Crypto tycoon Sam Bankman-Fried found guilty on all charges in fraud trial
Nov03

Crypto tycoon Sam Bankman-Fried found guilty on all charges in fraud trial

Former crypto tycoon Sam Bankman-Fried has been found guilty on all charges after orchestrating what authorities have described as one of the biggest financial frauds in US history. A jury convicted Bankman-Fried, the founder of cryptocurrency exchange FTX, on seven counts of fraud, embezzlement and criminal conspiracy after over four hours of deliberations. Prosecutors accused Bankman-Fried, once the poster boy for virtual currencies, of stealing about $10bn, using customers’ funds to make risky investments, buy property and fund political campaigns. The crypto entrepreneur, 31, now faces up to 110 years behind bars. The verdict, following a month-long trial, comes almost a year after FTX filed for bankruptcy in a spectacular collapse that stunned financial markets and wiped out his estimated $26bn personal fortune. During his trial, Bankman-Fried admitted to making mistakes in his running of FTX, which enjoyed endorsements from celebrities including Tom Brady and Larry David, but denied ever setting out to steal from customers. In a risky move, Bankman-Fried testified in his own defence after three of his former fellow top executives pleaded guilty to fraud and testified against him. Prosecutors argued that the Massachusetts Institute of Technology graduate had been consumed by greed and had the “arrogance to think that he could get away with a fraud”. “He didn’t bargain for his three loyal deputies taking that stand and telling you the truth: that he was the one with the plan, the motive and the greed to raid FTX customer deposits – billions and billions of dollars […]

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FTX founder Bankman-Fried headed to jail after judge revokes bail
Nov02

FTX founder Bankman-Fried headed to jail after judge revokes bail

A US judge has revoked Sam Bankman-Fried’s bail after finding probable cause that the indicted founder of the bankrupt FTX cryptocurrency exchange tampered with witnesses at least twice. United States District Judge Lewis Kaplan announced the decision on Friday at a hearing over Bankman-Fried’s bail conditions in federal court in Manhattan, less than two months before the scheduled October fraud trial. He rejected a defence request to delay Bankman-Fried’s detention pending appeal of the bail revocation. The decision could complicate Bankman-Fried’s efforts to prepare for trial. The 31-year-old former billionaire faces charges of having stolen billions of dollars in FTX customer funds to plug losses at his Alameda Research hedge fund. Bankman-Fried, who has pleaded not guilty, had been largely confined to his parents’ Palo Alto, California, home on $250m bond since his December arrest. He was led out of the courtroom by members of the US Marshals Service in handcuffs after removing his shoelaces, jacket and tie and emptying his pockets. His parents, both law professors at Stanford University, were present in the courtroom. His mother, Barbara Fried, nodded to him in tears as he left. His father, Joseph Bankman, placed his hand over his heart as he watched his son be led away. Prosecutors first made their request to jail the former billionaire in a July 26 hearing, saying he “crossed a line” by sharing former romantic partner Caroline Ellison’s personal writings with a New York Times reporter. Ellison was chief executive of Alameda Research. As part of Bankman-Fried’s […]

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Bankman-Fried heads to Brooklyn jail notorious for poor conditions
Nov02

Bankman-Fried heads to Brooklyn jail notorious for poor conditions

Sam Bankman-Fried will prepare for his fraud trial from a Brooklyn jail where inmates ranging from convicted sex trafficker Ghislaine Maxwell to Honduras’s former president have complained of subpar conditions. US District Judge Lewis Kaplan in Manhattan ruled on Friday that Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, must be jailed for tampering with witnesses while free on a $250m bond at his parents’ home in Palo Alto, California. Bankman-Fried, who has pleaded not guilty to fraud charges over FTX’s collapse, will now be housed before his October 2 trial in Brooklyn’s Metropolitan Detention Center (MDC), a far cry from the luxurious Bahamas resort where he lived until his December 2022 arrest and extradition to the United States. In recent years, MDC has been plagued by persistent staffing shortages, power outages and maggots in inmates’ food. Earlier this year, a guard pleaded guilty to accepting bribes to smuggle in drugs. Public defenders have called conditions “inhumane”. In the winter of 2019, an electrical fire cut off the jail’s lighting and heat for days as temperatures fell to near minus 18 Celsius (zero Fahrenheit). Lawyers for Maxwell, who was convicted of recruiting and grooming teenage girls for abuse by the late financier and sex offender Jeffrey Epstein, said raw sewage seeped into her MDC cell. Her attorneys compared the “reprehensible and utterly inappropriate” conditions there to Hannibal Lecter’s incarceration in the 1991 movie The Silence of the Lambs, “despite the absence of the cage and plastic face guard”. They also […]

