‘A Massive, Years-Long Fraud’: SEC Makes Case Against Bankman-Fried
"From at least May 2019 through November 2022, Bankman-Fried engaged in a scheme to defraud equity investors in FTX Trading Ltd... at the same time that he was also defrauding the platform's customers," the SEC said, in a civil complaint against Sam Bankman-Fried.
Bankman-Fried was arrested on Monday evening in the Bahamas at the request of the US. Appearing in court for the first time since being detained, he said he wouldn't waive his right to an extradition hearing. His attorneys said he sho
The real crime, imho, is the well-established US-based (governed by SEC rules/oversight and presumably operating in a business like manner) hedge funds who invested their investors money into FTX without doing any due diligence.
FTX would not have been able to appropriately respond to even a minimal “due diligence document request”- yet these hedge funds invested “other people’s money” anyway.
A friend of mine is the co-founder of a small tech start-up, and at one point as our kids were playing in his backyard, he told me about the hell he was going through trying to raise $5 million for a second round of financing. They had a everything lined up, and the only thing pending was the investors’ due-diligence. The shear amount of paperwork he had to produce was astonishing. Bank balances, vendors, payroll, payables, receivables, everything had to be verified. In addition to producing every imaginable financial document related to the company, as an executive, he had to cough up paperwork about the state of his own personal finances. It was weeks of pure paperwork hell.
The fact that some of the world’s most prominent hedge funds lent 3 orders of magnitude more money to SBF having looked at what I can only imagine were some basic pro-forma financial statements blows my mind.
If I were an investor at any fund that lent money to SBF, I’d absolutely be suing the fund for gross negligence. If only I had those kinds of problems!
Somebody needs to advise him to get a haircut, like yesterday.
Maybe the prison barber.
H-Man, I found it interesting that the SEC only pounced when the three legged deer had been mortally wounded by a criminal indictment. What changed to warrant the SEC from not filing earlier? We are talking about an agency that is supposed to protect the public prospectively, not in the rear view mirror.
They like to focus on small fry. Madoff, FTX, and others only come to light once the horse has left the barn.
$3BN withdrawals from Binance in 2 days, USDC withdrawals temporarily paused, supposedly because the conversion of Binance USD (BUSD) to USDC goes through a US bank and Binance didn’t have enough USDC on hand for overnight outflows. I guess when you deposit USDC at Binance, it is converted to Binance’s own stablecoin, BUSD. Which would piss me off, if I were a customer.