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Ever since the FTX bankruptcy case, new facts about the erstwhile second-largest cryptocurrency exchange emerge almost every day. Recently, an email reportedly revealed that the former FTX CEO Sam Bankman-Fried (SBF)has deep ties with current and former US regulators.
As per an email, SBF hired the Commodities Futures Trading Commission’s (CFTC) former regulators in the legal team representing FTX. As per LA Times, Ryne Miller, FTX’s general counsel was legal advisor to current SEC chairman Gary Gensler.
The current director at LedgerX and FTX’s former head of policy Mark Wetjen previously served as the acting chairman and a commissioner at the CFTC. Another former CFTC commissioner Jill Sommers worked on the FTX US Derivatives Board of Directors.
FTX was valued at $32 billion (USD) at its peak. It filed for Chapter 11 bankruptcy for misleading lenders and customers.
The United States Securities and Exchange Commission (SEC) labeled FTX native token FTT as a “security.” The SEC wrote in its complaint that “The large allocation of tokens to FTX incentivized the FTX management team to take steps to attract more users onto the trading platform and, therefore increased demand for, and increase the trading price of, the FTT token.”
Caroline Ellison: “I knew it was wrong,”
Earlier, Alameda Research’s former CEO, Caroline Ellison, had hired Stephanie Avakian to represent her in the FTX bankruptcy investigation. Avakian is a former SEC regulator who led major cases against tech giants including Tesla, FaceBook, Theranos and Wells Fargo. She was the director of the enforcement division when the financial watchdog filed lawsuits against Ripple Labs and Robinhood.
As per the transcript of the Monday hearing (unsealed on Friday), Ellison told US District Judge Ronnie Abrams, “We prepared certain quarterly balance sheets that concealed the extent of Alameda’s borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties.”
On December 21st, Damian Williams, American attorney, said that former FTX CTO Gary Wang and former Alameda Research CEO Caroline Ellison pleaded guilty to misleading FTX investors.
On December 13th, 2023, the US attorney general revealed that the SBF had been arrested in the Bahamas. After a week, SBF was released on a $250 million bond. He was allowed to stay at his parent’s house in California under house arrest.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
