Fgx, that was a real business. But prosecutors say FTX was just a scheme from day one. Joining me is former federal prosecutor Renato mariotti, a partner at Brian 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 of this scope brought within weeks of the precipitating event before. In other words, you know, 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 end, the breadth of the charge that are brought against mister banker and free, it really suggests to me a confidence that prosecutors have in this case, that's remarkable. I haven't seen before. Does it make you think that someone has already flipped on bankment freed? I would not necessarily lead to that conclusion. Saying, I look very closely at the indictment, for example. There's nothing in the indictment that indicates that there was a cooperator. Sometimes you can see a clue in a political agreement in this case and indictment that can help you understand or discern that a cooperator is already in the picture. There's no such indicator here. I think that a couple things make this stand out separate in the park from a Charles potential cooperator was certainly a possibility. One is the sheer breadth and brazen nature of the alleged fraud. In other words, this is not a fraud scheme related to a very particular portion of FTX business. It's not related to a specific deal or a specific customer. What the feds have alleged is that effectively all of FTX is a giant fraud on a customers that all Alameda with the product customers and investors. Very wide scale fraud, very simple straightforward garden variety fraud. And to that, I think certainly contributes to the confidence defense app. 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. In other words, we're not talking about one loan interview. Mister bankman three spoke to 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 himself 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. I mean, I think to be fair, that is not an uncommon defense in the front 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 proctor. 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 banker free is really with how 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, 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 as a service because under the federal rules amendment. He can not introduce his out of court statements in his defense. In other words, if he tries to introduce those interviews with Twitter space that said so forth, 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 feds 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 such that he's effectively locked in something 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 realized that some of the things he 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 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.
Crypto Banter
"mister bankman" Discussed on Crypto Banter
"Will keep you updated. We are expecting some more arrests pretty soon. There could be more risks of FTX people very, very, very soon. It looks like now people are being called to task Maxine waters was very, very, very upset that SPF wouldn't be testifying. In fact, I want to just quickly show you this where she wrote a message here, you should read it. She says, I'm surprised here that sandbank feed was arrested in The Bahamas at the direction of the United States attorney for the southern district of New York. It's about time the process of to bring mister bankman free to justice has begun. However, as the public knows Mustafa and I have been working diligently for the past month to secure mister banking freeze testimony before our committee tomorrow morning. We've received confirmation is often from bank confidence lawyers that he was still planning to appear before the committee tomorrow. But then he was arrested. Although mister bankman feed must be held accountable, the American public deserves to hear from mister banking about his actions. That have armed over 1 million people and wiped out the hard earned life savings of so many. The public has been waiting eagerly to get these answers under earth before Congress. And the timing of his race denies the public's opportunity. While I'm disappointed, there will not be able to hear from bankman free tomorrow. We remain committed to getting to the bottom of what happened. And the committee looks forward to hearing the investigation to investigation by hearing from John rabe. So she's upset. I'm not so upset. I think you should rather testify, let's not testify in front of Congress people. Just define a court in front of a bulldog prosecutor who's going to put him in jail for a long time. And I'll always remember that the last tweet that SBA flagged as a free man. Was a tweet that I published. No matter what happens from this point on, no matter what happens between from this point on, we now know that SPF's last tweet is a free man was the last likely is a free man was something here. We just had a tweet from CZ, which is probably a good interest in the next section. He says, we have had some withdrawals today. 1.14 billion ish. We have seen this before some days have net withdrawals some days have net deposits business as usual for us. I think it's actually a good idea to stress test withdrawals on the 6th at a rotating basis. It costs some network fees to run these tests, but keeps the industry healthy. Exchange business is simple. So this is probably a good jump to the next section of the show, which is the bank run on binance. Which we have spoken about, we spoke to you guys about yesterday. We told you that we think it's more a media tech than it is a bank run, but we got a non monitor what's happening with the bank run on binance, because there is definitely something going. So here we go. So let's talk about the bank run and what's happening. It's a bank run that's happening not only on finance, but also on the BUSD coin. So people are now very, very nervous about finance and they're very, very nervous about the B USD coin, which is binance's USD coin. Let's talk about both of them for a second. So first of all, you can see that the balance sheet was $63 billion. In other words, they had $63 billion of value in assets. And there were a certain number of BNB BUSD tokens.
Bloomberg Radio New York
"mister bankman" Discussed on Bloomberg Radio New York
"Need to segregate people's money. Thank you. That's simple. Thank you. And I'm chair I yield back. The gentlewoman from Missouri, misses Wagner is now recognized for 5 minutes. Thank you, madam chairwoman. I thank you, mister ray, for being here for the work that you're doing. Mister ray, you have compared. The House financial services committee, Missouri's, and Wagner speaking to FTX CEO John ray. Live coverage on Bloomberg radio. FCX is worse than one of the largest corporate frauds in history. The FTX group is unusual in the sense that I've done probably a dozen large scale bankruptcies over my career, including enron, of course. Every one of those entities had some financial problem or another. They have some characteristics that are in common. This one is unusual and it's unusual in the sense that literally there's no record keeping whatsoever. The absence of record keeping employees would communicate invoicing and expenses on slack, which is essentially a way of communicating for chat rooms. They use QuickBooks, multi-billion dollar company using QuickBooks. QuickBooks? QuickBooks. Nothing against QuickBooks, very nice tool. Just not for a multi-billion dollar company. There's no independent board. We had one person really controlling this. No independent board. That's highly unusual. Size company that says. And it's made all more complex because we're not dealing with widgets or something that's tangible. We're dealing with crypto. And the technological issues are made worse when you're dealing with an asset such as crypto. Mister ray, mister bankman freed has apologized, I'll sub quote here for mistakes he has made. Based on your review, is there a way to know if the transfer of FTX customer funds to Alameda research was done by mistake? I don't find any such statements to be credible. Reports suggest that FTX dot com transferred more than half of its customer funds. Roughly ten billion dollars to Alameda researching. Is that accurate, sir? Our work is not done. We don't have exact numbers for you today, but I will say it's several $1 billion in that range. So we know that the size of the harm was significant. Mister ray, FTX dot com, held the shelf out as having a sophisticated risk management system, commensurate with the size of its operations. You've touched on this a little bit. Based on your work to date, is this accurate, and can you explain the quote sophistication of its risk management system? I can see that's absolutely false. There was no sophistication. Whatsoever, there was an absence of any management. Mister ray, mister bankman freed, has been able to confuse interviewers by talking in circles around.
