Sam Bankman-Fried's sentence of 25 years came down this week, following his lawyers and family making all possible attempts at getting him a shorter sentence.

Here we will review those attempts, knowing that ultimately in the end, they failed. 

Sam's Parents Fear His Social Awkwardness Puts him in 'Extreme Danger' in a Prison Environment...

Sam's family made a desperate plea to the judge, begging for leniency in his sentencing for the FTX cryptocurrency fraud case. His parents, Barbara Fried and Joseph Bankman, warned that their son's social awkwardness and inability to read social cues could put him in "extreme danger" behind bars, fearing for his life in a typical prison environment.

In a heartfelt letter, Barbara Fried described her son's touching but naive belief in the power of facts and reason, arguing that his outward presentation and misinterpretation of social cues could lead to potentially disastrous situations with fellow inmates. Joseph Bankman echoed these concerns, cautioning that his son's "odd" social responses could be misconstrued as disrespect or evasion, putting him at significant physical risk.

Also included, a letter from Sam's current jail bunkmate, a former NYPD officer arrested after being caught soliciting underage teens for explicit images on twitter, calling Sam the 'least intimidating person here' which has led to other inmates targeting him for harassment. 

Lawyers Argue for a DRASTICALLY Shorter Sentence...

With the value of crypto increasing, it appears the FTX's holdings are worth enough to fully cover everything owed to customers.

Focused on this new factor, Bankman-Fried's legal team also made an effort to secure a lighter sentence, arguing for a prison term of no longer than 78 months, or 6 ½ years. They say the trial largely revolved around the story of a rogue, careless CEO whos actions caused his customers to lose billions.

However, this argument inspired the team handling the FTX bankruptcy to write a letter to the judge, where they say removing Sam is the only thing that stopped the bleeding, and that he deserves no credit for the company's ability to pay users back today, because at the time he was spending customers money without their knowledge, he was gambling, and easily could have lost it all.  

In the End, All Attempts for a Lighter Sentence FAILED...

All hopes for leniency were shattered when U.S. District Judge Lewis Kaplan handed down a 25-year sentence for Bankman-Fried's role in the fraud that led to the collapse of FTX. Judge Kaplan firmly rejected Bankman-Fried's statements from the trial when he took the stand in his own defense,  accusing him of lying during his testimony.

"He knew it was wrong," Kaplan said, "He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right."

Bankman-Fried was taken away by US Marshalls to begin his 25-year sentence - now living out the worst fears expressed by his concerned parents.

In conclusion...

It's expected that Sam's legal team will appeal, his parents stating they will "continue to fight" for their son, but the odds of that succeeding would be extremely low without some major new information coming to light.  

While Sam and his family may find it hard to find anything positive in how things ended, it's worth noting that his crimes gave the judge the option of sentencing him for up to 110 years in prison. While Sam's family and lawyers argued for a much shorter 6 years, getting 25 seems like a huge defeat - but compare to 110 years it seems the judge was still fairly lenient.

Sam will probably be free again, at 57 years old. It's widely believed that Sam has a secret stash of Bitcoin tucked away in a wallet no one knows belongs to him - what do you think the price of BTC will be in 2049?

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- Miles Monroe
Washington DC Newsroom
GlobalCryptoPress.com

With the approval of Bitcoin ETF's in the US, many were expecting to see the gains in Bitcoin's price to continue, but despite optimistic forecasts that the long-awaited ETFs would trigger a bitcoin price surge, the opposite happened - now we're learning why.

Heavy selling by FTX's bankruptcy estate appears to be a major contributor to bitcoin's price drop since the launch of US ETFs.

The Grayscale Bitcoin Trust (GBTC) was among those receiving ETF approval, so they converted their 'Trust' account into an ETF on January 11. 

FTX had purchased 22.3 million shares of GBTC valued at $597 million in October 2022, but when this converted to an ETF the value of FTX's position jumped to around $900 million.

This is when FTX liquidators decided it was time to sell, all of it.  

FTX's bankruptcy estate dumped 22 million GBTC shares worth close to $1 billion since ETFs were approved.

The irony is painful - Bitcoin ETFs finally receive approval, the crypto world celebrates this 'new gateway for mainstream investors' to get in the crypto market, logically many expected a boost in demand and price.

