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“Old-fashioned embezzlement”: Where did FTX’s money go? | FTX

SI'm Bankman Fried, former CEO of a bankrupt cryptocurrency exchange. FTX, led an epic collapse that cost customers billions of dollars. In his court filing, he argues that anyone who owes money from FTX “will ultimately be paid in full.” The US government claims he lives in a fantasy land.

Last week, FTX administrator John Ray III, who was appointed to oversee FTX's bankruptcy proceedings, told the court that Bankman Freed masterminded a “huge fraud” and was living a “life of delusion.” He reminded Mr. Bankman Freed of his lawyer's claims, saying: No one was harmed for being “categorically, callously, and patently false.”

bankman fried facing sentencing A man convicted of fraud and money laundering conspiracy in the collapse of a multibillion-dollar cryptocurrency exchange was sentenced Thursday. If he is sentenced to the maximum sentence, he will serve 100 years in prison.his lawyer asked 6 years in prison. The U.S. government wants to sentence a 32-year-old former CEO who defrauded his company's customers of $8 billion from 40 to 50 years in prison.

Justice Department lawyers say Bankman-Fried's sentencing submission shows an attempt “to recast his crimes as simple mistakes and misunderstandings,” and that if released at a younger age, he has “significant potential to commit fraud again.” He argues that there is a possibility.

Regardless of what Judge Lewis Kaplan decides on Bankman Fried, FTX's bankruptcy proceedings will be as controversial as its founder's blockbuster trial. This behavior could continue long after he is released from prison.

FTX: New technology, old embezzlement

This crypto entrepreneur has set up a smokescreen, spent millions of his clients' money on his lifestyle, courted politicians and celebrities with donations and endorsement deals, and the bottom line is that the greater the profit, the greater the good. It brought to the fore the pseudo-philosophy of effective altruism.

Last year, Mr. Wray testified before Congress that FTX's collapse was “a really old-fashioned embezzlement.” This is just taking money from customers and using it for their own purposes. ” Justice Department prosecutors echoed Bankman-Fried's remarks shortly after his conviction.

At trial, the court heard from accounting experts that $11.3 billion in customer funds was supposed to be held at FTX's hedge fund arm, Alameda Research. But all he found was $2.3 billion. The rest went to investments, political contributions, charitable foundations and real estate purchases. Surprisingly, FTX kept almost no transaction records.

“The damage was severe. There is no remorse. At least the effective altruism practiced by Mr. Samuel Bankman Freed was a lie,” Ray said in a recent court filing, calling himself added that his team spent “over a year protecting the property from a metaphorical dumpster fire.”

Who will receive compensation in FTX's bankruptcy and how?

FTX went bankrupt for 10 days in November 2022 and shortly after. filed for Chapter 11 bankruptcy – Statutes used to reorganize failed companies “in the public interest.” FTX's flagship exchange was shut down rather than restructured.

On January 31st, FTX announced that it would not reopen the exchange and would instead liquidate all assets. It promised to pay account holders the value of deposited cryptocurrencies in dollars.

However, a series of civil lawsuits are challenging decisions made regarding the handling of FTX after Bankman Fried's departure. The company said it would pay creditors based on the value of the cryptocurrency at the time of FTX's bankruptcy, when Bitcoin was trading at just over $17,000. Bitcoin has now quadrupled in value and is trading at more than $67,000. Plaintiffs in the lawsuit argue that FTX has a higher value.

Bankman Fried invested $500 million in AI startup Anthropic when it was valued at $3.4 billion. Currently worth about $15 billion, the shares could be worth $2 billion if FTX cashes out.

In a lawsuit filed in January, four FTX creditors said the company's plan to return customer funds does not reflect its obligations under Chapter 11 bankruptcy law. Some people object to the conversion of their crypto holdings into dollars, or “dollarization,” and the transparency that comes with it.

