Sam Bankman-Fried, FTX’s founder, is currently in the hands of the authorities

Sam Bankman-Fried, the Founder of the FTX Future Fund and the CEO of Alameda Research, has not been charged

Bankman-Fried, who became a pariah overnight last month as his company went bankrupt and left at least a million people unable to access their money, has not been charged.

Sam Bankman- Fried lied to investors about his house of cards being one of the safest buildings in cryptocurrencies, according to the chair of the S.E.C. The agency charged a man with defrauding investors in FTX of almost $2 billion, with $1 billion from U.S. entities. It claims that backers of FTX were kept in the dark over the diversion of funds to the exchange’s trading affiliate.

The details of Bankman-Fried’s alleged fraud will likely take months, and potentially even longer, to disentangle. But the broader story is relatively straightforward, and familiar: He allegedly spent years defrauding unsuspecting investors of gargantuan sums of money, and then allegedly used that money to not only bankroll his lavish lifestyle, but to set up tens of millions of dollars in illegal campaign contributions.

The staff of the FTX Future Fund quit on Thursday, saying they had committed $160 million in grants. The five-person team wrote that they have fundamental doubts about the legitimacy and integrity of the business operations that were funding the FTX Foundation.

They said a large portion of the total was gone. One source put the missing amount at about $1.7 billion. The other person said the gap was between $1 billion and $2 billion.

FTX investments were written down by a venture capital fund. Blockfi paused client withdrawals Friday after FTX was declared bankrupt. The Singapore-based exchange Crypto.com saw withdrawals increase this weekend for internal reasons but some of the action could be attributed to raw nerves from FTX.

Bankman-Fried, prior to his arrest in the Bahamas earlier this month, had sought to portray himself as a hapless entrepreneur who got out over his skis. He repeatedly apologized to customers and to FTX staff, saying he “f—ed up,” while denying that he knowingly defrauded anyone.

The fraud came to light after a blockbuster coinDesk article reported Alameda Research’s balance sheet consisted mostly of the FTT token, which kicked off a series of events that ended in FTX’s bankruptcy. Ellison said that Alameda would buy $22 a token and Changpeng Zhao said he would sell his FTT holdings.

Bankman-Fried met with executives in Nassau to figure out how much of FTX’s shortfall he needed from other sources, according to people with knowledge of FTX’s finances.

The documents show that Alameda had between $1 billion and 2 billion of funds that were not accounted for. The sources said they don’t know what the money went to, since spreadsheets didn’t indicate where it was moved.

They said the “backdoor” allowed Bankman-Fried to execute commands that could alter the company’s financial records without alerting other people, including external auditors. The set-up meant that there were no red flags about the $10 billion in funds moving to Alameda.

The Securities and Exchange Commission is looking into how FTX.com handles customer funds and other activities, according to a source with knowledge of the inquiry. The Department of Justice and the Commodity Futures Trading Commission are also investigating, the source said.

The crisis has sent reverberations through the crypto world, with the price of major coins plummeting. The failure of FTX is drawing comparisons to other major business collapses.

FTX said Friday that it had handed control of the company to John J. Ray III, who was the restructuring specialist who oversaw the insolvency of Enron Corp.

Swan Bitcoin: A Conversation with Cory Klippsten, CEO of Swan Bitcoin, and the First Twelfth Century Partner of Sequoia

Bankman-Fried told the paper in a statement that he was not aware of market manipulation and never intended to engage in it.

“I care because it’s retail investors who suffer the most, and because too many people still wrongly associate bitcoin with the scammy ‘crypto’ space,” said Cory Klippsten, CEO of Swan Bitcoin, who for months raised concerns about FTX’s business model. He is a firm believer in the benefits of bitcoins but also has doubts about other parts of the universe.

The meeting with Bankman-Fried is most likely to be described as speaking to the world’s first trillionaire. Several of the partners of Sequoia became enthusiastic about Bankman-Fried after attending a meeting. After several more meetings, Sequoia decided to invest in the company.