Instead, we're once again helpless and unable to do anything but watch Bankman-Fried's actions lead to consequences for people far outside of FTX. Their liquidation spree officially put a dampener on any immediate ETF boosts to the market. 

The Bright Side...

Now that FTX has sold its full position, pressure to sell may greatly decrease, bringing back the bull market. 

But for now, bears remain in control as today brought more downward movement. 


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Author: Mark Pippen
London Newsroom
GlobalCryptoPress | Breaking Crypto News

The SEC's legal battle against Ripple involved coming after them on 2 fronts - first was their claim the company illegally profited by selling an unlicensed security (XRP Tokens) violating the Securities Act of 1933. The second targeted the company's co-founders Christian Larsen and Bradley Garlinghouse, saying they were the ones who made the decisions at the company, so they were charged with "aiding and abettting”.

Today, the SEC's targeting of Larsen and Garlinghouse has officially come to an end as District Judge Analisa Torres announced that the US securities regulator notified the court that it would not continue in the case and has issued a “voluntary dismissal”.

Ripple's lead lawyer Stuart Alderoty shared the news first saying;

"The SEC made a serious mistake going after Brad & Chris personally – and now, they’ve capitulated, dismissing all charges against our executives. This is not a settlement. This is a surrender by the SEC.

That’s 3 consecutive wins for Ripple including the July 13 decision ruling that as a matter of law XRP is NOT a security, the Oct 3 decision denying the SEC’s bid for an interlocutory appeal, and now this." on X.

Current CEO Brad Garlinghouse responded saying;

"In all seriousness, Chris and I (in a case involving no claims of fraud or misrepresentations) were targeted by the SEC in a ruthless attempt to personally ruin us and the company so many have worked hard to build for over a decade.

The SEC repeatedly kept its eye off the ball while secretly meeting with the likes of SBF – failing again and again to protect US consumers & businesses. How many millions of taxpayer $ were wasted?! Feels good to finally be vindicated."

FTX a Massive Blemish On An Already Troubled SEC...

The SEC's 'crack down' on crypto has targeted companies like Coinbase, Binance and Ripple - but where are the investors accusing these companies of wrongdoing? Who did Coinbase, Binance, or Ripple scam? You would think reddit and other crypto related forums would be full of these complaints, but when searching for terms that should lead to them, nothing is found.

While the SEC was busy targeting these companies, FTX was actively misusing users funds and behaving suspiciously fearless of being caught.  Ironically, it was one of the people under SEC investigation who brought the FTX issue to light - Binance CEO 'CZ'.

This means if CZ had not exposed Sam Bankman-Fried, FTX would still be freely spending their users funds, while their top 2 competitors faced SEC harassment - suspicious to say the least.

It makes you wonder - could SEC deliberately be hiding corruption by appearing ignorant and disorganized? 

The Strangest Contradiction...

The most alarming and confusing factor in the SEC's current actions has to be the fact that the SEC evaluated Coinbase just a couple years ago, when they approved the company to go public and sale shares of their stock.  This process involves a deep evaluation of the business, and obviously, if a business's main source of income was unlawful, they would not have been approved.

But they were approved. Coinbase even passed a phase where the SEC asked questions about any parts of the business they wanted clarification on, Coinbase answered them, and they were approved. 

Nothing has changed since Coinbase was worthy of SEC approval. There's no new leadership at the SEC since they deemed Coinbase's business legitimate just two years ago, Coinbase isn't offering anything now that they were not then. But seemingly out of nowhere, suddenly Coinbase is operating outside of the law. 

So SEC saying;  just because they approved a company seeking approval to go public and sell share shares on the stock market, it does not mean that company is legitimate - no one has been able to make sense of why the SEC is now undermining themselves in such an extreme way.

Next For Ripple...

While the charges against company founders are dropped, the case against the company itself is still considered ongoing.  While the SEC lost on their first attempt, the last statement from them was that they are appealing that decision.

But some say dropping the charges against the founders is a sign they may do the same with the charges against the company - because if the company is guilty, those running it would be as well - it would be odd to drop one and not the other.

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Author: Mark Pippen
London Newsroom
GlobalCryptoPress | Breaking Crypto News

FTX may be making headlines again soon, and finally not for more details on their spectacular fall from grace, actually, the total opposite - their potential resurrection!

