November 2, 2023

USA: Sam Bankman-Fried, FTX Co-founder, Found Guilty Of All 7 Counts Of Wire Fraud, Securities Fraud And Money Laundering. His Brother Works For Democrat On Financial Services Committee.

UPDATE 11/3/23 at 12:22pm: Added vid below.

Sharing this video below for those of you who don't know who he is and what he did. This guy did a great job summing him up. (emphasis mine)
James Jani published September 1, 2023: The Fake Genius: a $30 BILLION Fraud. Sam Bankman-Fried (SBF) was supposed to be a billionaire genius running the world's largest Crypto exchange: FTX. In only a few weeks, his $32B empire crumbled, leading to his arrest. In this video, we unravel one of the decade's most significant cases of financial fraud.
CNBC Television published November 2, 2023: U.S. Attorney Williams: SBF perpetrated one of the biggest financial crimes in U.S. history. U.S. Attorney Damian Williams speaks after Sam Bankman-Fried verdict.
NBC News published November 2, 2023: BREAKING: Sam Bankman-Fried found guilty on all counts in FTX fraud trial. A jury found Sam Bankman-Fried, the co-founder of the FTX cryptocurrency exchange, guilty of all seven criminal counts of fraud and conspiracy against him. Bankman-Fried was charged with wire fraud, securities fraud and money laundering.
CBS News published November 2, 2023: How Sam Bankman-Fried was portrayed by prosecutors, defense at New York trial. Jury deliberations are set to begin in the New York trial of FTX founder Sam Bankman-Fried. The jury will have to consider if Bankman-Fried's statements on the stand contradict evidence presented by the prosecution. CBS News national correspondent Errol Barnett has the latest as attention turns to the jury.

written by Nikhilesh De, and Sam Kessler
Thursday November 2, 2023

NEW YORK -- Sam Bankman-Fried defrauded his customers and lenders, a New York jury found after a five-week trial for the FTX founder and former chief executive.

A tentative sentencing date was set for March 28, 2024. Bankman-Fried could spend decades in prison (and theoretically up to 115 years).

"Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history," U.S. Attorney Damian Williams said outside the courthouse after the guilty verdicts on all seven charges were revealed. "This kind of fraud, this kind of corruption is as old as time. We have no patience for it."

An appeal seems likely: In a statement, defense attorney Mark Cohen said Bankman-Fried respects the jury's decision but maintains his innocence and will continue to "vigorously fight the charges."

Jurors began deliberating a little after 3 p.m. ET. Just before 7:40 p.m., the judge said they had reached a verdict. The attorneys and Bankman-Fried returned to the courtroom and the guilty verdict was read out shortly thereafter to the packed courtroom.

Bankman-Fried kept still when the verdict was read. He'd been instructed by the judge to look toward the jury box, and jurors were told to look toward the court clerk and judge.

"The verdict unanimous, your honor," was the message from the 12 New Yorkers who voted guilty on all seven counts. The judge thanked jurors for their service.

The jury reached the guilty verdicts on the first anniversary, coincidentally, of the award-winning CoinDesk scoop that spurred the former crypto mogul's downfall.

SBF's parents in attendance

As the foreperson read the guilty verdicts, Joseph Bankman, the defendant's father, buried his head into his lap from a seat in the viewing gallery.

His mother Barbara Fried kept still, back straight, with a kind of sullen expressionlessness — staring straight ahead.

After the judge left the courtroom, Bankman-Fried stood up and his lawyers leaned in and spoke to him. He didn’t look back at the viewing gallery, even as his parents shuffled over to the wooden divider directly behind him.

Arms around each other, they stared at Sam’s back while roughly three dozen reporters swarmed around them.

Sam still hadn’t looked back at his parents or the rest of the gallery by the time he was escorted toward an exit at the front of the courtroom.

Just as he was about to reach the door, he shot back a final glance at his parents — with a blink-and-you’ll-miss-it half-smile and nod.

His mother brought her hand to her chest with an audible thump.

A month-long trial

Bankman-Fried, 31, was arrested last December and tried on allegations of defrauding FTX investors and customers, and Alameda Research's lenders.

The once-prominent crypto exchange CEO pleaded not guilty to all charges, and went to trial at the beginning of October, where federal prosecutors sought to paint him as someone who deliberately set out to steal his customers' funds – around $8 billion – for use in a variety of purchases and investments, including real estate, sports sponsorships and venture investments.

His defense team argued that Bankman-Fried was an overworked businessman who made the mistake of assuming the company funds he used belonged to those companies, rather than their customers or investors.

Bankman-Fried acknowledged "there were significant oversights," but said on the stand he did not defraud anyone or set out to take their funds.

"A lot of people got hurt – customers, employees – and the company ended up in bankruptcy," Bankman-Fried said on his first day of testimony before the jury. "... I made a number of small mistakes and a number of larger mistakes."

FTX collapsed nearly a year ago, after CoinDesk's Ian Allison reported that Alameda held a massive amount of FTX's exchange token, FTT, a revelation which, combined with tweets from Binance CEO Changpeng Zhao, sparked what Bankman-Fried described as a "run on FTX" – ultimately leading to FTX, Alameda and the companies' various subsidiaries filing for bankruptcy.

Key FTX and Alameda executives, including former Chief Technology Officer Gary Wang, former Head of Engineering Nishad Singh and former Alameda CEO Caroline Ellison, pleaded guilty to various charges and testified against Bankman-Fried during the trial, saying that they had taken direction from the MIT grad who co-founded the companies. A number of other former employees similarly testified that Bankman-Fried set the direction for FTX's operations.

