Crypto Exchange FTX Plans to Reopen Exchange in 2024, Awaits Approval from Creditors & Final Approval by United States Court in 2024, Submitted Proposal in November 2023
20th December 2023 | Hong Kong
Crypto exchange FTX is planning to reopen the exchange in 2024 and is awaiting approval from creditors & thereafter, final approval by United states Court in 2024. In November 2023, FTX had submitted the proposal to creditors, and sued Bybit Fintech & affiliates (Mirana & Time Research) to recover $953 million of assets withdrawn from FTX before FTX filed for Chapter 11 Bankruptcy in 2022 November. The lawsuit includes a senior Mirana executive & Singapore residents. Bybit Fintech investment unit (Mirana) had special benefits, providing the investment unit withdrawal access other FTX clients do not have (FTX had paused withdrawal during the period). Earlier in November 2023, Crypto exchange FTX founder Sam Bankman-Fried had been found guilty of 7 counts of fraud & conspiracy in the $32 billion FTX collapse. Key witnesses account includes $8 billion withdrawn from FTX client accounts, $14 billion hole in books, $65 billion credit line by hedge fund Alameda Research, FTX website code allows Alameda Research to withdraw unlimited funds after FTX launch in 2019. United States Judge Lewis Kaplan will announce the sentencing in 2024 March. FTX founder Sam Bankman-Fried (Age 31) was charged with 2 counts of fraud & five counts of conspiracy. In September 2023, FTX filed a lawsuit against FTX founder Sam Bankman-Fried parents Allan Joseph Bankman & Barbara Fried for exploiting FTX and enriching themselves, receiving $10 million cash gift & $16.4 million luxury Bahamas property from Alameda Research, complaining to increase Sam Bankman-Friedsalary from $200,000 to $1 million, and pushing for political & charitable donations including to Stanford University. More info below:
“ Crypto Exchange FTX Plans to Reopen Exchange in 2024, Awaits Approval from Creditors & Final Approval by United States Court in 2024, Submitted Proposal in November 2023 “
Crypto Exchange FTX Sues Bybit Fintech, Mirana & Time Research to Recover $953 Million Assets, Lawsuit Includes Senior Mirana Executive & Singapore Residents
11th November 2023 – Crypto exchange FTX bankruptcy advisor has sued Bybit Fintech & affiliates (Mirana & Time Research) to recover $953 million of assets withdrawn from FTX before FTX filed for Chapter 11 Bankruptcy in 2022 November. The lawsuit includes a senior Mirana executive & Singapore residents. Bybit Fintech investment unit (Mirana) had special benefits, providing the investment unit withdrawal access other FTX clients do not have (FTX had paused withdrawal during the period). Earlier in November 2023, Crypto exchange FTX founder Sam Bankman-Fried had been found guilty of 7 counts of fraud & conspiracy in the $32 billion FTX collapse. Key witnesses account includes $8 billion withdrawn from FTX client accounts, $14 billion hole in books, $65 billion credit line by hedge fund Alameda Research, FTX website code allows Alameda Research to withdraw unlimited funds after FTX launch in 2019. United States Judge Lewis Kaplan will announce the sentencing in 2024 March. FTX founder Sam Bankman-Fried (Age 31) was charged with 2 counts of fraud & five counts of conspiracy. In September 2023, FTX filed a lawsuit against FTX founder Sam Bankman-Fried parents Allan Joseph Bankman & Barbara Fried for exploiting FTX and enriching themselves, receiving $10 million cash gift & $16.4 million luxury Bahamas property from Alameda Research, complaining to increase Sam Bankman-Friedsalary from $200,000 to $1 million, and pushing for political & charitable donations including to Stanford University. More info below:
Crypto Exchange FTX Founder Sam Bankman-Fried Found Guilty of 7 Counts of Fraud & Conspiracy, $32 Billion FTX Collapse, $8 Billion Withdrawn from FTX Client Accounts, $14 Billion Hole in Books, $65 Billion Credit Line by Hedge Fund Alameda Research, FTX Website Code Allows Alameda Research to Withdraw Unlimited Funds after FTX Launch in 2019
4th November 2023 – Crypto exchange FTX founder Sam Bankman-Fried had been found guilty of 7 counts of fraud & conspiracy in the $32 billion FTX collapse. Key witnesses account includes $8 billion withdrawn from FTX client accounts, $14 billion hole in books, $65 billion credit line by hedge fund Alameda Research, FTX website code allows Alameda Research to withdraw unlimited funds after FTX launch in 2019. United States Judge Lewis Kaplan will announce the sentencing in 2024 March. FTX founder Sam Bankman-Fried (Age 31) was charged with 2 counts of fraud & five counts of conspiracy. In September 2023, FTX filed a lawsuit against FTX founder Sam Bankman-Fried parents Allan Joseph Bankman & Barbara Fried for exploiting FTX and enriching themselves, receiving $10 million cash gift & $16.4 million luxury Bahamas property from Alameda Research, complaining to increase Sam Bankman-Friedsalary from $200,000 to $1 million, and pushing for political & charitable donations including to Stanford University. More info below:
Bankrupt Crypto Exchange FTX with 9 Million Clients Received at Least 3 Bids to Buy & Restart the Exchange, United States Delaware Bankruptcy Court Possible Decision in Mid-December 2023
28th October 2023 – Bankrupt crypto exchange FTX with 9 million clients have received at least 3 bids to buy & restart the crypto exchange, with the United States Delaware bankruptcy court possible decision in mid-December 2023. In the ongoing FTX Founder Sam Bankman-Fried Trial which started on 5th Oct 2023 (Thursday), key witnesses account includes $8 billion withdrawn from FTX client accounts, $14 billion hole in books, $65 billion credit line by hedge fund Alameda Research, FTX website code allows Alameda Research to withdraw unlimited funds after FTX launch in 2019. Gary Wang (Age 30) is FTX’s former CTO & Co-founder, Nishad Singh is FTX former Chief Engineer, Adam Yedidia is former FTX computer programmer, Caroline Ellison who had headed hedge fund Alameda Research was also Sam Bankman-Fried’s girlfriend, Matt Huang, Co-founder of Paradigm (Crypto venture capital firm) invested over $275 million in FTX (total loss). More info below:
