All posts tagged: ftx collapse

FTX’s Sam Bankman-Fried Pleads Not Guilty to Fraud, Trial Set to Begin in October

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FTX co-founder Sam Bankman-Fried pleaded not guilty Tuesday to US criminal fraud charges over the spectacular collapse of his crypto exchange. The 30-year-old former digital currency billionaire, who is out on bail, entered the plea in federal court in Manhattan before New York judge Lewis Kaplan. FTX and its sister trading house Alameda Research went bankrupt in November, dissolving a virtual trading business that at one point had been valued by the market at $32 billion (roughly Rs. 2,65,300 crore). The US has charged Bankman-Fried with conspiracy, wire fraud, money laundering and election finance violations. Prosecutors allege he cheated investors and misused funds that belonged to FTX and Alameda Research customers. Bankman-Fried pleaded not guilty to all eight counts against him — five of which carry a maximum sentence of 20 years in prison each. Judge Kaplan set a tentative date of October 2 for the start of his trial. After its founding in 2019, FTX soared to become a leading player in the crypto-currency world. Bankman-Fried appeared on the covers of magazines, drew in huge …

Binance Faces Weeks of Challenges After Collapse of Rival Crypto Exchange FTX : All Details

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Even by the extreme standards of cryptocurrency trading, the past few weeks have been a wild ride for Binance, the world’s biggest exchange for crypto assets. After the collapse of its rival FTX in a hail of allegations of fraud and criminality last month, trust in the entire sector has crumbled. Customers pulled more than $3 billion (roughly Rs. 24,000 crore) from Binance in a single day last week as part of a three-day frenzy that saw more than $6 billion (roughly Rs. 48,000 crore) withdrawn. On Friday, accountancy firm Mazars, engaged by Binance to provide a “proof of reserves” report, abruptly halted work with all crypto firms because of “public misunderstanding” of what they were providing. A “proof of reserves” report is not a full audit and gives no information about liabilities. Media reports suggested US prosecutors were still weighing up money-laundering and sanctions-busting charges against the company and possibly its co-founder and CEO Changpeng Zhao. The firm has refused to comment on the inquiry. The stakes could not be higher. “It is absolutely vital …

Sam Bankman-Fried Said to Agree to US Extradition Hours After Informing Judge He Wasn’t Ready to Consent

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Sam Bankman-Fried has decided to agree to be extradited to the United States to face fraud charges, a person familiar with the matter said on Monday, just hours after the FTX founder’s lawyer told a Bahamas judge he was not ready to consent. The about-face paves the way for the 30-year-old cryptocurrency mogul to face charges in New York over accusations he stole billions from FTX customers to plug losses at Alameda Research, his hedge fund, before the exchange abruptly collapsed in November. It was not immediately clear when Bankman-Fried would depart the Bahamas, where he was arrested on December 12 per a US extradition request. No further court date was set at the conclusion of Monday’s hearing. His US-based defence lawyer, Mark Cohen, did not immediately respond to a request for comment. The US Attorney’s Office in Manhattan did not immediately respond to requests for comment. Bankman-Fried’s abrupt decision came after a tumultuous appearance on Monday morning before Magistrate Shaka Serville at a court in the capital Nassau, following reports by Reuters and other outlets over …

Sam Bankman-Fried Said to Reverse Decision to Contest Extradition to the US

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Former FTX Chief Executive Sam Bankman-Fried is expected to appear in court in the Bahamas on Monday to reverse his decision to contest extradition to the United States, where he faces fraud charges, a person familiar with the matter said on Saturday. The 30-year-old cryptocurrency mogul was indicted in federal court in Manhattan on Tuesday and accused of engaging in a scheme to defraud FTX customers by using billions of dollars in stolen deposits to pay for expenses and debts and to make investments for his crypto hedge fund, Alameda Research LLC. His decision to consent to extradition would pave the way for him to appear in U.S. court to face wire fraud, money laundering and campaign finance charges. Upon arrival in the United States, Bankman-Fried would likely be held at the Metropolitan Detention Center in Brooklyn, though some federal defendants are being held at jails just outside New York City due to overcrowding at the facility, said defense lawyer Zachary Margulis-Ohnuma. At his initial court hearing in Manhattan, Bankman-Fried would be asked to enter …

FTX Aftermath: Canada Introduces Stringent Rules for Crypto Trading Platforms

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The Canadian Securities Administrators (CSA) has spelled out a set of rules that must be abided by all platforms that offer crypto trading, in a bid to safeguard its residents from financial risks associated with crypto. The global crypto community is trying to overcome a major shake-up, in the aftermath of the downfall of the FTX crypto exchange last month. As part of these rules, Canada has imposed a ban on crypto exchanges offering ‘margin or leverage trading’ to the country’s residents. In margin trading, users are allowed to borrow funds from an exchange and use it to make a trade. This allows the traders to invest more than they have in crypto assets, which may or may not entail profitable results. Canada will soon issue a deadline for unregistered crypto companies to disclose their details and submit a pre-registration undertaking (PRU) to the financial regulator. The companies will have to vouch that they are in compliance with Canada’s laws. The CSA has further clarified that even international exchanges that are accessible by Canadians will …

FTX’s Sam Bankman-Fried Charged by US SEC For Defrauding Investors Out of Billions of Dollars

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The US Securities and Exchange Commission charged disgraced cryptocurrency tycoon Sam Bankman-Fried on Tuesday with defrauding customers out of billions of dollars, a day after he was arrested in the Bahamas at the request of the United States. “Today we are holding Mr. Bankman-Fried responsible for fraudulently raising billions of dollars from investors in FTX and misusing funds belonging to FTX’s trading customers,” the exchange said in a statement. “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 statement added investigations “as to other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.” Bankman-Fried’s FTX platform was plugged by celebrities in advertising campaigns, and the cyber whiz kid became a regular presence in Washington, where he donated tens of millions of dollars in political contributions. But after reaching a valuation of $32 billion, FTX’s implosion was swift following a November 2 report on …

Sam Bankman-Fried’s Apology Is as Hollow as His Empire

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Apologies from tech chief executive officers are in vogue, as years of easy money and pandemic profits come to an end. “I got this wrong,” Mark Zuckerberg said after the Facebook billionaire’s pivot to a more Meta world decimated its stock price and led to 11,000 layoffs. Charismatic leaders are learning humility. But in the league of weak-sauce apologies, the one from cryptocurrency exchange boss Sam Bankman-Fried stands head and shoulders above the rest. After his digital-asset empire FTX filed for bankruptcy on Friday, the onetime billionaire — who’s now lost it all — tweeted that he was “really sorry,” “shocked” at how things unraveled and “hopeful” that some kind of recovery was possible. Let’s start with the hope. Judging by the scale and complexity of this bankruptcy — more than 130 entities with assets and liabilities in the tens of billions of dollars — customers have little reason to be hopeful. It will take time and money to sift through claims, with customers at the back of the line if the recent bankruptcy of …