The FTX Disaster is Deeper Than you Think

[_NOBODY_]

The FTX Disaster is Deeper Than you Think​

 

[Trango Towers]

Wow. Excellent explanation
Shows MIT is corrupt with corrupt professors. American politics is corrupts and
Sam Bankman-Fried (JEW) NO SUPRPRISE THERE.

 

[_NOBODY_]

FTX Disaster - 7 Unbelievable Bankruptcy Discoveries​

 

[Trango Towers]

Wow. So easybto dupe greedy people. Never understood crypto so never invested ... I mean gambled

 

[Menthol]

How about Binance?

Does it a ticking bomb as well?

Wow. So easybto dupe greedy people. Never understood crypto so never invested ... I mean gambled

Yup, it's full of gambling.

I tried to understand the fundamental factor of it, and I found none.

 

[INS_Vikrant]

I still don't understand how these institutional investors, fund managers etc pour billions of dollars into something without doing a penny's worth of research.

Wow. So easybto dupe greedy people. Never understood crypto so never invested ... I mean gambled

Exactly most of my friends used to make fun of me for being old school geezer for not buying into the future, guess who is having the last laugh now.

 

[Trango Towers]

I still don't understand how these institutional investors, fund managers etc pour billions of dollars into something without doing a penny's worth of research.



Exactly most of my friends used to make fun of me for being old school geezer for not buying into the future, guess who is having the last laugh now.

I think they make money based on hype.
Even stock have no fundamentals. Trading on EPS that makes no sense.
Remember the tech stock bubble and then crypto. Soon there will be something else

 

[Nan Yang]

China bans crypto mining and Hong Kong SFC regulation of digital asset protects investors.
This does not happen by accident. They are run by smart people.


FTX’s lingering ties remind Hong Kong of the bullet it dodged and risks ahead to regain edge as Asia’s digital hub

• After leaving Hong Kong for the Bahamas, FTX and Alameda Research still had operations in Hong Kong and staff travelling between the two locations
• Investors who passed on FTX years ago now say they dodged a bullet and that Hong Kong’s conservative regulatory approach is vindicated

Xinmei Shen and Matt Haldane
Published: 8:00am, 28 Nov, 2022

The FTX logo arranged on a smartphone on November 15, 2022. Photo: Bloomberg

Ten days before his fall from grace in the collapse of the world’s second-largest cryptocurrency exchange, Sam Bankman-Fried was enjoying the limelight in Hong Kong.

Speaking by video from the Bahamas, the 30-year-old founder of FTX – valued then at US$32 billion – expounded on “how new technologies are supporting financial inclusion”, playing to a gallery of financial regulators who were lining up at 2022 Hong Kong FinTech Week to hear how disruptive technology could lead to the betterment of society.

Two days after the 35-minute interview with SBF, as Bankman-Fried is known in the crypto world, a report by Coindesk on a leaked FTX balance sheet revealed that the company’s largest asset was FTT, its own token. That set in motion a series of events that led to a run on FTX, exposed alleged fraud and mismanagement and ended in bankruptcy on November 11, marking one of the fastest implosions in global corporate history.

As liquidators pick through the aftermath of FTX, several global venture capital funds – including SoftBank, Sequoia Capital and the Ontario Teacher’s Pension Plan – wrote off their investments in the exchange. Singapore’s sovereign wealth fund Temasek wrote off US$275 million, possibly losing one of its largest bets in a single investment.

Sam Bankman-Fried, the founder and chief executive of the cryptocurrency exchange FTX, at a press conference during the FTX Arena event in Miami on June 4, 2021. Photo: Miami Herald/Tribune News Service

Hong Kong so far appeared to have dodged the bullet. Local investors speaking with the South China Morning Post said they either passed on, or missed, opportunities to invest in FTX and its related derivatives trading firm Alameda Research. The Securities and Futures Commission (SFC) previously said Hong Kong’s exposure to FTX was “immaterial.”

Still, regulators feel compelled to put up some guard rails to protect local investors, as they acknowledge that Hong Kong’s open economy and convertible currency leave crypto fans vulnerable to fraud and misadventures elsewhere. Financial Secretary Paul Chan Mo-po reiterated Hong Kong’s FinTech Week commitment to building a well-regulated digital assets market. The SFC said that week that it would unveil a public consultation for local retail investors to dabble in virtual assets.

Financial Secretary Paul Chan Mo-po delivered an online speech on the first day of the Hong Kong FinTech Week 2022 at Hong Kong Convention and Exhibition Centre in Wan Chai on October 31, 2022. Photo: Sam Tsang

“The FTX debacle points to exactly why Hong Kong regulators need to bring virtual asset trading back in a well-regulated market for investors,” said Richard Douglas, Hong Kong CEO of Saxo Markets. “The Securities and Futures Ordinance is a well-structured regulatory framework, [with] very detailed and specific guidelines around how client money and client securities should be treated, which all licensed entities have to adhere to, and is designed to prevent exactly this type of situation.”