“I don’t know how I know, I just do. SBF is a winner,” wrote Adam Fisher, a business journalist who wrote a profile of Bankman-Fried for the firm, referring to Bankman-Fried by his popular online moniker. An article was removed from the website.

“Obviously, not all of the investments in this early stage asset class perform to expectations,” said the Ontario Teachers’ Pension Fund in a terse statement.

A Conversation with Tom Brady about the Bankman-Fried King of Cryptography and the Fossil Money of Bill Clinton and the Football Star Tom Brady

When Bankman-Fried bought up the assets of bankrupt crypto firm Voyager Digital, it gave them a sense of relief, as their assets have been frozen since their own failure. That rescue is now in question.

As king of crypto, his influence was starting to pour into political and popular culture. FTX bought naming rights to an arena in Miami, as well as sports sponsorships with Formula Racing. Bill Clinton, who donated tens of millions of dollars to Democrats, was invited to speak at FTX conferences and he pledged a $1 billion donation to Democrats. Football star Tom Brady invested in FTX.

“Charming regulators and investors can distract [them] from digging in and seeing what’s really going on,” Bair, who chaired the Federal Deposit Insurance Corp. from 2006 to 2011, said in a phone interview on Monday. It felt like the same thing as Mr. Madoff.

Bair notes that 30-year-old Bankman-Fried, like Madoff, proved adept at using his pedigree and connections to seduce sophisticated investors and regulators into missing “red flags” hiding in plain sight.

Long before his Ponzi scheme collapsed, Madoff was known as a wizard on Wall Street. He was the former chairman of the Nasdaq Stock Market, served on Securities and Exchange Commission advisory panels and managed money for the rich and the famous.

Sam Bankman-Fried, the founder and CEO of the cryptocurrency exchange FTX, pleads not guilty to eight criminal charges at his arraignment on Tuesday

Dennis Kelleher, the CEO of Better Markets stated in statement on Monday that FTX had a strategy to “use their knowledge, influence and access at the agency and in Washington to move their agenda.”

If your peers invest in venture capital and you do, too, then you get this herd mentality. And that adds credibility with Washington policymakers. It all feeds on itself,” said Bair, who sits on the board of directors at Paxos, a blockchain infrastructure company (Bair said she was speaking for herself, not Paxos).

The track record of the Ponzi scheme that was offered to investors was amazing, with returns that were remarkably consistent and an amazing track record that later proved to be easy to execute.

The good news is the former FDIC chair is not worried about the FTX implosion threatening the entire financial system the way Lehman Brothers did in 2008. The broader economy and financial market are made up of fewer than 100 million people.

Sam Bankman-Fried, the disgraced co-founder and former CEO of the cryptocurrency exchange FTX, pleaded not guilty to eight criminal charges at his arraignment on Tuesday.

“You must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and wiped out billions of dollars owed to over a million creditors,” the senators wrote.

The House Financial Service Committee was going to hold a hearing about the FTX debacle today, but it was canceled because of the fact that Bankman- Fried has never talked under oath about it. Waters said she was surprised to learn of the arrest. “The public has been waiting eagerly to get these answers under oath before Congress,” she wrote, “and the timing of this arrest denies the public this opportunity.”

“There are still significant unanswered questions about how client funds were misappropriated, how clients were blocked from withdrawing their own money, and how you orchestrated a cover up.”

The Federal Reserve, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency were all given letters by Sen. Elizabeth Warren of Massachusetts and Tina Smith of Minnesota requesting a study of the banking system’s exposure to turmoil in the virtual world.

“Crypto firms may have closer ties to the banking system than previously understood,” Warren and Smith wrote. “Banks’ relationships with crypto firms raise questions about the safety and soundness of our banking system and highlight potential loopholes that crypto firms may try to exploit to gain further access.”

