Crypto
Bankman-Fried Agrees to Help FTX Investors Sue Celebrity Crypto Promoters
A group of FTX investors has agreed to drop legal claims against Sam Bankman-Fried.
In exchange, the disgraced former crypto exchange CEO will cooperate in the investors’ suits against other defendants stemming from FTX’s collapse, including various celebrities paid to promote the exchange, according to court documents filed Friday (April 19).
The settlement, first reported by Bloomberg News, comes weeks after Bankman-Fried was sentenced to 25 years in prison for the fraud that led to the multibillion dollar collapse of FTX in November of 2022.
Former investors and customers in FTX have sued some of the people who endorsed the company when it was flying high, alleging they helped further the exchange’s fraud.
According to the settlement, the plaintiffs believe Bankman-Fried has “knowledge and other information” the plaintiffs find valuable in that case. As part of the agreement, Bankman-Fried would also hand over non-privileged documents that list his assets and his investment in artificial intelligence (AI) startup Anthropic, as well as an affidavit certifying his net worth as negative.
He will also turn over any information he has on venture capital firms that invested in FTX and attorneys and accountants who worked for the company.
Even before criminal charges were filed against Bankman-Fried, a group of investors sued FTX’s celebrity endorsers — a group that includes Tom Brady, Gisele Bündchen, and Shaquille O’Neal — for securities law violations, claiming they failed to conduct proper due diligence.
The suit was filed in federal court in Miami in November 2022, days after FTX declared bankruptcy and weeks before Bankman-Fried was accused of using customer funds to finance investments, real estate purchases and political donations.
Last week’s settlement came days after Bankman-Fried appealed his conviction and sentence, part of what could be a yearslong process.
A report April 11 by Reuters noted that Bankman-Fried’s former lawyer, Mark Cohen, argued at a conference that day there was a disparity between his ex-client’s 25-year sentence and Binance founder Changpeng Zhao’s for violating anti-money laundering laws, which will likely be no more than 18 months.
The 25-year sentence was less than the 40- to 50-year prison term that prosecutors were seeking, but far more than the five to six years pushed by Bankman-Fried’s lawyers.
“At the end of the day, the criminal justice system thrives only if it’s seen as fair,” Judge Lewis Kaplan said when announcing the sentencing. “People need to feel it is fair, or we’re back to trial by combat. The punishment must fit the seriousness of the crime. And this was a serious crime.”
Crypto
Westlake police say cryptocurrency scam cost woman over $5,000
WESTLAKE, Ohio – A convenience store clerk at 1:30 p.m. on Nov. 26 alerted a police dispatcher that a female customer was feeding large amounts of cash into a cryptocurrency ATM at the store on Center Ridge Road at Dover Center Road.
The clerk said the customer would not believe the clerk’s warning that she was being scammed.
Officers arrived to find the 71-year-old still “anxiously depositing” cash into the machine. Officers told her to stop, but she did not believe the uniformed men. The officers talked to her for several minutes before she finally believed that there was an issue. She was still on the phone with the scammer at the time.
The incident started that morning when the victim received a pop-up message on her home computer instructing her to call a provided support phone number due to a supposed issue with the computer’s operating system. She called the number and was connected to a man who claimed he was a representative from Apple, according to a police department press release.
The man talked her into allowing him remote access to her computer while he asked for her bank information. The scammer talked the victim into believing that there was a problem with her accounts, and she was at risk of losing $18,000 in connection with pornographic websites out of China or Mexico.
She was connected to a fake fraud department for her bank, and another scammer persuaded her to go to a bank and withdraw as much cash as they would allow. The scammer even told her to give the teller a story about needing cash to buy a car. The perpetrator kept the woman on the phone as she took out cash and traveled to the crypto ATM. The victim had deposited approximately $5,500 before officers persuaded her to stop. The Westlake Detective Bureau is attempting to recover the lost funds.
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Read more from the West Shore Sun.
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