“Digital Currency”

ALAMEDA, Calif. — Before his mid-December arrest, cryptocurrency billionaire Sam Bankman-Fried repeatedly claimed that he was a responsible business leader who sought more regulation of cryptocurrency and wanted his industry to be part of the mainstream financial system.

But now that the Commodity Futures Trading Commission, the Securities and Exchange Commission, and the Justice Department are prosecuting the 30-year-old for fraud, the extensive professional relationships he cultivated with current and former federal regulators risk embarrassment for all involved.

As CEO of FTX, a crypto exchange, Bankman-Fried hired multiple former federal regulators who helped connect him with top officials at the CFTC, the agency he hoped would be charged with regulating his industry, emails show.

Disgraced FTX crypto mogul Sam Bankman-Fried’s ex-girlfriend Caroline Ellison was facing up to 110 years in prison before she agreed to cooperate with the federal government, her plea agreement shows.

The former Alameda hedge fund CEO, 28, pleaded guilty to federal fraud charges in an agreement signed on Monday.

The agreement also indicates that Ellison and FTX co-founder Gary Wang had agreed to “cooperate fully” with the feds, in exchange for which they will likely get much lighter sentences.

It appears prosecutors want Sam’s butt in a sling as the pleas to date specifically contradict the Mini-Madoff’s dindunuffin narrative.

It will be interesting to watch if this goes to trial. What if any sentence will be handed the Democrat’s 2nd largest donor?

Judge kept FTX execs’ plea deals secret to get founder to US

NEW YORK (AP) — A judge kept secret that two of Sam Bankman-Fried’s closest associates had turned against him so the cryptocurrency entrepreneur wouldn’t get spooked and fight extradition from the Bahamas, according to court transcripts made public Friday.

U.S. prosecutors in New York waited until Bankman-Fried, the founder of the collapsed crypto exchange FTX, was in FBI custody before revealing that his business partners, Carolyn Ellison and Gary Wang, had secretly pleaded guilty to fraud charges and were cooperating, which can earn them leniency at sentencing.

U.S. Attorney Damian Williams announced the guilty pleas when Bankman-Fried was in the air late Wednesday.

NEW YORK (Reuters) – Sam Bankman-Fried and other FTX executives received billions of dollars in secret loans from the crypto mogul’s Alameda Research, the hedge fund’s former chief told a judge in her guilty plea for her role in the exchange’s collapse.

Caroline Ellison, former chief executive of Alameda Research, said she agreed with Bankman-Fried to hide from FTX’s investors, lenders and customers that the hedge fund could borrow unlimited sums from the exchange, according a transcript of her Dec. 19 plea hearing that was unsealed on Friday.

“We prepared certain quarterly balance sheets that concealed the extent of Alameda’s borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties,” Ellison told U.S. District Judge Ronnie Abrams in Manhattan federal court, according to the transcript.

Holy Crap.

More … Chief executive of FTX sister company pleads guilty to seven offences

Disgraced FTX founder Sam Bankman-Fried was spotted early Friday arriving at his parents’ Palo Alto, California, home where he will remain under house arrest after being released on a record $250 million bond.

Two vehicles were seen pulling up to Joseph Bankman and Barbara Fried’s residence located in an exclusive neighborhood on the edge of Stanford University’s campus at around 4:30 a.m.

A Stanford campus police vehicle was seen outside the home, where the accused cryptocurrency fraudster will be spending his time with mom and dad, both law professors.

FTX founder Sam Bankman-Fried will released on $250 million bail in a deal designed by federal prosecutors and Bankman-Fried’s defense attorneys, a New York federal judge ruled.

Judge Gabriel Gorenstein said that Bankman-Fried would require “strict” supervision following his release to his parents home in California.

Gotta wonder how much cash is hidden offshore.

The ex-girlfriend of disgraced crypto mogul Sam Bankman-Fried and a co-founder of FTX pleaded guilty to fraud charges in the collapse of the cryptocurrency exchange and are both cooperating with federal prosecutors, officials announced Wednesday night.