Samuel Bankman-Fried is in the Bahamas and isn’t a member of the FTX Customer Recommendation Team

Bankman-Fried is in the Bahamas and was arrested last week. He was arraigned Tuesday, and a Bahamian judge denied his request for bail, saying that he posed a flight risk. His extradition to the United States could take weeks.

“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US government, based on a sealed indictment filed by the SDNY,” wrote US attorney Damian Williams. “We expect to move to unseal the indictment in the morning and will have more to say at that time.”

The United States’ extradition treaty with the Bahamas allows US prosecutors to return defendants to American soil if the charges would be considered punishable by imprisonment of at least a year in both jurisdictions.

“I didn’t knowingly commit fraud,” he told the BBC over the weekend. “I didn’t want any of this to happen. I was not as good a person as I thought I was.

I am disappointed that we won’t hear from Mr. Bankman-Fried tomorrow, but we will still get to the truth of what happened,” Waters said.

Bankman-Fried told DealBook that there was no person who was solely in charge of customers on FTX. “And that feels pretty embarrassing in retrospect.”

Bankman-Fried has denied knowledge of any such backdoor. He said in an interview that he did not know how to code.

Sam Bankman-Fried, US Attorney for the South District of New York, and John J. Ray III, testified before the Senate Banking Committee in the wake of his arrest

The US attorney for the southern district of NY said on Monday that the arrest was made at the request of the U.S. government.

In a statement, the prime minister of the Bahamas stressed the country is cooperating with law enforcement and regulators in the United States, but its own “regulatory and criminal investigations into the collapse of FTX continue.”

Bankman-Fried resigned hours before the bankruptcy filing and has spent the last month on a charm campaign, painting himself as a guy who let things slide and didn’t intentionally commit fraud in a variety of media interviews and even on Twitter Spaces.

Bankman-Fried was listed as a witness in the committee’s notice of the hearing, along with John Ray, the CEO of FTX.

The SEC said that Sam Bankman- Fried built a house of cards on a foundation of deception, and told investors it was one of the safest buildings in digital currency.

Bankman-Fried apologized for his mistake during an appearance at the New York Times DealBook Summit. I would do anything to accomplish this.

In a Tuesday press conference the US attorney Damian Williams said that the SBF contributions were funded by the stolen customer money and that they were hidden to look as if they were coming from wealthy co-conspirators.

SBF is accused of telling investors that FTX was a good place to put their money because of an automated risk engine that would sell off customers assets to make sure they stayed at the required levels.

Other charges may follow, but these are the ones he’s facing so far, and that’s just from the SEC — its announcement notes other charges are being filed today by the US Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission (CFTC).

He was due to testify remotely today before the House Financial Services Committee, after his arrest, and had continued his ongoing postbankruptcy-filing media tour of social media with at least two live appearances on Monday. John J. Ray III will testify at the hearing, which is scheduled to begin at 10AM.

The arrest has sparked jubilation in crypto circles, after some nail-biting over his ostensibly generous treatment by “mainstream media” and speculation (by Twitter CEO Elon Musk, no less) that his political donations may earn him a free pass of sorts with US law enforcement.

FTX, Bankman-Fried vs Alameda: A civil suit against the SEC and CFTC in the case of old-fashioned embezzlement

Ray described the situation at the two companies as “old-fashioned embezzlement” at the hands of a small group of “grossly inexperienced and unsophisticated individuals.”

Wang and Ellison are details on one of the civil suits the SEC andCFTC has filed. “Wang, with Ellison’s knowledge and consent, exempted Alameda from the risk mitigation measures” FTX used, providing Alameda Research with a “virtually unlimited ‘line of credit,’” according to the updated SEC complaint.

“Between 2019 and 2022, as part of my employment at FTX, I was directed to and agreed to make certain changes to the platform’s code,” Wang said in court. Those changes gave Alameda Research special privileges on the FTX platform. I did so knowing that others were representing to investors and customers that Alameda had no such special privileges and people were likely investing in and using FTX based in part on those misrepresentations.”

