cryptocurrency

The disgraced ‘crypto genius’ who established his 32 billion-dollar empire in the Bahamas and defrauded thousands of customers around the world, is going to prison after a conviction of seven charges of fraud.

Sam Bankman-Fried’s month-long case culminated in a guilty verdict around 7:40 pm on Thursday after four hours of deliberations in a Manhattan courtroom.

Prosecutor Damian Williams said Bankman-Fried “perpetrated one of the biggest financial frauds in American history.”

“The cryptocurrency industry might be new; the players like Bankman-Fried might be new. But this kind of fraud, this kind of corruption, is as old as time,” Williams said after the verdict was read.

Bankman-Fried, founder of the digital currency exchange FTX, was charged with seven counts of wire fraud, securities fraud and money laundering that swindled customers of FTX and channeled the money to his affiliated hedge fund, Alameda Research.

Bankman-Fried is expected to be sentenced on March 28, facing up to 110 years in prison.

Though Bankman-Fried issued a ‘not guilty’ plea and testified in his own defense, prosecutors had already reached a plea bargain with his conspirators who all pleaded ‘guilty’ for a lighter sentence. Former Alameda CEO Caroline Ellison, FTX co-founder Gary Wang and FTX head of engineering Nishad Singh who shared a five-bedroom luxury penthouse in Albany, New Providence with Bankman-Fried, all testified against him.

As Bankman-Fried stood in his own defense, clean-shaven in a pressed business suit, which is a far cry from his unkempt curls and casual dress sense–he answered “I can’t recall” over 140 times while under cross-examination. His defense attorney Mark Cohen attempted to sum up his dealings as a mistake, admitting “there were significant oversights.”

An appeal seems eminent since Cohen stated that though Bankman-Fried respects the jury’s decision he maintains his innocence and will continue to “vigorously fight the charges.”

Disgraced FTX Founder Sam Bankman-Fried who moved his multi-million dollar crypto empire to the Bahamas in 2021, is on a third night at Metropolitan Detention Center in Brooklyn after he violated his bail order.

The 31-year-old who adopted the Bahamas as his home, courting government officials before his empire imploded and was extradited to face fraud charges in the United States, tampered with witnesses ahead of his October trial according to Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York.

“My conclusion is there is probable cause to believe the defendant has attempted to tamper with witnesses on at least two… there is a rebuttable presumption that there is no set of conditions that will ensure Bankman-Fried will not be a danger.

“He has gone up to the line over and over again, and I am going to revoke bail,” Judge Kaplan said on Friday.

Since his extradition, Bankman-Fried was on bail and confined to his parent’s $4 million Palo Alto home.

What happened?

Prosecutors said, Bankman-Fried reached out to former FTX.US General Counsel Ryne Miller and used a virtual private network to watch the Super Bowl. Also, he shared part of his associate’s Alameda Research CEO Caroline Ellison’s private diary with the New York Times in an attempt to intimate her since she is a major witness for the prosecution in the case.

While on bail, prosecutors said he’s had conversations with author Michael Lewis, who is writing a book about FTX that is set for publication the week the trial begins.

After the judge’s order, Bankman-Fried was instructed to remove his navy suit jacket as two US marshalls prepared to handcuff him. His mother, Barbara Fried, attempted to approach him but was warned to stand back by a court officer and was expected to be taken to the Metropolitan Detention Center in Brooklyn.

The big story

After moving his exchange from Hong Kong to the Bahamas, Bankman-Fried flooded the Bahamas with money and donations. A little more than one year later, the millions of dollars disappeared from his exchange and it collapsed. He filed for bankruptcy.

Bankman-Fried’s trial is set for October as he faces charges of wire fraud, commodities fraud, securities fraud, money laundering and related conspiracy charges.

The industry titan courted by politicians and celebrities is now a criminal defendant facing years in prison.

Bankman-Fried’s lawyer said in court, he was protecting his reputation and intended to appeal.