In April we broke the story of an FTX relaunch even being a possibility, when our source inside the new FTX team told us they were considering two options - to pay back what they can and then close for good, or, the more intriguing option, re-open FTX for trading.

At that time they had just begun researching sentiment among former users, asking if all their funds had been returned to them, and knowing Sam Bankman-Fried was gone for good, would they consider trading at FTX again?

Then, if they determined enough users would return, they would still need to convince their larger backers, some of whom are owed millions, to go awhile longer or accept a smaller payment at first. However, if they support FTX's re-opening they could get 100% of their money back in the long run, because FTX would once again be generating profits.

That's Where We Left Off, And We Now Have An Update...

According to our source, re-launching the exchange is now their 'official' goal, as they've been instructed to begin preparing as if it is happening for sure — an order that comes directly from new CEO John Ray.

"I'll word it like this: it's not 100%, but it just went from a 50/50 chance to probably a 90% chance of FTX re-launching" our insider explained, but they still have some challenges ahead  "Right now we're legally a bankrupt company, so we don't have the freedom to just do something  we want to, there's additional oversight, and a process where we propose something and get approval to do it first."

When asked if they believed they would receive that approval, they told us "I think John (CEO) wants to make sure the proposal leaves no reason to say no. They'll want to see a company that fixed everything that went wrong under Sam, and see we've taken steps that would make a repeat impossible." I asked how close they were to being able to make those claims, and was told, "We can say all that now and it would be completely true" Reminding him I still needed an answer to the question, they added, "oh, yeah - yes" (they think the re-launch would be approved).

New Revelations...

This next part is a big deal - while I personally didn't have funds on FTX when it shut down, a lot of people did.  Since then, the media's coverage of the situation would probably give people the impression that most of what they stored on FTX is gone.

But when I asked what kind of responses they received from former FTX users when mentioning a possible re-launch, I got a surprising answer "First, they say F-off and they would never use a platform that basically stole from them. Fair enough.  But then you ask, what if they didn't take anything from them? What if it opened and all the funds they left there were still there?"

'Are you saying this is what would actually happen?' I asked "I'm not in accounting, so I can't say this is the case with 100% of accounts, but one thing you'll probably be hearing if FTX re-launches or when Sam's case goes to trial - he didn't really mess with the FTX US funds".

This Wasn't a Total Surprise To Hear - It May Be Sam Bankman-Fried's Secret Weapon...

Back at the beginning of the year when FBI agents brought Sam back to the US where he was arraigned and pled 'not guilty' to the charges against him it seemed like the response from the crypto community was 'he's a liar and that won't work once he has a trial'. 

But that made no sense to me. Sam's parents are both literally famous lawyers and Stanford Law School professors - Sam takes their advice.  So why would they advise him to fight the charges against him when shortly before his arrest he appeared on various podcasts admitting to misusing user funds - his point at the time was 'I wasn't stealing user funds, I just got confused, used funds that belonged to my users, and lost some of it.'.

I could only come up with one theory that made sense, and published 'The Twisted Way Sam May Be Found INNOENT' which goes in to more detail, but basically the only way someone who already admitted so much on video could go to trial and stay out of prison is if he only misused funds belonging to non-US citizens, and only did that while at his company headquarters, which is also outside of the US, in the Bahamas.

What does the US justice department do when laws are broken in another country and none of the victims are American?  Absolutely nothing.

Users finding out all the crypto they left on FTX is still there would be great news, which I said in our conversation, but as we suspected, they warned that non-US may have some bad news coming soon. "It's the funds from FTX's international platforms that Sam really screwed with." our source said  "We're (his team) not involved with any of the international stuff, but several times I've had to talk with some of the guys that are. For the first few months they always sounded stressed out and exhausted, they were cleaning up one hell of a mess."

But recently, even the team cleaning up the worst of it started to sound less miserable. "Last couple of times I talked to them, they seemed way more chill. Remember Bitcoin was at like $20k when FTX shut down, FTX is holding a lot of BTC and other coins that have gained almost $2 BILLION since trading stopped." I didn't really think of that until now, but it makes sense. "Yep, so that instantly becomes funds we can use towards making users whole, if the market continues this way, there's a chance FTX won't owe anyone anything".

That really would be a great ending to an otherwise miserable story, if HODLing pays the rest of FTX's debts.

In Closing...

