Crypto billionaire Bankman-Fried to be probed in US

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Crypto billionaire Bankman-Fried to be probed in US

The US marshals will transport Sam Bankman-Fried from a prison in Brooklyn to Daniel Patrick Moynihan's United States Courthouse in Lower Manhattan tomorrow.

The immediate agenda involves selection of jury members to sit in judgement of the onetime crypto billionaire, charged with multiple counts of fraud, money laundering, and campaign finance offences in connection with the failure of the exchange FTX last November.

Crypto itself is expected to remain in the dock along with Bankman-Fried, who has pleaded not guilty.

FTX, worth $32 billion at its peak, has become a symbol of the lawlessness associated with the digital assets market. And along with his slob-chic vibe and commitment to 'effective altruism, the 31-year-old entrepreneur has come to epitomise crypto for many in the mainstream.

By shifting billions of dollars worth of FTX deposits to cover losses in his hedge fund, prosecutors said Bankman-Fried violated one of the bedrock laws in finance - never tap customer deposits to juice your own trading book.

Prosecutors are expected to try and prove that he did what he did, bolstered by testimony from several of Bankman-Fried's former associates, including his ex-girlfriend Caroline Ellison.

The case has confirmed the fears of crypto critics that the sector is in a state of terrorism and Ponzi schemes, and embroiled watchdogs like Gary Gensler, the chairman of the US SEC, have been emboldened to crack down with a flurry of civil actions.

While Bitcoin has rallied 60% since FTX filed for bankruptcy on November 11, its trading volume has nosedived - in August, it dropped to a five-year low. The days when BTC attracted the attention of mainstream investors seem to be over, at least for now.

Decentralised finance hasn't been snatched from the market's ill-treatment. The deposits, or total value locked, of the sector is still about a quarter less than before FTX's downfall, according to DefiLama data.

If Bankman-Fried did nothing else, he appears to have proven yet again that if something seems to be too good to be true, it probably is. What is unfortunate given the amount of doing good that Bankman-Fried vowed to do.

In 2022, Bankman-Fried was running his FTX-Alameda empire from a $30 million penthouse in the Bahamas. He surrounded himself with colleagues who shared a lavish work-life space in the tropics.

Bankman-Fried charmed celebrities such as Superstar quarterback Tom Brady and his former wife, supermodel Gisele Bundchen, who were energetic - and well compensated - spokespersons for FTX. He found Michael Lewis, the best-selling author of The Big Short and Moneyball, as his biographer.

Lewis, who is releasing his new book on Bankman-Fried and FTX this week, said he watched in amazement as the'most famous people in the world' would gather around the rumpled entrepreneur. The young tycoon was known simply by his initials - SBF.

Bankman-Fried, a MIT maths whiz, was only a springboard to amassing enough wealth to tackle epochal challenges like pandemics and artificial intelligence. He chose EA, a philosophical and social movement designed to maximize the impact for the common good, as his chosen vehicle.

academics and intellectuals flew into the Bahamas to engage with Bankman-Fried and his colleagues at FTX's zenith. DL News spoke to several individuals who were privy to these discussions.

The interest in genetics, the person said, boiled down to a willingness to use gene editing to increase would-be parents' odds of having kids who are happy, healthy, and smart.

'' You can get sad, so you can have guilt-free meat,'' said the person, who asked for anonymity as a condition of talking about dealings with Bankman-Fried.

However, the interest did not translate into action. ''T have thought it was worth their time or money to actually do much on it,'' said the person who met with Bankman-Fried.

The Future Fund, FTX's philanthropic arm, dedicated $100 million to initiatives in pandemic prevention, addressing the risks of AI, and other futuristic projects.

Bankman-Fried said in his interview that he deemed an overly slow approval process by the US Food and Drug Administration.

These projects were designed to safeguard the long-term future of humanity and were in line with EA's thinking.

Another person familiar with Bankman-Fried's work lamented that his alleged misdeeds tarnished EA.

The money wasn't his, prosecutors said. In August, the Justice Department accused FTX customers of using money deposited by FTX customers to make $100 million in political campaign contributions in the run-up to the midterm elections in November.

The prosecutors said that ''s profile, and curry favour with candidates,'' prosecutors said in a new indictment that month.

Bankman-Fried will be the latest in a long list of bold-faced names who have faced justice in the federal court on Foley Square in downtown Manhattan.

Bernie Madoff, Ghislaine Maxwell, and Martha Stewart all passed through here on their way to guilty pleas or jury verdicts. Bankman-Fried's performance is predicted to be as hot as that of the media.

Bankman-Fried, who has been incarcerated for the past two months after violating the terms of his bail, faces the possibility of not living outside the walls of penal institutions for decades.

He faces a minimum of 20 years in prison on each of the main counts in his indictment.