The role of both Bankman-Fried and Alameda in the day to day operations of the companies could be false, as evidenced by the argument made by the CFTC.

According to the complaint, both teams shared office space, as well as technology, hardware, and intellectual property.

Ray stated that the crimes at Enron were well- planned financial machinations to keep their transactions off balance sheets. FTX was not sophisticated at all.

Why the Bankman-Fried Indictment was a Succession of a Ponzi Scheme: A Case Study in American Kleptocracy

The federal judge Thursday said Bankman-Fried would be arraigned on eight criminal counts including fraud and conspiracy at an unspecified future date.

There are still many unanswered questions about the case. But the fact that prosecutors put together an eight-count, 14-page indictment just four weeks after FTX filed for bankruptcy suggests prosecutors may have an ace in the hole, and/or a preponderance of evidence against the company. (The SDNY are an aggressive people, but they are not sloppy, and they don’t indict without a solid case.)

Several lawyers not involved in the case have told me that the speed of Bankman-Fried’s arrest signals that former FTX employees may be aiding prosecutors.

One or more of them would most likely have rushed to become a cooperator in order to get a more favorable treatment in exchange for help with the SEC’s investigation. He pointed out that the fact that one person has been arrested would indicate this as well.

Editor’s Note: Casey Michel is a writer and investigative journalist covering kleptocracy and dark money networks across the globe. He is the author of “American Kleptocracy: How the US Created the World’s Greatest Money Laundering Scheme in History,” and is at work on a book investigating foreign lobbying in Washington, DC. The opinions expressed in the article are of his own. CNN has more opinion.

In some ways, these kinds of cases, many of which resemble traditional Ponzi schemes, are as old as American capitalism itself. They almost always pair a lack of regulation and oversight with promises of easy wealth schemes, all predicated on some kind of proprietary technology that seems to generate returns out of thin air.

The same story is repeated over and over in American history. The Panic of 1873 caused a great crash of the American economy, as speculative investors without oversight in the railroad industry wreaked havoc.

Bankman-Fried’s appearance at a US attorney’s court in the early morning hours of his release from the Metropolitan Detention Center

It remains unclear what time Bankman-Fried will appear in court. If he waives his extradition, he would likely return to the United States quickly. Once he is in the states, he will appear before a US judge for a bail hearing.

Ellison has been charged with seven criminal counts, including conspiracy to commit wire fraud and money laundering. She and Bankman-Fried were close business associates who briefly dated.

The 30-year-old appeared to be holding a plastic bag of personal belongings during the hearing. Bankman-Fried told the officer that his address was a little unclear.

In the week and a half since his arrest in the Bahamas, the Bankman-Fried has been held in a prison that US officials have described overcrowded, dirty and lacking medical care. Its cells are often crowded and are located in dirty areas.

Prosecutors and attorneys for Bankman-Fried are discussing an arrangement for his release, with conditions, that would enable the failed crypto entrepreneur to avoid spending time at the Metropolitan Detention Center. The MDC is a pre-trial holding facility that former inmates and rights advocates have described as inhumane, citing frequent lockdowns, overcrowding and power outages that have left it without heat in the middle of winter.

Yesterday, Bankman-Fried was still on his way back to the US after being extradited by the Bahamas when a US attorney announced that Caroline Ellison, who was the CEO of SBF’s crypto trading firm Almeda Research, and Gary Wang, the co-founder and former CTO of FTX, had pleaded guilty to federal charges, and are cooperating with prosecutors. Now the DOJ has unsealed their guilty pleas and charges — which they submitted a few days ago on the 19th but were held until SBFs extradition had been secured — while redacting certain information.

Several hours before Ms. Ellison was due to appear in the court, Mr. Wang entered his plea. Mr. Wang told Judge Abrams that he knew what he “was doing was wrong,” according to a transcript of the proceeding, which also was unsealed on Friday.

In May, when the price of crypto began to crater, the lenders wanted their money back. Bankman- Fried told them to send customer deposits to the lender. Ellison used the money to pay his debts.