FTX Founder Sam Bankman-Fried Trial: $8 Billion Withdrawn from FTX Client Accounts, $14 Billion Hole in Books, $65 Billion Credit Line by Hedge Fund Alameda Research, FTX Website Code Allows Alameda Research to Withdraw Unlimited Funds after FTX Launch in 2019
7th October 2023 – FTX Founder Sam Bankman-Fried Trial – The trial started on 5th Oct 2023 (Thursday). Key witnesses account includes $8 billion withdrawn from FTX client accounts, $14 billion hole in books, $65 billion credit line by hedge fund Alameda Research, FTX website code allows Alameda Research to withdraw unlimited funds after FTX launch in 2019. Gary Wang (Age 30) is FTX’s former CTO & Co-founder, Nishad Singh is FTX former Chief Engineer, Adam Yedidia is former FTX computer programmer, Caroline Ellison who had headed hedge fund Alameda Research was also Sam Bankman-Fried’s girlfriend, Matt Huang, Co-founder of Paradigm (Crypto venture capital firm) invested over $275 million in FTX (total loss). FTX founder Sam Bankman-Fried (Age 31) is facing 2 counts of fraud & five counts of conspiracy. In September 2023, FTX filed a lawsuit against FTX founder Sam Bankman-Fried parents Allan Joseph Bankman & Barbara Fried for exploiting FTX and enriching themselves, receiving $10 million cash gift & $16.4 million luxury Bahamas property from Alameda Research, complaining to increase Sam Bankman-Friedsalary from $200,000 to $1 million, and pushing for political & charitable donations including to Stanford University. More info below:
FTX Files Lawsuit Against FTX Founder Sam Bankman-Fried Parents Allan Joseph Bankman & Barbara Fried for Exploiting FTX & Enriching Themselves, Received $10 Million Cash Gift & $16.4 Million Luxury Bahamas Property from Alameda Research, Complained to Increase Sam Bankman-Fried Salary from $200,000 to $1 Million, Pushed for Political & Charitable Donations Including to Stanford University, Parents are Professors at Stanford University with Allan Joseph Bankman Specialising in Taxes & Barbara Fried in Ethics, Stanford University Announced to Return All Donations
22nd September 2023 – FTX has filed a lawsuit against FTX founder Sam Bankman-Fried parents Allan Joseph Bankman & Barbara Fried for exploiting FTX and enriching themselves, receiving $10 million cash gift & $16.4 million luxury Bahamas property from Alameda Research, complaining to increase Sam Bankman-Friedsalary from $200,000 to $1 million, and pushing for political & charitable donations including to Stanford University. Parents are professors at Stanford University with Allan Joseph Bankman specialising in taxes and Barbara Fried in ethics. With the lawsuit, Stanford University announced to return all donations. Earlier in September 2023, former FTX Digital Markets Co-CEO Ryan Salame has pleaded guilty to United States Federal charges on unlawful political donations from Alameda subsidiary and operating an unlicensed money transfer business, agreeing to pay $6 million settlement & handover assets instead of facing 10 years jail. Failure to pay the settlement will incur total of $1.5 billion. Earlier in August 2023, FTX founder Sam Bankman-Fried had been arrested in custody with his $250 million bail revoked after a United States judge (11/8/23) had ruled Sam Bankman-Fried likely had intended to influence 2 key witnesses (Ex-Alameda Research CEO Caroline Ellison & Ex-FTX General Counsel).
Former FTX Digital Markets Co-CEO Ryan Salame Pleads Guilty to United States Charges on Unlawful Political Donations from Alameda Subsidiary & Operating Unlicensed Money Transfer Business, Agreed to Pay $6 Million Settlement & Handover Assets Instead of Facing 10 Years Jail, Failure to Pay Settlement Will Incur Total of $1.5 Billion
9th September 2023 – Former FTX Digital Markets Co-CEO Ryan Salame has pleaded guilty to United States Federal charges on unlawful political donations from Alameda subsidiary and operating an unlicensed money transfer business, agreeing to pay $6 million settlement & handover assets instead of facing 10 years jail. Failure to pay the settlement will incur total of $1.5 billion. Earlier in August 2023, FTX founder Sam Bankman-Fried had been arrested in custody with his $250 million bail revoked after a United States judge (11/8/23) had ruled Sam Bankman-Fried likely had intended to influence 2 key witnesses (Ex-Alameda Research CEO Caroline Ellison & Ex-FTX General Counsel). More info below:
FTX Founder Sam Bankman-Fried Arrested in Custody with $250 Million Bail Revoked after United States Judge Ruled Sam Bankman-Fried Likely to Had Intended to Influence 2 Key Witnesses Ex-Alameda Research CEO Caroline Ellison & Ex-FTX General Counsel
11th August 2023 – FTX founder Sam Bankman-Fried has been arrested in custody with his $250 million bail revoked after a United States judge (11/8/23) had ruled Sam Bankman-Fried likely had intended to influence 2 key witnesses (Ex-Alameda Research CEO Caroline Ellison & Ex-FTX General Counsel). Prosecutors had raised issues of Sam Bankman-Fried using encrypted app to communicate to key witnesses, which is witness tampering. Earlier in July 2023, Crypto exchange FTX filed a lawsuit (20/7/23) against FTX founder Sam Bankman-Fried & former executives Caroline Ellison (Chief Executive, Alameda Research Hedge Fund), Gary Wang Zixiao (CTO) & Nishad Singh (Director of Engineer) for misappropriating more than $1 billion from 2020 to 2022 before FTX bankruptcy in 2022 November, with $10 million transferred to Sam Bankman-Fried’s father Joe Bankman (Stanford University Law Professor). More info below.
