On Tuesday, December 13, 2022, the weight of the US government came down on Samuel Bankman-Fried (“SBF”). In one fell swoop, the Southern District of New York, The Securities and Exchange Commission (“SEC”) and The Commodities Futures and Trading Commission (“CFTC”) all charged SBF.
SBF was arrested in the Bahamas, a mere 12 hours before the charges were levied. He was arrested at the request of US authorities. He is in Bahamian jail. He was denied bail. He will likely be extradited. Whatever leniency may have been extended to SBF has been replaced with the gavel of the law.
The US House Committee on Financial Services investigation hearing on FTX also occurred on Tuesday, December 13. Bankruptcy appointed CEO John Ray provided prepared remarks and answered committee member questions. SBF was due to provide his remarks and answer questions via video conference. Subsequent to his arrest, he did not appear.
A lot of new evidence about FTX and SBF was revealed. I breakdown and provide insights on:
John Ray’s Congressional testimony
The SEC’s and CFTC’s investigation
The testimony SBF planned to give to Congress
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The United States District Court for the Southern District of New York unsealed its indictment of SBF Tuesday morning. SBF is the only named defendant. The indictment references “others known and unknown” that willfully and knowingly participated in the alleged crimes. The grand jury charged SBF with 8 counts:
Conspiracy to commit wire fraud on customers
Wire fraud on customers
Conspiracy to commit wire fraud on lenders
Wire fraud on lenders
Conspiracy to commit commodities fraud
Conspiracy to commit securities fraud
Conspiracy to commit money laundering
Conspiracy to defraud the United States and violate the campaign finance law
The counts allege that SBF defrauded customers of FTX.com. He defrauded lenders to Alameda. He defrauded investors in FTX. He violated campaign finance laws.
During the news conference to unseal the charges, US Attorney for the Southern District of New York Damian Williams called FTX “one of the biggest financial frauds in American history."
"From 2019 until earlier this year, Bankman-Fried and his co-conspirators stole billions of dollars from FTX customers," Williams said. "He used that money for his personal benefit, including to make personal investments and to cover expenses and debts of his hedge fund, Alameda Research."
SBF is also charged with violating campaign finance laws "by causing tens of millions of dollars in illegal campaign contributions to be made to candidates and committees associated with both Democrats and Republicans," Williams explained. "And all of this dirty money was used in service of Bankman-Fried's desire to buy bipartisan influence and impact the direction of public policy in Washington."
SBF stated on Twitter Spaces, only hours before his arrest, that he “did not think he would be arrested.” I find it hard to believe. On December 6, SBF added high-profile criminal defense attorney Mark Cohen to his legal team. Cohen defended Ghislaine Maxwell, Jeffrey Epstein’s convicted co-conspirator. I think that action sheds more light on where he thought this was going then an off the cuff Twitter Spaces rant.
What is surprising is how quickly criminal charges were brought. Complex financial fraud cases typically take years. Three reasons explain why charges were brought quickly:
Simple fraud: At its core, FTX is a story of using customer funds for personal use.
Incriminating evidence: SBF was on a media tour to shift the narrative. He portrayed an overwhelmed inexperienced entrepreneur that made a mistake. He incriminated himself in his interviews.
Informants: His co-conspirators likely became informants in exchange for leniency. SBF is the only person named in the indictment.
SBF could face up to 115 years in prison.
Ray’s Congressional testimony
John Ray, bankruptcy appointed CEO of FTX, made damning comments under oath during the testimony to the US House Committee on Financial Services. He started with:
“But never in my career have I seen such an utter failure of corporate controls at every level of an organization, from the lack of financial statements to a complete failure of any internal controls or governance whatsoever.”
Ray oversaw the Enron bankruptcy along with other high profile bankruptcies that involved criminal activity. He continued:
“The FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets.”
Read John Ray’s prepared remarks here.
Ray restated incriminating insights originally revealed in FTX’s Petitions and First Day Pleadings (read F’d TX: The Restructuring). He revealed five critical things:
Customer assets from FTX.com were commingled with assets from the Alameda trading platform.
Alameda used client funds to engage in margin trading which exposed customer funds to massive losses.
FTX and its affiliates, including FTX US, were run as one company. There was no distinction in their operations and who ran them. However, at this stage, it is unclear if FTX US customer assets were commingled with FTX.com.
FTX US is insolvent.
