The co-founder of FTX has confessed that he and Sam Bankm...

The Co-Founder of FTX Has Confessed That he and Sam Bankman-Fried Have Committed Fraud.

The co-founder of FTX has confessed that he and Sam Bankman-Fried have committed fraud. In Sam Bankman-Fried’s case, a crucial witness has testified that he and Bankman-Fried committed multiple financial crimes related to the oversight of the cryptocurrency exchange FTX.

The Co-Founder of FTX

Gary Wang, who co-founded FTX with Bankman-Fried, told the judges – as part of a plea deal – that he was a perpetrator of wire fraud, securities fraud, and commodities fraud, and that he carried out these crimes under Bankman’s guidance. Witness Wang, along with two other close business associates, is a significant part of the government’s case against the 31-year-old Bankman-Fried, alleging that he orchestrated a massive, years-long scheme to defraud investors and steal from users.

Bankman-Fried, also known as SBF, has pleaded not guilty to charges of fraud and conspiracy involving seven counts. Wang, whose testimony continued on Friday morning, presented an account that closely mirrors the government’s allegations and corroborates media reports about various special benefits FTX extended to its sister crypto firm Media Research.

Defense attorneys have yet to cross-examine Wang or call their own witnesses. In an opening statement, lead attorney Mark Cohen presented a narrative that attempts to deflect blame from fraud to ultimately bad business decisions.

Alameda’s ‘Unlimited’ Slush Fund

Unlike FTX’s regular users – the platform for individual investors and institutions to trade cryptocurrencies – which according to Wang were under collateralized and allowed FTX users to ‘withdraw unlimited amounts,’

Alameda had a $65 billion line of credit that is used as collateral when placing orders – a figure that represents larger orders given to other major credit players by FTX. While Wang’s admission was not unexpected, it marked the first occasion Jurie heard it directly from a top-level insider within the Bankman-Fried’s inner circle at FTX.

‘We’re Not Bulletproof this year’

“On the first day, Jurie heard from another former employee of FTX and a friend of Bankman-Fried, Adam Yedidia. Yedidia had a conversation with Bankman-Fried in the courtyard of their luxury Bahamas apartment complex, where they both lived.

 Yedidia asked SBF about the red flags regarding the responsibility of $8 billion hanging on the media balance sheet. In response, ‘Sam said something like, ‘We were bulletproof last year; we’re not bulletproof this year,” Yedidia told Jurie. The $8 billion represents the figure that FTX users would be obligated to pay if they decided to withdraw their deposits, which seemed like a ‘very big loan,’ and Yedidia wanted to know if the media could handle it.

 But he didn’t pursue the matter further, he added, ‘I trusted Sam.’ Yedidia said he stood by his friend, whom he had known since their undergraduate days at MIT when he learned that the media, considered a separate company from FTX, was using FTX users’ deposits to pay off Alameda’s creditors.

The Federal Rescue alleges

The Federal Rescue alleges that FTX’s founder, Samuel Bankman-Fried, engaged in a conspiracy to violate federal election laws by making political contributions exceeding federal legal limits and using the names of federal candidates and other political committees between November 2020 and November 2022.
In individual charges, Bankman-Fried is also accused of using corporate funds for the participation of candidates. He faces significant allegations of violating federal campaign finance laws because Bankman-Fried recently emerged as one of the largest contributors to midterm election candidates, according to OpenSecrets, a non-partisan group that tracks money in politics.

Crypto exchange executive doled out over $900,000 to candidates and nearly $39 million to outside groups during this election cycle – making him the top individual donor for the 2022 election cycle, according to a review by OpenSecrets. Most of the increased spending in politics favored Democrats. Federal filings show that a significant portion of Bankman-Fried’s publicly disclosed federal contributions – $27 million – went to Protect Our Future PAC, a super PAC he established with the stated goal of preparing for future pandemics.

Super PACs, which are believed to operate independently of the candidates they support, can accept unlimited sums from individuals, corporations, and unions, but federal law imposes strict limits on the amount an individual federal candidate can accept as a direct contribution. Direct contributions from corporations to presidential and congressional candidates are also illegal. The 14-page indictment, filed on Tuesday, is heavily redacted and does not identify the recipients of the contributions Bankman-Fried is alleged to have unlawfully made.

Info: John Kelly Confirms 

Leave a Comment