Last week, Wray set aside the visibility debate. The CEO stated that the crypto assets do not exist and cannot be returned. “The jury concluded beyond a reasonable doubt that Mr. Bankman Freed stole them and turned them into something else,” he said in a court filing.

Additionally, FTX's bankruptcy debt has become a hot commodity, with London-based distressed asset investor Attestor buying up the company's assets at rock-bottom prices. The certifier is currently defending itself in a New York court against a Panamanian FTX account holder who is seeking repayment of a bankruptcy debt that is now worth more than twice that amount.

FTX shareholders get zilch

Certain types of creditors are less likely to get their money back. I am a shareholder of FTX. Tiger Global management, Ontario Teachers' Pension Plan, Sequoia Capital, New England Patriots owner Robert Kraft, legendary NFL quarterback Tom Brady and his ex-wife Gisele Bündchen receive millions. They held the company's stock, and both were running advertisements for the company.their stakewhat was once worth tens of millions is now considered worthless.

Bankrupt FTX similarly has had little success recovering Bankman Fried's philanthropic and political contributions. That includes $44.6 million paid to Democratic candidates and causes and at least $23.9 million paid to Republicans in the last election cycle. FTX exhausted a total of $93 million in political contributions from March 2020 to November 2022. In February 2023, the exchange demanded the return of donations, claiming that it would file a lawsuit, but it has not responded to the threat.

However, some beneficiaries of FTX's PR efforts that claim to influence crypto-related regulations have returned their donations: New York's Metropolitan Museum of Art Came back Received $550,000 from FTX in 2022. Stanford University, where Bankman Fried's parents work as professors of legal ethics, has pledged to return the $5.5 million donation.

Academics question FTX's bankruptcy

Recently published academic papers It alleges that “obvious errors, omissions, and deceptions” in the company's dealings with Bankman Freed left FTX in the hands of lawyers Sullivan & Cromwell, which had “an undisclosed potential conflict of interest.” There is.

Temple University law professor Jonathan Lipson and University of Pennsylvania law professor David Skeel argue that “FTX is a wake-up call about the power that lawyers have to frame, manage, and profit from public interest claims.” , alleges that the bankruptcy involved a “transaction.” -Subterranean Assets-Sales to Favored Insiders”.

In their paper, the academics called for an independent inspector general to look into how this rapid collapse was handled.

“I don't see from the public record that they made any serious effort to resume trading,” Lipson told the Guardian. “Prior to the bankruptcy, Sullivan & Cromwell had an unusually long and important relationship with FTX and Bankman Freed, and the emergence of a conflict of interest caused them to panic and Bankman Freed to relinquish control of the company. We are concerned that they may have been misled to do so, which may have distorted the criminal case and harmed depositors and creditors.”

“His story of salvation”

In a text exchange with Vox reporter Kelsey PiperMr. Bankman Fried appeared to be undermining the foundations of the effective altruism ideology he once championed.

“I feel sorry for the people who have been screwed over by this stupid wake-up game that Westerners are playing, where they say random things and everyone likes us.”

Last month, SBF replaced its trial attorney with Mark Mukasey. He represents Donald Trump and Alex Mashinsky, the former CEO of the bankrupt cryptocurrency exchange Celsius and another tycoon accused of fraud. Mukasey described Bankman-Fried as a hard-working billionaire who avoided the trappings of great wealth and fame, and whose brusque social demeanor could be attributed to his “neurodiversity.” Stated.

In January, Ian Ayers, a professor at Yale Law School, and John Donoghue, a professor at Stanford Law School, both friends of the Bankman-Fried family, published an essay. project syndicate FTX claimed to have enough assets to make its customers whole.

And Daniel Czapski, former head of data science at FTX, says: I have written SBF was only interested in assisting bankruptcy attorneys and “worked almost 24 hours a day until exhaustion,” he said.

However, the government has backed off on these efforts. “What matters is that the defendant has a motive to start his own story of salvation and has already thought about how he will develop it. “Persuading others to part with money based on promises is realistic,” prosecutors said in their filing.