Crypto Exchange FTX Files Lawsuit Against Founder Sam Bankman-Fried & Former Executives Caroline Ellison, Gary Wang Zixiao & Nishad Singh for Misappropriating More than $1 Billion from 2020 to 2022 Before FTX Bankruptcy, $10 Million Transferred to Sam Bankman-Fried Father Joe Bankman Who is Law Professor at Stanford University
21st July 2023 – Crypto exchange FTX has filed a lawsuit (20/7/23) against FTX founder Sam Bankman-Fried & former executives Caroline Ellison (Chief Executive, Alameda Research Hedge Fund), Gary Wang Zixiao (CTO) & Nishad Singh (Director of Engineer) for misappropriating more than $1 billion from 2020 to 2022 before FTX bankruptcy in 2022 November, with $10 million transferred to Sam Bankman-Fried’s father Joe Bankman (Stanford University Law Professor) . In the filing, FTX claims the defendants had misappropriated more than $1 billion to buy luxury properties, make investments and political donations. The defendants had been charged by United States prosecutors with FTX founder Sam Bankman-Fried pleading not guilty while the executives had pleaded guilty – Caroline Ellison (Chief Executive, Alameda Research Hedge Fund), Gary Wang Zixiao (CTO) & Nishad Singh (Director of Engineer). Earlier in 2023 June, a United States court had dismissed FTX founder Sam Bankman-Fried filing to dismiss 10 of 13 criminal charges with the court trial scheduled for 2nd October 2023. In 2023 May, Sam Bankman-Fried had submitted a court filing requesting the court to withdraw 10 of 13 criminal charges, citing unfair government intervention and turning civil & regulatory issues into federal crimes. In April 2023, Sam Bankman-Fried had pleaded not guilty to new charges for bribery (United States Department of Justice) on paying $40 million to China officials to influence unfreezing of $1 billion value of cryptocurrency, breaching United States Foreign Corrupt Practices Act (28/3/23). More info below.
United States Court Dismissed FTX Founder Sam Bankman-Fried Filing to Dismiss 10 of 13 Criminal Charges with Trial Scheduled for 2nd October 2023
29th June 2023 – A United States court had dismissed FTX founder Sam Bankman-Fried filing to dismiss 10 of 13 criminal charges with the court trial scheduled for 2nd October 2023. In 2023 May, Sam Bankman-Fried had submitted a court filing requesting the court to withdraw 10 of 13 criminal charges, citing unfair government intervention and turning civil & regulatory issues into federal crimes. Earlier in April 2023, Sam Bankman-Fried had pleaded not guilty to new charges for bribery (United States Department of Justice) on paying $40 million to China officials to influence unfreezing of $1 billion value of cryptocurrency, breaching United States Foreign Corrupt Practices Act (28/3/23). More info below. View: court ruling (LEWIS A. KAPLAN, United States District Judge, 27/6/23)
FTX Founder Sam Bankman-Fried Submits Court Filing to Withdraw 10 of 13 Criminal Charges, Citing Unfair Government Intervention and Turning Civil & Regulatory Issues into Federal Crimes
11th May 2023 – FTX founder Sam Bankman-Fried has submitted a court filing requesting the court to withdraw 10 of 13 criminal charges, citing unfair government intervention and turning civil & regulatory issues into federal crimes. Earlier in April 2023, Sam Bankman-Fried had pleaded not guilty to new charges for bribery (United States Department of Justice) on paying $40 million to China officials to influence unfreezing of $1 billion value of cryptocurrency, breaching United States Foreign Corrupt Practices Act (28/3/23). The new charges bring the total number of charges on FTX Founder Sam Bankman-Fried to 13 charges. Sam Bankman-Fried had also argued the new charges violated terms of extradition. See below for more info.
FTX Founder Sam Bankman-Fried Pleads Not Guilty to Paying $40 Million to China Officials to Influence Unfreezing of $1 Billion Cryptocurrency & Breaching Foreign Corrupt Practices Act, Argued New Charges Violates Terms of Extradition
1st April 2023 – FTX founder Sam Bankman-Fried had pleaded not guilty to new charges for bribery (United States Department of Justice) on paying $40 million to China officials to influence unfreezing of $1 billion value of cryptocurrency, breaching United States Foreign Corrupt Practices Act (28/3/23). The new charges bring the total number of charges on FTX Founder Sam Bankman-Fried to 13 charges. Sam Bankman-Fried had also argued the new charges violated terms of extradition. See below for more info.