The bankruptcy team has been working closely with the Southern District of New York, the FBI, the SEC and the CFTC.
The confirmed commingling of customer assets and their use by Alameda spells fraud. Ray described FTX fraud as “old-fashioned embezzlement. This is just taking money from customers, and using it for your own purpose."
In response to a question about FTX US’ solvency, which SBF has continued to claim it is solvent, Ray noted “We still have a hole in the US. As we sit here today it is not solvent, that’s just inaccurate, and I’m not sure how he [SBF] would even know that, quite honestly.”
It is not a surprise that criminal charges, brought by the Southern District of New York, securities violations, brought by the SEC, and violation of the Commodity Exchange Act and Regulations, brought by the CFTC were levied all at once. Ray revealed he had been working in concert with these authorities. I suspect that once the authorities had enough evidence they levied charges immediately. Perhaps fearing SBF was a flight risk, US authorities instructed their Bahamian counterparts to arrest SBF immediately.
That all kind of makes sense…but there’s one strange thing.
SBF was due to testify under oath to the US House Committee on Financial Services the morning after his arrest.
Why not let him testify?
Surely the Attorney General for the Southern District of New York, the CFTC and the SEC were aware SBF was going to testify. If they’re so keen on pinning him, then why not let him testify and potentially perjure himself? That’s one more angle to make the case against him.
I could understand why authorities wanted to arrest him right before the sealed charges were revealed. That’s common practice. But it had been a month since FTX imploded. SBF was under surveillance in the Bahamas. Could the authorities have not waited another 18 hours and arrested him right after the testimony?
The timing of the arrest is bizarre. Perhaps there is more to it. For now, conspiracy theorists are salivating over it. Theories include that the arrest was a way to muzzle SBF and prevent politicians and regulators from being exposed during the congressional testimony.
Perhaps the timing of the arrest suggests the case against SBF is so strong. An additional potential charge of perjury didn’t make a difference. Authorities had enough of his circus.
SEC and CFTC charges
The SEC and CFTC are both conducting their own investigation and levied their own charges. Both the SEC and CFTC are relevant in this case.
The SEC oversees securities regulation. Investors in FTX bought private securities in FTX. Misrepresentations of FTX to US investors and defrauding US investors is a breach of securities law.
The CFTC oversees commodities trading. The CFTC views bitcoin and eth as a commodity. The CFTC believes FTX made misrepresentations and defrauded Americans trading those commodities. Therefore, FTX is in breach of commodities law.
The SEC charged SBF with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC is seeking an injunction preventing SBF from participating in any other securities related business, disgorgement of ill-gotten gains and a yet to be determined civil penalty.
The SEC stated that FTX orchestrated “a scheme to defraud equity investors in FTX Trading Ltd,” dating back to at least May 2019. At the same time, the SEC stated, “he was also defrauding the platform’s customers.” Investigations for additional securities violations are ongoing.
FTX raised $1.8 billion from equity investors, of which $1.1 billion came from 90 different US based investors. SBF promoted FTX as a “safe, responsible crypto asset trading platform, specifically touting FTX’s sophisticated, automated risk measures to protect customer assets.” The SEC alleges that in reality, SBF perpetrated a years-long fraud to conceal from FTX investors:
The undisclosed diversion of FTX customers’ funds to Alameda.
The undisclosed special treatment afforded to Alameda on the FTX platform, including providing Alameda with a virtually unlimited “line of credit” funded by the platform’s customers and exempting Alameda from certain key FTX risk mitigation measures.
Undisclosed risk stemming from FTX’s exposure to Alameda’s significant holdings of overvalued, illiquid assets such as FTX-affiliated tokens.
The use of commingled FTX customers’ funds at Alameda to make undisclosed venture investments, lavish real estate purchases, and large political donations.
The CFTC charged Samuel Bankman-Fried, FTX Trading Ltd. (d/b/a FTX.com), and Alameda Research LLC “with fraud and material misrepresentations in connection with the sale of digital commodities in interstate commerce.” The complaint asserts that “defendants’ actions caused the loss of over $8 billion in FTX customer deposits.”
The CFTC is seeking restitution, disgorgement, civil monetary penalties and a ban from all commodity trading activity.