Bankman-Fried, however, argued that he trusted his handpicked lieutenants to safely operate the companies while he was busy with his own roles as the head of the multibillion-dollar empire, including acting as the public face of FTX and lobbying regulators and lawmakers.

All told, Bankman-Fried was charged with wire fraud and conspiracy to commit wire fraud against FTX's customers, wire fraud and conspiracy to commit wire fraud against Alameda's lenders, conspiracy to commit securities fraud against FTX's investors, conspiracy to commit commodities fraud against FTX's customers and conspiracy to commit money laundering.

Reuters published September 20, 2023: FTX sues Bankman-Fried's parents over missing millions. Bankrupt crypto exchange FTX sued the parents of founder Sam Bankman-Fried, saying that Stanford professors Joseph Bankman and Barbara Fried used the company to enrich themselves at the expense of company’s customers
Fox News published November 14, 2022: Watters: Democrats are in the middle of the 'biggest financial fraud case in US history'. Fox News host Jesse Watters weighs in on the Democratic Party's relationship with the now bankrupt cryptocurrency company FTX on 'Jesse Watters Primetime.'
The Daily Signal
written by Roman Jankowski
November 15, 2022

A Democrat who sits on the House Financial Services Committee hired the brother of the head of the bankrupt cryptocurrency company FTX, potentially raising ethical questions.

Gabe Bankman-Fried, the younger brother of FTX CEO Samuel Bankman-Fried, went to work in January 2019 for Rep. Sean Casten, D-Ill.

Casten, then a freshman congressman, was named that same month to the House Financial Services Committee, which oversees regulation of cryptocurrency and hedge funds, among other matters.

Gabe Bankman-Fried remained employed for two years on the House staff, according to his LinkedIn profile. The website Legistorm, which tracks members of Congress and their staffers, says he worked for Casten.

The Los Angeles Times, NBC News, Politico, and other news organizations have reported that Sam Bankman-Fried, 30, is Gabe Bankman-Fried’s older brother.

Gabe Bankman-Fried is now director of Guarding Against Pandemics, an organization created by his brother Sam in 2020 to lobby Congress to support $30 billion in pandemic prevention included in the Biden administration-backed infrastructure legislation. The organization planned to spend $128,000 on TV and digital ads in the Washington metropolitan area.

The Daily Signal contacted Guarding Against Pandemics seeking comment from Gabe Bankman-Fried about his employment with Casten, but he had not responded as of publication time.

FTX, founded in May 2019 by Samuel Bankman-Fried and Gary Wang, also didn’t respond to email inquiries from The Daily Signal.

Samuel Bankman-Fried and others also founded the hedge fund Alameda Research in 2017.

The House Financial Services Committee, which has included Casten since January 2019, oversees regulation and laws governing cryptocurrency companies such as FTX and hedge funds such as Alameda, a responsibility that raises ethical questions for Casten.

On Friday, Sam Bankman-Fried resigned as chief executive officer of FTX and the company filed for Chapter 11 bankruptcy protection in Delaware, Bloomberg and other outlets reported.

Sam Bankman-Fried, who donated about $38 million to Democrat candidates and liberal causes during the midterm cycle, reportedly lost $16 billion in a week. He made an individual contribution of $2,800 to Joe Biden’s 2020 presidential campaign.

Alameda, the hedge fund, did almost all of its trading on the FTX cryptocurrency exchange and reportedly was financed with client funds from FTX.

The Daily Signal and The Heritage Foundation’s Oversight Project asked Casten’s spokesperson, Jacob Vurpillat, whether the congressman met with or received donations from FTX or any other cryptocurrency company. (The Daily Signal is Heritage’s multimedia news organization.)

Casten’s spokesman didn’t respond to email or phone inquiries Monday by publication time. We also reached out Tuesday to Casten through a Twitter direct message, but did not get a response.

We made inquiries by email asking whether ethical limitations regarding interactions with cryptocurrency companies were placed on Casten or Gabe Bankman-Fried, who was employed by Casten as a legislative correspondent from January 2019 through February 2021.

Typically in government, when an apparent conflict of interest arises involving a relative with whom a government employee has a close relationship, that employee or government office would seek counsel from a lawyer regarding ethical issues.

We also asked Casten’s spokesperson whether the congressman met with Treasury Department officials and discussed FTX or any other cryptocurrency companies.

The Daily Signal emailed the House Financial Services Committee to ask whether Chairwoman Maxine Waters, D-Calif., was aware of Gabe Bankman-Fried’s employment with Casten and his brother’s position leading FTX.

If Waters was aware of that employment, we asked, were any limitations placed on Casten, his office, or Gabe Bankman-Fried? We also asked whether committee staff met with representatives of FTX, Alameda Research, or any other cryptocurrency companies from January 2019 until now.

In a public statement Thursday, Waters said the Financial Services Committee has investigated cryptocurrency for four years. The California Democrat said she has worked with ranking member Rep. Patrick McHenry, R-N.C., to establish a “federal framework for stable coins.”

Waters’ statement didn’t address the employment of the brother of FTX’s chief executive officer by Casten, a committee member.

“Now more than ever,” she said, “it is clear that there are major consequences when cryptocurrency entities operate without robust federal oversight and protections for customers.”

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