Sam Bankman-Fried

Sam Bankman-Fried’s lawyer says FTX fraud trial was “almost impossible” to win: Report

The head of Sam Bankman-Fried’s legal defense admitted the odds of winning the FTX fraud trial were stacked against the former CEO.

The lawyer responsible for Sam Bankman-Fried’s criminal trial defense has admitted that the case was “almost impossible” to win from the outset.

In a one-on-one interview with Bloomberg, Stanford Law School professor David Mills recounts how Bankman-Fried’s reluctance to follow his recommendations and the damning testimony of his former associates had the FTX founder’s back against the ropes.

Related: Caroline Ellison wanted to step down but feared a bank run on FTX

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Sam Bankman-Fried will not file any post-trial motions, say lawyers

The former FTX CEO was found guilty of seven felony charges on Nov. 2, for which he could face up to 115 years in prison.

Following his conviction on federal fraud charges on Nov. 2, former FTX CEO Sam “SBF” Bankman-Fried will not pursue any post-trial motions.

In a Dec. 1 letter to Judge Lewis Kaplan in United States District Court for the Southern District of New York, lawyers representing Bankman-Fried said they had “decided not to file any post-trial motions” but reserved their rights to pursue claims on appeal. The filing was the latest following SBF’s conviction on Nov. 2 as he awaits sentencing on March 28.

Source: Courtlistener

It’s unclear whether prosecutors plan to move forward with Bankman-Fried’s second trial in March.

Related: What’s next for the ‘crypto king’ Sam Bankman-Fried?

After the jury verdict was handed down, Bankman-Fried returned to the Brooklyn Metropolitan Detention Center, where he is expected to remain until sentencing. 30, crypto blogger Tiffany Fong interviewed a former mob enforcer, Gene Borrello, who reported on some of SBF’s experiences in jail.

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SBF was almost extorted for ‘protection' in Brooklyn jail, recalls ex-inmate

Gene Borrello, a former prisoner at MDC, told crypto blogger Tiffany Fong that Sam Bankman-Fried was targeted for his timid nature and having “the body of the 80-year-old.”

Sam Bankman-Fried was reportedly worried for his safety during his pre-trial detention time at the Brooklyn Metropolitan Detention Center and even considered paying another inmate for “protection,” according to a former inmate. 

New York mob enforcer-turned-informant Gene Borrello told crypto blogger Tiffany Fong in a Nov. 30 interview that he spent time with Bankman-Fried in the lead-up to his criminal trial.

Borrello said during his time there, other prisoners saw the former crypto mogul as timid, having “the body of the 80-year-old,” and was presumed to have access to money.

“He has the body of the 80-year-old. He has, like, no shape to him, you know what I mean?”

A prisoner reportedly attempted to make Bankman-Fried fearful to extort him for protection money, according to Borello.

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SBF was almost extorted for ‘protection’ in Brooklyn jail, recalls ex-inmate

Gene Borrello, a former prisoner at MDC, told crypto blogger Tiffany Fong that Sam Bankman-Fried was targeted for his timid nature and having “the body of the 80-year-old.”

Former FTX CEO Sam “SBF” Bankman-Fried was reportedly worried for his safety during his pretrial detention time at the Brooklyn Metropolitan Detention Center and even considered paying another inmate for “protection,” according to a former inmate. 

New York mob enforcer-turned-informant Gene Borrello told crypto blogger Tiffany Fong in a Nov.

Borrello said that during his time there, other prisoners saw the former crypto mogul as timid, having “the body of the 80-year-old,” and he was presumed to have access to money.

“He has the body of the 80-year-old. He has, like, no shape to him, you know what I mean?”

A prisoner reportedly attempted to make Bankman-Fried fearful to extort him for protection money, according to Borello.

“[The other prisoner] wanted Sam Bankman to feel like ‘this is dangerous in here, you need protection,’” he recalled.

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Spreading misinformation about Changpeng Zhao ‘was the norm’ for SBF, says Binance CSO

Binance chief strategy officer Patrick Hillmann claimed former FTX CEO Sam Bankman-Fried was “constantly” using his platform to disparage CZ without considering the FTX Token sale.

Former FTX CEO Sam Bankman-Fried used Twitter and other means to spread “fake rumors” about Binance CEO Changpeng “CZ” Zhao, according to a Binance executive.

In an April 21 Twitter thread, Patrick Hillmann — the chief strategy officer at Binance — said Bankman-Fried, also known as “SBF,” used his influence to label CZ as an “evil Chinese” through “fake rumors” to perpetuate his alleged scams at FTX. Prior to and following FTX filing for bankruptcy in November 2022, SBF and CZ’s public relationship was often antagonistic, though the two exchanges had financial ties.

“Sam denigrating CZ was the norm for us,” said Hillman. “Had nothing to do with deciding to sell the worthless FTT on the company’s books.”

In November, CZ announced plans for Binance to liquidate its position in FTX Token (FTT) prior to FTX’s bankruptcy, hinting that Binance would consider purchasing the competitor. When the deal fell apart and FTX filed for Chapter 11, the two industry heads traded barbs through social media, with CZ calling SBF a “fraudster” and the former FTX CEO suggesting that Zhao lied about the buyout discussions.