According to court records that have just been made available to us, there has been nothing less than a  massive army of professionals working non-stop to clean up the mess at FTX. 

They've been tasked with examining every bit of FTX's business, due to the lack of record keeping during the reign of it's former CEO, Sam Bankman-Fried. 

Of course, hiring a large amount people qualified to review complex financial data doesn't come cheap -but no one seems to have expected it would be this expensive either, as these firms have now billed FTX $38 million PLUS expenses...and that's just for January!

Breaking Down The Bill...

On the financial front, Alvarez & Marsal and Perella Weinberg Partners were tasked with sorting through FTX's accounting records and determining which assets it could sell. According to court filings, Sullivan & Cromwell billed $16.8 million for January, while Quinn Emanuel Urquhart & Sullivan billed $1.4 million, and Landis Rath & Cobb billed $663,995. Collectively, the three firms have over 180 lawyers assigned to the case and over 50 non-lawyer staff, such as paralegals.

What's more, court filings show that Sullivan & Cromwell lawyers and staff billed a total of 14,569 hours for January. The largest project that Sullivan & Cromwell worked on was discovery, followed by asset disposition and asset analysis and recovery.

Interestingly, the U.S. Department of Justice initially objected to FTX hiring Sullivan & Cromwell, citing potential conflicts of interest. Sam Bankman-Fried, FTX's founder, also objected to the bankruptcy administrators hiring the firm, claiming that the law firm's staff had pressured him into filing for bankruptcy in November. However, in late January, a Delaware bankruptcy court judge approved the firm to continue representing FTX.

In early February, Sullivan & Cromwell submitted a bill for $7.5 million for the first 19 days of bankruptcy work after FTX filed in November. The majority of billed time for Quinn Emanuel Urquhart & Sullivan was spent on Asset Analysis and Recovery as well as Avoidance Action – legalese for attempts to undo certain transactions that the debtor engaged in before bankruptcy. As for Landis Rath & Cobb, a significant amount of time was billed for hearings, litigation, and asset disposition.

But that's not all. AlixPartners billed $2.1 million for 2,454 hours of work. Investment bank Perella Weinberg Partners billed $450,000 (its monthly fee), and court documents show that it spent a significant amount of time on developing a restructuring strategy, as well as correspondence with third parties.

According to its billing breakdown, the bank spent a large amount of time working on the sale of FTX assets LedgerX and FTX Japan. In January, a bankruptcy judge gave the sale the green light to create liquidity to pay back creditors.

Last but not least, Alvarez & Marsal billed $12.3 million, the second-largest charge for the month, behind Sullivan & Cromwell. Some of the largest items it billed for were Avoidance Actions, at 3,370 hours, financial analysis, at 1,168 hours, and accounting at 1,106 hours.

In November, shortly after FTX declared bankruptcy, interim CEO John J. Ray III said that the exchange had a "complete failure of corporate controls and such a complete absence of trustworthy financial information." Ray, who also oversaw the liquidation of Enron and Nortel Networks when they collapsed, called the FTX situation "unprecedented".

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Author: Mark Pippen
London News Desk 
Breaking Crypto News

Sam Bankman-Fried, the former CEO of cryptocurrency exchange FTX, pleaded not guilty to charges of fraud and money laundering on Tuesday. From what you hear in the press, you would reasonably assume there is a mountain of evidence against him - so is Sam crazy? 

Well, he may not be as crazy as it sounds. 

Why Risk More Years in Prison Instead of Negotiating? To Get ZERO Years in Prison...

Approximately 97% of cases are resolved with a plea deal. Sam, like most defendants, had the option to negotiate how long he would stay in prison, in exchange for pleading guilty. 

We don't know what that deal would have been, but with the charges against him, it's reasonable to think he could have reduced his time behind bars by 10+ years. Turning this down is not a decision someone takes lightly. 

If you choose to be among the 3% of people to go to trial, you must be confident that you can win.

Why Sam Believes the Jury Will find Him INNOCENT...

What Sam and his legal team believe they can prove to a jury revolves around the fact that there is no FTX'- there's two of them, completely separate companies, functioning independently. 

No country in the world charges people with crimes committed in foreign nations with foreign victims.  Bankman-Fried can only be charged with crimes he committed while in the US or against US citizens.