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Bankman-Fried slapped with new charges of using stolen funds for politics
Nov02

Bankman-Fried slapped with new charges of using stolen funds for politics

Sam Bankman-Fried used stolen customer funds to make more than $100m in political campaign contributions ahead of the 2022 United States midterm elections, federal US prosecutors said on Monday in a new indictment filed against the FTX cryptocurrency exchange’s founder. The indictment charges the 31-year-old former billionaire with seven counts of conspiracy and fraud over the collapse of the exchange. He has previously pleaded not guilty to charges of stealing billions in FTX customer funds to plug losses at Alameda Research, his crypto-focused hedge fund. Mark Botnick, a spokesman for Bankman-Fried, declined to comment. Bankman-Fried rode a boom in cryptocurrency values to amass a net worth estimated at $26bn and became an influential donor to mostly Democratic candidates and causes. But the November 2022 collapse of FTX – after a flurry of customer withdrawals due to concerns about the commingling of FTX and Alameda funds – decimated both his wealth and reputation. In the superseding indictment filed on Monday, the US Attorney’s Office in Manhattan said Bankman-Fried directed other FTX executives to make donations to evade contribution limits as part of a push for crypto-friendly regulation. A superseding indictment amends and replaces the original document and lists the formal charges against the defendant. “He leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow,” the indictment read. Prosecutors initially charged him with violating US campaign finance laws but […]

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Hong Kong bets on crypto as sector’s star dims over crackdowns overseas
Nov02

Hong Kong bets on crypto as sector’s star dims over crackdowns overseas

Hong Kong, China – Cryptocurrencies have had a rough ride in recent years, with prices spiralling through periods of boom and bust and the industry threatened by stunning downfalls as well as uncertain regulatory regimes. But even as these troubles have led some jurisdictions to crack down on the sector, Hong Kong is embracing virtual assets, betting that a new regulatory framework will help the city avoid the stumbles seen elsewhere. Hong Kong officials have acknowledged that cryptocurrencies are here to stay and that the semi-autonomous Chinese territory must welcome the industry to keep its status as a global financial hub, which has been tarnished by years of tough COVID restrictions and a sweeping crackdown on dissent. Earlier this month, authorities issued licences granting two cryptocurrency exchanges approval to engage in retail trading of digital assets for the first time. HashKey Exchange and OSL secured regulatory approval after Hong Kong’s Securities and Futures Commission (SFC) opened applications for licensing mom-and-pop investing in June. “We are not aiming to be a crypto trading hub but we recognise crypto trading as an important part of the virtual asset ecosystem,” Julia Leung, SFC chief executive officer, said in a speech in June. Leung emphasised that a well-balanced regulatory system was crucial to building trust in the industry. “Up to now, many jurisdictions have adopted a light-touch approach to regulating crypto asset service providers,” she said, adding that “the ‘crypto winter’ has strengthened the resolve of global financial regulators”. Hong Kong has for decades […]

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FTX’s Sam Bankman-Fried ‘subsisting on bread and water’ in jail: lawyer
Nov02

FTX’s Sam Bankman-Fried ‘subsisting on bread and water’ in jail: lawyer

FTX cryptocurrency exchange founder Sam Bankman-Fried is “subsisting on bread and water” because the federal jail where he is being held in advance of his fraud trial has not provided him with a vegan diet as he requested, his lawyer said on Tuesday. Bankman-Fried, 31, pleaded not guilty in Manhattan federal court to seven criminal charges contained in a new indictment during a hearing before United States Magistrate Judge Sarah Netburn. His lawyer, Mark Cohen, told Netburn during the hearing that a lack of adequate food and medication provided at Brooklyn’s Metropolitan Detention Center was hampering Bankman-Fried’s ability to prepare for his scheduled October trial. The former billionaire was led into court wearing leg restraints and a beige-coloured uniform for his first appearance since his bail was revoked on August 11 by District Judge Lewis Kaplan, who found that Bankman-Fried had tampered with witnesses at least twice. “Not guilty,” Bankman-Fried told Netburn in entering his plea. After the hearing, Bankman-Fried spoke to his mother, Stanford Law School professor Barbara Fried, across the low partition between the courtroom well and the gallery. The new indictment, returned on August 14, charged Bankman-Fried with seven counts of fraud and conspiracy over the November 2022 collapse of FTX, which is now in bankruptcy. Prosecutors accused him of stealing billions of dollars in FTX customer funds to plug losses at his hedge fund, Alameda Research. Bankman-Fried has acknowledged inadequate risk management at FTX, but has denied stealing customer funds. The indictment no longer charges Bankman-Fried […]

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