Tag: sam bankman-fried

Sam Bankman-Fried May Be Extradited to the US Amid FTX Investigation: Report

The United States and Bahamas authorities are discussing the possibility of bringing Sam Bankman-Fried to the US for questioning as new legal proceedings against FTX and its former CEO were also launched on Wednesday. SBF’s collapsed crypto exchange FTX, which filed for bankruptcy in the US last week, has fanned fears about the future of the crypto industry after it outlined a ‘severe liquidity crisis’. Since then, the regulators have opened investigations and the lawmakers have called for clearer rules on how the industry operates.

Citing multiple sources involved in the discussions, a Bloomberg report stated that “conversations between law-enforcement officials in the two countries have intensified in recent days,” and that Bankman-Fried has been “cooperating” with the Bahamian authorities, who interviewed him on Saturday.

The report said no one involved in the collapse of FTX and Alameda has been arrested or taken into custody yet. The US Justice Department, the US Attorney’s Office for the Southern District of New York, and the Royal Bahamas Police’s financial crimes unit all declined to comment as of Wednesday morning.

In addition to the former CEO, FTX co-founder Gary Wang and director of engineering Nishad Singh are still in the Bahamas and remain “under supervision” by local authorities. Over the weekend, there were rumours that Bankman-Fried and Alameda CEO Caroline Ellison were looking to flee to Dubai.

On Tuesday evening, SBF posted a series of tweets claiming that “to the best of [his] knowledge,” Alameda had more (illiquid) assets than liabilities marked to market; Alameda had a margin position on FTX International; and that FTX.US still had enough to repay all its customers. “Not everyone necessarily agrees with this,” he wrote.

He claimed that his one goal is to “do right by customers” and that he’s been meeting in person with regulators. He didn’t specify which regulators, representing which countries. He said that there was too much leverage, “more than I realised. A run on the bank and market crash exhausted liquidity.”

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Michael Saylor Calls Sam Bankman-Fried the ‘The Wolf of Wall Street’ of Crypto

Microstrategy founder and Bitcoin supporter Michael Saylor has come down heavy on fallen FTX founder and former billionaire Sam Bankman-Fried (SBF). “I think this (crypto) crash expedites regulatory action,” Saylor said in an interview. “I mean, in a way, SBF is like the Jordan Belfort of the crypto era. Instead of The Wolf of Wall Street, they’re going to make a movie called The King of Crypto.” Belfort was found guilty of stock market manipulation in 1999 for which he eventually spent 22 months in prison.

Speaking to Yahoo Finance, Saylor claimed that Sam Bankman-Fried “was using stolen money” and co-operated with corrupt regulators to keep his business going. The market turmoil and volatility would be suitable for Bitcoin and a “handful” of other coins because it would wipe out thousands of pointless cryptocurrencies, said Saylor.

Saylor also brought forward the point that most of the crypto projects are unregistered securities backed by nothing. On top of that, they are being traded on unregulated exchanges, most of which are being operated offshores. He also believes that the proof-of-stake tokens are backed by nothing and possess a similar risk. It is worth highlighting that Ethereum transitioned to the PoS mechanism this year.

MicroStrategy’s CEO believes that this crash is an eye-opener and an educational moment for the crypto community.

“This is simply a very expensive lesson for the crypto ecosystem and (on) the difference between crypto and Bitcoin. This is going to be really helpful for Bitcoin because this is an educational moment, and people are realising the benefits of buying a crypto asset that’s backed by the world’s most powerful computing network,” says Saylor.

Talking about Bitcoin, Michael Saylor mentioned that the asset is now moving into strong hands, and there is massive institutional and investor interest in the asset.

Saylor is an avid supporter of the crypto industry and has been very vocal about his support for Bitcoin. He also took on Twitter to address the FTX crash and said that the crypto industry would succeed when it’s about registered digital assets trading on registered digital exchanges.

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FTX Founder Sam Bankman-Fried Says He Failed to See Warnings Signs That Led to Firm’s Collapse

FTX founder and former Chief Executive Sam Bankman-Fried said he expanded his business too fast and failed to notice signs of trouble at the exchange, whose downfall sent shock waves through the crypto industry, the New York Times reported late on Monday. “Had I been a bit more concentrated on what I was doing, I would have been able to be more thorough,” Bankman-Fried said in an interview with the newspaper. FTX filed for bankruptcy on Friday, one of the highest-profile crypto blowups, after traders rushed to withdraw $6 billion (roughly Rs. 488 crore) from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.

The US Justice Department, the Securities and Exchange Commission and the Commodity Futures Trading Commission are now all investigating how FTX handled customer funds, a source told Reuters.

Bankman-Fried, who is based in the Bahamas, declined to comment on his current location, citing safety concerns, the newspaper said.

When asked whether FTX used customer funds to prop up the trading firm Alameda Research that he founded, Bankman-Fried told the New York Times that Alameda had accumulated a large “margin position” on FTX.

“It was substantially larger than I had thought it was,” he said and added without providing details that the size of the position was in the billions.

Reuters reported last week that Bankman-Fried had secretly transferred $10 billion (roughly Rs. 81,360 crore) of customer funds from FTX to Alameda.

A large portion of that total has since disappeared, according to a Reuters report. One source put the missing amount at about $1.7 billion (nearly Rs. 13,700 crore). The other said the gap was between $1 billion and $2 billion (nearly Rs. 16,100 crore).

The financial hole was revealed in records that Bankman-Fried shared with other senior executives last Sunday, according to the two sources. The records provided an up-to-date account of the situation at the time, they said. Both sources held senior FTX positions until this week and said they were briefed on the company’s finances by top staff.

© Thomson Reuters 2022

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Ethereum Co-Founder Believes Crypto Industry Shouldn’t Put Much Effort Into Attracting Institutional Capital

Ethereum co-founder Vitalik Buterin, in sharing his opinion on crypto regulation, declared that he is “kinda happy” that exchange-traded funds (ETFs) are being delayed. In a lengthy thread on Twitter, Vitalik Buterin discussed how regulations would impact crypto. According to Buterin, all regulations focus on either consumer protection or making it difficult for bad actors to move large amounts of money around. Buterin also showed support for regulations that could make it easier for the industry to reach mainstream adoption.

Buterin notes that regulations that limit the mainstream growth of crypto are as bad as those regulations that hurt crypto projects internally.

The Ethereum co-founder also reacted to the proposed KYC for decentralised finance (DeFi) frontends put forward by FTX’s founder Sam Bankman-Fried. According to him, KYC for DeFi is pointless and would only annoy the users. In Buterin’s view, all regulations focus on achieving two goals — consumer protection and making it difficult for criminals and bad actors to move large amounts of money around.

When it comes to bad actors moving money around, Ethereum founder Vitalik Buterin said these issues are not only “concentrated in DeFi, but in large-scale crypto payments in general.” Still, he recommended regulations for the DeFi frontends. These included a limit on leverage, requiring transparency on audits and security checks for contract codes, and limiting usage by knowledge-based tests instead of net worth.

Buterin said, “I would love to see rules written in such a way that requirements can be satisfied by zero-knowledge proofs as much as possible. ZKPs offer lots of new opportunities to satisfy reg policy goals and preserve privacy at the same time, and we should take advantage of this.”

Buterin explained that the crypto industry should not be going after institutional capital as the ecosystem needs to mature first. Still, he is somehow happy that the SEC keeps rejecting applications for spot ETFs.

The discussion over regulating crypto has gained traction recently, especially after FTX founder Sam Bankman-Fried published a policy statement explaining how he thinks crypto should be regulated.

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