The Ordinance, which regulates all financial instruments from bonds to equities and funds, does not cover the crypto tokens traded by Alameda on FTX. That is why both companies, based in Hong Kong until September 2021, did not come under the purview of the SFC.

FTX’s remaining links to Hong Kong now present regulators with a chance to prove that it can corral the wild-west crypto market as it joins other jurisdictions to find out where the exchange’s money has gone.

Caroline Ellison, the former chief executive of FTX’s Alameda research trading unit, in a LinkedIn profile photo showing what appeared to be Hong Kong’s high rises in the background. The profile page has been removed. Photo: LinkedIn.

At the time of Alameda’s collapse, former CEO Caroline Ellison was reported by The New York Times to be in Hong Kong, where she travelled from her new home in the Bahamas. She did not answer multiple calls placed to her mobile phone.

FTX owes money to an estimated 1 million creditors, investors and staff, according to bankruptcy filings in the US state of Delaware. About 3 per cent of customers were in Hong Kong, even if the FTX website barred non-professional investors from certain products. Mainland China, which banned crypto mining outright in 2021, still made up 8 per cent of FTX’s customers, according to the filings.

This is why some see an opportunity for better regulations in Hong Kong. SBF once championed this in Washington, a cause that has since been taken up by his rival and Binance founder Zhao Changpeng, who played a role in FTX’s downfall when he disclosed plans to liquidate his company’s FTT holdings.

Zhao Changpeng, known as CZ in the cryptocurrency world, attended the B20 Summit ahead of the G20 leaders’ summit, in Bali’s Nusa Dua on November 14, 2022. Photo: Reuters.

As regulators mull their next move, some local investors are breathing a sigh of relief at not having given in to FTX’s overtures.

In May 2021, SBF and FTX’s head of product Ramnik Arora held multiple meetings with potential investors in Hong Kong to raise US$500 million, valuing the company at US$20 billion.

At the time, FTX was doing “exceptionally well”, according to an email by Arora, a former Facebook research scientist for the Libra stablecoin project. “Last week was cray cray [sic] in crypto but very positive for FTX.”

Kenetic Capital’s founder Jehan Chu was a seed investor in FTX, which raised US$8 million in August 2019, according to data by Crunchbase.

“Though some material personal funds were lost on FTX, Kenetic had no direct exposure, as the company had already exited our seed investment in FTT tokens,” Chu said.

Among Hong Kong investors, only New Huo Technology, formerly known as Huobi Technology, publicly quantified its loss from FTX, which it put at US$18.1 million deposited with the exchange.

Back in 2019, FTX and Alameda occupied office space at the Pacific Place in Admiralty, within walking distance from the US and UK consulates.

Today, the only sign of any physical presence in Hong Kong is an address on Wan Chai’s Lockhart Road of Cottonwood Grove Limited, a subsidiary of Alameda’s British Virgin Islands entity, which was registered in 2018.

The office appeared vacant. Not even the hallway lights were turned on. The floor was not listed on the building’s directory, but a property agent confirmed that it was still occupied.

An unlit corridor at the address of Cottonwood Grove Limited, unlisted in the office directory of a building in Wan Chai, during a visit on November 15, 2022. Photo: Matt Haldane.

FTX Hong Kong Limited, another related entity, was registered on September 22, sharing the same address as the corporate services firm FastLane Consulting in Sheung Wan district.

Ellison, who stepped down this month as Alameda’s CEO, appeared to have kept more ties to Hong Kong than SBF. Before her LinkedIn page was removed, Ellison’s profile picture showed her against a backdrop of the city’s green hills and high-rise apartment buildings.

She moved last year to Nassau, capital of the Bahamas, where she shared a US$30 million penthouse with nine other senior FTX staff, including SBF, with whom she was at times romantically involved, according to media reports.

Albany Resort marina in the Bahamas, where the senior executives of FTX and Alameda, including Sam Bankman-Fried and Caroline Ellison, shared a penthouse apartment. Photo: Albany Resort.

Ellison was also active in Hong Kong’s rationalist community, a loosely organised group of people interested in statistics-based decision-making, which overlaps with effective altruism, the philosophically-driven ethos that guided her and SBF to make as much money as possible to give away to charities they believed would help the most people.

In September 2021, Ellison attended a meeting for readers of the newsletter Astral Codex Ten (ACX), the successor to the popular rationalist blog Slate Star Codex written by the psychiatrist Scott Alexander Siskind, according to an attendee, who asked not to be named. Ellison was not at this year’s ACX Hong Kong meet-up, the person said.

A WhatsApp group for the event included Ellison’s US phone number registered by her mother Sara Ellison, an economist at the Massachusetts Institute of Technology, according to Twilio’s caller identification information. Calls to the number ended up in the former Alameda CEO’s voice mail box.

