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Sam Bankman-Fried demanded special privileges for Alameda Research: ex-colleague Gary Wang

Economic Times

Economic Times · 1y ago

Sam Bankman-Fried demanded special privileges for Alameda Research: ex-colleague Gary Wang

Gary Wang, a former college roommate and ex-colleague of Sam Bankman-Fried, founder of the FTX cryptocurrency exchange, testified in court during Bankman-Fried's fraud trial. Wang claimed that Bankman-Fried instructed him to grant special trading privileges to the hedge fund Alameda Research, which included a $65 billion line of credit, far larger than what other users could borrow. Alameda had withdrawn $8 billion from FTX before the exchange's bankruptcy in November 2022. Bankman-Fried faces allegations of stealing billions from FTX customer deposits to cover losses at Alameda and other uses, which he denies. Wang is one of three cooperating witnesses in the trial.

Related News

Sam Bankman-Fried stole customer funds from the beginning of FTX, exchange's cofounder tells jury

Economic Times

Economic Times · 1y ago

Sam Bankman-Fried stole customer funds from the beginning of FTX, exchange's cofounder tells jury

Gary Wang, co-founder of FTX cryptocurrency exchange, testified in a New York trial that Sam Bankman-Fried, the CEO of FTX, authorized the illegal use of FTX customers' funds and assets to cover losses at an affiliated hedge fund, Alameda Research. Bankman-Fried allegedly ordered code changes giving Alameda special privileges, including a $65 billion line of credit. Prosecutors claim Bankman-Fried stole billions of dollars to fund a lavish lifestyle. Wang, part of FTX's "inner circle," pleaded guilty to fraud charges and is testifying in exchange for leniency in his case. The trial continues.

Sam Bankman-Fried prosecutor says Gary Wang's cooperation sped up case

Economic Times

Economic Times · 1y ago

Sam Bankman-Fried prosecutor says Gary Wang's cooperation sped up case

FTX founder Sam Bankman-Fried was charged by US prosecutors due in part to the cooperation of the former chief software engineer of the cryptocurrency exchange, Gary Wang. Wang's assistance was crucial in understanding how Bankman-Fried stole $8 billion in customer funds. Without Wang's help, it would have taken much longer for investigators to uncover the fraud. Bankman-Fried was recently sentenced to 25 years in prison and plans to appeal the conviction. Wang, along with other former FTX employees, pleaded guilty to fraud and testified against Bankman-Fried during the trial.

Former FTX CEO Sam Bankman-Fried's bail revoked ahead of trial

Startup News FYI

Startup News FYI · 1y ago

Former FTX CEO Sam Bankman-Fried's bail revoked ahead of trial

Sam Bankman-Fried, the ex-CEO of bankrupt crypto exchange FTX, had his bail revoked by US District Court Judge Lewis Kaplan on Friday. The decision was prompted by allegations that Bankman-Fried leaked the diary of Caroline Ellison, former CEO of FTX's investment-arm Alameda Research, to the New York Times. Kaplan made the announcement during a federal court session in Manhattan.

Caroline Ellison says FTX founder Sam Bankman-Fried corrupted her values so she could lie and steal

Economic Times

Economic Times · 1y ago

Caroline Ellison says FTX founder Sam Bankman-Fried corrupted her values so she could lie and steal

In a New York City trial, Caroline Ellison, the former top executive of Sam Bankman-Fried's cryptocurrency hedge fund Alameda Research, accused Bankman-Fried of corrupting her values, leading her to lie, steal, and create false balance sheets. Ellison said that Bankman-Fried's philosophy, which sometimes justified bending or breaking the rules, made her more willing to engage in dishonest activities. She admitted to doctoring balance sheets and sending false information to lenders, expressing a sense of dread throughout her time with Alameda. Bankman-Fried faces fraud charges, while Ellison pleaded guilty to fraud charges in December.