This also reminds me of when after his arrest in the Bahamas, he said he planned on fighting being extradited to the United States, then suddenly reversed this and fully cooperated to insure his trial would take place in the US.

Bankman-Fried's Defense is NOT that He Did Not Break The Law, But Rather that Any Alleged Wrongdoing Occurred Outside the US and Involved Foreign Victims...

Meaning that the alleged crimes were committed by a separate, foreign entity and involved funds belonging to users of FTX International. 

Structurally, the companies remained separate, there were no (known) shared accounts, no fiat or crypto spilling from one to the other. The company/exchange for US citizens had its own website at www.FTX.us - then there was FTX International at www.FTX.com.

If someone from the US attempted to sign up on the FTX international site, they would simply get an error message redirecting them to the US site.

With everything separate, it would have been easy for Sam to simply leave all funds related to FTX US alone, and this is exactly what Sam claims happened. 

So Far, There's No Evidence Saying Otherwise...

In every interview, Sam said that 'all funds in FTX US  were "never touched" and they could give users access to it right now if they wanted to.  This statement is included in the testimony he was planning to give Congress, under oath, but he was arrested the day before that was set to happen. 

But let's forget what Sam has to say, he's a proven liar on other related matters. -  what's been found since he lost control of the company? 

John J. Ray is the acting CEO of FTX appointed to oversee the company being dismantled in the bankruptcy process, and he is no fan of Bankman-Fried.

When testifying to Congress a couple weeks ago, he shared in his opening statements his belief that FTX US funds were involved, but later, during the portion where he takes questions from lawmakers, he was asked what they had found so far - and so far, nothing. 

In a previous report, an insider at the company shared that the new CEO believes they just need to dig deeper to find proof that Bankman-Fried did misuse FTX US funds - he just did a better job at hiding it compared to FTX International. It's reasonable to assume that, and the investigation isn't over - but Sam, the one person who would know, just pleaded innocent in court. 

Sam May Have Viewed US Funds as 'Off Limits' From The Start...

Ryan Miller, a member of FTX US's legal team used to work for the person in charge of regulating FTX, the current head of the SEC, Chairman Gary Gensler.  By the time this all happened, he had been with FTX for nearly a year, tasked with being the contact between the company and regulators. 

Sam's mom was a lawyer at one of the top firms in the US with clients like Exxon, JPMorgan, Citigroup, Universal Pictures, Sony and more. His father is considered one of the leading experts in tax law, tax shelters, and tax compliance, and teaches law at Stanford.

Between Miller, someone from the world of financial regulation, and his parents, who would surely advise him of the additional rules and risks attached to US investor funds, it's believable that Sam may have just considered this portion of his businesses off-limits. 

Did Sam Plead Innocent Because he Knows They Won't Find Records of Him Misusing US Funds?

This is the big question. 

Keep in mind, however, that Sam's original lawyers dropped him shortly after FTX's collapse due to his "incessant and disruptive tweeting" when he kept ignoring their advice to stop publicly speaking about the matter. 

Sam clearly believes he has a talent for persuading people, and maybe he once did, but the more he spoke publicly to audiences already suspicious of him, the more hated he became. I'm not sure if Sam ever really accepted that this tactic was a failure and he should have listened to his lawyers. 

So is Sam continuing to be a nightmare client for any legal team to represent? He may be pleading innocent because he believes he's so smart, he can just confuse a jury into thinking he's innocent. 

Or, does he know prosecutors will fail to find the evidence they need to prove the charges against him?

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Author: Ross Davis
Silicon Valley Newsroom
GCP | Breaking Crypto News

There's only two ways this can turn out, both bad, but one massively worse than the other.

Prosecutors from New York have unsealed the indictment against him, charging Bankman-Fried with wire fraud, conspiracy, committing fraud against investors, lenders, and the United States, securities fraud, money laundering, and violation of campaign finance laws.

But things aren't as straightforward as it sounds - there's a real possibility some, maybe even most of these charges, get dropped.

It All Comes Down to This: Did Sam Misuse of Funds Include Those from FTX US - a Separate Company and Website from FTX International?

This could be the difference between life in prison, or 10 years with a chance to get out early with good behavior.

The US will only charge him with crimes he committed while in the US, or against US citizens.

For example, US law enforcement cannot pursue a case where investors from France were victims of fraud committed by a company in the Bahamas.  Actually, no country on earth prosecutes cases under those circumstances.