FTX Founder Sam Bankman-Fried Charged for Paying $40 Million to China Officials to Influence Unfreezing of $1 Billion Cryptocurrency, Breaching Foreign Corrupt Practices Act
29th March 2023 – Department of Justice), paying $40 million to China officials to influence unfreezing of $1 billion value of cryptocurrency, breaching United States Foreign Corrupt Practices Act (28/3/23). The new charges bring the total number of charges on FTX Founder Sam Bankman-Fried to 13 charges. In March 2022, FTX Founder Sam Bankman-Fried was reported to transferred a total of $3.2 billion to founders & key employees, transferring mainly from hedge fund Alameda Research and an additional $240 million spent on luxury Bahamas property, political & charitable donations. The information were shared in a statement by FTX (15/3/23). Ongoing structuring and creditors information can be found on an alternate FTX website. Earlier in March 2023, 18 defendants including Sequoia Capital, Softbank & Singapore Temasek received a class action lawsuit in United States (Miami, Florida) for allegedly conspiring with crypto exchange FTX, with the lawsuit claiming the defendants wielded power, influence & deep pockets to launch FTX house of cards into multi-billion scale.
FTX Founder Sam Bankman-Fried Transferred Total of $3.2 Billion to Founders & Key Employees, Transferred Mainly from Hedge Fund Alameda Research & Additional $240 Million Spent on Luxury Bahamas Property, Political & Charitable Donations
18th March 2023 – FTX Founder Sam Bankman-Fried had transferred a total of $3.2 billion to founders & key employees, transferring mainly from hedge fund Alameda Research and an additional $240 million spent on luxury Bahamas property, political & charitable donations. The information were shared in a statement by FTX (15/3/23). Ongoing structuring and creditors information can be found on an alternate FTX website. Earlier in March 2023, 18 defendants including Sequoia Capital, Softbank & Singapore Temasek received a class action lawsuit in United States (Miami, Florida) for allegedly conspiring with crypto exchange FTX, with the lawsuit claiming the defendants wielded power, influence & deep pockets to launch FTX house of cards into multi-billion scale. The lawsuit cited Singapore Temasek ($297 billion Singapore state-owned investment company): “We conducted an extensive due diligence process on FTX, which took approximately eight months from February to October 2021.”
18 Defendants Including Sequoia Capital, Softbank & Singapore Temasek Received Class Action Lawsuit in United States for Conspiring with Crypto Exchange FTX, Claims Defendants Wielded Power, Influence & Deep Pockets to Launch FTX House of Cards into Multi-Billion Scale
2nd March 2023 – 18 defendants including Sequoia Capital, Softbank & Singapore Temasek have received a class action lawsuit in United States (Miami, Florida) for allegedly conspiring with crypto exchange FTX, with the lawsuit claiming the defendants wielded power, influence & deep pockets to launch FTX house of cards into multi-billion scale. The lawsuit cited Singapore Temasek ($297 billion Singapore state-owned investment company): “We conducted an extensive due diligence process on FTX, which took approximately eight months from February to October 2021.” On 28th February 2023, the United States Securities & Exchange Commission (SEC) charged crypto-exchange FTX Co-Founder & Co-Lead Engineer Nishad Singh for defrauding equity investors in FTX, coding FTX software to allow FTX client funds to be diverted to hedge fund Alameda Research owned by FTX founders Sam Bankman-Fried & Gary Wang and withdrawing $6 million from FTX for personal use (Property & Charitable Donations) when FTX was nearing collapse. More info below.
United States SEC Charged FTX Co-Founder & Co-Lead Engineer Nishad Singh for Defrauding Equity Investors in FTX, Withdrew $6 Million for Personal Use & Coded Software to Allow FTX Client Funds to be Diverted to Hedge Fund Alameda Research Owned by FTX Founders Sam Bankman-Fried & Gary Wang
2nd March 2023 – The United States Securities & Exchange Commission (SEC) has charged crypto-exchange FTX Co-Founder & Co-Lead Engineer Nishad Singh for defrauding equity investors in FTX, coding FTX software to allow FTX client funds to be diverted to hedge fund Alameda Research owned by FTX founders Sam Bankman-Fried & Gary Wang and withdrawing $6 million from FTX for personal use (Property & Charitable Donations) when FTX was nearing collapse. United States SEC: “Singh created software code that allowed FTX customer funds to be diverted to Alameda Research, a crypto hedge fund owned by Bankman-Fried and Wang, despite false assurances by Bankman-Fried to investors that FTX was a safe crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets and that Alameda was just another customer with no special privileges. The complaint alleges that Singh knew or should have known that such statements were false and misleading. The complaint also alleges that Singh was an active participant in the scheme to deceive FTX’s investors. The complaint further alleges that, even as it became clear that Alameda and FTX could not make customers whole for the funds already unlawfully diverted, Bankman-Fried, with the knowledge of Singh, directed hundreds of millions of dollars more in FTX customer funds to Alameda, which were used for additional venture investments and loans to Bankman-Fried, Singh, and other FTX executives. Moreover, according to the complaint, as FTX neared collapse, Singh withdrew approximately $6 million from FTX for personal use and expenditures, including the purchase of a multi-million dollar house and donations to charitable causes.” Separately, the Commodity Futures Trading Commission (CFTC) has also charged Nishad Singh with fraud by misappropriation and aiding & abetting fraud related to Digital Asset Commodities. More info below
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement: “We allege that this was fraud, pure and simple: while on the one hand FTX touted its supposed effective risk mitigation measures to investors, on the other Mr. Singh and his co-defendants were stealing customer funds using software code Mr. Singh helped create. A pillar of our securities laws is that when companies and their representatives decide to speak on an issue, they can’t lie to investors on matters that are core to their investment decisions. That’s true when it comes to crypto asset securities, just as it is in connection with any other securities.”