Sam Bankman-Fried has 'regret' for not probing $8 billion debt to FTX

Economic Times

Economic Times · 1y ago

Sam Bankman-Fried has 'regret' for not probing $8 billion debt to FTX

Sam Bankman-Fried, the founder of FTX, concluded his defense in his fraud trial, expressing "regret" for not examining the $8 billion his hedge fund borrowed from the cryptocurrency exchange before its collapse in November. Bankman-Fried claimed he thought it was "permissible" for his Alameda Research hedge fund to use customer deposits in a bank account it controlled, per FTX's instructions. He faces two counts of fraud and five counts of conspiracy. Prosecutors allege he looted customer funds to support Alameda, made speculative investments, and donated to U.S. political campaigns.

Fourth top FTX executive pleads guilty ahead of Sam Bankman-Fried trial

Economic Times

Economic Times · 1y ago

Fourth top FTX executive pleads guilty ahead of Sam Bankman-Fried trial

Ryan Salame, a former top executive at cryptocurrency exchange FTX, has pleaded guilty to criminal charges related to a fraud case against FTX's founder, Sam Bankman-Fried. Salame admitted to making millions in political contributions at Bankman-Fried's direction, labeling them as loans from FTX's sister company, crypto hedge fund Alameda Research. He will pay a $6 million fine, over $5 million in restitution to FTX, forfeit two properties, and could face up to 10 years in federal prison. Salame is the fourth executive in Bankman-Fried's circle to admit to criminal conduct, putting pressure on Bankman-Fried ahead of his trial next month.

Sam Bankman-Fried testifies he believed FTX was 'fine' until just before collapse

Economic Times

Economic Times · 1y ago

Sam Bankman-Fried testifies he believed FTX was 'fine' until just before collapse

Sam Bankman-Fried, the founder of FTX, testified in his fraud trial that he believed the cryptocurrency exchange was solvent when he tweeted "FTX is fine" days before it declared bankruptcy in November 2022. He defended himself against allegations that he misled the public about FTX's health. Bankman-Fried recounted the events leading up to FTX's collapse, including heavy losses sustained by his hedge fund Alameda Research. He claimed that Alameda's debts to FTX affected his perception of the exchange's solvency. He faces charges of fraud and conspiracy, with prosecutors accusing him of misappropriating customer funds.

SBF's prison sentence marks the end of the crypto grift era — so what's next?

TechCrunch · 1y ago

SBF's prison sentence marks the end of the crypto grift era — so what's next?

Federal judge sentenced former FTX CEO Sam Bankman-Fried to 25 years in prison for wire fraud and money laundering. Bankman-Fried and his partners used their cryptocurrency exchange, FTX, to secretly divert customer deposits to their hedge fund, Alameda Research. The scheme was exposed through leaks and investigative work. This sentencing marks a shift towards a more cautious phase in the crypto industry, where developers are urged to build useful applications on blockchain technology. However, the value of most blockchain projects still revolves around speculation, and there hasn't been a successful blockchain-based startup yet. Bitcoin remains as the most stable and widely adopted cryptocurrency due to its tangible backing of energy consumption.

Why Silicon Valley Falls for Frauds

Wired · 1y ago

Why Silicon Valley Falls for Frauds

Aditiya Baradwaj joined crypto-trading firm Alameda Research, led by Sam Bankman-Fried, who was a billionaire and proponent of effective altruism. However, a complaint by the US Department of Justice alleges that Alameda was using customers' deposits to fund its trading, leading to FTX's bankruptcy and criminal charges against senior figures. The case highlights how charismatic leaders in the crypto industry can create a "reality distortion field" that attracts investors, even when they have access to financial documents, ultimately resulting in one of the largest financial frauds in history. Silicon Valley often prioritizes narrative over economic fundamentals, leading to investments in companies that may not succeed.

FTX's Sam Bankman-Fried appeals jailing as trial nears

Economic Times

Economic Times · 1y ago

FTX's Sam Bankman-Fried appeals jailing as trial nears

Sam Bankman-Fried, founder of FTX cryptocurrency exchange, has appealed a decision to jail him for alleged witness tampering ahead of his trial over the collapse of FTX. Bankman-Fried's lawyers argue that he exercised his First Amendment rights by sharing writings by his former colleague Caroline Ellison with a New York Times reporter to defend his reputation. Prosecutors claim he released the writings to harass Ellison and dissuade others from testifying. Bankman-Fried's bail was revoked on Aug. 11, and he faces charges of stealing billions of dollars in FTX customer funds.

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