Embattled crypto-knight Sam Bankman-Fried is reportedly facing a security risk after three men drove into a metal barricade outside of his home in California, his lawyers filed in a Manhattan federal court.

“You won’t be able to keep us out,” the unidentified men said to a security guard as they got back in the vehicle and drove away.

Christian Everdell from New York law firm Cohen & Gresser said the 30-year-old disgraced one-time billionaire and his parents are targets of “actual efforts to cause harm to them,” requesting that US District Judge Lewis Kaplan reject the notion to unseal documents revealing the guarantors of Bankman-Fried’s $250,000,000 bail.

The men have not been identified neither did his lawyers reveal when the incident occurred but only said “recent.”

The scare comes after customers of the fallen crypto exchange and bankrupt FTX, demand billions of dollars allegedly defrauded by Bankman-Fried. At last court hearing, it was revealed a million customers were affected and many lost their life savings.

Bankman-Fried lives in the home with his parents Joseph Bankman and Barbara Fried since December when he was extradited from the Bahamas to New York, where he was released on bail when his parents put up their 1.8 million dollar home as equity.

The 30-year-old was accused of his involvement in some shady dealings of funneling billions of dollars to his sister company Alameda Research.

He pleaded not guilty and returns to court in October to face trial.

Though FTX Founder Sam Bankman-Fried was unable to get bail in the Bahamas, he secured a hefty $250 million bail in New York, which was described as “the largest-ever pretrial bond.”

When he went to court last week in the Bahamas, a judge feared he could flee the country and denied him bail as he was ordered to jail at the Bahamas Department of Corrections. But when he was extradited to New York, a US judge easily granted him bail, which was surprising considering the billions of dollars lost on his platform and the alleged funneling of money from FTX to his sister company.

The former billionaire previously stated in a media interview that he only had $100,000 left in his bank account after filing bankruptcy on his $32 billion crypto exchange, FTX. So when he was released on a $250 million bond, many were surprised.

What are the terms of Sam Bankman-Fried’s bail?

• Judge Gabriel Gorenstein said Bankman-Fried would be released to his parents’ home in California with “strict” supervision.
• He was released on a ‘recognizance bail’ which means he signed a commitment to return to court on Jan 3, when he will enter his plea of ‘guilty’ or ‘not guilty’ and be arraigned.
• The ‘personal recognizance bond’ is based on Bankman-Fried’s promise with his parents’ promise to pay $250 million if he fails to show up for court.
• His parent’s home, reportedly worth $4 million, was put up as equity, with their signatures along with two other people with “considerable” assets.
• Bankman-Fried wears an electronic monitoring bracelet.
• He must submit to mental health counseling.
• The 30-year-old can only travel within and between the Northern District of California and the Southern and Eastern Districts of New York.
• He can not open any new lines of credit of more than $1,000 while awaiting trial.

Unprecedented

Bankman-Fried did not have to pay any cash, but a simple commitment made him a free man. Typically, defendants on bond are charged 10-15 percent of the bail in cash or must commit to collateral in the full amount of the bond and if he or she fails to show up to court, the pledged collateral is forfeited.

Photo credit: Epoch Times

Former crypto-darling and billionaire Sam Bankman-Fried left the Bahamas on Wednesday around 8 pm, bound for the United States to face fraud charges in a New York court.

The extradition was the conclusion of his stay in the Bahamas since establishing his multibillion-dollar crypto headquarters in the Bahamas. And it marks the end of a tumultuous week since his arrest last Monday.

He intended to fight the extradition but eventually reversed the decision which landed him at Odyssey Aviation where he was carried by US Marshalls to New York, where he is detained.

He is represented by high-profile lawyer Mark Cohen who could apply for bail. It remains to be seen if it will be granted.

Bankman-Fried’s handover at Odyssey Aviation, Bahamas

Bankman-Fried’s arrival in New York, USA

Photo credit: The Royal Bahamas Police Force and Fox News

Former FTX CEO Sam Bankman-Fried will be extradited to the United States following a back-and-forth in Bahamian courts.