The Breakdown
"mister bankman" Discussed on The Breakdown
"The New York Times reported yesterday that federal prosecutors are now looking into whether FTX and Alameda manipulated the market for Tara USD and Luna in a way that led to their demise. From The New York Times, quote, U.S. prosecutors in Manhattan are examining the possibility that mister bagman freed steered the prices of two interlinked currencies, Terra USD and Luna, the benefit the entities he controlled, including FTX and Alameda research. A hedge fund he cofounded and owned. The investigation is in its early stages and it is not clear whether prosecutors have determined any wrongdoing by mister bankman fried. Or when they began looking at the terror USD and Luna trades. The matter is part of a broadening inquiry into the collapse of mister bankman freed's Bahamas based cryptocurrency empire and the potential misappropriation of billions of dollars in customer
Techmeme Ride Home
"mister bankman" Discussed on Techmeme Ride Home
"Sam bankman freed was not just responsible for his own implosion for the blow up of FTX and Alameda. But also for a lot of other explosions, blow ups, that is what U.S. prosecutors are wondering. As sources say they are investigating whether or not SPF manipulated Terra USA and Luna markets, thereby triggering the big cryptocurrency collapses back in May. Quoting The New York Times. The focus on possible market manipulation adds to the legal storm brewing around mister bankman freed. It is illegal for an individual to knowingly stage market activity designed to move the price of an asset up or down. In May, major cryptocurrency market makers exchanges or individuals who arrange for buyers and sellers to be matched. Notice a flood of sell orders coming in for Terry USD, said one person with knowledge of the market activity, the orders were in small denominations, but they were placed very quickly the person said. The sudden jump in sell orders for Terry USD overwhelmed the system, making it hard to find matching buy orders for them under normal conditions, any sell orders that remain unfulfilled for too long would be matched with buy orders at a lower price. The longer the orders lingered without being matched, the more they forced down the price of Terra USD and caused a corresponding drop in lunar prices because of the way the two coins were linked. The exact causes of the collapse of the two cryptocurrencies remain unclear. However, the bulk of the sell orders for Terry USD appeared to be coming from one place. Sam bankman fried's cryptocurrency trading firm, which also placed a big bet on the price of Luna falling, according to a person with knowledge of the market activity. Had the trade gone as expected, the price declines in Luna could have yielded a fat profit. Instead, the bottom fell out of the entire Terra USD Luna ecosystem. The collapse caused more trouble in the cryptocurrency industry, sending several prominent companies into bankruptcy and erasing about $1 trillion in value from the crypto market. The ripple effects from the lunar crash ultimately contributed to the collapse of mister bankman freeze business empire as well.
The Crypto Overnighter
"mister bankman" Discussed on The Crypto Overnighter
"Here, encrypted, it's 10 p.m. Pacific time, my name is nicodemus and welcome back to the crypto overnighter, where we take a nightly look at the crypto NFT and metaverse space, and keep in mind nothing in this show should ever be considered financial advice. Last night, we spoke for a bit about maple finance and some of the difficulties that they were running into. And I wanted to give you a bit of an update. Nexus mutual is a peer to peer insurance alternative. And they are expecting to take a loss on their investment in a credit pool on maple finance. Now, listeners from last night will remember that maple finance is a decentralized lending platform. And now the company warned about a potential loss of 2461 eth, which is around $3 million due to orthogonal trading default. Nexus has started to withdraw all of their funds from the affected pool, which represents about 1.6% of their assets. In August, nexus deposited over 15,000 eth worth around $19.3 million. That went into the credit pool on maple finance following a community vote. However, more of nexus funds are potentially at risk due to orthogonal trading default debt and oros global's failure to repay alone. Now nexus mutual is warning that it may take a loss on its investment in the credit pool on maple finance. What that means is that the potential losses due to orthogonal trading default on its debt and maples credit dashboard shows that the defaulted debt represents 56% of the outstanding debt on the rapid Ethereum credit pool. At present, there is only $3.1 million in cash deposits that are not tied up in loans. That limits nexus ability to withdraw funds. Maple has a ten day waiting period before depositors can withdraw capital. This news comes as the collapse of the crypto exchange FTX continues to impact DeFi lending protocols. Have you been paying attention to silvergate bank because something's going on there? And now, silvergate has always been kind of interesting from a crypto point of view. One interesting thing that happened is when they closed their door on the Libra, DM stablecoin project, they bought the intellectual property and said that they intended to create a coin using those assets. Well, things started going downhill for them on Monday morning as the bank's shares plummeted 3%. What happened was that Morgan Stanley downgraded its rating on silvergate capital to underweight. That's due to the risks arising from the bankruptcy of the crypto exchange FTX. The banks analysts believe that silvergate faces significant uncertainty about deposit flows in the near term. They estimate that the bank's digital deposits have fallen in about 60% so far in the fourth quarter. The demise of FTX could also lead to litigation and headline risk across the crypto industry. Allen lane is silver bank capital CEO. He published a public letter that said that the bank conducted quote extensive due diligence on FTX and its related entities, including Alameda research. He added that the bank followed all of the relevant regulatory procedures and investigated any potential untoward activity. Lane said that speculation and misinformation being spread by short sellers and other opportunists is trying to capitalize on the market uncertainty. Silvergate disclosed one month ago that FTX deposits made up nearly 10% of their $11.9 billion in deposits from digital asset customers. However, the bank does not appear to be a creditor to FTX. Now, lane said that the bank has a resilient balance sheet and ample liquidity. He added that the lender carries cash and securities in excess of their digital asset related deposit liabilities. Silvergate stock is down 53% over the last month and was little changed in after hour trade on Monday. Well, since then, U.S. Congress has gotten involved. Three U.S. senators, Elizabeth Warren, John Kennedy and roger Marshall have written to silvergate. They want answers about its supposed role in facilitating transfers between the exchange FTX and Alameda research. The senators letter come after allegations were made that sbf made large transfers of customer funds from the exchange to Alameda research. FTX and other companies reportedly held around 20 accounts at silvergate, according to a bankruptcy filing. The senators letter said that there were, quote, reports that mister bankman freed secretly transferred some $10 billion of customer funds to his trading vehicle automated research to fund risky bets, violating both U.S. securities laws and FTX owned terms of service. They also said that they were concerned about surrogates role in these activities because of reports suggesting that silvergate facilitated the transfer of FTX customer funds to Alameda. Shares were down another 6.15% and have touched a new 52 week low in Tuesday morning trade, adding to their roughly 50% decline since the FTX collapse. Silvergate has issued a statement