This is how Bankman-Fried created a historic scam

In just over a month he spent Sam Bankman Fried To run FTX cryptocurrency platform from a luxury penthouse in the Bahamas to Going to prison with health problems on the same island. This is how the life of the president of one of the most important frauds in US history changed.

On December 12, the founder and former CEO of FTX were arrested by Bahamas authorities at the request of the US government. known as Warren Buffett of cryptocurrency He was indicted by the New York District Attorney’s Office on wire fraud, securities fraud, conspiracy to commit securities fraud, and money laundering, as expected. New York times.

Added to these charges is the lawsuit filed by the US Securities and Exchange Commission (SEC). The US market regulator accuses him of masterminding fraud against investors.

[Auge y caída de FTX: así se ha desmoronado el imperio del ‘Warren Buffett’ de las cripto]

“Sam Bankman Fried built a house of cards on a bluff while telling investors it was One of the safest cryptocurrency structuresSEC Chairman Gary Gensler said in a statement.

Bankman-Fried has been held responsible by the regulator Fraudulently collect billions of dollars from FTX users and embezzlement of funds belonging to clients.

embezzlement

Thus, the SBF – as it calls itself on social networks – was going to organize a whole lot that for years would have transferred money from the platform to the investment arm of its business network: Alameda Research.

The key is that in the middle of 2020, FTX Chief Architect Nishad Singh made a secret change to the software from the platform.

It modified the code to exempt Alameda Research from a feature of the trading platform where it could automatically sell its assets if the losses were too large, it reported. Reuters.

This exemption allowed Alameda to continue to borrow money from FTX regardless of the value of the collateral backing those loans. Moreover, the above money does not belong to the platform, but it was customer deposits.

Modifying the FTX code was just one of the methods used by Backman-Fried. The second is also indicated Reuters, was the use of Alameda bank accounts to convert users’ deposits in traditional currency. In total, money transfer It could reach 8,000 million dollars (about 7,555 million euros at the current exchange rate).

Bankman-Fried supported its location Crypto empire Where Luxurious penthouse in the exclusive Albany development, in Nassau, the capital of the Bahamas. SBF shared it with several members of the company, who were in polyamorous relationships and spent time playing video games, according to various media outlets at the time the scandal broke.

[El nuevo CEO de FTX advierte de que la quiebra de la plataforma es peor que el escándalo financiero de Enron]

Last Tuesday in his appearance before the US House Committee on Financial Services, current FTX CEO John Ray admitted that There were no internal controls and no discrimination between the company and Alameda Research.

Ray – who has already compared the situation with Enron bankruptcy– Notice that Don’t think Bankman-Fried transferred funds from FTX to Alameda Research “by mistake” And developed that the collapse of the group seems to be caused by Concentration of power in the hands of inexperienced peoplewho accused him of taking money from clients for his own benefit.

However, Bankman-Fried points to the cryptocurrency sale that occurred earlier in the year as the reason for the bankruptcy. As he explained, the crypto winter halved the FTX guarantee, about $30,000 million (€28,341 million).

At that point, according to Bankman-Fried, cryptocurrency selling continued, Coupled with a credit crunch and “running the bank”lowering the guarantee to $9,000 million (8,502 million euros) before the FTX announcement.

Bankman Fried is now imprisoned in Bahamas Prison Service, As known b Fox Hill. Despite its rural nickname – Fox Hill, in English – these facilities are notorious for overcrowding, poor nutrition, inadequate sanitation and inadequate medical care.

This was denounced by a US State Department report described in 2020 Infestations of rats and worms, as well as small cells without toilets. Bachman-Fried will be in the maximum security unit ward, where he will remain until his extradition hearing on February 8.

At Bankman-Fried’s first court appearance, last Tuesday, his attorney made clear his intent Fight extradition to the United States.

But that was before the judge denied his request to be released on bail of $250,000 (236,181 euros). The conditions of the facilities in which you will spend the next month and a half may make you change your mind.

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