The now disgraced crypto knight who has become known as the mastermind behind one of the biggest financial schemes had planned to fight the extradition, then apparently folded. But when he appeared in court, his lawyer and the prosecutor seemed shocked to learn about the decision. Bankman was carried back to prison but returned a short time later, agreeing to face a US court.

Bankman-Fried’s lawyer Jerone Roberts said the fallen crypto king “wishes to put the customers right and that is what has driven his decision to be voluntarily extradited to the United States.”

Bankman-Fried would have to sign an extradition paper as he prepares to be handcuffed, placed on board a plane with an escort from the US Marshals Service, carried to La Guardia or JFK Airport, and sent to the Southern District of New York courthouse.

Bankman-Fried is expected to appear in Bahamian court again on Tuesday morning to complete the extradition process.

He was arrested by Bahamian authorities last week Monday around 6 pm at the request of the US government, and spent a week in Bahamian prison after he was denied bail.

Prime Minister Philip Davis who became an acquaintance of Bankman-Fried said at the time of his arrest, “The Bahamas and the United States have shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law.”

He is wanted in New York for eight criminal charges– conspiracy, fraud, money laundering and violation of the fiance law, and could be sentenced to 115 years in prison. And more could be pending. All of this comes after the implosion of his 32-billion-dollar crypto empire and revelations that he diverted customer monies to his trading company, Alameda Research.

The 30-year-old crypto darling who has permanent residency in the Bahamas was in the country since 2021 when he moved the exchange from Hong Kong, China.

His high-profile attorney Mark Cohen represents him as he attempts to beat the charges.

Photo credit: Reuters

Sam Bankman Fried, former FTX CEO is expected to appear before a judge in the Bahamas on Monday instead, to be extradited to the United States to face 8 criminal charges of fraud and conspiracy, a source close to the matter said.

The fallen billionaire and crypto genius is thinking of willfully deciding to return to the US after he initially petitioned to not waive his rights to be extradited, and was placed in the custody of prison guards at the infamous Bahamas Department of Corrections (Fox Hill Prison) where he sits watching movies and reading news articles about himself as he attempts to adapt to his new life, far removed from his luxurious life in Albany.

It is not known what spurred him to reconsider the extradition fight, but the former ‘crypto darling’ whose extradition hearing was scheduled for February 8, could be sentenced to 115 years in a US prison where prosecutors labeled his dealings at FTX as “one of the biggest financial frauds in US history.”

Michael Zweiback, a Los Angeles-based criminal lawyer who spoke on the matter earlier in the week said after extradition, “he will be placed in handcuffs and put on board a plane with an escort from the US Marshals Service and brought to La Guardia or JFK Airport and brought straight to the SDNY courthouse (the Manhattan federal court).

“He can sign extradition paperwork tomorrow and be there within a week,” he said.

Bankman-Fried and his lawyers attempted to get bail since his arrest last Monday, but were denied and were expected to seek another hearing on January 7 so that he no longer sits in the medical area of the prison where officials say he remains in “good spirits.”

The Washington Post reported that the former billionaire said, “It’s okay, I will deal with it,” when asked by guards how he felt watching news reports about himself splattered around the globe in recent days.

It is unclear if the Bahamas will press charges against Bankman-Fried and attempt to hold him. But its Securities Commission Executive Director Christina Rolle revealed to Commissioner Police Clayton Fernander that it was made aware of possible fraud when his Digital Markets Co-chief Executive Officer Ryan Salame alerted the board about funds being diverted from FTX to Alameda Research, to cover losses.

Billions of dollars are reportedly missing amidst the bankruptcy of the exchange, as customers and investors await the outcome of this big financial scandal.

US Securities and Exchange Commission charged FTX founder Sam Bankman-Fried with defrauding investors of billions of dollars.

The US SEC filed a complaint on Tuesday alleging that the failed billionaire promoted FTX as a safe and responsible platform while raising more than $1.8 billion through FTX, but diverted the funds to his trading firm Alameda Research.

