At one point in recent years, Sam Bankman Fried, The co-founder of cryptocurrency exchange FTX was reportedly worth an estimated $26 billion. Earlier last week, that figure was $16 billion. Now it’s about zero dollars and zero cents. And that must hurt, but perhaps of greater concern to “SBF,” as he’s known, is the prospect of potentially jail following the stunning, epic collapse of his company, which filed for bankruptcy on Friday, days after he insured to go customers that “FTX is fine”.
FTX is also reportedly under investigation by the Securities and Exchange Commission and the Commodity Futures Trading Commission.
According to prosecutors, using customer funds for a purpose that has not been clearly communicated can be the basis of allegations of fraud or embezzlement. “That will boil down to whether there were willful lies to convince depositors or investors to divest themselves of their assets?” Samson Enzer, a former Manhattan prosecutor said the Diary. “Were false statements made and the maker of those statements knew they were false and were made with intent to mislead the investor?” The Feds could also reference SBF’s tweets last week just before the company collapsed, in which he wrote that FTX was “fine,” as were its assets, especially given that he later deleted such claims.
As the diary notes, “Authorities would need to show that Mr. Bankman-Fried intended to mislead customers when he wrote these tweets,” and while proving intent can be difficult, prosecutors could point to the allegedly secret efforts SBF made to to support Alameda. “These are all potentially strong circumstantial evidence of intent” Aitan Goelman, a former federal prosecutor said the Diary. Over the weekend, Reuters reported that of the roughly $10 billion in client funds SBF transferred from FTX to Alameda, at least $1 billion and possibly as much as $2 billion had “disappeared.” The outlet also wrote that Bankman-Fried “secretly wired” the money; In response, he texted Reuters that he “disagreed with the characterization” of the transfer, writing, “We did not conduct the transfer in secret.” We had confusing internal captions and got it wrong.” When asked about the alleged missing funds, he replied: “???”
Reuters also reported that:
In his writings to Reuters, Bankman-Fried denied the implementation of a “back door”. On Friday he has tweeted that he was “putting together” what had happened at FTX, adding: “I was shocked to see things unraveling the way they did earlier this week. I’ll be writing a more full post on play-by-play soon.” At 10pm on Sunday in the Bahamas, where SBF is based and FTX operates, he tweeted, “What”. Almost an hour later, he tweeted the letter H. Over the course of Monday he seemed to be spelling it out Happened, although he had done it in the late afternoon only got around to it the letter n.
https://www.vanityfair.com/news/2022/11/sam-bankman-fried-sbf-ftx-alameda-doj-investigation How Much Trouble Is FTX’s Sam Bankman-Fried In?