FTX’s move to the Bahamas in 2019 was once seen as an indictment of Hong Kong’s stricter regulations around crypto, which drove the industry offshore to Singapore, the United Arab Emirates and the Bahamas.

Now, it seems like a blessing in disguise, vindicating Hong Kong’s conservative approach, some analysts said. Just before FTX’s collapse, Hong Kong’s regulators were in talks to establish the framework for a regulated crypto exchange to reclaim its status as Asia’s digital assets hub, according to several people familiar with the matter.

“We recognise that [virtual assets], cryptos, are unstoppable new financial innovations,” Financial Secretary Chan said on November 25 in a dialogue with the Hong Kong Association of Banks, adding that the collapse of certain exchanges are causing concerns. “We need to embrace them. We therefore set out our vision for [virtual assets] to enable this sector to thrive in Hong Kong, progressively and sustainably.”

As FTX’s bankruptcy proceedings begin, more about the fallout could be revealed, claiming more than the plan for the city’s own crypto exchange, which now hangs in suspense.

 

[khansaheeb]

Why Hasn’t Sam Bankman-Fried Been Arrested Yet?

Bernie Madoff was arrested in a matter of days after his fraud came to light, but SBF is still a free man. What gives?

nymag.com

THE LAW DEC. 2, 2022

Why Hasn’t Sam Bankman-Fried Been Arrested Yet?​

By Ankush Khardori

Sam Bankman-Fried rejects comparisons to Bernie Madoff. Photo-Illustration: Intelligencer. Photos: Getty Images
On December 11, 2008, Bernie Madoff was arrested and criminally charged with one of the biggest financial frauds in history — an audacious, long-running Ponzi scheme that resulted in tens of billions of dollars in lost investor funds. At the time, the scandal sparked a national conversation about the gross deficiencies of our country’s white-collar enforcement regime, but ever since the initial revelations about the problems at FTX and about Sam Bankman-Fried’s criminal exposure, the Madoff case has resurfaced as a point of comparison for Bankman-Fried’s alleged misdeeds — and as a rallying cry for people who believe he should already have been locked up by U.S. prosecutors.
Bankman-Fried was asked about the comparison by Good Morning America anchor George Stephanopoulos and (of course) rejected it, arguing that FTX was a “real business” in contrast to Madoff’s outright Ponzi scheme.

But how much weight does the comparison deserve — particularly as a guide to how prosecutors ought to be handling the case? Unfortunately for those seeking immediate action by the Department of Justice, while the juxtaposition — between the swiftness of Madoff’s arrest and the fact that SBF is apparently enjoying life in the Bahamas — is superficially compelling, it does not withstand more than a few minutes’ worth of scrutiny. In fact, these claims run the serious risk of misleading the many people, including victims, who are understandably angry about what may have been a gigantic fraud. Those who are eager to see Bankman-Fried charged with serious financial crimes will just have to be patient.

Sign up for Dinner Party​

A lively evening newsletter about everything that just happened.

Let’s start with the actual circumstances of Madoff’s arrest. The scheme was not detected by the government or the media — infamously — but was in fact revealed by Madoff himself, who confessed the whole thing to his sons once he realized that he could not keep up the fraud. According to the criminal complaint filed on the day of his arrest, Madoff told his sons “that he was ‘finished,’ that he had ‘absolutely nothing,’ that ‘it’s all just one big lie,’ and that it was ‘basically a giant Ponzi scheme.’” His sons called the FBI, and two days later, two agents showed up at his home and asked whether “there’s an innocent explanation” for what Madoff had told his sons. Madoff literally replied, “There is no innocent explanation.”
At the risk of stating the obvious, the reason Madoff was arrested so quickly is because he confessed to every element of criminal fraud — including both the underlying scheme and his criminal intent. This meant that the FBI had both that confession and highly potent, admissible evidence of guilt in the form of testimony from his adult children (who had no apparent axe to grind).
If that is all the government ever had, they would have been able to convict Madoff easily at trial. (He eventually pled guilty.) They also needed to make sure that Madoff did not have second thoughts — he told his sons that he planned to turn himself in to authorities in about a week — and that he would not attempt to flee the country instead.
We have not seen anything like a real admission of criminal conduct from SBF yet and, of course, he is not in the country at the moment, so there is no imperative (no ability, really) to keep him in the United States. As important, SBF has been rather talkative in interviews — including in an interview with New York’s Jen Wieczner that was published yesterday — but he has been careful as well. So far as I can tell, he has held firm on a central point for his defense — that the epic, still-unspooling fiasco at FTX was the result of sloppiness and inadvertent missteps by the company’s leadership rather than an intentional effort to mislead FTX customers or investors.

