WSJ: SBF may plead not guilty to FTX-related fraud charges

This article comes fromDecrypt, Original Author: Andrew Hayward

Odaily Translator | Nian Yin Si Tang

, Original Author: Andrew Haywardto reportOdaily Translator | Nian Yin Si TangAccording to the Wall Street Journal, citing people familiar with the。

to report

, FTX founder Sam Bankman-Fried (SBF) is expected to enter a "not guilty plea" next week, and he is currently in the Southern District of New York

Facing eight federal charges related to the collapse of his cryptocurrency exchangeSBF is expected to enter a not guilty plea in person on Jan. 3 in Manhattan.FTX crashed in November following a sell-off of FTT tokens and a liquidity squeeze on the exchange, which used celebrities like Tom Brady and Larry David to boost its image. Its valuation soars to $32 billion by early 2022.

The exchange reportedly allows Alameda Research, a trading firm also founded by SBF, to

Take advantage of the "secret exemption" from liquidation rulesGet plenty of liquidity. After Terra’s collapse this summer, Alameda allegedly tapped billions of dollars in FTX client funds to plug holes in its balance sheet."Never in my career have I seen such a complete failure of corporate control, such a complete lack of trustworthy financial information," FTX's new CEO, John J. Ray III, wrote in a November bankruptcy filing. road,documentdetailing various flaws in the company's previous management

. According to a previous filing with Delaware Bankruptcy Courtdocument, FTX Ventures both invests in companies and receives investments, spreading its funds among Clifton Bay Investments LLC, FTX Ventures Ltd, Island Bay Ventures Inc and some potential affiliates. Of these groups, Clifton Bay Investments and FTX Ventures are the only entities that prepare quarterly financial statements. According to John J. Ray III, even Island Bay Ventures' financial statements haven't been found yet.

News Dec. 13, according to John J. Ray III's transcript of his hearing testimony

, a “substantial portion” of FTX’s assets remain “missing, misappropriated, or unobtainable.” The team is continuing the painstaking forensic work to pinpoint the whereabouts of all assets. His new team has acquired more than $1 billion in digital assets to date, though that’s a fraction of the billions FTX owes clients and other creditors. FTX US does not operate independently of parent company FTX.com, so filing for bankruptcy protection is necessary for FTX US. FTX lacks security controls that allow Alameda to borrow funds from FTX "without any effective restrictions," lacks reliable financial statements, and lacks independent governance.discloseIn addition, he also confirmed that FTX spent about $5 billion on various investments and acquisitions, and another $1 billion went to insiders as loans and other payments, especially since these acquisitions and investments may no longer have their original value.

Meanwhile, John J. Ray III is still hearingdisclose, there is bad news for FTX.com's customers, many of whom will not be able to recover the funds lost due to the company's bankruptcy, and the company will not be able to cover all losses of these users; FTX US is poor because the US exchange FTX has far less clients and trading volume than FTX.com. He also said they might find more assets attributable to the U.S. company.

SBF finally launched earlier this month

Arrested in the Bahamas, where FTX is headquartered, and was charged by U.S. prosecutors with eight counts of fraud.He is charged with: conspiracy to commit wire fraud against a customer; wire fraud against a customer; conspiracy to commit wire fraud against a lender; wire fraud against a lender; conspiracy to commit commodity fraud; conspiracy to commit securities fraud; conspiracy Money Laundering; Conspiracy to Defraud the United States, Violation of Campaign Finance Laws.The former encryption giant alsoFacing charges from the SEC and lawsuits from the Commodity Futures Trading Commission (CTFC)

, CTFC also sued FTX and Alameda. SBF was extradited to the U.S. last week, New York Judge Gabriel W. Gorenstein

SBF granted bail on $250 million

. SBF's next court appearance is January 3, 2023, the judge said.It is reported that the bail is secured by SBF's parents' house in Palo Alto, California. The bail requirements also include that SBF must not conduct financial transactions exceeding $1,000 and cannot open new lines of credit.SBF will be required to wear an electronic monitoring wristband when leaving the courthouse. After bail, he will be placed under house arrest at his parents' home in California.

This week, there has been a series of mysterious transfers and token swaps from wallets associated with Alameda Research. In response, SBF tweeted

deny

own role in these transactions.

“None of these were mine,” SBF tweeted for the first time since its Dec. 12 arrest in the Bahamas, along with a link to a media report about the Alameda-related transfers. "I did not and cannot transfer the funds; I no longer have access to them."It is reported that more than $1.7 million worth of cryptocurrencies in wallets associated with Alameda Research were exchanged and transferred through exchanges and mixers. Mixers are used to mask the movement of crypto funds between wallets, meaning it is unlikely that the funds were moved by liquidators.Those funds were still flowing as of Friday, with anonymous on-chain data analyst ZachXBT noting that the bitcoins had been moved to Wasabi, a bitcoin-centric wallet that can group transactions together to hide their origin.

It’s unclear who was moving the funds from these wallets, though many crypto watchers point to SBF, as he is now home on bail and apparently has access to the internet. Despite his denials, many prominent cryptocurrency builders, investors, and celebrities were quick toreplytweeted SBF, calling him a liar.