Summarize this content to 100 words SI'm Bankman Fried, former CEO of a bankrupt cryptocurrency exchange. FTX, led an epic collapse that cost customers billions of dollars. In his court filing, he argues that anyone who owes money from FTX “will ultimately be paid in full.” The US government claims he lives in a fantasy land.Last week, FTX administrator John Ray III, who was appointed to oversee FTX's bankruptcy proceedings, told the court that Bankman Freed masterminded a “huge fraud” and was living a “life of delusion.” He reminded Mr. Bankman Freed of his lawyer's claims, saying: No one was harmed for being “categorically, callously, and patently false.”bankman fried facing sentencing A man convicted of fraud and money laundering conspiracy in the collapse of a multibillion-dollar cryptocurrency exchange was sentenced Thursday. If he is sentenced to the maximum sentence, he will serve 100 years in prison.his lawyer asked 6 years in prison. The U.S. government wants to sentence a 32-year-old former CEO who defrauded his company's customers of $8 billion from 40 to 50 years in prison.Justice Department lawyers say Bankman-Fried's sentencing submission shows an attempt “to recast his crimes as simple mistakes and misunderstandings,” and that if released at a younger age, he has “significant potential to commit fraud again.” He argues that there is a possibility.Regardless of what Judge Lewis Kaplan decides on Bankman Fried, FTX's bankruptcy proceedings will be as controversial as its founder's blockbuster trial. This behavior could continue long after he is released from prison.FTX: New technology, old embezzlementThis crypto entrepreneur has set up a smokescreen, spent millions of his clients' money on his lifestyle, courted politicians and celebrities with donations and endorsement deals, and the bottom line is that the greater the profit, the greater the good. It brought to the fore the pseudo-philosophy of effective altruism.Last year, Mr. Wray testified before Congress that FTX's collapse was “a really old-fashioned embezzlement.” This is just taking money from customers and using it for their own purposes. ” Justice Department prosecutors echoed Bankman-Fried's remarks shortly after his conviction.At trial, the court heard from accounting experts that $11.3 billion in customer funds was supposed to be held at FTX's hedge fund arm, Alameda Research. But all he found was $2.3 billion. The rest went to investments, political contributions, charitable foundations and real estate purchases. Surprisingly, FTX kept almost no transaction records.”The damage was severe. There is no remorse. At least the effective altruism practiced by Mr. Samuel Bankman Freed was a lie,” Ray said in a recent court filing, calling himself added that his team spent “over a year protecting the property from a metaphorical dumpster fire.”Who will receive compensation in FTX's bankruptcy and how?FTX went bankrupt for 10 days in November 2022 and shortly after. filed for Chapter 11 bankruptcy – Statutes used to reorganize failed companies “in the public interest.” FTX's flagship exchange was shut down rather than restructured.On January 31st, FTX announced that it would not reopen the exchange and would instead liquidate all assets. It promised to pay account holders the value of deposited cryptocurrencies in dollars.However, a series of civil lawsuits are challenging decisions made regarding the handling of FTX after Bankman Fried's departure. The company said it would pay creditors based on the value of the cryptocurrency at the time of FTX's bankruptcy, when Bitcoin was trading at just over $17,000. Bitcoin has now quadrupled in value and is trading at more than $67,000. Plaintiffs in the lawsuit argue that FTX has a higher value.Bankman Fried invested $500 million in AI startup Anthropic when it was valued at $3.4 billion. Currently worth about $15 billion, the shares could be worth $2 billion if FTX cashes out.In a lawsuit filed in January, four FTX creditors said the company's plan to return customer funds does not reflect its obligations under Chapter 11 bankruptcy law. Some people object to the conversion of their crypto holdings into dollars, or “dollarization,” and the transparency that comes with it.Last week, Wray set aside the visibility debate. The CEO stated that the crypto assets do not exist and cannot be returned. “The jury concluded beyond a reasonable doubt that Mr. Bankman Freed stole them and turned them into something else,” he said in a court filing.Additionally, FTX's bankruptcy debt has become a hot