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Hours before his arrest, SBF denied being part of ‘Wirefraud’ chat group

Sam Bankman-Fried’s last tweet before his arrest for allegedly committing wire fraud was denying his involvement in a group chat called “Wirefraud.”

Merely hours before news of his arrest by Bahamian police, Sam Bankman-Fried took to Twitter to deny his involvement or knowledge of a secret group chat named “Wirefraud” — which allegedly involved former FTX and Alameda ranking executives.

In a Dec. 12 response to a report from the Australian Financial Review (AFR), Bankman-Fried used Twitter to deny involvement in or knowledge of a “Wirefraud” group chat on messaging app Signal, which reportedly included members of Bankman-Fried’s inner circle, including FTX co-founder Zixiao “Gary” Wang, FTX engineer Nishad Singh and former Alameda CEO Caroline Ellison.

The AFR report said the chat was used to send secret information about FTX and Alameda’s operations in the lead-up to its failure.

Bankman-Fried however said on Twitter that if the group chat was “true” he “wasn’t a member” and was “quite sure it’s just false” as he had “never heard of such a group.”

If this is true then I wasn’t a member of that inner circle

(I’m quite sure it’s just false; I have never heard of such a group)

— SBF (@SBF_FTX) December 12, 2022

Until very recently, Bankman-Fried was expected to appear remotely before a United States House Committee hearing on Dec. 13 to explain the collapse of the FTX exchange. But he was taken into custody by Bahamian authorities on Dec. 12, to face U.S. charges that reportedly include wire and securities fraud and money laundering.

Committee Chair Maxine Waters on confirmed later on Dec. 12 that the panel “will not be able to hear” SBF’s testimony hearing due to the arrest.

Bankman-Fried was also requested to attend a separate hearing on Dec. 14 with the Senate Committee on Banking but had never confirmed his attendance, with his lawyers reportedly refusingto accept a subpoena compelling his testimony, according to a Dec. 12 joint statement from Senators Sherrod Brown and Pat Toomey.

Chief restructuring officer and FTX CEO John Ray, in written testimony released ahead of his appearance at the House Committee hearing, said FTX customer assets were “commingled” with Alameda’s funds.

Ray asserted that Alameda “used client funds to engage in margin trading which exposed customer funds to massive losses” and the trading firm’s business model required it to deploy those funds to “various […] exchanges which were inherently unsafe.”

Rep. Cawthorn fined for ethics breach over Let’s Go Brandon token promo

The Ethics Committee couldn’t agree if the Representative sought to profit from his promotions, but he was fined for it regardless and for also not declaring a “gift” of the token.

The outgoing United States House Representative Madison Cawthorn has been fined over $15,000 by the House Committee on Ethics for his promotion of a cryptocurrency in which he had an undisclosed investment.

A report released by the Committee on Dec. 6 after a seven-month-long investigation found Cawthorn “improperly promoted a cryptocurrency in which he had a financial interest” violating conflict of interest rules.

Cawthorn’s “direct and unambiguous” promotional commentary on social media followed an undisclosed purchase by the Representative of $150,000 worth of the token in December 2021.

He promoted the Ethereum-based token Let’s Go Brandon (LETSGO) — named after a slogan and meme that is used as a substitute for the phrase “F— Joe Biden” — after Cawthorn was able to secure the purchase of around 180 billion LETSGO tokens “on terms more favorable than those available to the general public.”

The $150,000 sum Cawthorn paid to an unnamed person involved with the token saw him receive 180 billion LETSGO, which were trading for an average value of around $164,200 at the time. Cawthorn also did not pay transaction fees .

The $14,237 difference between the amount Cawthorn paid and the average value of the tokens at the time he received them was considered a “gift” by the Committee that recommended Cawthorn repay the amount “to an appropriate charitable organization.”

After his purchase of the tokens on Dec. 21, 2021, Cawthorn sold “nearly all” of them in three batches, netting an overall loss by late January 2022 of nearly $7,500.

The Committee “did not reach a consensus” on whether Cawthorn intended to “personally profit from his promotional activities,” and no “sufficient evidence” was found that Cawthorn used non-public information to time his transactions.

“Cawthorn also failed to file timely reports to the House disclosing his transactions relating to the cryptocurrency,” the report said. However, as the requirements on crypto disclosures “are relatively new” as per the report, the Committee found Cawthorn’s failure to disclose was not “knowing or willful” as he was “misinformed regarding the requirements.”

The outgoing Representative will also need to submit a transaction report detailing the purchase and sales of the tokens and pay a $1,000 late fee along with his over $14,000 charitable donation.

Cawthorn disclosed he still owns more than 15.3 billion LETSGO, which has a current value of under $25.50, according to CoinGecko data.

The Representative will leave office in January 2023 after serving one year for North Carolina’s 11th Congressional District, being beaten in a Republican party primary in May by North Carolina Senator Chuck Edwards.