This means that the Justice Department will need to try to get to the bottom of it by conducting an investigation that could take a long time, which is not to say that it will take SBF’s claims at face value. In fact, I am sure it will not, since his comments on the most prominent issue at the moment — FTX’s transfer of customer funds to SBF’s hedge fund, Alameda Research, and the subsequent loss of more than $1 billion — have been transparently evasive and substantively meaningless. (We have seen this before, down to eerily familiar media minutiae: In 2016, just days after The Wall Street Journal published its first exposé about Theranos, Elizabeth Holmes took the stage for an interview at a conference organized by the paper in which she insisted that the whole thing was a huge misunderstanding.)
What does an investigation of an international financial fraud like this look like? To simplify matters greatly, the government is going to be looking for three things — documents, witnesses, and data — to determine whether SBF or those around him committed fraud. Let’s take these in turn.
It is not yet clear how easy it will be for the government to obtain internal emails from FTX and personal communications among SBF and his lieutenants. It will depend in significant part on whether and to what extent FTX, SBF, et al. were using U.S.-based technology providers like Google or Microsoft who (a) still have this material and (b) can and will comply with U.S. legal process. (Anything that has been permanently deleted or that was communicated over an encrypted messaging app like Signal will be difficult if not impossible to recover as a practical matter.) Even in the relatively straightforward situation in which the government can obtain emails from a third party like Microsoft, this still requires the government to undertake a potentially lengthy process — to prepare an application for a search warrant that establishes probable cause as to each of the email accounts whose contents investigators are seeking; to wait for the company to comply, which can take months under ordinary circumstances; and to actually review the material itself.
There are some ways around this, though whether and to what extent the Justice Department will be able to avail itself of them is unclear at the moment. The government could try to subpoena one of FTX’s U.S.-based entities for the documents, or FTX’s new lawyers could voluntarily produce material to prosecutors, but neither of these paths is as straightforward as they sound if the documents actually reside on a server outside the U.S., and both rely on FTX (or its service providers) having retained the underlying material in the first place. It is also possible that the Bahamian authorities might have their own legal tools to obtain documents and that they would be willing to share them with U.S. prosecutors, but that is also far from clear at the moment.
Of course, documents are a foundational part of any financial-fraud case, but at the end of the day, if criminal charges are actually brought, witnesses have to take the stand to explain to a jury what happened. That means that prosecutors have to identify knowledgeable people who can and will cooperate, but so far, I have yet to see anyone who worked at FTX provide a compelling firsthand account of criminal conduct perpetrated by SBF or anyone else. That does not mean nothing nefarious happened — just that the government may need to piece things together using accounts from different people who themselves may not have had full visibility into FTX and Alameda’s operations.
The Justice Department will have to try to interview people who worked at FTX and Alameda, which is par for the course in a financial-fraud case, but that is much harder when witnesses are overseas. For one thing, the government cannot simply subpoena witnesses the way it can with people who are in the country, and witnesses in foreign countries can easily decline voluntary interviews. The government also has much less leverage over witnesses abroad who have criminal exposure, since the risk of an indictment is not as potent when you might plausibly never see the inside of a U.S. courtroom even assuming that you are charged at some point.
As for “data,” that is a very large bucket that could include both customer-level account and transaction data as well as the company’s enterprise-level books and records, assuming that these things even exist and are reliable — two very big unknowns. When I prosecuted international financial fraud at the Justice Department, I placed a significant premium on the swiftness of criminal accountability even if the underlying flow of funds could not be forensically retraced, but this was not a universally held view among my colleagues.
Some prosecutors believe that juries expect a comprehensive accounting of what actually happened to all of the money in a complex fraud scheme, but in this day and age, that is getting harder for prosecutors to provide, particularly when foreign bank accounts are involved. The Justice Department can request foreign banking data from other countries, but depending on the jurisdiction, it can take literal years to get a response, and even then, the information may be incomplete or simply lead the government to more foreign bank accounts, which, in turn, require further requests and investigation.
The FTX bankruptcy proceeding is going to complicate matters further. As is sadly common for these situations, the company is now spending what little money it still has on expensive lawyers and bankruptcy professionals, including a team from Sullivan & Cromwell who will do what I gather is an internal investigation on behalf of the company’s new leadership. The government is going to need to figure out its posture toward that investigation, which is not going to be easy.
I certainly understand why people would bristle at all of these sources of potential delay, but this sort of investigative slog is much more common in a white-collar case than a quick arrest. For instance, it took almost a year for the U.S. Attorney’s office in Manhattan (which is reportedly handling the FTX investigation) to charge the founder of the electric-truck start-up Nikola with fraud even though the short-selling firm Hindenburg Research seemingly did all of the work when it published a lengthy report that precipitated the investigation in the first place. And it took nearly two years for the department to charge Holmes even after the Journal’s John Carreyrou publicly exposed the central problems at Theranos.
Prosecutors at the Justice Department cannot — and do not — simply indict people based on what they read in the press, no matter how damning it may seem. Even if they desperately want to charge someone, prosecutors have to conduct their own investigation to develop robust, admissible evidence of criminal misconduct, which requires gathering and reviewing documents and data, speaking with witnesses, and — perhaps above all — time.

How much is Bernie Madoff worth today?