In response to a staff question, “Ellison also acknowledged that her November 6 tweet to the Binance CEO offering to buy his FTT holdings at $22 per token was ‘kind of a misleading thing to tweet’ and expressed remorse,” according to the CFTC complaint. The staff resigned after that.

These uses weren’t authorized by customers, as the CFTC suit makes clear. It echoes the SEC suit about Alameda using customer funds in questionable ways. Indeed, FTX’s terms of service explicitly forbid this kind of thing, the CFTC suit says. The executives were aware that it was important to keep customer assets safe and that they were separate from other funds, which is crucial for proving fraud charges.

Alameda Bankman-Fried used his personal piggybank to buy luxury condominiums, support political campaigns, and make private investments.

Ms Ellison and Mr. Wang differed from Mr. Bankman-Fried. While Mr. Bankman-Fried has said repeatedly — including at the DealBook Summit last month — that he wasn’t aware of what was happening at Alameda, the exchange’s trading affiliate, documents filed yesterday by the authorities claim otherwise.

The judge said that Bankman-Fried would be charged with stealing billions of dollars from customers of his platform at a future date.

Bankman-Fried was escorted into the courtroom by a US Marshal, wearing a navy suit jacket and white button-down shirt. He was walking to his defense table when he could hear the sound of his shackles clanking.

During the hearing, Bankman-Fried asked if he understood the consequences of skipping out on bail, to which the court replied “Yes, I do.”

Other bail conditions include mental health treatment, surrender of any firearms, and prohibitions against opening any new lines of credit, businesses, or engaging in transactions over $1,000 without the government approval.

The Alameda hedge fund CEO apologized to a New York federal judge for stealing millionss of dollars from banks and repaying loans

The testimony of other employees of the company and the use of ciphertexts are part of the evidence against Bankman-Fried.

For now, the 30-year-old, whose net worth had been calculated to be in the billions until recently, will live in San Francisco with his parents, well-known law professors at Stanford, while wearing an electronic monitoring device. SBF is scheduled to appear in person at his next hearing on the afternoon of January 3rd in New York City.

We didn’t see any mention of any restriction from using computers or the internet, but now that charges have been filed, it would be even more shocking if SBF’s Zoom and Twitter Spaces-powered media tour continues.

According to a report in Newsweek, the former CEO of the Alameda hedge fund apologized to a New York federal judge for stealing billions of dollars from customers of Bankman-Fried’s FTX exchange and attempting to cover it up.

GARY WANG, 29, is charged with and has pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit commodities fraud, which carries a maximum sentence of five years in prison; and one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.

“I agreed with others to borrow several billion dollars from FTX to repay those loans,” Ms. Ellison told Judge Ronnie Abrams of the U.S. District Court for the Southern District of New York.

From July through October, she told the court, Ellison agreed with Bankman-Fried and others to provide “materially misleading financial statements to Alameda’s lenders,” and prepared balance sheets that concealed the extent of Alameda’s borrowing, according to transcripts from plea hearings held on December 19 and recently unsealed.

Ellison and Wang are cooperating with the federal prosecutors, who have denied intentionally defrauding customers and investors.

Bankman-Fried flew from California to New York to enter his plea in person during a court hearing at the U.S. District Court for the Southern District in Lower Manhattan.

Bankman-Fried was released on a bond of $250 million and is confined to his parents home in Palo Alto, California.

The once high-flying crypto executive is facing up to 115 years in prison over charges stemming from the spectacular collapse of FTX in November. The charges include lying to investors and taking billions of dollars of his customers’ money for his own personal use.

BlockFi is suing Bankman-Fried for the Robinhood shares, which BlockFi claims it is owed after Alameda defaulted on $680 million in collateralized loan obligations.

Sam Bankman-Fried, a Stanford law professor, is a guarantors of an online cryptocurrency broker

We don’t have many information that you guys don’t have. We’re just watching this unfold and … it’s going to be locked up in bankruptcy proceedings, most likely for some time.”