Caroline Ellison, the former CEO of Bankman-Fried’s crypto hedge fund company Alameda Research, and Gary Wang, a co-founder of FTX, pleaded guilty to the criminal offenses before Bankman-Fried landed in New York to face his own charges, Manhattan US Attorney Damian Williams said in a statement.

The charges filed against the pair were “in connection with their roles in the frauds that contributed to FTX’s collapse,” Williams said.

Disgraced FTX founder Sam Bankman-Fried completed his extradition paperwork Wednesday and is set to be transported from the Bahamas to the US, where he will face a slew of criminal charges over allegations he defrauded $1.8bn from investors.

The fallen crypto king said he consented to extradition because he wants “to make the relevant customers whole,” according to court papers — a turnaround after he had initially said he would fight the process.

More than 100 bitcoins previously held in inaccessible virtual wallets linked to defunct cryptocurrency exchange QuadrigaCX have been transferred four years after the death of the company’s founder led to its collapse.

It is not clear who moved the 104 bitcoins this month, worth approximately $2.4-million, nor how anyone could do so. Bankruptcy trustee Ernst & Young Inc. said in 2019 that it was not able to access the wallets, meaning the funds could not be recovered to help compensate users who lost money when the exchange went out of business.

The girlfriend of disgraced FTX founder Samuel Bankman-Fried reportedly cooperated with federal officials, it was revealed, shortly after he was arrested in the Bahamas in connection with the collapse of his crypto empire.

Former U.S. attorney Marc Litt, who was involved in prosecuting Bernie Madoff, joined “Fox & Friends Weekend” Sunday to discuss the report alleging Alameda Research CEO Caroline Ellison worked with officials in relation to the charges.

“It wouldn’t surprise me at all,” Litt told Will Cain regarding the report. “She was the CEO of a company that seems to be intimately involved in the alleged fraud, and she’s… in the cross-hairs of the government… and she’s got a choice to make.”

Federal prosecutors investigating the collapse of FTX and Sam Bankman-Fried have reached out to Democratic and Republican campaigns and organizations for information on political donations the company founder and two former executives made, according to a report.

At first glance, Sam Bankman-Fried bears little resemblance to Bernie Madoff. One is a smartly-suited, grey-haired financial titan with a 40-year career on Wall Street, and the other a 30-year-old millennial king of crypto in shorts and T-shirt.

But almost 14 years to the day since Madoff was arrested and charged with fraud in New York for orchestrating a long-running pyramid scheme, the FTX crypto scandal is being compared to Madoff’s criminal enterprise.

Diana Henriques, a financial historian and the author of The Wizard of Lies, a book delving into Madoff’s $64bn (£53bn) scheme, says the similarities between Bankman-Fried – or SBF as he is known – and the Wall Street investment manager are “striking”.

In case you missed it … Sam Bankman-Fried reverses decision to fight extradition to US

As revelations emerge about the vast scope of the FTX debacle, the inevitable comparisons are being made between its disgraced chief executive Sam Bankman-Fried and legendary Ponzi schemer Bernie Madoff.

To be sure, both scoundrels were adept at parting fools and their money – lots of it. But Mr. Madoff’s victims might elicit some sympathy for being taken in by his carefully crafted façade of respectability. Mr. Bankman-Fried’s willing dupes should get no such leniency. They should have seen trouble coming.

Mr. Bankman-Fried’s venture had more red flags than a Beijing military parade, the biggest one being that head office in the Bahamas. There is perhaps no redder flag than a corporate headquarters in a sketchy tax haven with a long history of dirty dealing that has been called out by global watchdogs.

Dec 17 (Reuters) – 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.

FTX investor and former paid spokesperson Kevin O’Leary refused to condemn Sam Bankman-Fried or classify the doomed company’s meltdown as fraud during a tense television appearance on Friday.

O’Leary, one of the sharks on the hit show “Shark Tank,” provided a toothless response when pressed to point a finger at who’s to blame.

“I don’t have all the facts,” he told the hosts of CNBC’s “Squawk Box.”