The CFTC alleges that crimes started as early as May 2019. The CFTC asserts that FTX represented itself as “the safest and easiest way to buy and sell crypto.” FTX claimed that customer deposits were held in “custody” by FTX and segregated from FTX’s own assets. On the contrary, “FTX customer assets were routinely accepted and held by Alameda and commingled with Alameda’s funds.” The CFTC continued “Alameda, Bankman-Fried, and others also appropriated customer funds for their own operations and activities, including luxury real estate purchases, political contributions, and high-risk, illiquid digital asset industry investments.” The CFTC alleges that at SBF’s direction, FTX created “ features in the FTX code that favored Alameda and allowed it to execute transactions even when it did not have sufficient funds available.” Alameda was allowed to “withdraw billions of dollars in customer assets from FTX.” These features were not disclosed to the public.
Revelations from SEC and CFTC investigations
The SEC and CFTC filed a 28 page and 40 page complaint respectively against SBF. There is a lot of overlapping detail between the two investigations. I summarize the key findings of the two below. Unless I specifically state one organization, both discovered the same malfeasance.
1. SBF was in control of everything
The SEC believes SBF was the “ultimate decision-maker” at Alameda even while Caroline Ellision and Sam Trabucco were co-CEOs. SBF had full access to Alameda’s records and databases. SBF was also in full control of FTX and its related entities. The CFTC disclosed that SBF remained a signatory of Alameda bank accounts. He had decision making authority over all of Alameda’s investments. SBF participated, often daily, “in various in person and mobile chat communications with senior personnel at Alameda.”
2. SBF and other executives knew of the fraud
CFTC states at least one Alameda executive, in addition to SBF instructed Alameda to use FTX customer funds.
3. Everything was run together
There was no separation between FTX, Alameda and various other entities comprising the FTX Enterprise. SBF repeatedly stated things were run separately. Ellison corroborated his claims. CFTC investigation revealed that “assets flowed freely between the entities, often without documentation or effective tracking.” FTX and Alameda shared office space, key personnel, technology and hardware.
4. Alameda carried out the fraud
FTX customer funds were diverted to Alameda in two ways. One was having FTX customers directly deposit fiat in bank accounts controlled by Alameda. The other was having Alameda draw on its limitless line of credit from FTX, which was funded by FTX customer deposits. There was “no meaningful distinction between FTX customer funds and Alameda’s own funds,” according to the SEC. SBF gave Alameda “carte blanche'' to use FTX funds however it wanted. SBF directed Alameda’s line of credit to be raised to “tens of billions of dollars.” In essence, SBF used Alameda as “his own personal piggy bank.” SBF executed loans from Alameda to himself and FTX executives totalling $1.338 billion between March 2020 and September 2022. In two instances, SBF was “both the borrower in his individual capacity and the lender in his capacity as CEO of Alameda.” On July 22, 2022, in the depth of the crypto bear market, SBF loaned himself $136 million.
5. SBF misled investors and clients about Alameda’s preferential relationship with FTX
Alameda was able to hold a negative balance in its account. Alameda was exempt from FTX’s automated liquidation process. The CFTC also claimed that Alameda had preferential trade execution. Alameda’s trades were executed “several milliseconds faster” than other clients. It provided a profit advantage to Alameda.
6. SBF oversaw Alameda’s preferential treatment
According to the CFTC investigation, SBF directed software to be written in August 2019 and updated in May 2020 that allowed Alameda to maintain a negative account balance. In May 2020, SBF instructed that Alameda be exempt from FTX auto-liquidation mechanism.
7. SBF misrepresented the risk Alameda posed to FTX
SBF hid the fact that the collateral Alameda posted consisted of FTX-linked tokens that couldn’t possibly be sold at the value at which they were reported. SBF claimed that FTX’s risk engine would limit FTX’s exposure to any single customer. He failed to disclose that the risk engine did not apply to its largest customer, Alameda.
8. Alameda took on billions in third party debt and repaid them with FTX deposits
In 2021, SBF instructed Alameda to borrow “billions of dollars” from third party crypto lenders according to the SEC. The CFTC stated it was as much as $10 billion. In May 2022, when crypto prices crashed, lenders requested that their loans be repaid. SBF instructed Alameda to draw on its line of credit from FTX to repay the loans. “Billions of dollars of FTX customer funds were thus diverted to Alameda and used by Alameda to re-pay its third-party loan obligations.”
9. Audited financials were falsified
The audited financials for FTX.com did not disclose the multi-billion dollar line of credit to Alameda.