SEC Charges Nishad Singh with Defrauding Investors in Crypto Asset Trading Platform FTX
28th Feb 2023 – The SEC’s complaint charges Singh with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC’s complaint seeks an injunction against future securities law violations; a conduct-based injunction that prohibits Singh from participating in the issuance, purchase, offer, or sale of any securities, except for his own personal accounts; disgorgement of his ill-gotten gains; a civil penalty; and an officer and director bar. Singh has consented to a bifurcated settlement, which is subject to court approval, under which he will be permanently enjoined from violating the federal securities laws, the above-described conduct-based injunction, and an officer and director bar. Upon motion of the SEC, the court will determine whether and what amount of disgorgement of ill-gotten gains plus prejudgment interest and/or a civil penalty is appropriate, as well as the length of the officer and director bar and the conduct-based injunction imposed against Singh.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission (CFTC) today announced charges against Singh.
Singh is cooperating with the SEC’s ongoing investigation, which is being conducted by Devlin N. Su, Ivan Snyder, and David S. Brown of the Crypto Assets and Cyber Unit and Brian Huchro, Pasha Salimi, and Ainsley Kerr. It is being supervised by Amy Flaherty Hartman, Michael Brennan, Jorge Tenreiro, and David Hirsch. The SEC’s litigation will be led by Amy Burkart and David D’Addio and supervised by Ladan Stewart and Olivia Choe.
The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the FBI, and the CFTC.
28th Feb 2023 – The Commodity Futures Trading Commission today filed fraud charges against Nishad Singh, an FTX senior executive, in a complaint filed in the U.S. District Court for the Southern District of New York. The two-count complaint charges Singh with fraud by misappropriation and with aiding and abetting fraud committed by Samuel Bankman-Fried, FTX Trading Ltd. d/b/a FTX.com (FTX), and Alameda Research LLC (Alameda). Singh was a shareholder and senior executive of FTX, and was FTX’s Director of Engineering at the time of its collapse in November 2022.
The charges against Singh are related to those in a previously filed and ongoing CFTC action against Bankman-Fried, FTX, Alameda, FTX Co-Founder Gary Wang, and Alameda Co-CEO Caroline Ellison, that alleges a fraudulent scheme causing the loss of over $8 billion in FTX customer assets. [See CFTC Press Release Nos. 8638-22 and 8644-22].
Singh does not contest his liability on the CFTC’s claims, and has agreed to the entry of a proposed consent order of judgment as to his liability on the charges in the complaint.
In its continuing litigation against Singh and in the related ongoing action against Bankman-Fried, FTX, Alameda, and executives Ellison and Wang, the CFTC seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and permanent injunctions against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
“Today’s filing reflects the CFTC’s commitment to protecting the U.S. digital commodity markets. Today’s filing also includes a concession of liability by an individual who, as charged, engaged in and aided significant violations of the Commodity Exchange Act and CFTC regulations,” said Division of Enforcement Principal Deputy Director and Chief Counsel Gretchen Lowe.
Case Background
The complaint alleges that from approximately May 2019 through November 11, 2022, FTX represented that customers’ assets were held in “custody” by FTX and segregated from FTX’s own assets. To the contrary, FTX customer assets were routinely held by FTX’s sister digital asset trading company, Alameda, and were misappropriated by Alameda, FTX, and Alameda executives for improper purposes such as luxury real estate purchases, political contributions, and high-risk, illiquid digital asset industry investments.
As alleged, Singh was responsible for creating or maintaining various undisclosed components in the code underlying FTX that, operating together with other features, granted Alameda functionalities that allowed it to misappropriate FTX customer assets. Among other things, these features in the FTX code favored Alameda and allowed it to execute transactions even when it did not have sufficient funds available, including, critically, a “can withdraw below borrow” functionality that allowed Alameda to withdraw billions of dollars in customer assets from FTX.
The complaint further charges that Singh personally misappropriated millions of dollars of assets, including FTX customer assets, through poorly documented “loans” from Alameda and other improper withdrawals of funds from FTX for various personal expenditures, and did so even after Singh knew or should have known the source of those assets was, at least in part, FTX customer assets.
The CFTC cautions that orders requiring repayment of funds to victims may not always result in the recovery of lost money because the wrongdoers may not have sufficient funds or assets
Parallel Criminal/Civil Enforcement Actions
In addition to the CFTC’s filing, today Singh entered a guilty plea as to commodities fraud and other charges in a separate, parallel action against him in the Southern District of New York. United States v. Nishad Singh, Crim No. 22-CR-673 (S.D.N.Y. 2023). In connection with that action, Singh agreed to forfeit certain assets received from FTX and Alameda. In addition, today the Securities and Exchange Commission (SEC) charged Singh in its own action.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, the SEC, and the Securities Commission of The Bahamas.