Related: New FTX documentary to spotlight SBF-CZ relationship

Zhao continues to lead Binance as CEO and regularly posts messages on social media amid changes to the regulatory environment for crypto firms. Bankman-Fried, in contrast, faces 13 federal charges, including those related to bribery and wire fraud, and has only limited internet access as part of his bail conditions.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Financial Services Chair McHenry sends SEC 2nd request for records related to SBF arrest

Sam Bankman-Fried was arrested just before his committee appearance was scheduled.

Leadership in the United States House of Representatives Financial Services Committee was not satisfied with Securities and Exchange Commission head Gary Gensler’s response to their request for documents. They have reached out to the SEC chairman again in a sharply worded letter. 

Committee Chair Patrick McHenry and the chair of the Oversight and Investigations Subcommittee, Rep. Bill Huizenga, wrote Gensler on Feb. 10, “demanding records and communications between and among both the SEC’s Division of Enforcement, the Office of the Chair, and the Department of Justice (DOJ)” in regard to the timing of charging and arrest of former FTX CEO Sam Bankman-Fried.

Bankman-Fried was scheduled to appear before the Financial Services Committee on Dec. 13, but was prevented from testifying by his arrest.

The SEC has missed deadlines for submitting the documents requested and so impeded the work of the committee. Moreover, SEC staff provided 232 pages of documents that were “publicly available and not responsive to the request.”

Related: US lawmakers argue SEC accounting policy places crypto customers at risk

The legislators set a new deadline for select documents of April 17 at the end of the workday. They warned:

“Failure to produce the requested information could result in the Committee considering using compulsory process, if necessary, to obtain the requested information.”

Attached to the letter were 14 pages of instructions “for the purpose of this Request” for producing the material the congressmen had requested.

Gensler is set to appear before the committee in person on April 18, McHenry has previously announced.

Magazine: The secret of pitching to male VCs: Female crypto founders blast off

FTX has recovered $7.3B in assets, will consider rebooting exchange

Sam Bankman-Fried’s failed cryptocurrency exchange filed for bankruptcy in November 2022 and has since been mired in court proceedings.

Cryptocurrency exchange FTX may be considering restarting in the future, according to the legal team behind the debtors.

In an April 12 hearing in the United States Bankruptcy Court for the District of Delaware, lawyers with Sullivan & Cromwell representing FTX said the crypto firm had recovered roughly $7.3 billion in liquid assets. A March filing from the debtors reported the four FTX company silos had roughly $4.8 billion in scheduled assets as of November 2022, with an investigation into the assets ongoing.

According to the legal team, FTX will also consider restarting its crypto exchange operations sometime in the second quarter of 2024 — suggesting a reboot as early as April. FTX CEO John Ray was reportedly mulling reviving the bankrupt exchange in a January interview.

The price of the FTX Token (FTT) surged from $1.32 to $2.80 at roughly the same time lawyers announced the potential reboot of the exchange — an increase of more than 112%. The token price had largely stayed between $1 and $2 since the firm’s bankruptcy filing.

At the same hearing, the bankruptcy judge denied a motion that would have allowed the court to prioritize reimbursing former FTX CEO Sam “SBF” Bankman-Fried’s legal fees. He left the door open for SBF to present evidence to the court in the future regarding the motion.

“Frankly, I have zero evidence to establish cause here,” said Judge John Dorsey. “Mr. Bankman-Fried did not put out any evidence whatsoever as to the balancing of the equities here, what harm is going to occur to him. I don’t know what other insurance policies he has access to, I don’t know what other assets he has access to privately that would allow him to cover these costs and then recover them later under this policy.”

Related: SBF says Sullivan & Cromwell contradicted itself with insolvency claims

The bankruptcy court proceedings followed the debtors’ announcement that a Swiss court had granted a petition allowing the sale of FTX Europe AG, the firm’s European arm. FTX Europe AG, along with 133 other subsidiaries, was part of FTX’s Chapter 11 filing in U.S. bankruptcy court in November 2022.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Update (April 12 at 6:17 pm UTC): An earlier version of this article said FTX would consider rebooting in the second quarter of 2023, which was incorrect. The correct year is 2024.

Crypto news site The Block gets new CEO and reported staff layoffs following admitted ties to SBF

The Block reportedly laid off roughly 33% of its staff, including interim CEO Bobby Moran, to stabilize the platform following loans it received from Sam Bankman-Fried.

Larry Cermak, vice president of research at The Block, has announced that he will be taking the reins at the crypto and blockchain news website from interim CEO Bobby Moran — the second change in leadership since reports surfaced that former CEO Mike McCaffrey financed the platform through loans from Alameda Research. 

In a March 31 tweet, Cermak said he would be stepping up as CEO after roughly five years at the crypto news site. Axios also reported that The Block laid off roughly 33% of its staff — including Moran — to stabilize the platform following the controversial loans it received from former FTX and Alameda Research founder Sam Bankman-Fried.

