More from Crypto collapse: FTX’s fall is one piece of a long, cold, contagious crypto winter
A year ago, the DOJ announced it recovered more than 50k Bitcoin stolen from the Silk Road market in 2012 and that James Zhong had pleaded guilty to the crime.
CNBC’s 30-minute report uncovers how they found him (he moved $800 in Bitcoin to an account registered under his real name) and shows body camera footage of cops investigating his house while pretending to pursue a thief who’d broken in and stole some crypto. That person’s identity is still unknown.
That is a theme of Caroline Ellison’s remarks about Sam Bankman-Fried and FTX during his trial on charges of wire fraud and conspiracy.
As Liz Lopatto captured from Tuesday’s testimony:
“[SBF] was very ambitious,” she said. Besides telling her about his presidential chances, he also told her that if there was a coin flip where tails destroyed the world and heads made the world twice as good, he’d flip the coin. He called this being “risk-neutral,” which seems like a fancy way of saying he was a gambling addict.
Ellison is back on the stand today, and I can’t wait for the next big update.
That’s one of the things mentioned during the ongoing testimony of former Alameda Research CEO Caroline Ellison against her terrible ex-boyfriend, as well as the idea SBF sought to have regulators “crack down on Binance,” the competing crypto exchange that sparked the run that took FTX down.
You can expect more updates from Wednesday’s events in the Sam Bankman-Fried / FTX fraud trial to come later today.
The Verge reporter Liz Lopatto is back in a New York City courtroom today, as Sam Bankman-Fried’s friends turned cooperating witnesses continue to take the stand in the case against the fallen FTX boss.
We broke down FTX CTO Gary Wang’s testimony / code review on Friday, and today the case restarted with him still on the stand, and former Alameda CEO and SBF ex Caroline Ellison is expected to make her appearance later today. Stay tuned here for all of the latest updates from the crypto exchange fraud trial.
Before they collapsed, FTX and Alameda Research “massed a roster of portfolio companies that included major names in the industry, such as stablecoin providers Circle and Paxos, blockchain developer Aptos Labs and crypto bank Anchorage Digital,” Bloomberg writes.
But venture funding for the crypto world has plunged; selling those stakes could further depress startup valuations.
The government’s prosecution of Sam Bankman-Fried continues where it left off Thursday, with another former college roommate and alleged co-conspirator testifying against the former FTX CEO about exactly how all that customer money ended up being used for SBF’s other interests.
You can read up on all of the details about the missing billions right here, ahead of another trial update later today from The Verge’s Liz Lopatto, who is in the courtroom right now.
Two of Bankman-Fried’s MIT roommates make a damning case for the prosecution.
‘Is he going to throw the entire industry under the bus?’
The head of legal and the chief risk officer at Binance.US are leaving, The Wall Street Journal reports. The CEO of Binance.US quit earlier this week.
Just remembering the time that FTX’s legal and compliance team quit, no reason.
How involved were SBF’s powerful parents?
Legal filings suggest Bankman and Fried were crucial to their son’s transfiguration from schlubby startup nerd to hyperconnected crypto mogul. The couple profited tremendously from FTX, netting $26 million in cash and real estate in 2022 alone. They were regular fixtures at the company’s offices, offered words of encouragement to employees and were included in internal company communications. Their reputations and connections were essential to FTX’s success.
FTX has said its holdings are worth $3.4 billion.
FTX revealed earlier this week that it holds $1.16 billion of solana (SOL) – approximately 16% of the token’s outstanding supply – and about $560 million in bitcoin (BTC). The rest of its holdings consist of lesser known illiquid tokens.
Good luck out there, folks!
Sebastian Greenwood was the co-founder of a fraudulent cryptocurrency that pulled in $4 billion from investors between 2014 and 2016. Now U.S. District Judge Edgardo Ramos has sentenced him to 20 years in prison, and he was ordered to pay $300 million in forfeiture.
Through the MLM structure, OneCoin members received commissions for recruiting others to purchase cryptocurrency packages. As the top MLM distributor of OneCoin, GREENWOOD earned 5% of monthly OneCoin sales from anywhere in the world, which totaled more than $200 million from the fourth quarter of 2014 through the fourth quarter of 2016 alone and exceeded approximately $300 million in total.
Meanwhile, his partner, Ruja Ignatova, aka the “Cryptoqueen” we wrote about last year when she was added to the FBI’s Top Ten Most Wanted List, remains at large, with a $100,000 reward for information leading to her arrest.
The price of Bitcoin dropped below $25,000, as people believe the FTX bankruptcy may sell off significant holdings of “altcoins” from the failed exchange. (CoinDesk)
Ethereum founder Vitalik Buterin’s Twitter / X account was hacked and sent out a malicious link that stole $691k in crypto.
And someone paid a $500,000 fee to send $1,865 worth of Bitcoin. (Web3 is Going just Great)
The bankrupt exchange agreed to pay a fine of $24 million to settle the SEC’s charges that it operated as an unregistered national securities exchange, broker, and clearing agency.
The SEC also alleged that Bittrex attempted to get rid of “problematic” public statements that suggested the exchange sold securities:
For years, Bittrex worked with token issuers to ‘scrub’ their online statements of any indicia that they were investment contracts — all in an effort to evade the federal securities laws. They failed.
Bloomberg reports Ryan Salame, who donated $24 million to Republican campaigns, is negotiating a guilty plea on charges of violating campaign finance laws.
Coincidentally, prosecutors recently confirmed (PDF) they’re still charging FTX co-founder Sam Bankman-Fried for an illegal campaign finance scheme (as well as other alleged fraud and money laundering). He is due back in court on Friday (PDF) after a New York Times article published details from the diary of Caroline Ellison, who has already pleaded guilty and is cooperating in the case against him.