As covered in previous articles, if someone from the United States visited FTX International (ftx.com) they would find themselves unable to get past the home page, they were blocked from joining, only able to view a message re-directing them to FTX's platform for US citizens (ftx.us).

The platforms did not share storage of funds with FTX International either, separate wallets for crypto, separate banks for fiat currency.

In other words, it would be extremely easy for Sam to exclude US funds from his alleged scheme, which would be the smartest thing someone in his position could do (besides leave everyone's funds alone).

So, are there any signs indicating FTX US funds were left untouched?

While Sam's word means very little and I'm not suggesting you put any trust into him, for some reason in every interview he's done following the FTX collapse, he made sure to tell the audience that the US site was not effected, everyone's funds are still there, and he believes 'it could open to let people withdraw today'.

If that is true, Sam committed no crime while in the US, and committed no crimes against US citizens, and suddenly this becomes a very different thing.

Sam Bankman-Fried Being Taken Into Custody by Police in the Bahamas.

As predicted in previous articles, we see Sam being charged with additional crimes like wire fraud, this so they can still lock him up for something even if the charges directly related to him losing billions don't hold up in court.

Similar to how the FBI lacked evidence against Mafia leaders for murders they knew they had committed, so they started digging through their tax history and locked them up for tax violations.

Are There any Signs Sam Mismanaged Funds Belonging to Both FTX International and FTX US Users?

The acting CEO, John J. Ray, appointed to oversee the company's bankruptcy testified with Congress yesterday, Sam was scheduled to appear but that was canceled with his arrest. 

Ray stated they had "NOT found evidence (that Sam made unauthorized withdraws from US customer funds) of that yet"

This is a HUGE - It means if what Ray said is True, Prosecutors do Not Have Evidence for Several of the Charges Against Him! 

If Sam really did leave US funds alone, several charges get dropped before he ever sets foot in a courtroom.

However, a source on the 'inside' at FTX told me that the new CEO "thinks Sam was so reckless with funds from FTX International he's assuming Sam did the same at FTX US and just hid it better" adding that this was "just a personal opinion, but it's a fact that they're looking into where every dollar or token went, so if Sam did anything he shouldn't have they will find it'.

The new CEO and his team have been digging through the records for nearly a month, and their failure to find anything showing Sam's abuse of funds included the FTX US has me prepared for the possibility Sam told the here.

Remember, FTX US staff included former government regulators - would you hire former IRS tax auditors to work for your company if you were secretly committing tax fraud? Probably not.

It's starting to look like Sam followed the rules when it came to FTX US, all high-profile employees specifically worked for FTX US, and saw no red flags that would stop them from vouching for Sam as a legitimate business person.

Where they went wrong is assuming FTX International was operating similarly to FTX US - when in reality Sam saw FTX International as the place where the rules no longer applied.

Life in Prison?

Yes, really.  Many think life-sentences aren't given for financial crimes, and that's true for the average case of someone stealing thousands or even low-millions from a company they work for.

But when someone defrauds investors at a total cost in the billions, everyone involved is willing to punish  them as severely as legally allowed. Prosecutors seek the maximum sentence, and if guilty, the jury will agree. 

Looking at the other high-profile multi-billion dollar scandals, one thing that immediately stands out is how we refer to them by the company name, 'Enron scandal' or 'Worldcom scandal' for example. With the focus on the companies involved, the names of the actual people behind those scandals are generally forgotten. 

A multi-billion dollar loss with all the blame focused on 1 individual, the only other name that comes to mind is Bernie Madoff, the former head of the NASDAQ stock exchange, who lost billions of investors funds when his investment firm was exposed for not investing in anyone, it was actually the largest Ponzi scheme in history.

If Sam truly belongs in the same category as Madoff, he should expect a similar fate. Madoff received a sentence of 150 years in prison in 2009 - he died there last year.

If found guilty on all charges, Sam could be sentenced for a maximum of 115 years under current law.

An Unplanned, Early Exit?

Sam was politically connected, and many FTX members with empty accounts are wondering how their money is gone, but Sam had millions in 'profits' to donate to politicians.

Sam and Bill Clinton shared the stage at a conference in the Bahamas.

