“Digital Currency”

A Manhattan federal judge on Wednesday ordered accused crypto schemer Sam Bankman-Fried not to contact any current or ex-employees of FTX, his former digital currency company, while he is out on bail in the sprawling fraud case.

Judge Lewis Kaplan issued the order at the request of federal prosecutors and will hear arguments from Bankman-Fried’s attorneys about the restrictions during a hearing on Feb. 7.

In a letter to Kaplan, prosecutors revealed that Bankman-Fried sent a message to FTX’s current general counsel on the encrypted messaging app Signal weeks after he was indicted in Manhattan federal court.

This was a blatant attempt to influence a witness, Sammy must still think he is untouchable.

NEW YORK, Jan 28 (Reuters) – Lawyers for Sam Bankman-Fried on Saturday urged a U.S. judge not to ban the indicted FTX cryptocurrency executive from communicating with former colleagues as part of his bail, saying prosecutors “sandbagged” the process to put their client in the “worst possible light.”

The lawyers were responding to a Friday night request by federal prosecutors that Bankman-Fried not be allowed to talk with most employees of FTX or his Alameda Research hedge fund without lawyers present, or use the encrypted messaging apps Signal or Slack and potentially delete messages automatically.

Because he’s a connected little snot …

“The fact that an offshore hedge fund that was basically a crypto firm was buying a stake in a tiny bank for multiples of its stated book value should have raised massive red flags for the F.D.I.C., state regulators and the Federal Reserve,” said Camden Fine, a bank industry consultant who used to head the Independent Community Bankers of America. “It’s just astonishing that all of this got approved.”

Federal prosecutors in Manhattan said on Friday that the disgraced cryptocurrency executive Sam Bankman-Fried had tried to contact a potential witness in his criminal case, and they asked a judge to impose new bail conditions limiting his ability to communicate with former colleagues.

In a court filing, the U.S. attorney’s office for the Southern District of New York said Mr. Bankman-Fried sent messages over email and the encrypted messaging app Signal this month to the general counsel of the U.S. arm of FTX, the cryptocurrency exchange he founded. Mr. Bankman-Fried, 30, has been charged with fraud, money laundering and campaign finance violations linked to the implosion of FTX last year.

The parents and brother of alleged crypto fraudster Sam Bankman-Fried should be forced to answer questions and provide financial documents about their personal wealth and any money they may have gotten from FTX, the bankrupt firm he founded, lawyers said in a court filing.

FTX asked a judge for permission to question, under oath, Bankman-Fried’s family and a handful of the company’s former top executives as part of a hunt for hidden assets that could be used to repay creditors owed billions of dollars.

Federal prosecutors in the United States have seized almost $700 million in cash and assets linked to Sam Bankman-Fried, founder of the FTX cryptocurrency exchange.

The former billionaire, accused of orchestrating one of America’s largest ever financial frauds, is due to face trial in October.

Prosecutors have laid claim to funds and assets connected to Bankman-Fried, including a vast stake in Robinhood Markets, the digital trading platform, worth more than $520 million.

Sam Bankman-Fried cultivated ties with A-list celebrities, politicians and investors alike — but one power couple in particular was key to boosting his profile in influential and moneyed circles.

Bill Clinton was paid north of $250,000 when he spoke at the disgraced FTX CEO’s Crypto Bahamas Conference in April, sources told The Post. At the over-the-top tropical shindig, the ex-US president along with former UK Prime Minister Tony Blair were famously photographed onstage next to Bankman-Fried, who appeared wearing shorts and a T-shirt.

Sam Bankman-Fried found ways to control the prices of digital coins to benefit his companies, FTX and Alameda, according to cryptocurrency investors.

In Sam Bankman-Fried’s quest to keep his cryptocurrency empire looking profitable, the disgraced founder of FTX often promoted newfangled digital currencies that crypto aficionados came to call “Samcoins.”

Mr. Bankman-Fried wooed the developers of these new coins with names like Serum and Maps, insisting that they make their trading debuts on the FTX exchange. Then his hedge fund, Alameda Research, would buy some of these newly listed Samcoins to prop up their value, while Mr. Bankman-Fried used FTX’s influence in the crypto industry to drum up interest in those coins and convince other investors to also buy significant amounts.

Mr. Bankman-Fried was thus able to inflate the coins’ value artificially, making Alameda look healthier than it was and papering over problems at his companies until they imploded in November.

Sam Bankman-Fried ordered the co-founder of his cryptocurrency exchange FTX to create a “secret” backdoor that allowed his hedge fund Alameda Research to borrow $65 billion of clients’ money without their permission, according to testimony over the firm’s implosion.

Gary Wang was told to create a secret line of credit using customer funds from FTX to Alameda, said Andrew Dietderich, an attorney for FTX, in Delaware bankruptcy court on Wednesday.

“Mr. Wang created this backdoor by inserting a single number into millions of lines of code for the exchange, creating a line of credit from FTX to Alameda, to which customers did not consent,” Dietderich testified.

Bankruptcy courts are not built for Sam Bankman-Fried’s mess

On january 5th Sam Bankman-Fried turned up at the funeral of his own crypto empire. He lodged a complaint against ftx’s bankruptcy proceedings, demanding $500m in frozen assets earmarked for creditors. Mr Bankman-Fried wants the money in order to pay legal fees for his criminal trial, in which he is accused of sucking billions of dollars of customer deposits from the crypto exchange for his own use (he has pled not guilty).

The demand is an opening salvo in what will be a long, chaotic battle. America’s bankruptcy laws have evolved over centuries to pick apart regular businesses. Now, on the fly, lawyers must work out how to apply them to crypto companies. In November ftx filed for bankruptcy under Chapter 11, which allows a bankrupt firm to re-organise rather than liquidate. The process usually plays out as a legally refereed tussle between a company and its creditors. The firm, told by a court what it owes, tries to convince lenders to accept stakes in the business rather than cash. If successful, it emerges with less borrowing and a shiny new growth plan. If unsuccessful, it shuts up shop. A big restructuring might have 100 creditors. A long one lasts a year. A complex one takes at least a couple.

(Reuters) – A U.S. Trustee filed an objection on Saturday to plans by bankrupt crypto exchange FTX to sell its digital currency futures and clearinghouse LedgerX, as well as units in Japan and Europe, according to a court filing.

FTX filed for bankruptcy protection in November and said last month it planned to sell its LedgerX, Embed, FTX Japan and FTX Europe businesses. On Tuesday, FTX founder Sam Bankman-Fried pleaded not guilty to criminal charges that he cheated investors and caused billions of dollars in losses, in what prosecutors have called an “epic” fraud.