saying that it was quote the victim of FTX and Alameda research's apparent misuse of customer assets. They said that they believe their full cooperation will help set the record straight. Now the bank has until December 19th to officially respond to the senators. SPF has reportedly hired Mark Cohen, a former federal prosecutor as his defense attorney. His spokesperson said the former CEO has retained Cohen amid a flurry of civil litigation from investors in the crypto exchange and investigations by U.S. lawmakers and regulators. Now Cohen is a cofounder of the law firm Cohen and gresser and was a former assistant U.S. attorney for the eastern district of New York. He also worked on the defense team for Ghislaine Maxwell. Wait, didn't she get convicted? Anyway, FTX group filed for bankruptcy under chapter 11 in the district of Delaware on November 11th. This was following a reported liquidity crunch in which the firm claimed billions in leverage, making it unable to meet withdrawal demands. Filing in bankruptcy court suggested FTX could be accountable to more than 1 million creditors. After the company's collapse, SPF has made several media appearances and has spoken to reporters many times. Despite criticism from some in the crypto space. The former CEO has apologized for his role in the exchanges downfall. He said that he plans to make it up to affected team members, but has not yet offered a concrete plan to compensate investors. John ray became the exchanges CEO in November. Now, one defender SPF doesn't have to hire is Kevin O'Leary. Because it was in an interview with Yahoo finance today that Shark Tank's mister wonderful called for calm following FTX is collapse. O'Leary stated that the exchanges former CEO should be considered innocent and less evidence emerges that he committed fraud. He called for FTX to be audited to reveal where they exchange his money went so that investors can get their funds back. On November 30th and December 1st, SPF took several interviews in which he claimed that he was not guilty of fraud, which led to backlash within the crypto community. However, O'Leary defended him in a new interview, saying that he is quote innocent until proven guilty. O'Leary explained quote, I am of the ilk, and of the group of people that says, you're innocent until proven guilty. That's what I believe, and I want the facts. And so if you tell me that you didn't, you did or didn't do something, I'm going to believe you until I find out it's a falsehood.
The Breakdown
"mister bankman" Discussed on The Breakdown
"Dubious relationship between FTX and Alameda. Basically, the issue is that Sam during his extensive PR tour has been saying that before FTX was able to get its own banking relationships, it would have exchanged clients send money to Alameda instead. In a regulatory filing on Monday, silvergate acknowledged that it had processed wire transfers for Alameda. Silvergate CEO Alan lane is basically pushing back saying that whatever the intent was from Sam and co, Alameda had bank accounts with them, so when they got payments to Alameda, they processed them in credited to those accounts at Alameda. In other words, to the extent that these were FTX clients that should have gone to FTX accounts, that's FTX job, not silver Gates job. At least that's the claim that Allen lane seems to be making. Still, some aren't content with silver Gates answers to questions around due diligence. Count markets among those as silvergate stock prices down 84% this year and around 50% since all the FTX revelations came about compared to 23% in general for banks. Politicians are also getting up in this right now. Yesterday, senators Elizabeth Warren and John Kennedy, as well as congressman roger Marshall, wrote silvergate a letter demanding some answers. The letter cuts straight to the quick of the $10 billion of customer funds transferred to Alameda and what silver Gates potential role was. From the letter, quote, mister bankman fried has himself admitted that FTX customer funds were improperly transferred to Alameda's bank accounts. When asked how FTX customer deposits ended up in Alameda's accounts, mister free told vox that the company did not originally have a bank account, and so it directed customers to wire money to Alameda's account with silvergate in exchange for assets on FTX. According to mister bankman freed, executives at the company quote forgot about the scheme until the company imploded, telling a reporter, quote, it looks like people wired 8 billion to Alameda and oh God, we basically forgot about the stub account that corresponded to that, and so it was never delivered to FTX. Silvergate provided banking services to both Alameda and FTX, raising questions about the bank's role in facilitating the improper transfer of FTX customer funds to Alameda. quote some FTX customers continue to send wire transfers to Alameda silvergate account as recently as this year. It appears that silvergate did nothing to halt these activities. Simply put they write later, Alameda's depository account with your bank appears to be at the center of the improper transmission of FTX customer funds. Now where this led the congressman and senators, who was a set of questions. Were you aware that FTX was directing its customers to wire money to Alameda's account with your bank? Did silvergate flag a suspicious the movement of funds to Alameda accounts or between Alameda accounts and FTX or FTX affiliate accounts. Before November 11th, 2022, were you aware that Alameda research LLC was a distinct company from FTX and its subsidiaries. Has silvergate ever undergone an independent audit of its BSA anti money laundering compliance program. Did silvergate have any communication with representatives from Alameda FTX or FTX affiliated entities regarding concerns about the transfer of funds into silvergate. Et cetera, et cetera, et cetera now I'm certainly not jumping on some screw silvergate bandwagon. There are plenty of people there already, including short seller Mark cahoots, who is one of the loudest voices calling out SPF for months. Still, silvergate has been one of the only banks actually willing to take the risk of banking crypto companies, and I'm going to be pretty pissed if they didn't behave improperly and get caught up in Sam's fallout. However, to the extent that they helped perpetrate the fraud, this really does need to be investigated, no matter how unpalatable or unfunded it seems. All of this continues to leave crypto in a very liminal in between moment. The industry is waiting to see justice served to Sam. But it's also waiting to see whether other institutions will fall. DCG and genesis are high on that list of WTF is going on. But in the vacuum there is emerging a clear category of winner and I'm not talking about binance, although clearly they're the last exchange standing when it comes to inside the industry itself. Know that likely winner is trad 5. That was reinforced today when Reuters reported that Goldman Sachs is planning to spend tens of millions of dollars to invest in or buy outright crypto companies that are newly repriced, let's say, in the wake of MTX is collapse. Matthew McDermott, who's Goldman's head of digital assets, told Reuters that FTX is implosion, has heightened the need for more trustworthy, regulated cryptocurrency players, and big banks are seeing an opportunity to pick up business. In an interview McDermott said, quote, we do see some really interesting opportunities priced much more sensibly. On FTX, he said, it's definitely set the market back in terms of sentiment. There's absolutely no doubt of that. If the X was a poster child in many parts of the ecosystem, but to reiterate, the underlying technology continues to perform. Now, as of this recording apparently, the firm is doing due diligence on a number of different crypto firms, although they didn't specify which. So I think there are a few ways to look at this. The first is obviously as a vote of confidence, and Reuters itself sort of nails his angle, saying, while the amount Goldman may potentially invest is not large for the Wall Street