The implosion of Cryptocurrencies has been a disaster for the company. In April the company cut 9% of its employees and in August 23% of them were laid off. The stock of the online broker has plummeted due to lack of trading.

Kramer and Paepcke signed bonds worth $500,000 and $200,000, respectively. Bankman-Fried’s parents, both Stanford law professors, are also guarantors, and used their Palo Alto, California, home to secure the bond.

“It is common for defendants to do this,” said Christine Chung, a professor at Albany Law School. “After a not guilty plea, you can get a better idea of the evidence the government has collected in its investigation by going to the discovery process.”

Sam Bankman-Fried is likely to be the main instigator of the fraud and so he probably wasn’t offered a deal. He had no incentive to plead guilty and would attempt to get a more favorable sentence than was being offered at the beginning of the case.

A federal judge released the names of two people who co-signed Sam Bankman-Fried’s $250 million bail deal, which allowed him to be released on house arrest while he awaits trial on federal fraud and conspiracy charges.

The court revealed in documents made public Wednesday that the former dean of the law school and the computer scientist had signed on as guarantors.

During the past two years, my family faced a harrowing battle with cancer, but they were the truest of friends, and we wanted to support them as they faced their own crisis.

Sam Bankman-Fried, the FTX General Counsel, has pleaded guilty to multiple wiretap and wiretap counts in the Digital Private Network’ trial

Federal prosecutors on Wednesday asked the judge to significantly restrict Bankman-Fried’s use of cellphones, computers and the internet after they alleged he found “loopholes” in his bail conditions.

Prosecutors said in a letter to the judge that there is a record of a person who appears to circumvent monitoring and find loopholes in existing bail conditions.

Kaplan was concerned that Bankman-Fried’s use of any device or application that could be unlocked or had auto- deletion functions could violate the law.

Bankman-Fried will only use a VPNs to access a database that he wants to use in his defense. When using the VPN, lawyers will have to send someone from their firm to supervise him. That person will “remain with Mr. Bankman-Fried while he uses the laptop, and take back the laptop and remove it from the residence when he is finished,” Kaplan wrote.

Lawyers for Sam Bankman-Fried agreed to pay for a security expert to help the federal judge overseeing his fraud case navigate technology issues as they seek to keep the FTX founder out of jail before his trial.

The judge has been grappling with finding a balance to allow Bankman-Fried access to communication channels so he can prepare his defense against the potential misuse of those apps or VPNs. Bankman-Fried entered a not guilty plea to multiple fraud charges.

After the judge said he wanted to limit the use of electronic devices, the ex-general counsel of FTX reached out to the digital nomad and used a virtual private network.

He has gone to great lengths to defend himself in the public eye despite being charged with orchestrating one of the largest financial frauds in history and facing the risk of spending his life in prison.

“Shut Up, and Let Us Talk,” said Mermelstein, the prosecutor of Bankman-Fried’s bankruptcy fraud

“If you asked every white-collar lawyer to shut up, they’d reply, ‘Shut up, and let us talk,'” says Rebecca Mermelstein.

Bankman-Fried left behind a trail of communication, which some are already coming back to haunt him.

“All my Republican donations were not up to par,” he said. The reason was not related to regulatory reasons. If you donate to a Republican, the reporters are going to freak out. They’re all super liberal, and I didn’t want to have that fight. So, I made all the Republican ones dark.”

Federal prosecutors made new details about their case against Bankman-Fried when they unveiled four additional charges on Thursday.

The comments from that interview were cited in the newest indictment as part of the evidence for the charge of “unlawful political contributions.”

Source: https://www.npr.org/2023/02/26/1157528598/ftx-crypto-sam-bankman-fried-bankruptcy-fraud-criminal-charges

FTX CEO Martin Bankman-Fried: “Pharma Bro” Martin Shkreli and the “Disgraced” Tom Brady

They say that they want to use each other as a source of resources, or at least vet things with each other in a way that is constructive. I’d like to chat on the phone soon.