Bernard Lawrence Madoff (/ˈmeɪdɔːf/ MAY-dawf; April 29, 1938 – April 14, 2021) was an American fraudster and financier who ran the largest Ponzi scheme in history, worth about $64.8 billion. He was at one time chairman of the NASDAQ stock exchange.

 

[TNT]

As usual ppl start blaming crypto. Its not fault of crypto, the guy literally stole ppl's wallet money and used it in other investments. I think binance knew about it and destroyed them.

 

[Menthol]

Why Hasn’t Sam Bankman-Fried Been Arrested Yet?

Bernie Madoff was arrested in a matter of days after his fraud came to light, but SBF is still a free man. What gives?

nymag.com

THE LAW DEC. 2, 2022

Why Hasn’t Sam Bankman-Fried Been Arrested Yet?​

By Ankush Khardori

Sam Bankman-Fried rejects comparisons to Bernie Madoff. Photo-Illustration: Intelligencer. Photos: Getty Images
On December 11, 2008, Bernie Madoff was arrested and criminally charged with one of the biggest financial frauds in history — an audacious, long-running Ponzi scheme that resulted in tens of billions of dollars in lost investor funds. At the time, the scandal sparked a national conversation about the gross deficiencies of our country’s white-collar enforcement regime, but ever since the initial revelations about the problems at FTX and about Sam Bankman-Fried’s criminal exposure, the Madoff case has resurfaced as a point of comparison for Bankman-Fried’s alleged misdeeds — and as a rallying cry for people who believe he should already have been locked up by U.S. prosecutors.
Bankman-Fried was asked about the comparison by Good Morning America anchor George Stephanopoulos and (of course) rejected it, arguing that FTX was a “real business” in contrast to Madoff’s outright Ponzi scheme.

But how much weight does the comparison deserve — particularly as a guide to how prosecutors ought to be handling the case? Unfortunately for those seeking immediate action by the Department of Justice, while the juxtaposition — between the swiftness of Madoff’s arrest and the fact that SBF is apparently enjoying life in the Bahamas — is superficially compelling, it does not withstand more than a few minutes’ worth of scrutiny. In fact, these claims run the serious risk of misleading the many people, including victims, who are understandably angry about what may have been a gigantic fraud. Those who are eager to see Bankman-Fried charged with serious financial crimes will just have to be patient.

Sign up for Dinner Party​

A lively evening newsletter about everything that just happened.

Let’s start with the actual circumstances of Madoff’s arrest. The scheme was not detected by the government or the media — infamously — but was in fact revealed by Madoff himself, who confessed the whole thing to his sons once he realized that he could not keep up the fraud. According to the criminal complaint filed on the day of his arrest, Madoff told his sons “that he was ‘finished,’ that he had ‘absolutely nothing,’ that ‘it’s all just one big lie,’ and that it was ‘basically a giant Ponzi scheme.’” His sons called the FBI, and two days later, two agents showed up at his home and asked whether “there’s an innocent explanation” for what Madoff had told his sons. Madoff literally replied, “There is no innocent explanation.”
At the risk of stating the obvious, the reason Madoff was arrested so quickly is because he confessed to every element of criminal fraud — including both the underlying scheme and his criminal intent. This meant that the FBI had both that confession and highly potent, admissible evidence of guilt in the form of testimony from his adult children (who had no apparent axe to grind).
If that is all the government ever had, they would have been able to convict Madoff easily at trial. (He eventually pled guilty.) They also needed to make sure that Madoff did not have second thoughts — he told his sons that he planned to turn himself in to authorities in about a week — and that he would not attempt to flee the country instead.
We have not seen anything like a real admission of criminal conduct from SBF yet and, of course, he is not in the country at the moment, so there is no imperative (no ability, really) to keep him in the United States. As important, SBF has been rather talkative in interviews — including in an interview with New York’s Jen Wieczner that was published yesterday — but he has been careful as well. So far as I can tell, he has held firm on a central point for his defense — that the epic, still-unspooling fiasco at FTX was the result of sloppiness and inadvertent missteps by the company’s leadership rather than an intentional effort to mislead FTX customers or investors.