The Division of Enforcement staff responsible for this matter are Nina Ruvinsky, Bryan Hsueh, Carlin Metzger, Yusuf Capar, Ray Lavko, Ansley Schrimpf, Joseph Patrick, Jack Murphy, and Benjamin Jackman. The case is being supervised by Elizabeth N. Pendleton, Scott R. Williamson, and Robert T. Howell. The Division of Market Oversight and the Division of Clearing and Risk also assisted in this matter. The Division of Enforcement’s Digital Asset Task Force also provided assistance.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the CFTC Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.
United States Prosecutors Seized $700 Million Assets from FTX founder Sam Bankman-Fried, $525 Million Robinhood Shares & $94.5 Million Cash in Silvergate Bank
21st January 2023 – United States prosecutors have seized $700 million assets from FTX founder Sam Bankman-Fried, with $525 million from Robinhood Shares and $94.5 million cash in Silvergate Bank (Court Filing: 20/1/23). The FTX Official Committee of Unsecured Creditors (UCC) estimated current liquid assets of $5.5 billion, including $1.7 billion of cash, $3.5 billion of crypto assets and $300 million in securities (Meeting 17/1/23). FTX CEO John Ray is currently evaluating possibility of restarting FTX International Exchange. Earlier in January 2023, FTX has recovered more than $5 billion of liquid assets, including cash, cryptocurrencies and securities, and to sell non-strategic investments with book value of around $4.6 billion. FTX Lawyer Andy Dietderich to US Delaware bankruptcy Judge John Dorsey: “We have located over $5bn of cash, liquid cryptocurrency and liquid investment securities.”
FTX Recovers $5 Billion of Liquid Assets Including Cash, Cryptocurrencies & Securities, To Sell Non-Strategic Investments with Book Value of $4.6 Billion
12th January 2023 – FTX has recovered more than $5 billion of liquid assets, including cash, cryptocurrencies and securities, and to sell non-strategic investments with book value of around $4.6 billion. FTX Lawyer Andy Dietderich to US Delaware bankruptcy Judge John Dorsey: “We have located over $5bn of cash, liquid cryptocurrency and liquid investment securities.” FTX legal team is still working on calculating customer shortfall. The US Commodities Futures Trading Commission (CFTC) had previously estimated FTX missing funds to be around $8 billion. FTX assets (FTX’s proprietary and illiquid FTT token) that had been seized by Securities Commission of the Bahamas are not included (FTX lawyer estimated value of $170 million, Bahamas estimated value of up to $3.5 billion). Other FTX groups LedgerX, Embed, FTX Japan and FTX Europe are independent of FTX group and have segregated customer accounts and separate management teams. Earlier in January 2023, FTX Founder Sam Bankman-Fried had pleaded not guilty to money laundering, wire & securities fraud charges in New York (United States), with the trial set on 2nd October 2023. More info below.
FTX Founder Sam Bankman-Fried Pleads Not Guilty to Money Laundering, Wire & Securities Fraud Charges in New York, Trial Set on 2nd October 2023
5th January 2023 – FTX Founder Sam Bankman-Fried has pleaded not guilty to money laundering, wire & securities fraud charges in New York (United States), with the trial set on 2nd October 2023. The judge also agreed to keep the identities of the 2 people who had helped to secured his $250 million bail. Prosecutors: “One of the biggest financial frauds in American history.” FTX new CEO John Ray III: “Old-fashioned embezzlement … … grossly inexperienced and unsophisticated individuals.” FTX founder Sam Bankman-Fried had been released on a $250 million bail (22/12/22) via a Recognizance Bond secured by equity in parents’ home and signatures of his parents & 2 individuals with considerable assets. Earlier in December 2022, Alameda Research CEO Caroline Ellison and FTX Trading CTO (Chief Technology Officer) Gary Zixiao Wang have both pleaded guilty to United States Securities & Exchange Commission (SEC) charges for fraud (21/12/22), Official Announcement & Twitter Video Message below), with FTX founder Sam Bankman-Fried extradited from The Bahamas to the United States (22/12/22).
FTX Founder Sam Bankman-Fried & CTO Gary Wang had also borrowed $546 million from Alameda Research via Emergent Fidelity Technologies (EFT) to buy 8% of commission free brokerage Robinhood in May 2022. FTX customers has filed a class action lawsuit against FTX, Alameda Research, Sam Bankman-Fried & senior executives to secure first payment rights and compensation including interest. The lawsuit was filed in the United States Bankruptcy Court for the District of Delaware (27/12/22). The lawsuit is to claim the cash & assets of FTX customers, which were wrongly defrauded and commingled including with funds at Alameda Research, with the frozen funds of FTX should be prioritised to repay FTX customers first and not secured creditors or investors.
FTX Founder Sam Bankman-Fried & CTO Gary Wang Borrowed $546 Million from Alameda Research via Emergent Fidelity Technologies to Buy 8% of Commission Free Brokerage Robinhood in May 2022
29th December 2022 – FTX Founder Sam Bankman-Fried & CTO Gary Wang had borrowed $546 million from Alameda Research via Emergent Fidelity Technologies (EFT) to buy 8% of commission free brokerage Robinhood in May 2022, with Sam Bankman-Fried owning 90% of Emergent Fidelity Technologies and Gary Wang owning 10% of Emergent Fidelity Technologies. The transactions were detailed in an affidavit that surfaced during a dispute in the United Sates bankruptcy court (27/12/22). In August 2022, Robinhood announced 23% job cuts of 780 staffs (2/8/22), with Robinhood CEO Vlad Tenev acknowledging over-hiring having forecast the 2020 & 2021 market conditions would had last longer. On 27th Dec 2022, FTX customers has filed a class action lawsuit against FTX, Alameda Research, Sam Bankman-Fried & senior executives to secure first payment rights and compensation including interest. See more info below.