Sam leveraged his political donations for meetings with lawmakers and other VIPS, he was becoming well-connected in Washington DC - many believe Sam may "know too much" and that worries powerful people.

Take this with a huge grain of salt since it is both a conspiracy theory and prediction - but the idea that Sam's former friends may now want him eliminated was on enough people's minds that both 'Sam Bankman-Fried' and 'Epstein' began trending on twitter with hundreds of tweets like:

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Author: Ross Davis
Silicon Valley Newsroom
GCP | Breaking Crypto News

 We've just received this notice from the Bahamas...

This story is developing, but we thought it was important to publish this as many are hearing this as a rumor and wondering if it's real - it is. 

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GlobalCryptoPress / Silicon Valley News Team

In a sign of how seriously this is being taken, the investigation into Biden's appointed head of the SEC comes from a member of his own party, Representative Ritchie Torres (D-NY) is requesting the Government Accountability Office (GAO) to conduct review of the SEC’s actions leading up to FTX’s collapse last month.

The letter largely focuses on SEC chair Gary Gensler for exclusively claiming regulatory powers over crypto exchanges, but failing to properly regulate them...

“If the SEC has the authority Mr. Gensler claims, why did he fail to uncover the largest crypto Ponzi scheme in US history?” Torres wrote. “One cannot have it both ways, asserting authority while avoiding accountability.”

Torres continues to drill into the Chairman "The operating principle of the SEC must be protection for the investing public, rather than publicity for the political appointee in charge" a reminder of Gensler's investigation into Kim Kardashian's tweet promoting a cryptocurrency, concerned that Gensler was preoccupied with inconsequential but high-profile acts while ignoring less glamorous but necessary responsibilities.

The letter goes as far as basically accusing Gensler of causing the SEC to fall apart under his leadership...

One of those demoralized colleagues is SEC Commissioner Hester Peirce, who has remarked in interviews that Gensler's approach to regulation is "not a good way to regulate" and is not surprised to hear that many have "given up on us."

When it comes to crypto, Gensler has consistently avoided explaining the rules or sharing concerns - organizations only discover they violated regulations when enforcement actions are taken against them.

The SEC has the ability to issue a company an 'exceptive order' which basically results from the company's leaders being able to come in and address concerns with SEC officials. If the SEC believes they are operating outside of the rules unintentionally, this exceptive order serves as an agreement that allows the company to fix what is wrong within a limited timeframe, and the SEC agrees to hold off any enforcement actions against them during that timeframe. 

Zero exceptive orders have been issued since Gensler took over, which shows how badly he destroyed what should be a healthy relationship between regulators and the companies they regulate.

Legitimate businesses should never fear requesting the SEC review their plans or practices, to verify they are in compliance with all relevant regulations. Under Gensler, companies fear they'll leave the meeting with an enforcement action against them.

SEC agents who previously believed their role involved providing assistance and guidance, backed by the ability to enforce the rules, have quit in record numbers as their job changed to simply 'punishing people'.

While watching Sam Bankman-Fried's recent media appearances, a theory entered my head - a gut feeling, but a strong one saying "He's been told he has nothing to worry about" and the more I listened with this theory in mind, the more convinced I became. 

Take a look for yourself and tell me if you see a man in fear of spending years in a federal prison - I don't think anyone could hide how stressful that possibility would be, but at no point did Sam show he was feeling any significant amount of stress. Not in some delusional way either - I don't believe his lack of stress comes from him being detached from reality, pretending everything is fine.

What I do see, is someone who believes the worst case scenario isn't going to happen...

While it was met with disbelief every time he said it, he remained firm on not knowing vital details about Alameda Research, even though it is a company he created, that he has majority ownership of, and is holding a massive amount of the funds from investors he brought in.  I doubt his pitch to investors was 'put a few million in to this company, which I have nothing to do with'. 

My point is, he isn't making these public appearances to claim innocence, or even explain what happened. He's making them with the goal of getting people to say "Sam's a good guy who just made some mistakes".

I can't help but think that the only way being liked becomes more important than being free, is if he's already convinced his freedom isn't at risk.

But in order to objective, i'm open to the possibility that I'm just misreading him.  So I set aside any of my own opinions and 'gut feelings' and re-examined the situation strictly looking at the facts to see if I come to the same conclusion in the end.

Starting with some things worth a deeper look.