commodity, with London-based distressed asset investor Attestor buying up the company's assets at rock-bottom prices. The certifier is currently defending itself in a New York court against a Panamanian FTX account holder who is seeking repayment of a bankruptcy debt that is now worth more than twice that amount.FTX shareholders get zilchCertain types of creditors are less likely to get their money back. I am a shareholder of FTX. Tiger Global management, Ontario Teachers' Pension Plan, Sequoia Capital, New England Patriots owner Robert Kraft, legendary NFL quarterback Tom Brady and his ex-wife Gisele Bündchen receive millions. They held the company's stock, and both were running advertisements for the company.their stakewhat was once worth tens of millions is now considered worthless.Bankrupt FTX similarly has had little success recovering Bankman Fried's philanthropic and political contributions. That includes $44.6 million paid to Democratic candidates and causes and at least $23.9 million paid to Republicans in the last election cycle. FTX exhausted a total of $93 million in political contributions from March 2020 to November 2022. In February 2023, the exchange demanded the return of donations, claiming that it would file a lawsuit, but it has not responded to the threat.However, some beneficiaries of FTX's PR efforts that claim to influence crypto-related regulations have returned their donations: New York's Metropolitan Museum of Art Came back Received $550,000 from FTX in 2022. Stanford University, where Bankman Fried's parents work as professors of legal ethics, has pledged to return the $5.5 million donation.Academics question FTX's bankruptcyRecently published academic papers It alleges that “obvious errors, omissions, and deceptions” in the company's dealings with Bankman Freed left FTX in the hands of lawyers Sullivan & Cromwell, which had “an undisclosed potential conflict of interest.” There is.Temple University law professor Jonathan Lipson and University of Pennsylvania law professor David Skeel argue that “FTX is a wake-up call about the power that lawyers have to frame, manage, and profit from public interest claims.” , alleges that the bankruptcy involved a “transaction.” -Subterranean Assets-Sales to Favored Insiders”.In their paper, the academics called for an independent inspector general to look into how this rapid collapse was handled.”I don't see from the public record that they made any serious effort to resume trading,” Lipson told the Guardian. “Prior to the bankruptcy, Sullivan & Cromwell had an unusually long and important relationship with FTX and Bankman Freed, and the emergence of a conflict of interest caused them to panic and Bankman Freed to relinquish control of the company. We are concerned that they may have been misled to do so, which may have distorted the criminal case and harmed depositors and creditors.””His story of salvation”In a text exchange with Vox reporter Kelsey PiperMr. Bankman Fried appeared to be undermining the foundations of the effective altruism ideology he once championed.“I feel sorry for the people who have been screwed over by this stupid wake-up game that Westerners are playing, where they say random things and everyone likes us.”Last month, SBF replaced its trial attorney with Mark Mukasey. He represents Donald Trump and Alex Mashinsky, the former CEO of the bankrupt cryptocurrency exchange Celsius and another tycoon accused of fraud. Mukasey described Bankman-Fried as a hard-working billionaire who avoided the trappings of great wealth and fame, and whose brusque social demeanor could be attributed to his “neurodiversity.” Stated.In January, Ian Ayers, a professor at Yale Law School, and John Donoghue, a professor at Stanford Law School, both friends of the Bankman-Fried family, published an essay. project syndicate FTX claimed to have enough assets to make its customers whole.And Daniel Czapski, former head of data science at FTX, says: I have written SBF was only interested in assisting bankruptcy attorneys and “worked almost 24 hours a day until exhaustion,” he said.However, the government has backed off on these efforts. “What matters is that the defendant has a motive to start his own story of salvation and has already thought about how he will develop it. “Persuading others to part with money based on promises is realistic,” prosecutors said in their filing.
https://www.theguardian.com/business/2024/mar/27/where-did-ftx-money-go “Old-fashioned embezzlement”: Where did FTX’s money go? | FTX

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