Charges against Jeffrey B. Bankman-Fried for the Instability of the First Cryptocurrency Collapse of Binance
In May, a group including Rabbitte began to gather on the messaging platform Telegram to discuss an idea that, to many ears, might sound impossible: restarting FTX, without SBF. They had all lost money to the exchange. They can expect to recover a small portion of that money at the end of the case. They think that firing up the exchange could lead to a faster and more complete recovery.
Both of Bankman- Fried’s parents taught at the university. They were law professors, but mathematics was his forte. After graduating with a degree in physics from MIT, he worked as a quant trader at Jane Street Capital, one of the largest firms on Wall Street. He was reportedly drawn by its associations with effective altruism (EA), an intellectual movement that advocates for earning as much money as possible in order to give it away. The idea was very popular.
The CEO of Binance, the world’s largest crypto exchange, whose relationship with Bankman-Fried had become increasingly fraught in the lead-up to the fall of FTX. Bankman-Fried blamed the run on deposits that happened on social media for it. The prosecution may refer to these tweets as it frames events for the jury. The DOJ and US regulators both charged Binance with a number of violations earlier in the year.
Bankman- Fried’s romantic partner is the CEO of Alameda Research. They met at Jane Street, where they both worked after college. She has pleaded guilty to seven crimes, including wire fraud.
The co-CEO of Alameda Research alongside Ellison, Trabucco left the post three months before the collapse of FTX. The DOJ has not accused him of wrongdoing and it is not clear whether he is cooperating with prosecutors. His location is unknown.
FTX couldn’t meet withdrawals, the DOJ alleges, because Bankman-Fried had mismanaged and misappropriated funds that were used to bankroll risky trading activity; make loans to himself and others; engage in investments, acquisitions, real estate purchases, marketing campaigns, and political donations; and service debt.
In January, Bankman-Fried pleaded not guilty to each of the seven charges. He was taken into custody in August after the prosecution alleged that he was tampering with witnesses. If convicted he could face decades in prison, during the trial which is expected to last around a month.
At first, Anand thought it was just a glitch. It was said that withdrawals from FTX, the second- largest exchange in the world, had stopped. He said that he didn’t take the situation very seriously because it had happened before in the market. The next morning, he woke up to find Twitter had gone wild. #FTX was trending. He tried to log on to the website, but couldn’t access his account.
Even before FTX’s collapse, the winter that preceded it, and the bust of the year were seen as a form of gambling. There are other uses for it in parts of Asia, Latin America, Africa, and the Middle East.