Sam's parents are not typical lawyers, and after learning more about them I think it's time to question how involved in FTX Sam's parents may be... 

Those who graduate from Stanford law school are considered among the top of the legal field - so you can imagine what it takes to be hired to teach those students - both of Sam's parents worked as Stanford Law professors. 

What kind of law do they specialize in? The kind that someone in Sam's position would be hiring right now.

The mother worked at Paul Weiss, one of the top firms in the US with clients like Exxon, JPMorgan, Citigroup, Universal Pictures, Sony and more. She is one of the founders of a "secretive Silicon Valley PAC that supports Democratic candidates" called Mind The Gap. 

Sam's father is considered one of the leading experts in tax law, tax shelters, and tax compliance, according to his Stanford bio page. I found this video uploaded by Stanford Law School featuring him speaking on the topic.

In other words, Sam Bankman-Fried was born with the perfect legal team already in the room.

If anyone could make sure Sam's actions stayed within legal grey areas or completely unenforceable by US regulators, it's them.

On this note, Sam has repeated in every interview that none of these questionable actions were done with funds from the US version of FTX. There indeed was a completely separate site for US investors, and if someone from the US tried to access the FTX for the rest of the world, they would find themselves blocked from signing up.

Sam remaining in the Bahamas doesn't help him avoid anything, the Bahamas does have an extradition treaty with the US, so if US regulators charged him with a crime, the government in the Bahamas would arrest Sam and put him on an airplane.  Most seem to believe he's 'obviously guilty' - so why hasn't he been extradited?

But his parents weren't his only source for guidance...

These are the people who helped make sure the US branch of FTX stayed completely separate from FTX International...

Sam is doing interviews again - which is something no CEO in his position has done before.

Sam's decision to continue speaking publicly has already caused his original lawyer quit,

What Sam doesn't seem to understand is there is no valid reason/excuse for what happened - it's that simple.  Therefore, nothing he says can make it better.

Reaction to his latest interviews have been predictable.

"[Sam is] Either the STUPlDEST man alive, or all those funds donated to lawmaker’s political campaigns is paying off… He’s acting like he’s been told ‘you have nothing to worry about’" Tweeted Crypto Press Association Editor in Chief, Ross Davis.

In this video, Michael Novogratz, Billionare CEO of Galaxy Digital reacts to Sam Bankman-Fried's interview yesterday at The New York Times' DealBook Summit.  Novogratz calls Sam as 'delusional' and believes he "needs to prosecuted".

Video courtesy of CNBC

"Regarding any speculation as to whether this is a move against a competitor, it is not" said Binance CEO 'CZ' on Twitter, while confirming "recent revelations that have come to light" are behind a decision to sell-off $2.1 billion USD worth of FTT, the native token of rival exchange FTX.

Binance first obtained the tokens last year, as part of their payment from a pre-planned exit from investment in FTX equity.

Can't Have it Both Ways...

CZ first attempts to include the FTT sell-off as part of everyday 'business-as-usual' saying:

"Liquidating our FTT is just post-exit risk management, learning from LUNA."

That sounds like he's saying it's a purely strategic move, like the reasoning behind it could be something as simple as not believing the bear market has hit bottom - until in his next sentence where he immediately makes it clear - there's more to this story.

"We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards."

FTX is accused as a company, or perhaps CEO Sam Bankman-Fried himself of doing something behind the scenes, with at least the goal of hurting a competing crypto company...

At least that seems to be the accusation CZ, the Binance CEO, is making, although vaguely, and because of their mention of LUNA (which famously crashed, then crashed the market, and never recovered) and FTT together - the FTX CEO has been trying to assure customers that their token has none of the same risk factors (and from what we can see, that's true).

Any comparison of FTT with LUNA is a bit unfair...

There's no reason for CZ to bring back memories of the LUNA disaster when mentioning FTT - none of LUNA's risk factors can be applied to FTT.

"A competitor is trying to go after us with false rumors. FTX is fine. Assets are fine" said CEO Sam Bankman-Fried his first public response.

However - Binance CEO CZ has proven to be a level-headed voice of reason in the industry, and seems to have a reasonable outlook on the 'big picture' of cryptos future - so if he's accusing FTX or their CEO of crossing a line, it's probably true. 

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Author: Oliver Redding
Seattle Newsdesk  / Breaking Crypto News