Although Bankman-Fried has not made a public comment since Jan. 19, lawyers who have dealt with prominent white-collar defendants warn that it can be a challenge to keep them quiet for long, especially if they are accustomed to living in the spotlight.

That’s a potential problem for Bankman-Fried, who hobnobbed with people like former President Clinton and former quarterback Tom Brady at the height of his popularity.

Former US Attorney Barbara McQuade says that she has seen politicians struggle with the temptation to talk.

“‘If I could just talk to you for a long time, I can explain it all away,'” she thinks of a person thinking. “‘And I can tell you that I was doing was perfectly legitimate.'”

The former CEO of FTX tried to maintain that he’s not a bad guy in public, by saying that he did not intend to spark losses for FTX customers.

George Stephanopoulos asked if it was right for people to compare Bankman-Fried to a man who had fleeced billions of dollars from clients around the world.

“I don’t think that’s who I am at all,” Bankman-Fried replied. I understand why they’re saying that. People lost a lot of money.

Bankman-Fried may not believe he is like Madoff, but he reminds lawyers of another young, disgraced CEO who couldn’t keep quiet before his trial: “Pharma Bro” Martin Shkreli.

He first sparked controversy after his company bought the rights to a drug used to treat people with compromised immune systems, and then spiked the price dramatically.

He did interviews against his lawyer’s advice after getting into a public feud with Ghostface Killah. Then, when his trial got underway, Shkreli wandered into the press room and badmouthed the prosecution to reporters.

Source: https://www.npr.org/2023/02/26/1157528598/ftx-crypto-sam-bankman-fried-bankruptcy-fraud-criminal-charges

Sam Bankman-Fried’s Proposal for a Judge’s Bail in the Presence of a “Tampering Threat”

Fred Garcia, who teaches crisis management at New York University and Columbia University, says he can’t understand what Bankman-Fried “hopes to get out of it.”

Bankman- Fried gained fame as a twenty-something CEO due to his public image. He played a video game during his meeting with a prominent venture capital firm and became well-known for his shorts and t-shirts.

But Anthony D’Angelo, a professor of public relations at Syracuse University, says that persona is unlikely to play well any longer among FTX customers, now that they fear their fortunes have disappeared.

“Unorthodox is okay,” D’Angelo says. “Losing $8 billion among people is not, and whatever charm your cargo shorts and frizzy hair may give you an advantage in in other forums, it’s not going to help here.”

The use of a flip phone, or some non-smartphone, is one of several restrictions that prosecutors and Sam Bankman-Fried’s attorneys are jointly asking the judge to approve.

The lawyers have been working to satisfy concerns raised by Judge Lewis Kaplan, who said he could “conceivably” revoke Bankman-Fried’s bail after he found there was a “threat” of witness tampering.

According to the proposal, Bankman-Fried has a new laptop that will be configured so that he is only able to use the internet through a proxy, and that the websites that he access through the proxy will be white listed on the internet.

Among the websites are programs he could use to prepare for his defense, including Zoom, Microsoft Office, Python, and Adobe Acrobat. Monitoring tools also would be installed on his laptop and he would be prohibited from buying electronic devices.

The judge previously raised concerns about Bankman-Fried’s access to his parents’ computers, cell phones and internet. Attorneys proposed the parents sign affidavits stating they won’t let their son use their devices, which would be password protected. In addition, each device would have software that would photograph or take video of the user.

Comments on ‘Smart’ Phones and Tablets that Allow Chat and Voice Communication’ by K.F. Bankman-Fried

The accounts were released after the payment was transferred in from Alameda’s main trading account to a private cryptocurrency wallet, according to the indictment.

Under the new terms, Bankman-Fried will be allowed access to two electronic devices — a closely monitored laptop and a phone that can only be used for voice calls and texts. Kaplan wrote that he is not permitted to use any other cellphones, tablets, computers, videogames, or “smart” devices that allow chat or voice communication.