giant, which earned $21.6 billion last year, its willingness to keep investing amid the sector shakeout shows its senses a long-term opportunity. Second, I think that this does show a trend but not a ubiquitous one. On the trend side fidelity recently opened retail crypto trading for both Bitcoin and Ethereum. Fidelity is one of the largest asset managers in the world and this is a huge vote of confidence. Of course, plenty of skepticism still remains. Morgan Stanley CEO James Corman said at the Reuters next conference on December 1st, quote, I don't think it's a fad or going away, but I can't put an intrinsic value on it. The HSBC CEO told the banking conference in London that they have no plans to extend into crypto trading, and Jamie Dimon was on CNBC today telling them that crypto was just pet rocks and that they spend way too much time on it. Still, it's certainly seems like trad fire is likely to become one of the winners. Again, from Reuters, quote, the ripple effects from FTX collapse have boosted Goldman's trading volumes, McDermott said, as investors sought to trade with regulated and well capitalized counterparties. He said what's increases the number of financial institutions wanting to trade with us. I suspect a number of them traded with FTX, but I can't say that with cast iron certainty. Goldman also sees recruitment opportunities as crypto and tech companies shed staff, although the bank is happy with the size of its team for now. Now that same piece also suggests that some institutions that hadn't gotten into crypto yet are now looking at it because their customers are just over doing business with crypto native institutions. The Britannia financial group said that it's now building out cryptocurrency related services. CEO Mark Bruce told Reuters, quote, we have seen more client interest since the demise of FTX. Customers have lost trust in some of the younger businesses in the sector that purely do crypto and are looking for more trusted counterparties. So the question that I want to pause it to you is is this a problem? Or is it just unreservedly good? I think the answer is of course it depends. On the one hand, it's hard not to be gratified that in a world where many antagonistic voices are calling for the end of this whole experiment, there are still big firms taking a big picture view and investing for the long term. Relatedly, I think there's a fairly good argument that for citizens of countries with sophisticated banking and investing infrastructure, try 5 brokerages and platforms were always going to capture the mainstream. So this might have just accelerated the inevitable. On the other hand, there are challenges with having this category of actor take the pole position in the industry. They are clearly more focused on compliance and integrating with the existing system than in challenging that system. This could lead to very different priorities. For example, fidelity launched their retail trading product without the ability for customers to withdraw and self custody assets. There's also the question of how synthetic products around Bitcoin undermine and supply limitations. If everyone can just play financial games without ever actually having exposure to the underlying Bitcoin, does that diminish the value of its 21 million supply cap? This is something that folks like Caitlyn long have warned about in the past. And the fact that when all was said and done, FTX had zero Bitcoin on its balance sheet, suggests it's already a problem. Now, I do believe that this was sort of a problem that was always going to happen and it has just been accelerated, but that doesn't mean it's not a problem. This is something that Ben hunt from epsilon theory has discussed quite a bit. He wrote multiple pieces on this and yesterday said, if you don't see that the crypto quote unquote industry has become just as blindingly corrupt as the traditional financial services industry, it was supposed to replace, well, you're just not paying attention. What made Bitcoin special is nearly lost and what remains is a false and constructed narrative that exists in service to Wall Street and Washington rather than in resistance. The Bitcoin narrative must be renewed. And that will change everything. Now, interestingly, on December 16th, 2020, as the last bull market was just getting up and running, I had human rights foundations Alex gladstein and Ben hunt on the show to debate will Wall Street ruin Bitcoin. Ben argued many of the same things he has argued around Sam over the last 6 months, even back then, although obviously in general at that time. He argued that Bitcoin was going to become just another financialized plaything for the already rich to extract value from. Gladstone's counterpoint was that even if that happened, it didn't change the value of Bitcoin as a transportable censorship resistant, hard to seize asset for people living under autocratic rule or in turmoil, conflict, et cetera. It's a really good conversation and I suggest you go back and listen. Like I said, December 16th, 2020, will Wall Street ruin Bitcoin with Ben hunt and Alex gladstein. I was reminded of it today thinking about all this, but especially when I saw a tweet from Troy cross. He wrote, do I want to live in a world where krugman Wall Street are laughing off Bitcoin? The EU and U.S. governments are trying to curb mining and mute demand through regulation while we see grassroots adoption throughout Africa, Latin America, Southeast Asia? Yes, yes I do actually. And I think that that speaks to the redemptive side of all of this. The question of whether, even Bitcoin getting caught up in these financial games. In markets like the U.S., can on a fundamental level undermine what it's valuable for in the places that need it most. There's a lot that we could discuss around that, but we are so short right now, an optimistic thoughts that that's one that I am going to hold on to. For now I want to say thanks again to my sponsors next to IO, circle and kraken, and again today, crypto watch for supporting the show, and thanks to you guys for listening. Until tomorrow be safe and take care of each other. Peace
Bloomberg Radio New York
"mister bankman" Discussed on Bloomberg Radio New York
"That's a Bloomberg business flash Tom and Paul. He's not on the edge of Karen, but nice and scary. Getting better. Good morning, everyone across the station right now pulling up in an automobile at The White House in the south lawn a perfect December day. The president of the United States greeting the president of the republic of France. It is a true special relationship, the First Lady's greeting each other as they begin and I believe there's a state dinner tonight. Yeah. We do. We did a pretty well. State dinner to the French. Exactly. Do you go French food? You go French wine. I mean, what do you do? Is Chanel Bassett going? Maybe. She might be on she'll get the I think she's on his surveillance of salad down. The connection she's got. She's probably going to be there. Let's do this. I want you to listen to this folks. And this is, of course, at The New York Times DealBook with my good friend Andrew Ross Sorkin yesterday. Here is mister bankman freed yesterday by video link. Whatever happened why where it happened, I had a duty at a duty to all of our stakeholders to our customers, our creditors, how did you reach our employees for investors? And to the regulators of the world, to do right by them, to make sure the right things happened at the company. And clearly I didn't do a good job with that. I was shocked by what happened this month. Sam bankman freed at The New York Times DealBook conference yesterday, miss Bassett joins us this morning. Should Ali, we've had a huge response to the comments, Lisa John and I were having earlier this morning. Let me continue it. With you right now. Now this guy's remote, right? He's out of the country. If he showed up in an airport right now, what would happen? Andrew Ross Sorkin directly asked him, was he concerned about criminal liability? He said that he asked that, and he didn't really answer it directly. He