This means that the Justice Department will need to try to get to the bottom of it by conducting an investigation that could take a long time, which is not to say that it will take SBF’s claims at face value. In fact, I am sure it will not, since his comments on the most prominent issue at the moment — FTX’s transfer of customer funds to SBF’s hedge fund, Alameda Research, and the subsequent loss of more than $1 billion — have been transparently evasive and substantively meaningless. (We have seen this before, down to eerily familiar media minutiae: In 2016, just days after The Wall Street Journal published its first exposé about Theranos, Elizabeth Holmes took the stage for an interview at a conference organized by the paper in which she insisted that the whole thing was a huge misunderstanding.)
What does an investigation of an international financial fraud like this look like? To simplify matters greatly, the government is going to be looking for three things — documents, witnesses, and data — to determine whether SBF or those around him committed fraud. Let’s take these in turn.
It is not yet clear how easy it will be for the government to obtain internal emails from FTX and personal communications among SBF and his lieutenants. It will depend in significant part on whether and to what extent FTX, SBF, et al. were using U.S.-based technology providers like Google or Microsoft who (a) still have this material and (b) can and will comply with U.S. legal process. (Anything that has been permanently deleted or that was communicated over an encrypted messaging app like Signal will be difficult if not impossible to recover as a practical matter.) Even in the relatively straightforward situation in which the government can obtain emails from a third party like Microsoft, this still requires the government to undertake a potentially lengthy process — to prepare an application for a search warrant that establishes probable cause as to each of the email accounts whose contents investigators are seeking; to wait for the company to comply, which can take months under ordinary circumstances; and to actually review the material itself.
There are some ways around this, though whether and to what extent the Justice Department will be able to avail itself of them is unclear at the moment. The government could try to subpoena one of FTX’s U.S.-based entities for the documents, or FTX’s new lawyers could voluntarily produce material to prosecutors, but neither of these paths is as straightforward as they sound if the documents actually reside on a server outside the U.S., and both rely on FTX (or its service providers) having retained the underlying material in the first place. It is also possible that the Bahamian authorities might have their own legal tools to obtain documents and that they would be willing to share them with U.S. prosecutors, but that is also far from clear at the moment.
Of course, documents are a foundational part of any financial-fraud case, but at the end of the day, if criminal charges are actually brought, witnesses have to take the stand to explain to a jury what happened. That means that prosecutors have to identify knowledgeable people who can and will cooperate, but so far, I have yet to see anyone who worked at FTX provide a compelling firsthand account of criminal conduct perpetrated by SBF or anyone else. That does not mean nothing nefarious happened — just that the government may need to piece things together using accounts from different people who themselves may not have had full visibility into FTX and Alameda’s operations.
The Justice Department will have to try to interview people who worked at FTX and Alameda, which is par for the course in a financial-fraud case, but that is much harder when witnesses are overseas. For one thing, the government cannot simply subpoena witnesses the way it can with people who are in the country, and witnesses in foreign countries can easily decline voluntary interviews. The government also has much less leverage over witnesses abroad who have criminal exposure, since the risk of an indictment is not as potent when you might plausibly never see the inside of a U.S. courtroom even assuming that you are charged at some point.
As for “data,” that is a very large bucket that could include both customer-level account and transaction data as well as the company’s enterprise-level books and records, assuming that these things even exist and are reliable — two very big unknowns. When I prosecuted international financial fraud at the Justice Department, I placed a significant premium on the swiftness of criminal accountability even if the underlying flow of funds could not be forensically retraced, but this was not a universally held view among my colleagues.
Some prosecutors believe that juries expect a comprehensive accounting of what actually happened to all of the money in a complex fraud scheme, but in this day and age, that is getting harder for prosecutors to provide, particularly when foreign bank accounts are involved. The Justice Department can request foreign banking data from other countries, but depending on the jurisdiction, it can take literal years to get a response, and even then, the information may be incomplete or simply lead the government to more foreign bank accounts, which, in turn, require further requests and investigation.
The FTX bankruptcy proceeding is going to complicate matters further. As is sadly common for these situations, the company is now spending what little money it still has on expensive lawyers and bankruptcy professionals, including a team from Sullivan & Cromwell who will do what I gather is an internal investigation on behalf of the company’s new leadership. The government is going to need to figure out its posture toward that investigation, which is not going to be easy.
I certainly understand why people would bristle at all of these sources of potential delay, but this sort of investigative slog is much more common in a white-collar case than a quick arrest. For instance, it took almost a year for the U.S. Attorney’s office in Manhattan (which is reportedly handling the FTX investigation) to charge the founder of the electric-truck start-up Nikola with fraud even though the short-selling firm Hindenburg Research seemingly did all of the work when it published a lengthy report that precipitated the investigation in the first place. And it took nearly two years for the department to charge Holmes even after the Journal’s John Carreyrou publicly exposed the central problems at Theranos.
Prosecutors at the Justice Department cannot — and do not — simply indict people based on what they read in the press, no matter how damning it may seem. Even if they desperately want to charge someone, prosecutors have to conduct their own investigation to develop robust, admissible evidence of criminal misconduct, which requires gathering and reviewing documents and data, speaking with witnesses, and — perhaps above all — time.

How much is Bernie Madoff worth today?


Bernard Lawrence Madoff (/ˈmeɪdɔːf/ MAY-dawf; April 29, 1938 – April 14, 2021) was an American fraudster and financier who ran the largest Ponzi scheme in history, worth about $64.8 billion. He was at one time chairman of the NASDAQ stock exchange.

There's no pressure to arrest SBF immediately, because no members of USA's shadow government's money are involved in this.

And Bahamas is designed as the best location for the USA rich people to store their wealth.

It's intended to be protected.

How wrong is it, it can't be touched.