“We are not immune to the contraction of the crypto market, and the economy more broadly,” the company reportedly said. “We grew too quickly to capitalize on a bull market in crypto. Now, we must shift our strategy and recalibrate our teams to align with the reality of the current market.“

In December 2022, Moran revealed that McCaffrey had used two loans totaling $27 million from Alameda in 2021 in his efforts to restructure the crypto news site. McCaffrey failed to disclose the loans to The Block’s leadership team, which led to his resignation as CEO. The Block’s editor-at-large Frank Chaparro, who previously referred to McCaffrey as “literal scum” who betrayed the platform’s staff, lauded Cermak’s advancement to CEO, saying the site was “returning to our crypto native roots.”

Cermak reportedly said he had received no direction from McCaffrey to cover stories about FTX or Bankman-Fried “in any particular way,” despite the platform’s financial ties. All news stories on the website include a disclaimer with details about the loans from SBF.

Related: FTX presentation shows ‘massive shortfall’ in firm’s assets

Since FTX filed for Chapter 11 bankruptcy on Nov. 11, 2022, many news outlets, lawmakers, and organizations reported financial ties to the defunct crypto exchange or directly to Bankman-Fried. In February, the firm’s leadership announced that it planned to recover all political donations, reporting in March that a research team had determined there had been roughly $25 million as of November 2022.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Sam Bankman-Fried pleads not guilty to bribery, charges from superseding indictment

The former FTX CEO’s legal team argued that, although SBF had entered a not-guilty plea, he did not acknowledge the new charges, which included bribing a Chinese government official.

Lawyers for former FTX CEO Sam Bankman-Fried have entered a not-guilty plea for five additional charges since his December 2022 arraignment, including allegations of bribery.

According to multiple reports, Bankman-Fried pleaded not guilty in United States District Court for the Southern District of New York to four charges added as part of a superseding indictment in February, and one charge added on March 28 related to the former CEO allegedly bribing a Chinese government official. Other charges include conspiracy counts related to fraud as well as those for wire fraud and securities fraud during his time at FTX.

Mark Cohen, the attorney representing Bankman-Fried in the criminal case, reportedly argued that though SBF had entered a not guilty plea, there was no acknowledgement that the court had the authority to bring the charges against him. The latest charge alleged that SBF was involved in transferring “at least approximately $40 million in cryptocurrency intended for the benefit of one or more Chinese government officials” intended to facilitate transactions tied to Alameda Research.

Related: Sam Bankman-Fried is paying for legal defense using previously gifted funds from Alameda: Report

Bankman-Fried has been free on bail since being turned over to U.S. custody from the Bahamas in December, largely confined to his parents’ California home. A federal judge recently amended his bail conditions to prohibit the use of any smartphone with internet access. Bankruptcy proceedings for FTX are also currently underway in the District of Delaware.

Magazine: SBF legal fees, BTC market cap flips Meta and USDC climbs back to $1: Hodler’s Digest, March 12-18

Sam Bankman-Fried is paying for legal defense using previously gifted funds from Alameda: Report

The former FTX CEO reportedly gave Joseph Bankman roughly $10 million funded by a loan from Alameda Research as a part of a lifetime estate and gift tax exemption.

Former FTX chief executive officer Sam Bankman-Fried, also known as SBF, is reportedly funding the legal team defending him against federal charges with millions of dollars he gifted his father from Alameda Research.

According to a March 29 Forbes report that cited sources with “operational knowledge” of FTX and Alameda, in 2021 Bankman-Fried gave his father at least $10 million that was funded by a loan from Alameda. The former FTX CEO sent the funds to Joseph Bankman — a Stanford Law professor who has stopped teaching classes amid his son’s legal troubles — as part of a lifetime estate and gift tax exemption.

Bankman-Fried’s defense team consists of Mark Cohen and Christian Everdell of the law firm Cohen & Gresser, whom the former FTX CEO reportedly retained prior to his extradition to the United States in December. Though SBF remains free on bail at the time of publication, many of his in-person court appearances since his arraignment have focused on potentially restricting these conditions. A judge recently prohibited Bankman-Fried from using a smartphone with internet access.

Amid the collapse of FTX and Bankman-Fried’s subsequent arrest, members of his family, including his father, mother, and close associates, have become embroiled in the situation with the crypto exchange. Bankman reportedly retained his own attorney in January, and he and others have been named in potential subpoenas for FTX’s bankruptcy case.

Related: Sam Bankman-Fried petitions court to prioritize reimbursing his legal fees

SBF faced 12 criminal counts following a superseding indictment from federal prosecutors in February, which was amended to 13 on March 28 to include allegations he spent $40 million bribing a Chinese government official. Other charges include conspiracy counts related to fraud as well as those for wire fraud and securities fraud. Bankman-Fried entered a not-guilty plea in December, with the trial scheduled to begin in October.

Magazine: SBF legal fees, BTC market cap flips Meta and USDC climbs back to $1: Hodler’s Digest, March 12-18