FTX Customers File Class Action Lawsuit Against FTX, Alameda Research, Sam Bankman-Fried & Senior Executives to Secure First Payment Rights & Compensation Including Interests
29th December 2022 – FTX customers has filed a class action lawsuit against FTX, Alameda Research, Sam Bankman-Fried & senior executives to secure first payment rights and compensation including interest. The lawsuit was filed in the United States Bankruptcy Court for the District of Delaware (27/12/22). The lawsuit is to claim the cash & assets of FTX customers, which were wrongly defrauded and commingled including with funds at Alameda Research, with the frozen funds of FTX should be prioritised to repay FTX customers first and not secured creditors or investors. The filing: “Because of the FTX Executive Defendants’ breaches of customer agreements, fiduciary duties and duties of care, millions of customers of the FTX Group who deposited cash and digital assets at either or both the FTX Group’s U.S.-based and non-U.S.-based trading platforms have been unable to withdraw, use or access the billions of dollars in assets that were contractually required to be held safely in accounts on their behalf … … Even worse, according to widespread reports, up to $2 billion in customer property is missing. At its simplest, this Adversary Proceeding is necessary because the Customer Class members should not have to stand in line along with secured or general unsecured creditors in these Bankruptcy Proceedings just to share in the diminished estate assets of the FTX Group and Alameda. Cash and assets traceable to customers, which never belonged to FTX or Alameda and do not belong to the estates, should be earmarked solely for customers, and victimized customers should likewise have priority to any other cash possessed or recovered by Debtors.” Earlier in December 2022, FTX founder Sam Bankman-Fried was released on a $250 million bail (22/12/22) via a Recognizance Bond secured by equity in parents’ home and signatures of his parents & 2 individuals with considerable assets. More info below | Track official FTX proceeding here
FTX Founder Sam Bankman-Fried Released on $250 Million Bail via Recognizance Bond Secured by Equity in Parents Home & Signatures of Individuals with Considerable Assets, Awaits Trial for Fraud & Criminal Charges on 3rd Jan 2023
24th December 2022 – FTX founder Sam Bankman-Fried had been released on a $250 million bail (22/12/22) via a Recognizance Bond secured by equity in parents’ home and signatures of his parents & 2 individuals with considerable assets. Sam Bankman-Fried will await trial for fraud & criminal charges on 3rd January 2023. Sam Bankman-Fried will also be required to wear an electronic monitoring bracelet, and not allowed to open new lines of credit of more than $1,000. On 21st Dec 2022, United States SEC released a statement on Alameda Research CEO Caroline Ellison and FTX Trading CTO (Chief Technology Officer) Gary Zixiao Wang pleading guilty to United States Securities & Exchange Commission (SEC) charges for fraud. More info below.
Alameda Research CEO Caroline Ellison & FTX Trading CTO Gary Zixiao Wang Pleads Guilty to United States SEC Charges for Fraud, FTX Founder Sam Bankman-Fried Extradited to United States
22nd December 2022 – Alameda Research CEO Caroline Ellison and FTX Trading CTO (Chief Technology Officer) Gary Zixiao Wang have both pleaded guilty to United States Securities & Exchange Commission (SEC) charges for fraud (21/12/22), Official Announcement & Twitter Video Message below), with FTX founder Sam Bankman-Fried extradited from The Bahamas to the United States (22/12/22). United States SEC: “Between 2019 and 2022, Ellison, at the direction of Bankman-Fried, furthered the scheme by manipulating the price of FTT, an FTX-issued exchange crypto security token, by purchasing large quantities on the open market to prop up its price. FTT served as collateral for undisclosed loans by FTX of its customers’ assets to Alameda, a crypto hedge fund owned by Wang and Bankman-Fried and run by Ellison. The complaint alleges that, by manipulating the price of FTT, Bankman-Fried and Ellison caused the valuation of Alameda’s FTT holdings to be inflated, which in turn caused the value of collateral on Alameda’s balance sheet to be overstated, and misled investors about FTX’s risk exposure. In addition, the complaint alleges that, from at least May 2019 until November 2022, Bankman-Fried raised billions of dollars from investors by falsely touting FTX as a safe crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets and by telling investors that Alameda was just another customer with no special privileges; meanwhile, Bankman-Fried and Wang improperly diverted FTX customer assets to Alameda. The complaint alleges that Ellison and Wang knew or should have known that such statements were false and misleading.”
United States SEC Chair Gary Gensler: “As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried schemed to manipulate the price of FTT, an exchange crypto security token that was integral to FTX, to prop up the value of their house of cards. We further allege that Ms. Ellison and Mr. Wang played an active role in a scheme to misuse FTX customer assets to prop up Alameda and to post collateral for margin trading. When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag. Until crypto platforms comply with time-tested securities laws, risks to investors will persist. It remains a priority of the SEC to use all of our available tools to bring the industry into compliance. As alleged, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang were active participants in a scheme to conceal material information from FTX investors, including through the efforts of Mr. Bankman-Fried and Ms. Ellison to artificially prop up the value of FTT, which served as collateral for undisclosed loans that Alameda took out from FTX pursuant to its undisclosed, and virtually unlimited, line of credit,” said Sanjay Wadhwa, Deputy Director of the SEC’s Division of Enforcement. “By surreptitiously siphoning FTX’s customer funds onto the books of Alameda, defendants hid the very real risks that FTX’s investors and customers faced.”