10. FTX repeatedly lied about the security of FTX deposits
FTX Terms or Service stated “you control the Digital Assets held in your Account;” “title to your Digital Assets shall at all times remain with you and shall not transfer to FTX;” and “none of the digital assets in your account are the property of, or shall or may be loaned to, FTX Trading.” FTX’s website claimed FTX “segregates customer assets from its own assets across our platforms,” and “liquid assets for customer withdrawals…[to] ensure a customer without losses can redeem its assets from the platform on demand.” Evidently, none of this was accurate.
11. “hidden, poorly internally labeled ‘fiat@ account.” was FTX deposits at Alameda
In early November as FTX scrambled to raise money, its balance sheet was leaked (read F'd TX: The Un-Balanced Sheet). There was a strange entry called “hidden, poorly internally labeled ‘fiat@ account.” for $8 billion. That entry represented the customer deposits FTX had sent to Alameda. The CFTC states that SBF was aware of what this account was. He was the one that directly managed its use and its characterization on the FTX systems.
12. FTX.com clients were instructed to wire fiat to Alameda owned bank accounts in the US
FTX.com clients were instructed to wire funds to North Dimension, a Delaware-registered wholly-owned subsidiary of Alameda. Its bank accounts were in the US. The CFTC believes the entity deliberately had a name that would not link it to Alameda.
13. SBF admitted to bailing out crypto companies to plug FTX’s holes
The CFTC was made aware that SBF stated privately that he was pursuing an acquisition strategy in the spring of 2022 in part to “gain access to additional sources of capital that could be used to support his existing businesses and fill the hole in customer funds that had been created.”
14. SBF considered shutting down Alameda in September 2022
He wrote an internal memo outlining his thoughts on whether or not Alameda should be shuttered. His reason to wind it down included “the fact that we didn’t hedge as much as we should have alone cost more in EV [expected value] than all the money Alameda has ever made or ever will make,” and “Alameda is making some money trading, but not enough to justify its existence.” The reason to keep Alameda operational was “given the amount that Alameda is doing, we can’t really shut it down.”
15. SBF acknowledged internally that customer funds were gone
The CFTC revealed that by November 7, SBF and other key personnel of FTX and Alameda “acknowledged internally…[that] FTX customer funds were irrevocably lost because Alameda had misappropriated them.” On that day, Alameda traders were instructed “sell everything that could be sold quickly from Alameda’s holdings, to maximize open lines of credit or any other available sources of capital, and generally do anything possible to quickly obtain billions of dollars in capital to send to FTX.”
16. FTX US had its own shortfall
Around November 7 or 8, according to the CFTC, FTX executives discovered a shortfall at FTX US that they “did not understand and were unable to quantify.” On November 8, SBF instructed Alameda traders to prioritize meeting FTX US capital requirements. Alameda sent over $185 million to FTX US to fill the hole in its balance sheet.
17. Alameda CEO admits internally to fraud
On November 9 at approximately 10 AM ET, the CEO of Alameda, Caroline Ellison, held an all-hands meeting. Ellison stated that “earlier that year, in response to an accounting or book-keeping problem, Bankman-Fried and other individuals had decided to use FTX customer funds for Alameda. The CEO indicated that FTX had always allowed Alameda to borrow customer funds, and that FTX did not require collateral from Alameda, though in practice the collateral was Alameda’s FTT.” Most of Alameda’s staff resigned after the meeting.
It’s bad and it touches the US
The SEC and CFTC investigation are condemning. They allege to have evidence of what happened, when, what was said and who was aware. The level of detail suggests FTX insiders have been corroborating. That view is supported by the fact that SBF is the only named plaintiff. Perhaps Ray and his team also discovered and turned over incriminating evidence to authorities.
The authorities make a case that SBF was well aware of everything that was going on. He orchestrated it. It was no mistake as SBF has claimed. They made it clear that customer funds were used to fund venture investments, political donations, personal loans and to repay Alameda indebtedness. All those disbursements will make FTX’s bankruptcy more complicated. They could be clawed back. They could also have spillover effects into other ongoing crypto restructurings.
Regardless of FTX US and its American depositors’ implication in the alleged fraud. The fraud almost certainly touched US soil, which gives US authorities ground to persecute. In essence, if a fraud happened outside of the US, but the US financial system was used in the fraud, US authorities can charge the culprit with wire fraud. That’s how FIFA was nailed. SBF’s criminal charges mostly stem from wire fraud.