said, the real answer sounds weird to say, it's not what I'm focusing on. I've had a bad month, but what matters is the millions of customers. But he didn't answer whether the reason he wouldn't come here is because of that. You're a team. Lydia Bayer leading our coverage. I'm going to say annabelle and all the rest and Katie and were you super. Were you surprised that people were like applauding? Andrew was great about it. But you know, are you friend of mine? Your friends with Andrew and friends with FinTech Frank, Frank chaparra, the cavalier reporter at the block that are at large. And his big thing when he tweeted about this was it's a nerving to me as someone who has spoken on the phone with dozens of employees who have sobbed to me recounting how they lost everything. So, of course, there was an uproar. After a crowd was clapping after after. So what do we know? I mean, I was shocked to see sin beckman free to actually speak in public on record and then he obviously did some more TV this morning I think with Good Morning America. I'm sure his lawyers are pulling their hair out. But what do we know about next steps here? It seems like it happened so quickly, but here we are a few weeks gone by and nothing's happened, really. He gave you a little bit of a playbook. So he had mentioned, I did not ever try to commit fraud on anybody I didn't knowingly commingle funds. And at the end of the day, when people are investigating him when investigators are looking into this, intent will be a thing that they look at. And so that's part of what we're seeing here. The other thing that's important here is that he's distancing himself from Alameda, which is his trading firm. He said he was nervous because of the conflict of interest about being too involved. Did his lawyers want him to do that? I mean, I assume he has lawyers. He said that his lawyers did not want him to do the interview. Yet he not only has he done the interview yesterday, he also did to your point Good Morning America. And he has a slate of crypto interviews coming up with local publication, including with FinTech Frank. Apparently. So he has a lot more public appearances coming up. He has not been shy to be public in this time. Have we heard anything from the regulators U.S. regulars? Anybody who's saying we want to speak with him? We want him back in the United States. We need to go visit him. We need him. So remember, the House financial services committee has adhering on December 13th. He hinted that he could come back to the United States to speak in front of lawmakers. I wonder if it means that day. I will be down in D.C. that day. We'll be dying to see him in person, speaking about this event to lawmakers and a full accounting of what happened. Remember also today the CFTC chair is also in a hearing about this at the agriculture community. So the lawmakers and regulators are both holding or try and hold each other accountable about what happened here. What is the singular question. Bitcoin crypto crisis team has this morning? With a money running out safe for Monday. It's where the money went. Where we don't have answers and frankly, we also
Crypto News Alerts | Daily Bitcoin (BTC) & Cryptocurrency News
"mister bankman" Discussed on Crypto News Alerts | Daily Bitcoin (BTC) & Cryptocurrency News
"The Bitcoin one hour Kendall chart, the Bitcoin slash USD pair dropped to 15,479 on this stamp after the Wall Street open, recovering only slightly to circle around 16,200 at the time of this recording, not coin itself, also hit a record low at the same time while equally embattled GBTC retained the majority of its discount at over 40% versus the Bitcoin spot price despite arcs buy in, so there you have it, also breaking news the Bitcoin hashrate also just hit yet another all time high, and as I shared the lows for this cycle, are currently in at around 15,000, 500. Do you think we're likely to drop even lower? Let me know your thoughts in those comments right down below. I think it's important to actually to discuss where do you feel that this cycle low will likely be? Let me know. We're going to be covering that in great detail later on in the show. So stick around, but without further ado, now let's dive in to the fact that bankman freed an FTX were purchasing over a $100 million worth of properties in The Bahamas using your money. The latest revelation from the FTX case reveals that the bahamian properties worth millions were bought in the company name at TX at the time operated by bank min freed, his parents and other high level executives of the company reportedly purchased at least 19 properties in The Bahamas just over the last two years. Now collectively, these purchases have a worth of over a 121 million, according to Reuters report of the official property records, and among the acquired properties were 7 luxurious condos while the residents of the condos remain unknown at this time. The property deed claims they were to be used as residences for key personnel of the defunct exchange and additionally a property worth 16.4 million has bankman freed's parents Joseph bankman and Barbara fried as signatories, the deed allegedly had the property designated as a vacation home. I bet with documents dating back to June 15th of this year and according to original reports, a spokesperson for the couple did not answer the question as to how this leisure property was acquired and if any FTX funds were involved only the couple had been trying to return the property to FTX prior to the bankruptcy since before the bankruptcy proceedings, mister bankman, and miss freed have been seeking to return the deed to the company and are awaiting further instructions that FTX moved its headquarters from Hong Kong to The Bahamas in September of last year, which was purchased for $60 million and had a groundbreaking ceremony in April of this year, the official channel, the prime minister of The Bahamas, released a video of the ceremony, however, according to reports from a recent property visited by media outlets, the space has been untouched for months and has the liquidity crisis and bankruptcy scandal unraveled bahamian authorities had bankman freed and two former associates at the former exchange under supervision in the country where they still allegedly remain today that court documents filed after the initial bankruptcy. Notice revealed the company may have over 1 million creditors in total, you can't make this stuff up folks with over 3 billion collectively owed to the 50 largest creditors and yesterday, November 21st, the U.S. Senate committee announced a scheduled FTX hearing for December 1st, which is around the corner next
Crypto News Alerts | Daily Bitcoin (BTC) & Cryptocurrency News
"mister bankman" Discussed on Crypto News Alerts | Daily Bitcoin (BTC) & Cryptocurrency News
"The most historically accurate Bitcoin price model since the inception of Bitcoin. And if it wasn't for these black swan events, which I think took a lot of us off guard this year, we can potentially be at an all time high for Bitcoin at around 72,000. However, unfortunately, many crypto lenders collapse, including the second largest crypto exchange in the world, which is FTX, so it is what it is. But with that being shared again, welcome everyone just tuning in. Now I want to discuss the ongoing saga of SPF and FTX as his lawyers have officially quit, which is not shocking to me whatsoever with the level of scheme and fraudulent activity going on. Now, Paul, why is the law firm backing FTX CEO bankman freed, amid bankruptcy, renounced representing non citing a conflict of interest, the decision to withdraw from representation after bankman frees tweets were found to disrupt the law firms re organization efforts. That's right, starting November 14th, SPF published a series of tweets that amass extensive attention across crypto Twitter to stay the least. We've been watching this unfold in real time. It's been entertaining to say the least. Now the move. However, spark speculations that crypto tweets were used to distract bots from noticing, concurrently, deleted tweets. And while no ill intent