 

[Trango Towers]

As usual ppl start blaming crypto. Its not fault of crypto, the guy literally stole ppl's wallet money and used it in other investments. I think binance knew about it and destroyed them.

Did you watch the documentary about thus company. It tells you exactly what they did???

 

[_NOBODY_]

Why Hasn’t Sam Bankman-Fried Been Arrested Yet?

Bernie Madoff was arrested in a matter of days after his fraud came to light, but SBF is still a free man. What gives?

nymag.com

THE LAW DEC. 2, 2022

Why Hasn’t Sam Bankman-Fried Been Arrested Yet?​

By Ankush Khardori

Sam Bankman-Fried rejects comparisons to Bernie Madoff. Photo-Illustration: Intelligencer. Photos: Getty Images
On December 11, 2008, Bernie Madoff was arrested and criminally charged with one of the biggest financial frauds in history — an audacious, long-running Ponzi scheme that resulted in tens of billions of dollars in lost investor funds. At the time, the scandal sparked a national conversation about the gross deficiencies of our country’s white-collar enforcement regime, but ever since the initial revelations about the problems at FTX and about Sam Bankman-Fried’s criminal exposure, the Madoff case has resurfaced as a point of comparison for Bankman-Fried’s alleged misdeeds — and as a rallying cry for people who believe he should already have been locked up by U.S. prosecutors.
Bankman-Fried was asked about the comparison by Good Morning America anchor George Stephanopoulos and (of course) rejected it, arguing that FTX was a “real business” in contrast to Madoff’s outright Ponzi scheme.

But how much weight does the comparison deserve — particularly as a guide to how prosecutors ought to be handling the case? Unfortunately for those seeking immediate action by the Department of Justice, while the juxtaposition — between the swiftness of Madoff’s arrest and the fact that SBF is apparently enjoying life in the Bahamas — is superficially compelling, it does not withstand more than a few minutes’ worth of scrutiny. In fact, these claims run the serious risk of misleading the many people, including victims, who are understandably angry about what may have been a gigantic fraud. Those who are eager to see Bankman-Fried charged with serious financial crimes will just have to be patient.

Sign up for Dinner Party​

A lively evening newsletter about everything that just happened.

Let’s start with the actual circumstances of Madoff’s arrest. The scheme was not detected by the government or the media — infamously — but was in fact revealed by Madoff himself, who confessed the whole thing to his sons once he realized that he could not keep up the fraud. According to the criminal complaint filed on the day of his arrest, Madoff told his sons “that he was ‘finished,’ that he had ‘absolutely nothing,’ that ‘it’s all just one big lie,’ and that it was ‘basically a giant Ponzi scheme.’” His sons called the FBI, and two days later, two agents showed up at his home and asked whether “there’s an innocent explanation” for what Madoff had told his sons. Madoff literally replied, “There is no innocent explanation.”
At the risk of stating the obvious, the reason Madoff was arrested so quickly is because he confessed to every element of criminal fraud — including both the underlying scheme and his criminal intent. This meant that the FBI had both that confession and highly potent, admissible evidence of guilt in the form of testimony from his adult children (who had no apparent axe to grind).
If that is all the government ever had, they would have been able to convict Madoff easily at trial. (He eventually pled guilty.) They also needed to make sure that Madoff did not have second thoughts — he told his sons that he planned to turn himself in to authorities in about a week — and that he would not attempt to flee the country instead.
We have not seen anything like a real admission of criminal conduct from SBF yet and, of course, he is not in the country at the moment, so there is no imperative (no ability, really) to keep him in the United States. As important, SBF has been rather talkative in interviews — including in an interview with New York’s Jen Wieczner that was published yesterday — but he has been careful as well. So far as I can tell, he has held firm on a central point for his defense — that the epic, still-unspooling fiasco at FTX was the result of sloppiness and inadvertent missteps by the company’s leadership rather than an intentional effort to mislead FTX customers or investors.