What may seem innocuous, but is particularly noteworthy is North Dimension. FTX.com instructed clients to wire money to North Dimension. FTX.com is FTX’s International business. The international business is where most of the deposits were and where most of the alleged fraud took place. North Dimension is a US business with US bank accounts.
Bingo! That’s wire fraud.
North Dimension could be what nails the alleged FTX International fraud.
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SBF’s prepared remarks to Congress
“I would like to start by formally stating, under oath:
I fucked up.”
That’s how SBF intended to open his prepared remarks to the House Committee on Financial Services on Tuesday, December 12. He continued by apologizing and dedicating himself to “doing right by customers.” He reiterated how much he regrets filing for bankruptcy. He explained that he cannot provide the detailed testimony that he would like because the Chapter 11 team has barred him from any access to FTX documentation.
Ironically, his 18 pages of prepared remarks were laced with explanations, bold claims and wild accusations. SBF’s defense strategy was to play offense. These are his claims and my takes.
1. FTX US is solvent
FTX US could “pay all customer withdrawals tomorrow.” FTX US is a totally separate entity with segregated funds regulated by US authorities. FTX US clients “should be made whole immediately.” FTX US was processing customer withdrawals as of November 10. The chapter 11 process is not required for FTX US and US customers are “being materially harmed by the process without good reason.”
I doubt this is true. Twitter and Telegram were awash with US clients struggling to withdraw funds from FTX US in the days leading up to its filing. Ray is adamant FTX US is insolvent. The CFTC states it has evidence from insiders proving there was a shortfall at FTX US that SBF knew about.
2. FTX.com can be resuscitated
SBF still believes in a plan to raise “significant external financing” and restart operations. He thinks that’s the best path forward to make a depositor's hole. SBF claims “as of today, I am still aware of billions of dollars of serious offers of financing, including signed LOIs: billions of dollars that could potentially make customers whole.”
He is dreaming. SBF planned on admitting multiple exhibits as part of his prepared remarks. If these LOIs were legit, then why not admit them? Whatever interest may have existed has evaporated. It’s awfully hard to justify an investment into the biggest alleged fraud since Madoff.
3. What went down
SBF planned to give a convoluted explanation of what happened and what went wrong. The gist of it is Alameda had a net asset value of zero in early November ($11 billion of both assets and liabilities). There was a run on FTX precipitated by CZ (for a refresher read F'd TX: The Saga). FTX was forced to margin call customers, including Alameda. Alameda was not able to make its margin calls. It defaulted against FTX International. As a result, “FTX International was not able to meet customer withdrawal requirements.”
FTX wasn’t aware of Alameda’s position. FTX’s dashboard for client positions did not display Alameda’s. SBF admits that his mistake was not paying close enough attention to risk management.
First, there are four pages devoted to the explanation. It’s riddled with extraneous complicating detail. I think it's done purposely to confuse the listener.
Second, the numbers don’t reconcile. FTX is accused of absconding around $10 billion of customer deposits. I think it was closer to $12 billion as explained in F'd TX: The Un-Balanced Sheet. We know that FTX provided margin to many of its clients and that Alameda had loans from third parties. It’s highly unlikely that all of Alameda’s $11 billion of liabilities were funded by FTX. Furthermore, SBF stated that Alameda sold $3 billion worth of liquid assets. Giving SBF the benefit of the doubt and assuming all those funds were used to repay FTX margin and all of Alameda’s liabilities were from FTX. That leaves $8 billion of Alameda liabilities. Therefore, Alameda’s demise does not account for all the missing $10-12 billion customer funds. So even if SBF’s explanation is true, where is the missing $2-4 billion?
Third, how on earth did FTX not know Alameda’s position? It just wasn’t on FTX’s dashboard??!? FTX’s whole business is risk management. Risk management doesn’t work if you ignore your largest counterpart.
4. Coerced into chapter 11 filing
SBF states that as of November 8, he was “put under extreme pressure” to file Chapter 11 by the law firm Sullivan & Cromwell (“S&C”) and its associates. S&C represented FTX US and International. SBF claims S&C pressured him into filing against his better judgment because S&C stood to make significant fees. SBF’s logic is that S&C presided over the Enron bankruptcy. John Ray was appointed to oversee the Enron bankruptcy. He was also appointed to oversee FTX bankruptcy. In Enron’s case, S&C and other law firms and Ray were collectively paid $700 million in fees. SBF tried to rescind the filing but S&C prevented it.