could be concluded, Paul Weiss attorney, Martin flume, believed that bankman freed's incessant and disruptive tweeting was negatively impacted in the reorganization efforts, quitting him here. We informed mister bankman freed several days ago about the filing of the FTX bankruptcy that conflicts have arisen that preluded us from representing him in the law firm's decision to back out from helping bankman freed. Coincided with a much awaited ruling of fellow fraudster Elizabeth Holmes, who got sentenced to prison, I believe, for 11 years after being convicted of criminal fraud and bankman fried makes her look like child's play to say the least bankman fried currently faces scrutiny from multiple directions, including ongoing investigations around the misuse of customer funds and disclosing a bankruptcy related documents. That's right. He literally stole the customer's funds in the exchanges to make very ill intended investments, which obviously didn't pan out. And despite informing the defendants, the court may refuse an attorney's request and order them to continue to representation, which may seem impossible, considering bankman frees behavioral concerns, raised by the law firm and recently the binance CEO CZ opened up about the time when binance was almost ready to bail out FTX from a collapse, reflected on the situation, CZ shared when he came to me. I knew he was desperate. If we can't help him, there's probably nobody else that would, probably a bunch of people passed on the deal before us. However, the deal for us to take over was called off after due diligence, revealed bigger problems so there you go, the saga continues with SPF. What do you feel will likely happen to this man as he seems to be very well connected politically? Do you think he'll actually serve any jail time for the biggest fraud in history, which makes elrond look like Charles play as well? Let me know your honest thoughts in the comments right down below. I also want to call out Gary gensler. I mean, FTX was heavily regulated the top second largest crypto exchange in the world. So the fact that the SEC and Gary was regulating this and they allowed this to happen and it was that obvious that people and outsiders looking at where bankman free came up with his fortune, this is a red flag and it should send red flag warnings across the entire industry, so obviously I just wanted to point
The Breakdown
"mister bankman" Discussed on The Breakdown
"These are not the thoughtful considered beliefs of a man who has seen the world in all its confounding agony and inconsistency. It's freshman seminar nihilism from a boy who found it easier to justify his want and ambition by pretending that everyone else was just pretending, too. Welcome back to the breakdown with me, and I'll W it's a daily podcast on macro, Bitcoin and the big picture power shifts remaking our world. The breakdown is sponsored by nexo IO, circle, and kraken, and produced and distributed by coindesk. What's going on guys? It is Thursday, November 17th, and today we are talking about how the guy who oversaw the demise and breakup and bankruptcy of enron says that FTX is worse. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us in the breakers Discord. You can find a link in the show notes or go to bit LY slash breakdown pod. Well folks, the hits just keep on coming. Two big pieces of news in the FTX saga. And unfortunately, that is where we will be focused for today. I will promise you again that starting on Monday we are in grateful for Bitcoin week, and to the extent that there are any mentions of this, it will only be in passing it in the context of lessons learned. All right, so as I said, two big pieces of news in the saga and the first has to do with revelations from the bankruptcy process. As you all know at this point, on Friday, FTX filed for chapter 11. This has not been a straightforward process. In fact, there is a jurisdictional battle around where the bankruptcy happens. On Wednesday, The Wall Street Journal wrote that the securities commission of The Bahamas said that John Jay ray the third, the new CEO, designated by FTX to oversee the bankruptcy, did not have the authority to initiate a U.S. based chapter 11 proceeding. On Tuesday, FTX digital markets, the company's Bahamas subsidiary filed for chapter 15 in New York in order to seek recognition of bohemian liquidation proceedings. If that is successful, some of the proceedings could move from the U.S. bankruptcy courts to the local Bahamas courts. There's an initial hearing on December 13th. Now the details of all this don't so much matter other than as a demonstration of just how messy this is going to get. However, in the U.S. chapter 11 proceeding, ray has filed his first day pleadings, which is effectively a 30 page overview of where the case is so far. It is in a single word shocking. Here are some of the highlights. Maybe the most quoted part comes from the very, very beginning. Ray writes, I've over 40 years of legal and restructuring experience. I've been the chief restructuring officer or chief executive officer in several of the largest corporate failures in history. I have supervised situations involving allegations of criminal activity and malfeasance. Enron. I have supervised situations involving novel financial structures, and Ron and residential capital, and cross border asset recovery in maximization. Nortel and overseas ship holding. Nearly every situation in which I've been involved has been characterized by defects of some kind in internal controls, regulatory compliance, human resources, and systems integrity. Never in my career. Have I seen such a complete failure of corporate controls and 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. Now, obviously this is where the title of this show comes from, and that never in my career quote, is making it all the way around the Internet. Now, going back to the jurisdictional issues, it sounds from this document that Sam is trying to meddle to try to get the jurisdiction out of the U.S.. Ray writes, mister bankman freed the co owner and controlling owner of all of the debtors and of FTX DM, appears to be supporting efforts by the JPL's to expand the scope of the FTX DM proceedings in The Bahamas to undermine these chapter 11 cases and to move assets from the debtors to accounts of The Bahamas under the control of the bahamian government. In verified messages posted through Twitter, mister bankman free just yesterday expressed profane disdain for regulators. His regrets that these chapter 11 cases having been filed and disclosed his goal that, quote, we win a jurisdictional battle versus Delaware to have any proceedings occur in The Bahamas. Now I'll leave it to you dear listener to determine why you think Sam might be so eager to have the jurisdiction out of the U.S. and into the bahamian government that he was very close with. However, that's not where this ends and it gets even messier. Going back to the document from Rey. In connection with investigating a hack on Sunday, November 13th, mister bankman freed and mister Wang stated in recorded and verified text that Bahamas regulators instructed that certain post petition transfers of debtor assets be made by mister Wang and mister bankman freed, who the debtors understand were both effectively in the custody of Bahamas authorities, and that such assets were custody on fire blocks under the control of the bahamian government. The debtors thus have credible evidence that the bahamian government is responsible for directing unauthorized access to the debtor system for the purpose of obtaining digital assets of the debtors. That took place after the commencement of these cases. The appointment of the JPL's and recognition of the chapter 15 case are thus in serious question. It appears that the automatic stay has been flaunted by a government actor no less. This is no time to be arguing over venue. Basically ray is accusing the bahamian government. Of colluding with Sam and Gary Wang to move funds to them even after the chapter 11 bankruptcy had been filed. Still, when it comes to what the