Bitcoin discussion thread - Page 67

On December 09 2022 16:04 {CC}StealthBlue wrote:
Perfectly normal???

https://twitter.com/coinbase/status/1600997059770736641

Almost as if aimed at announcing after hours?

FTX founder Sam Bankman-Fried was arrested by Bahamian authorities this evening after the United States Attorney for the Southern District of New York shared a sealed indictment with the Bahamian government, setting the stage for extradition and U.S. trial for the onetime crypto billionaire at the heart of the crypto exchange’s collapse.

Damian Williams, the U.S. Attorney for the Southern District of New York, said on Twitter that the federal government anticipated moving to “unseal the indictment in the morning.”

Bahamas Attorney General Ryan Pinder said that the United States had filed unspecified criminal charges against Bankman-Fried and was “likely to request his extradition.”

In a statement, Bahamian Prime Minister Philip Davis said, “The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law.”

“While the United States is pursuing criminal charges against SBF individually, The Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX, with the continued cooperation of its law enforcement and regulatory partners in the United States and elsewhere,” continued the statement.

Bahamian regulators and FTX’s attorneys had been engaged in a bruising battle in chambers and in the court of public opinion. Earlier Monday, FTX attorneys once again accused the Bahamian government of allegedly working with Bankman-Fried to spirit away FTX assets from company control and into Bahamian crypto wallets. Bankman-Fried’s arrest by Bahamas law enforcement, as well as his expected extradition, suggest that close cooperation between the Bahamas and the U.S. will continue to evolve throughout the bankruptcy proceedings.

Bankman-Fried was expected to testify before the House Financial Services Committee tomorrow. His arrest is the first concrete move by regulators to hold individuals accountable for the multi-billion dollar implosion of FTX last month.

In November, FTX and its affiliates filed for bankruptcy and Bankman-Fried stepped down from his role as CEO. The crypto trading firm imploded in spectacular fashion following a run on assets similar to a bank run.

FTX’s collapse was precipitated when reporting from CoinDesk revealed a highly concentrated position in self-issued FTT coins, which Bankman-Fried’s hedge fund Alameda Research used as collateral for billions in crypto loans. Binance, a rival exchange, announced it would sell its stake in FTT, spurring a massive withdrawal in funds, equivalent to a bank run. The company froze assets and declared bankruptcy days later. Reports later claimed that FTX had commingled customer funds with Bankman-Fried’s crypto hedge fund, Alameda Research, and that billions in customer deposits had been lost along the way.

Bankman-Fried was replaced by John J. Ray III, who had overseen Enron’s bankruptcy. Ray is also scheduled to testify before Congress this week. In prepared remarks released Monday, Ray said that FTX went on a “spending binge” from late 2021 through 2022 when approximately ”$5 billion was spent buying a myriad of businesses and investments, many of which may be worth only a fraction of what was paid for them,” and that the firm made more than $1 billion in “loans and other payments...to insiders.”

Ray also confirmed media reports that FTX customer funds were commingled with assets from Alameda Research. Alameda used client funds to do margin trading, which exposed them to massive losses, Ray said.

Legal experts told CNBC that if the federal government pursues wire or bank fraud charges that Bankman-Fried could face life in prison without the possibility of supervised release. Such a severe punishment would be unusual but not extraordinary. Ponzi scheme mastermind Bernie Madoff was sentenced to 150 years in prison, an effective life sentence, for his massive ponzi scheme. FTX’s collapse has already triggered the demise of BlockFi Lending, and has thrown the entire space into disarray.

U.S. prosecutors may charge Binance, the largest cryptocurrency exchange, and its top executives with money laundering and sanctions violations, the latest twist in a probe that began in 2018 and gained traction during the FTX collapse that shocked the industry.

Founder Changpeng "CZ" Zhao is among executives who may be targeted, Reuters reported, citing people familiar with the matter. Department of Justice officials are split, however, about whether to proceed, and some want more time to review evidence.

According to reports, three Justice Department offices are involved, the Money Laundering and Asset Recovery Section (MLARS), the US Attorney's Office for the Western District of Washington in Seattle, and the National Cryptocurrency Enforcement Team. Binance's defense attorneys have met with DOJ officials about possible plea deals, per the report.

In a thinly veiled tweet on Dec. 12, Zhao, 45, said: "Ignore FUD. Keep building!" The exchange also tweeted a communication shared with Reuters, saying their reporters "had it wrong again." Binance also said in a blog statement that it was "possibly even the strongest in the entire financial sector" in terms of security.

Binance and its CEO have been instrumental in reacting to the recent collapse of the FTX exchange, which rocked the industry. First, as rumors of FTX's insolvency began to circulate, Binance pulled the plug on $529 million in FTX token holdings, a move that undermined its now-bankrupt rival. Zhao has been a leader in trying to bring further transparency and guidance to other industry participants.

Earlier this year, Binance pointed out in a blog post that of all 2021 transactions made with cryptocurrencies, only 0.15% were associated with some type of illicit activity. Although this might give some investors hope, there is no denying that authorities are cracking down on crypto firms, especially after the FTX collapse.

On December 13 2022 23:57 {CC}StealthBlue wrote:
Interim FTX CEO about to testify before the US Senate.

https://www.youtube.com/watch?v=myRf-tVbZ-s

On December 16 2022 17:43 Slydie wrote:


Everyone was lining up to jump on SBF and FTX once the collapse happened, but how could he keep this scheme running for so long?

My hope is that they just did not care or know enough about the crypto market to keep an eye on it, but it is easy to think of other reasons, like lobbying, donations and endorsements...

On December 16 2022 18:28 Gorsameth wrote:
Is it even regulated to begin with?

On December 17 2022 06:12 Slydie wrote:


There are laws for any business, and it seems obvious that many of them were broken in this case. You can't take peoples money under false premises.

Some right-wing media is indeed using FTX' donations to DEM politicians against them, and I think they are right to do it. Politicians need to be more careful about who they accept donations from, and Democrats are no saints

On December 17 2022 07:19 arbiter_md wrote:
Is it public information which are the institutions that suffered from FTX collapse? Also I would love to see the list of companies that have assets in crypto in general. Just to stay away from them.

On December 17 2022 06:29 GreenHorizons wrote:
On one hand I'd like to see as much clawed back as possible, on the other, I'm suspicious that whatever is recovered will prioritize making the most predatory investors whole before the oblivious grandparents talked into it by some idiot they're related to.

On December 17 2022 11:49 TDonkfarts wrote:


There's no suspicions to be had here, retail investors will be SOL regardless of what distribution methods they choose to go with. While the firm owes around $102 million to customers, it has $3.1 billion in debts to roughly a million creditors.

That's ignoring just how god awful their accounting is, how SBF had a back door that allowed him to commingle and muddy the books between FTX and Alameda without anyone being aware of it, and how much of their investments are tied up in dead projects or illiquid assets.

Realistically there won't really be any funds to squeeze out of FTX because the majority of investments are actually pretty bad. I imagine they'll make an example of SBF for that reason. Some creditors might get paid but the majority of people, including a majority of creditors and probably all retail investors are going to get stiffed.

On December 17 2022 08:52 {CC}StealthBlue wrote:


Well I believe MicroStrategy has the largest amount of Bitcoin compared to any other Corporate entities. In the billions of dollars worth I think. According to this they own 130k Bitcoins.

https://blockworks.co/news/are-companies-aside-from-microstrategy-still-buying-bitcoin