This means that the Justice Department will need to try to get to the bottom of it by conducting an investigation that could take a long time, which is not to say that it will take SBF’s claims at face value. In fact, I am sure it will not, since his comments on the most prominent issue at the moment — FTX’s transfer of customer funds to SBF’s hedge fund, Alameda Research, and the subsequent loss of more than $1 billion — have been transparently evasive and substantively meaningless. (We have seen this before, down to eerily familiar media minutiae: In 2016, just days after The Wall Street Journal published its first exposé about Theranos, Elizabeth Holmes took the stage for an interview at a conference organized by the paper in which she insisted that the whole thing was a huge misunderstanding.)
What does an investigation of an international financial fraud like this look like? To simplify matters greatly, the government is going to be looking for three things — documents, witnesses, and data — to determine whether SBF or those around him committed fraud. Let’s take these in turn.
It is not yet clear how easy it will be for the government to obtain internal emails from FTX and personal communications among SBF and his lieutenants. It will depend in significant part on whether and to what extent FTX, SBF, et al. were using U.S.-based technology providers like Google or Microsoft who (a) still have this material and (b) can and will comply with U.S. legal process. (Anything that has been permanently deleted or that was communicated over an encrypted messaging app like Signal will be difficult if not impossible to recover as a practical matter.) Even in the relatively straightforward situation in which the government can obtain emails from a third party like Microsoft, this still requires the government to undertake a potentially lengthy process — to prepare an application for a search warrant that establishes probable cause as to each of the email accounts whose contents investigators are seeking; to wait for the company to comply, which can take months under ordinary circumstances; and to actually review the material itself.
There are some ways around this, though whether and to what extent the Justice Department will be able to avail itself of them is unclear at the moment. The government could try to subpoena one of FTX’s U.S.-based entities for the documents, or FTX’s new lawyers could voluntarily produce material to prosecutors, but neither of these paths is as straightforward as they sound if the documents actually reside on a server outside the U.S., and both rely on FTX (or its service providers) having retained the underlying material in the first place. It is also possible that the Bahamian authorities might have their own legal tools to obtain documents and that they would be willing to share them with U.S. prosecutors, but that is also far from clear at the moment.
Of course, documents are a foundational part of any financial-fraud case, but at the end of the day, if criminal charges are actually brought, witnesses have to take the stand to explain to a jury what happened. That means that prosecutors have to identify knowledgeable people who can and will cooperate, but so far, I have yet to see anyone who worked at FTX provide a compelling firsthand account of criminal conduct perpetrated by SBF or anyone else. That does not mean nothing nefarious happened — just that the government may need to piece things together using accounts from different people who themselves may not have had full visibility into FTX and Alameda’s operations.
The Justice Department will have to try to interview people who worked at FTX and Alameda, which is par for the course in a financial-fraud case, but that is much harder when witnesses are overseas. For one thing, the government cannot simply subpoena witnesses the way it can with people who are in the country, and witnesses in foreign countries can easily decline voluntary interviews. The government also has much less leverage over witnesses abroad who have criminal exposure, since the risk of an indictment is not as potent when you might plausibly never see the inside of a U.S. courtroom even assuming that you are charged at some point.
As for “data,” that is a very large bucket that could include both customer-level account and transaction data as well as the company’s enterprise-level books and records, assuming that these things even exist and are reliable — two very big unknowns. When I prosecuted international financial fraud at the Justice Department, I placed a significant premium on the swiftness of criminal accountability even if the underlying flow of funds could not be forensically retraced, but this was not a universally held view among my colleagues.
Some prosecutors believe that juries expect a comprehensive accounting of what actually happened to all of the money in a complex fraud scheme, but in this day and age, that is getting harder for prosecutors to provide, particularly when foreign bank accounts are involved. The Justice Department can request foreign banking data from other countries, but depending on the jurisdiction, it can take literal years to get a response, and even then, the information may be incomplete or simply lead the government to more foreign bank accounts, which, in turn, require further requests and investigation.
The FTX bankruptcy proceeding is going to complicate matters further. As is sadly common for these situations, the company is now spending what little money it still has on expensive lawyers and bankruptcy professionals, including a team from Sullivan & Cromwell who will do what I gather is an internal investigation on behalf of the company’s new leadership. The government is going to need to figure out its posture toward that investigation, which is not going to be easy.
I certainly understand why people would bristle at all of these sources of potential delay, but this sort of investigative slog is much more common in a white-collar case than a quick arrest. For instance, it took almost a year for the U.S. Attorney’s office in Manhattan (which is reportedly handling the FTX investigation) to charge the founder of the electric-truck start-up Nikola with fraud even though the short-selling firm Hindenburg Research seemingly did all of the work when it published a lengthy report that precipitated the investigation in the first place. And it took nearly two years for the department to charge Holmes even after the Journal’s John Carreyrou publicly exposed the central problems at Theranos.
Prosecutors at the Justice Department cannot — and do not — simply indict people based on what they read in the press, no matter how damning it may seem. Even if they desperately want to charge someone, prosecutors have to conduct their own investigation to develop robust, admissible evidence of criminal misconduct, which requires gathering and reviewing documents and data, speaking with witnesses, and — perhaps above all — time.

How much is Bernie Madoff worth today?


Bernard Lawrence Madoff (/ˈmeɪdɔːf/ MAY-dawf; April 29, 1938 – April 14, 2021) was an American fraudster and financier who ran the largest Ponzi scheme in history, worth about $64.8 billion. He was at one time chairman of the NASDAQ stock exchange.

His donations to both Democrats and Republicans will now come in handy.

 

[SD 10]

Crypto was full of shit from day one... but people just want a shorcut to everything...tried stopping so many idiots from investing in this but they never learn!

 

[TNT]

Did you watch the documentary about thus company. It tells you exactly what they did???

Nop but its known they made a backdoor in the system to use exchange money in alameda. They also hedged their own token and took loans.