crypto space is talking about most, there are a couple distinct things. One very notable part of the filings seems to give an answer to where did all this money go? Effectively, these documents show that, among other smaller loans, FTX loan Sam a total of $3.3 billion and his cofounder nashad $543 million. Some people are honestly relieved because at least it shows where some of this money went. Still, I think the thing that might have the community most livid comes from this section, section F, digital asset custody. It's short, so I'm going to just read it here. The FTX group did not keep appropriate books and records or security controls with respect to its digital assets. Mister bankman freed and mister Wang controlled access to digital assets of the main business in the FTX group with the exception of ledger X regulated by the CFTC and certain other regulated and or licensed subsidiaries. Unacceptable management practices included. The use of an unsecured group email account as the root user to access confidential private keys and critically sensitive data for the FTX group companies around the world. The absence of daily reconciliation of positions on the blockchain. The use of software to conceal the misuse of customer funds. The secret exemption of Alameda from certain aspects of FTX dot com's auto liquidation protocol, and the absence of independent governance as between Alameda, owned 90% by mister bankman fried and 10% by mister Wang, and the dot com silo in which third parties had invested. Now obviously the new thing that we learned here because we had known about the software to conceal the misuse of customer funds after Reuters reporting last week. The new thing here was the secret exemption of Alameda from certain aspects of FTX auto liquidation protocol. So when everyone else was getting liquidated for making bad trades, Alameda was not. The conclusion ended as strongly as ray began. Finally, and critically he writes, the debtors have made clear to employees and the public that mister bankman fried is not employed by the debtors and does not speak for them. Mister bankman freed currently in The Bahamas, continues to make erratic and misleading public statements. Mister bagman freed, whose connections and financial holdings in The Bahamas remain unclear to me, recently stated to a reporter on Twitter. They make everything worse. And suggested the next step for him was
CoinDesk Podcast Network
"mister bankman" Discussed on CoinDesk Podcast Network
"The breakdown is sponsored by nexo IO, circle, and kraken, and produced and distributed by coindesk. What's going on guys? It is Thursday, November 17th, and today we are talking about how the guy who oversaw the demise and breakup and bankruptcy of enron says that FTX is worse. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review or if you want to dive deeper into the conversation. Come join us in the breaker's Discord. You can find a link in the show notes or go to bit dot LY slash breakdown pod. Well folks the hits just keep on coming. Two big pieces of news in the FTX saga. And unfortunately, that is where we will be focused for today. I will promise you again that starting on Monday we are in grateful for Bitcoin week, and to the extent that there are any mentions of this, it will only be in passing it in the context of lessons learned. All right, so as I said, two big pieces of news in the saga, and the first has to do with revelations from the bankruptcy process. As you all know at this point, on Friday, FTX filed for chapter 11. This has not been a straightforward process. In fact, there is a jurisdictional battle around where the bankruptcy happens. On Wednesday, The Wall Street Journal wrote that the securities commission of The Bahamas said that John Jay ray the third, the new CEO, designated by FTX to oversee the bankruptcy, did not have the authority to initiate a U.S. based chapter 11 proceeding. On Tuesday, FTX digital markets, the company's Bahamas subsidiary filed for chapter 15 in New York in order to seek recognition of bahamian liquidation proceedings. If that is successful, some of the proceedings could move from the U.S. bankruptcy courts to the local Bahamas courts. There's an initial hearing on December 13th. Now the details of all this don't so much matter other than as a demonstration of just how messy this is going to get. However, in the U.S. chapter 11 proceeding, ray has filed his first day pleadings, which is effectively a 30 page overview of where the case is so far. It is in a single word shocking. Here are some of the highlights. Maybe the most quoted part comes from the very, very beginning. Ray writes, I have over 40 years of legal and restructuring experience. I've been the chief restructuring officer or chief executive officer in several of the largest corporate failures in history. I have supervised situations involving allegations of criminal activity and malfeasance. Enron. I have supervised situations involving novel financial structures and Ron and residential capital and cross border asset recovery in maximization. Nortel and overseas ship holding. Nearly every situation in which I've been involved has been characterized by defects of some kind in internal controls, regulatory compliance, human resources, and systems integrity. Never in my career, have I seen such a complete failure of corporate controls and 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. Now, obviously, this is where the title of this show comes from, and that never in my career quote, is making it all the way around the Internet. Now, going back to the jurisdictional issues, it sounds from this document that Sam is trying to meddle to try to get the jurisdiction out of the U.S.. Ray writes, mister bankman freed the co owner and controlling owner of all of the debtors and of FTX DM, appears to be supporting efforts by the JPL's to expand the scope of the FTX DM proceedings in The Bahamas to undermine these chapter 11 cases and to move assets from the debtors to accounts of The Bahamas under the control of the bahamian government. And verified messages posted through Twitter, mister bankman free just yesterday expressed profane disdain for regulators. His regrets that these chapter 11 cases having been filed and disclosed his goal that, quote, we win a jurisdictional battle versus Delaware to have any proceedings occur in The Bahamas. Now I'll leave it to you dear listener to determine why you think Sam might be so eager to have the jurisdiction out of the U.S. and into the bahamian government that he was very close with. However, that's not where this ends and it gets even messier. Going back to the document from Rey. In connection with investigating a hack on Sunday November 13th, mister bankman freed and mister Wang stated in recorded and verified text that Bahamas regulators instructed that certain post petition transfers of debtor assets be made by mister Wang and mister bankman freed, who the debtors understand were both effectively in the custody of Bahamas authorities, and that such assets were custody on fire blocks under the control of the bahamian government. The debtors thus have credible evidence that the bahamian government is responsible for directing unauthorized access to the debtor system for the purpose of obtaining digital assets of the debtors. That took place after the commencement of these cases. The appointment of the JPL's and recognition of the chapter 15 case are thus in serious question. It appears that the automatic stay has been flaunted by a government actor no less. This is no time to be arguing over venue. Basically ray is accusing the bahamian government of colluding with Sam and Gary Wang to move funds to them even after the chapter 11 bankruptcy had been filed. Still, when it comes to what the crypto space is talking about most, there are a couple of distinct things. One very notable part of the filings seems to give an answer to where did all this money go? Effectively, these documents show that, among other smaller loans, FTX loan Sam a total of $3.3 billion and his cofounder nishad $543 million.