SEC Chair Gary Gensler said the crypto genius “built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.”

“FTX operated behind a veneer of legitimacy Mr. Bankman-Fried created by, among other things, touting its best-in-class controls, including a proprietary ‘risk engine,’ and FTX’s adherence to specific investor protection principles and detailed terms of service. But as we allege in our complaint, that veneer wasn’t just thin, it was fraudulent,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

This comes after Bankman–Fried was arrested in the Bahamas on Monday evening at the request of the US Government. He is expected to be extradited to the USA to face a litany of fraud charges.

The 30-year-old has been a popular fixture in the media since the implosion of his crypto platform a month ago, apologizing for the ‘accounting errors’ as he claimed he did not commit fraud in one interview with New York Times.

Bankman-Fried is expected to face a judge today in the Bahamas to process his extradition.

US regulators signaled that other charges are pending stating that there are ongoing investigations into “other securities law violations” and into other entities and individuals.

Once crypto darling now crypto villain FTX founder Sam Bankman-Fried is gearing up for a legal fight and has retained high-profile Mark Cohen as his defense attorney to battle allegations of fraud and misappropriation of funds, according to Bloomberg.

Bankman-Fried has not been arrested for any crime, but US and Bahamas investigators said they are probing the events that unfolded involving the ex-billionaire and how he handled customers’ money on the cryptocurrency platform.

Mark Cohen of Cohen and Gresser Law Firm is a former federal prosecutor, and a star-studded white-collar criminal lawyer, who represented American convicted sex offender Ghislaine Maxwell in the high-profile sex trafficking trial involving her connection to sex offender Jefferey Epstein.

Bankman-Fried’s hiring of Cohen could mean investigations are ramping up.

Bankman-Fried has been making media tours in a somewhat repentant manner and has chalked up the downfall to simple accounting mistakes he made because he was not “focused.”

In an interview with Andrew Sorkin of New York Times Deal Book Summit, Bankman-Fried said he was talking against the advice of his lawyers because he had “a duty to explain” himself.

At least one attorney, Martin Flumenbaum of Paul, Weiss, Rifkind, Wharton & Garrison, has already walked away from Bankman-Fried, citing a conflict of interest.

Bankman-Fried has accepted an invitation to attend a hearing on Capitol Hill in Washington before the Finance Committee, to answer questions on the billions of dollars reportedly lost from the once-valued 32 billion dollar exchange, before its collapse.

Legal experts say the 30-year-old could face 20 years in prison if he is convicted.

US Senate Banking Committee says it will subpoena FTX founder Sam Bankman-Fried to testify on his former company’s failings on December 14, if he does not come voluntarily.

Chairman Sherrod Brown (D-Ohio), in a public letter, said the former crypto billionaire must appear in person to “answer for the failure of both entities (FTX and Alameda Research) 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.”

Bankman-Fried was CEO when the third biggest crypto exchange collapsed and he filed bankruptcy, losing billions of dollars in customer funds on the platform. He has denied any misappropriation of funds and has said it was simply an accounting mistake.

“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,” Brown said in the letter.

The 30-year-old will be forced to the hearing in Dirksen Senate Office Building, Room G50, at 10:00 a.m.

“If you chose not to appear, I am prepared, along with Ranking Member Pat Toomey, to issue a subpoena to compel your testimony.”

The tone of this request is somewhat different from the friendly tweet Congresswoman Maxine Waters posted on Twitter when she invited him to testify before the Finance Committee which she chairs: “We appreciate that you’ve been candid in your discussions about what happened at FTX. Your willingness to talk to the public will help the company’s customers, investors and others. To that end, we would welcome your participation in our hearing on the 13th.”

Investigations appear to be ramping up as the US and the Bahamas investigators report that they are probing Bankman-Fried’s dealings in his former company.

Featured Image: Chairman Sherrod Brown (D-Ohio) and Sam Bankman-Fried