I’m sure he did feel pressure. But what other option was there? His diatribe reeks of conspiracy theory: a law firm taking down a global business impacting millions of people’s savings in order to earn fees. Surely there are easier ways to earn fees.
5. Unlawful jurisdiction
FTX International is not a US entity. It has no meaningful US customers. It is not regulated by US authorities. The primary regulatory body is the Securities Commission of The Bahamas.
“I do not believe that Mr. Ray or any member of his team are the CEO or are on the Board of Directors of the primary operating entity of FTX International, and as such I do not believe that they have lawful jurisdiction over the preponderance of FTX International’s insolvency proceedings.”
SBF claims that Ray and his team have overstepped their mandate. Ray and his team in the US have seized assets from FTX International, a company run in the Bahamas regulated by Bahamian authorities and servicing non-US clients. SBF accuses Ray and his team of prejudicing Bahamian regulators.
“Their assumptions [referring to Ray & team], without evidence, of malign intent and incompetence on the part of other races, cultures, and governments would be considered deeply offensive if directed at American minorities. It is no less offensive when directed at the citizens of other countries, let alone their regulators. Meanwhile, seizing assets overseen by other governments is a practice most recently considered appropriate centuries ago.”
SBF wants the Bahamian regulators to oversee the process. He claims the current leadership does not have the legal authority to lead the restructuring. SBF states:
“They [Ray & team] are acting outside of their mandate, defying the law in multiple jurisdictions, and misappropriating funds that are the property of the primary entity of FTX International.”
Whoa…those are incendiary accusations. In Congress, SBF was going to accuse Ray and his team of being racist and breaking laws.
The loophole argument SBF makes is that the main entity of FTX International, FTX Digital Markets, did not file for Chapter 11 Bankruptcy. Therefore, Ray and his team are not its administrators. US authorities do not have jurisdiction. The Bahamians do.
Debate over which jurisdiction presides over bankruptcy hearings is not uncommon. Usually one jurisdiction will cede to the other. The US is usually the jurisdiction of choice. It’s strange for someone so intimately involved at the bankrupt entity to be lobbying so hard for one jurisdiction.
SBF’s true intentions are muddled. Is he making this claim on the grounds that US authorities will be biased towards preferential outcomes for US customers and investors over international ones? Or, does SBF think he personally will be better treated in a Bahamian process? My sense it's the latter.
I don’t know how viable his claim is. I don’t know if FTX Digital Markets was actually the main entity. In light of SBF behavior, I suspect he’s got ulterior motives.
We were spared the fireworks SBF’s testimony would have set off in Congress. He was not able to dial in from his Bahamian prison. I can barely imagine the reaction of those in the house hearing SBF’s remarks right after Ray’s. It would have blown up the internet…well at least Twitter.
That was a lot…
The gloves have come off. The entirety of the US legal and financial systems is going after SBF and FTX. They are not taking this lightly. SBF attempted to fight back in his prepared remarks to Congress. He’s now in jail. We won’t be hearing much from him unless it's in a courtroom.
Two things will go on simultaneously and inform one another. The bankruptcy proceeding and criminal investigation. Since the Bahamians cooperated with US authorities to arrest SBF and are willing to extradite him, I suspect they’ll also be willing to comply with the US’ bankruptcy proceedings. The Bahamians have made it clear they’re prioritizing their relationship with the US over that with SBF.
The disclosure from the Southern District of New York, the SEC and the CFTC suggest they have a lot of evidence against SBF. It does not look good for him. He’ll get his day in court to plead his defense. What he has shared so far doesn’t seem compelling.
The restructuring process will continue. As I explained in F'd TX: The Restructuring, it will be complicated and lengthy.
I don’t think we’ll hear much on either front for a few months. I hope this dark period heralds required crypto regulation. We put an end to the world's largest levered casino trading nonsense tokens.
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Nicely done 👏🏻👏🏻
Man #13 on the CFTC complaint is so pernicious. I remember when they "bailed out" Blockfi with the $400m revolver that was subordinate to client funds and the option to purchase in the future. Its wild to now know all that was done to get Blockfi's client's funds onto FTX to try to plug a hole, just a vampire attack on Blockfi's balance sheet. Great write up!