Sam Bankman-Fried Rejects Claims of Misusing Client Money: A Look At What Really Happened
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Sam Bankman-Fried, a co-founder of FTX, has consistently rejected claims made by the US government that he misappropriated $8 billion in client funds. As Sam Bankman-Fried gets ready to defend himself against fraud accusations, he gave one of his most thorough explanations of the FTX disaster to date, blaming falling markets and a rival’s attack for the final collapse of his exchange.
This was regarded as one of his most comprehensive public defenses since the Department of Justice charged Bankman-Fried with eight counts of fraud, money laundering, and other offenses last month. He is under house arrest at his parents’ home in Palo Alto, California, and will stand trial later this year for these accusations.
Sam Bankman-Fried Disproves FBI Charges
Sam Bankman-Fried claimed on Thursday that Binance CEO Changpeng “CZ” Zhao had led a months-long effort to bring down FTX. He also denied allegations that he stole billions of dollars in user money. Sam Bankman-Fried’s strongest point against FBI allegations is that he schemed an $8 billion scam that destroyed his $32 billion cryptocurrency company.
Bankman-Fried pleaded not guilty to eight federal offenses, including fraud and money laundering, and was released earlier this month on a $250 million recognizance bond. The trial to decide his fate will start in October of this year, following his most recent court appearance.
Bankman-Fried estimates Alameda’s net worth at $99 billion at the start of 2022. He calculated that his hedge fund’s net assets had fallen to $10 billion by the end of October. He compared his FTT token to Tesla stock and the Invesco QQQ ETF, which tracks the Nasdaq 100, and blamed the market downturn for the token’s value drop.
Bankman-Fried Sticks to His Story
Investigators and prosecutors believe that FTX and Alameda are more likely to be tools than entirely legitimate organizations in Fried’s banker’s scam. According to FTX’s reorganization management, the firms experienced considerable and confusing liquidity constraints following FTX’s bankruptcy filing in November.
Regulators built their case against Bankman-Fried with the help of his former executives, like Zixiao Gary Wang and Caroline Ellison, who both agreed to plea deals on fraud charges.
In addition, he had made a number of additional claims, including that FTX US were still in good financial standing and that market volatility rather than dishonesty was responsible for Alameda’s lack of liquidity. He continued by saying that FTX International and Alameda were both successful companies that operated in an ethical manner.
