SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX
"We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto," said SEC Chair Gary Gensler. "The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws. Compliance protects both those who invest on and those who invest in crypto platforms with time-tested safeguards, such as properly protecting customer funds and separating conflicting lines of business. It also shines a light into trading platform conduct for both investors through disclosure and regulators through examination authority. To those platforms that don’t comply with our securities laws, the SEC’s Enforcement Division is ready to take action."
Considering that FTX went through 3 rounds of funding, I still have the unanswered question as to why these investors did not demand a known and respected CFO!? It still smells as if they knew he was a goof and played along for precisely this outcome. How self-aware SBF was - or is - cannot as yet be established.
You may also wish to read this summary: For SBF and FTX, the fraud started from day one. That and other revelations from the SEC.
Or, perhaps more amusingly, this disclaimer at the end of the article:
Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.
Note that the SEC case makes little reference to crypto itself and could easily be any other financial fraud using the same lack of safeguards. This is a LOT easier than trying to define crypto as a security, as in the Ripple case.
The Securities and Exchange Commission today charged Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading Ltd. (FTX), the crypto trading platform of which he was the CEO and co-founder. Investigations as to other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.
I remain of the opinion to not fall for the fall-guy.
FTX’s legal team claimed that the Bahamas authority worked with SBF to mint FTX tokens worth millions of dollars, which were transferred to the government on Nov. 12.
The lawyers added that SBF had promised Bahamas Attorney General Ryan Pinder that he would allow local customers to withdraw their funds. As a result, about 1,500 “Bahamians” reportedly withdrew over $100 million, after the exchange filed for bankruptcy.
SBF allegedly worked with Bahamas government to mint millions of FTX tokens
The joys of offshore havens.
Do the "Bahamians" perhaps include some of the investors in FTX securities?
FTX an ‘old-fashioned embezzlement’ says new CEO as US authorities charge Bankman-Fried with fraud
So, he was jailed for his own protection.
there is still this myth of trying to find "assets". As the FTX valuation is based on a hugely inflated price of FTT, that has since fallen some 97%... there are no "assets" apart from other coins - and all the money stolen (or donated), of course.
...that might be a lesson they will learn when they had a deeper knowledge of what they are talking about, most of those guys don´t have the most minimum clue what this is all about ;)
But that ignorance inflates the myth!
I've been managing tokens for some 5 years - I know the difference between what Hive-Engine calculates and what the funds are actually worth. Takes one second to create $1m from thin air - then I could burn them - and then "lose" $1m... but what has actually been lost? nothing
Or, if I swap them for another token, then both tokens tank, what has been lost?
One important thing is to separate one's native token held as minted but not active from the same token that is actually part of the fund and hence has value. That isn't hard for a physics grad! lmao
When it rains, it pours.
https://www.documentcloud.org/documents/23450344-unsealed-indictment-in-us-v-bankman-fried-22-cr-673-abrams-as-sam-bankman-fried-of-ftx-heads-to-sdny-echoes-of-onecoin-and-un-bribery-cases
This is on top of the SEC charges!
smile :-D