United States SEC Announcement on Guilty Plead – Twitter
Statement of U.S. Attorney Damian Williams on U.S. v. Samuel Bankman-Fried, Caroline Ellison, and Gary Wang pic.twitter.com/u1y4cs3Koz
— US Attorney SDNY (@SDNYnews) December 22, 2022
United States SEC Announcement
SEC Charges Caroline Ellison and Gary Wang with Defrauding Investors in Crypto Asset Trading Platform FTX
21st Dec 2022 – The Securities and Exchange Commission today charged Caroline Ellison, the former CEO of Alameda Research, and Zixiao (Gary) Wang, the former Chief Technology Officer of FTX Trading Ltd. (FTX), for their roles in a multiyear scheme to defraud equity investors in FTX, the crypto trading platform co-founded by Samuel Bankman-Fried and Wang. Investigations into other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.
According to the SEC’s complaint, between 2019 and 2022, Ellison, at the direction of Bankman-Fried, furthered the scheme by manipulating the price of FTT, an FTX-issued exchange crypto security token, by purchasing large quantities on the open market to prop up its price. FTT served as collateral for undisclosed loans by FTX of its customers’ assets to Alameda, a crypto hedge fund owned by Wang and Bankman-Fried and run by Ellison. The complaint alleges that, by manipulating the price of FTT, Bankman-Fried and Ellison caused the valuation of Alameda’s FTT holdings to be inflated, which in turn caused the value of collateral on Alameda’s balance sheet to be overstated, and misled investors about FTX’s risk exposure.
In addition, the complaint alleges that, from at least May 2019 until November 2022, Bankman-Fried raised billions of dollars from investors by falsely touting FTX as a safe crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets and by telling investors that Alameda was just another customer with no special privileges; meanwhile, Bankman-Fried and Wang improperly diverted FTX customer assets to Alameda. The complaint alleges that Ellison and Wang knew or should have known that such statements were false and misleading.
The complaint also alleges that Ellison and Wang were active participants in the scheme to deceive FTX’s investors and engaged in conduct that was critical to its success. The complaint alleges that Wang created FTX’s software code that allowed Alameda to divert FTX customer funds, and Ellison used misappropriated FTX customer funds for Alameda’s trading activity. The complaint further alleges that, even as it became clear that Alameda and FTX could not make customers whole, Bankman-Fried, with the knowledge of Ellison and Wang, directed hundreds of millions of dollars more in FTX customer funds to Alameda.
“As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried schemed to manipulate the price of FTT, an exchange crypto security token that was integral to FTX, to prop up the value of their house of cards,” said SEC Chair Gary Gensler. “We further allege that Ms. Ellison and Mr. Wang played an active role in a scheme to misuse FTX customer assets to prop up Alameda and to post collateral for margin trading. When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag. Until crypto platforms comply with time-tested securities laws, risks to investors will persist. It remains a priority of the SEC to use all of our available tools to bring the industry into compliance.”
“As alleged, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang were active participants in a scheme to conceal material information from FTX investors, including through the efforts of Mr. Bankman-Fried and Ms. Ellison to artificially prop up the value of FTT, which served as collateral for undisclosed loans that Alameda took out from FTX pursuant to its undisclosed, and virtually unlimited, line of credit,” said Sanjay Wadhwa, Deputy Director of the SEC’s Division of Enforcement. “By surreptitiously siphoning FTX’s customer funds onto the books of Alameda, defendants hid the very real risks that FTX’s investors and customers faced.”
The SEC’s complaint charges Ellison and Wang with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC’s complaint seeks injunctions against future securities law violations; an injunction that prohibits Ellison and Wang from participating in the issuance, purchase, offer, or sale of any securities, except for their own personal accounts; disgorgement of their ill-gotten gains; a civil penalty; and an officer and director bar. Ellison and Wang have consented to bifurcated settlements, which are subject to court approval, under which they will be permanently enjoined from violating the federal securities laws, the above-described conduct-based injunctions, and officer and director bars. Upon motion of the SEC, the court will determine whether and what amount of disgorgement of ill-gotten gains plus prejudgment interest and/or a civil penalty is appropriate, as well as the length of the officer and director bar and the conduct-based injunction imposed against Wang.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced charges against Ellison and Wang.
Ellison and Wang are cooperating with the SEC’s ongoing investigation, which is being conducted by Devlin N. Su, Ivan Snyder, and David S. Brown of the Crypto Assets and Cyber Unit and Brian Huchro and Pasha Salimi. It is being supervised by Amy Flaherty Hartman, Michael Brennan, Jorge Tenreiro, and David Hirsch. The SEC’s litigation will be led by Amy Burkart and David D’Addio and supervised by Ladan Stewart and Olivia Choe. Additional assistance to the investigation was provided by Therese Scheuer, Alistaire Bambach, Ainsley Kerr, William Connolly, and Howard Kaplan.
The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the FBI, and the Commodity Futures Trading Commission.
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