Crypto Banter
"mister bankman" Discussed on Crypto Banter
"Run on the bank and market crashed exhausted liquidity. So what can I try to do now? Raise liquidity and make customers hope and restart. Maybe I'll fill. Now, he's delusional because the liquidator has walked into FDX and the first thing that the liquidator said is he said, there's a statement from John ray chief restructuring officer sincere if take digital regarding mister bankman fried's public statements, as previously announced mister bankman resigned on November 11th from FTX. And they directly and indirectly are in subsidies. Mister bankman fried has no ongoing role at FTX official FTX U.S. all element research. So I don't know where this guy thinks he's going to be raising money or trying to fix things. But I don't know, maybe in Sam's head and in sense world, this is what happens. Anyway, yesterday, we finished off a truth and beauty. He continued to give us once upon a time a month ago once upon a time a month ago. If TX was a valuable enterprises, had ten to $15 billion of daily volume, roughly 1 billion of annual revenue and $40 billion of equity. And we were held as paragons of running an effective company. So I was on the cover of every magazine and FTX was a dialing of Silicon Valley, but overconfident in KLS and problems were brewing larger than I realized. Leverage built up to about $5 billion back by $20 billion of assets, which were, well, they had value, FTT. So is admitting SPF is admitting that he was leveraged against his own token, which is what everyone has accused him of. And he now admits that the token was the risk of FTT was collateralized. That's definitely coming down. He says, roughly 25 of custom assets were withdrawn each day, 4 billion as it turned out I was wrong leverage wasn't 5 billion to 13 billion, which made a run on the bank, shrapnel, and he says last night I talked to a friend of mine, and he carries on. He says, it sucks. I'm sorry things ended up. As I said, I'm going to do everything I can to try and make it right. A few thoughts it's really hard to be a regular. They have an impossible job to regulate it. What the hell is it talking about regulation for? To regulate the entire industries that grow faster than them. And so this tweet storm carries on and on and on and he says, anyway, none of that matters for now. What matters is that I'm doing the best I can do, which is nothing because the liquidator basically says, look, Sam, you're not actually allowed to you're not actually allowed to be talking on behalf of FTX. You have nothing to do with FTX. At the
Bloomberg Radio New York
"mister bankman" Discussed on Bloomberg Radio New York
"Whole of this magnitude? Man, it doesn't parse together for me. It's not like a normal discussion of bankruptcy. And it's got to be wrapped around a board. Is there a board of FTX advising on this? There's a board of FTX for sure. And Sam bankman fried, you know, he is smart enough to surround himself with people that aren't yes men. On the other hand, he is the driving force in this business. You know, we've learned, for example, that there are employees operating without talking to him, which, you know, has to be something that he's not happy about. There was a lawyer operating for FTX U.S. who was putting out a memo to employees. And then the board told the lawyer to take the memo down. So there are forces operating inside maybe against Sam bankman freed's better wishes. Okay, here's what we're going to do. We're doing this in real time folks, which is what we love to do. It's surveillance. We're going to come back pretty Gupta is going to tell you about the market. We're going to move on here into the equity market opening at red and green on the screen. NASDAQ critically pulls back here on this FTX news. That's why we're going to stay. On this. And I do want to point out Bitcoin 16,600 was done $1200 moments ago. That's about an $800 move off these headlines. Again, FTX group says mister bankman fried is resigned as the chief executive officer. The FTX group says it is quote commenced bankruptcy proceedings
Techmeme Ride Home
"mister bankman" Discussed on Techmeme Ride Home
"As the entire crypto sector continues to get rocked. I'd love to tell you what's going on with Twitter's whole check mark saga, but I don't know. Elon doesn't know and frankly, by the time you hear this, it's likely to have changed anyway. GitHub is getting into the voice assistant game and Amazon becomes the first company to lose a $1 trillion in valuation. Here's what you missed today in the world of tech. Welp, binance has abandoned its rescue acquisition offer for FTX after apparently reviewing FTX finances saying the issues with FTX were beyond their ability to help. Quoting The Wall Street Journal. Binance chose not to go ahead with the non binding offer following a review of the company's finances, the exchange said, quote, in the beginning, our hope was to be able to support FTX customers to provide liquidity. But the issues are beyond our control or ability to help binance said in a statement. And internal FTX slack channel, Sam bankman freed on Wednesday, wrote quote, we obviously just saw binance's statement. They relayed that to the media first, not to us, and had not previously informed us or expressed those reservations. According to a copy of the message reviewed by The Wall Street Journal, mister bankman fried wrote that he was working on next steps and doing what he could to protect customers employees and investors. I'm deeply sorry that we got into this place. And for my role in it, that's on me. And me alone and it sucks, and I'm sorry, not that that makes it any better. End quote. Besides, the firm and mister bankman fried well-known institutions that invested in the exchange are on the hook for potentially big losses among investors in a $900 million fundraising last year where SoftBank Sequoia, hedge fund third point and tech oriented private equity firm tomo bravo. In a letter to its investors late Wednesday, Sequoia said it is writing off the $150 million that one of its funds invested in FTX because of solvency risk for the crypto company. The full nature and extent of this risk is not known at this time. The letter said, based on our current understanding, we are marking our investment down to $0. Shares in coinbase global fell almost 10%, despite assurances from its chief executive on Twitter, that the company has sufficient assets for customer withdrawals and doesn't have any material exposure to FTX. Coinbase closed at its lowest level since going public last year when it fetched in $85 billion valuation. Its market value, Wednesday, was around $10 billion. Shares of silvergate capital, the closest U.S. bank to the crypto world dropped 12% and have shed some 75% of their value this year. Shares of micro strategy, which pivoted from business software to largely a buy and hold vehicle for Bitcoin. Fell nearly 20%. Brokerage app Robinhood markets, which offers trading in more than just crypto, was burned by fears that one of its biggest shareholders, mister bankman freed, would have to dump his shares. Robinhood shares dropped nearly 14% on Wednesday, bringing losses for the week to more than 30%. I've also seen more fear in crypto folks than I've seen in years over the last 24 hours. Folks are keeping an eye on tether, watching if it can hold its dollar peg. If tether were to buckle, whoo. Katie bar the door. And just as I've been writing this, Sam bankman fried broke his silence on Twitter with a thread, apologizing, saying he effed up, claiming his priority is doing right by users and saying he plans to raise funds and shutter Alameda over the coming days. We'll see.