Crypto
Sam Bankman-Fried must now convince a jury that the former crypto king was not a crook
For a while, Sam Bankman-Fried tried to convince politicians and the public that he was the next J.P. Morgan. Now, he has to convince a jury that he wasn’t, in reality, the next Bernie Madoff.
The trial of Bankman-Fried, the founder of the failed cryptocurrency brokerage FTX, will begin Tuesday with jury selection. Prosecutors from the Southern District of New York are expected to lay out a case against Bankman-Fried that shows he stole billions of dollars in FTX customer deposits and used the money to fund his hedge fund, buy real estate and make millions of dollars of illegal campaign donations to Democrats and Republicans in an attempt to buy influence over cryptocurrency regulation in Washington.
While the case will involve the complicated world of cryptocurrencies, prosecutors are expected to try to boil it down to the simplest of terms for jurors: Bankman-Fried took money from customers and used it in ways he wasn’t supposed to.
“Prosecutors are going to say, ‘look at where the money went and how it was spent,’” said Michael Zweiback, a former federal prosecutor and co-founder of the law firm Zweiback, Fiset & Zalduendo. “This case is less about the complicated investments and all about garden-variety fraud.”
Before FTX collapsed and filed for bankruptcy in November, Bankman-Fried was one of the most powerful people in the cryptocurrency industry. “SBF” had an estimated net worth of $32 billion last year, at least on paper. He interacted with former presidents, politicians on both sides of the aisle, celebrities and CEOs. When smaller crypto firms started imploding in early 2022, Bankman-Fried told the public he would help prop up the market, prompting the comparisons with J.P. Morgan.
The 31-year-old Bankman-Fried founded FTX in 2019, and it grew rapidly. The son of Stanford University professors, who was known to play the video game “League of Legends” during meetings, Bankman-Fried attracted investments from the highest echelons of Silicon Valley. FTX quickly became the second-largest crypto brokerage behind Binance.
Bankman-Fried and his inner circle of executives ran their then-growing crypto empire from the Bahamas, out of the luxury apartment complex Albany, where celebrities such as Tiger Woods and Justin Timberlake have vacation homes.
FTX had effectively two lines of business: a brokerage where customers could deposit, buy and sell cryptocurrency assets on the FTX platform, and an affiliated hedge fund known as Alameda Research, which took highly speculative positions in various cryptocurrency investments. As Alameda started to pile up losses during last year’s cryptocurrency market declines, prosecutors allege Bankman-Fried directed funds to be moved from FTX’s customer accounts to Alameda to plug holes in the hedge fund’s balance sheet.
The house of cards that Bankman and his lieutenants built came crashing down in early November, when reports surfaced about the condition of Alameda’s balance sheet. Spooked investors, who had already seen several crypto firms collapse during the year, quickly pulled their money out of FTX and within days the firm was bankrupt.
John Ray III, the restructuring expert who was tasked with cleaning up FTX in bankruptcy, described the conditions inside of FTX as worse than Enron, long considered the benchmark for corporate malfeasance in popular culture.
Bankman-Fried is expected to come face-to-face with his former lieutenants at FTX for the first time since its collapse. Several of them have agreed to plead guilty to lesser crimes in exchange for testifying against him. This includes Caroline Ellison, who was the chief executive of Alameda and Bankman-Fried’s off-and-on girlfriend, as well as FTX co-founder Gary Wang.
Ryan Salame, another top executive at FTX, pleaded guilty on Sept. 7 to making illegal campaign contributions to Republicans on behalf of Bankman-Fried, who was publicly making contributions to Democrats. It is not known whether Salame will testify against Bankman-Fried.
Ellison is expected to be the prosecution’s central witness. Prosecutors are likely to count on her to demonstrate that the collapse of FTX was not due to a few mistakes, as Bankman-Fried alleges, but to fraud. She has previously said in a statement through her lawyers that she knew funneling FTX customers’ money into Alameda was wrong.
“I expect the government is going to be able to show that Bankman-Fried knew what he was doing was wrong, and here are the people in the room who can corroborate that story,” said Christine Adams, a former federal prosecutor and a partner at Adams, Duerk & Kamenstein.
The defense is expected to argue that while Bankman-Fried made some mistakes, the mistakes do not amount to fraud and FTX was just the latest casualty in the broad collapse of the cryptocurrency market last year. Until he had his computer privileges taken away by the presiding judge in the case, Bankman-Fried himself spent months reaching out to reporters and posting on social media to explain his actions.
“Look, I screwed up,” he said in a remote interview with the New York Times’ Andrew Ross Sorkin late last year.
Bankman-Fried was extradited from the Bahamas to New York in December. Before his bail was revoked, Bankman-Fried had been permitted to live with his parents in their Palo Alto home with strict rules limiting his access to electronic devices. Bankman-Fried was ordered to be jailed after Judge Lewis A. Kaplan said there was probable cause to believe he was trying to tamper with potential witnesses, including Ellison, in the case.
Broadly, the crypto industry has still not recovered since FTX’s collapse. The price of Ethereum and Bitcoin, the two most widely used cryptocurrencies, are still down two-thirds from where they were a year ago and the volume of trading in crypto is half what it was. The market for NFTs, artificially scarce digital objects meant to create unique digital versions of memorabilia or photographs, has all but evaporated. Roughly 3,000 NFTs trade hands daily now, compared to more than 40,000 a day a year ago, according to NonFungible.com.
Even Bankman-Fried’s former competitors are facing their own legal scrutiny. This summer the Securities and Exchange Commission brought charges against Binance and its founder, Changpeng Zhao, similar to the allegations against FTX, including commingling of customer funds with the firm’s investments. Coinbase, the publicly traded crypto exchange, has also been charged by the SEC with securities violations.
AP staff writer Larry Neumeister contributed to this report.
Crypto
VT Markets Anticipates Cryptocurrency Growth from Policy Changes and Market Momentum in 2025 Q1 Economic Outlook
HONG KONG SAR – Media OutReach Newswire – 13 January 2025 – VT Markets, an award-winning financial services provider, today releases its 2025 Q1 Economic Outlook. The report highlights how the dual tailwind of favourable policies and market dynamics will propel the cryptocurrency sector into a new era of mainstream adoption. The report also underscores the transformative strides achieved by cryptocurrencies in 2024, which sets the stage for further growth in the upcoming year.
2024 As A Landmark Year for Cryptocurrency
With the conclusion of the 2024 U.S. Presidential election, cryptocurrencies have ascended from niche assets to mainstream investment products. Political developments, particularly arising President Trump’s re-election and his pro-cryptocurrency stance, acted as the main catalyst for this phenomenon. Participants observed Bitcoin’s price surging by over 40%, crossing $108,000 by year-end anticipating dovish policy shifts and renewed investor confidence towards the digital asset.
Key regulatory appointments, such as naming crypto advocate Hester Peirce as SEC Chair, signalled to the market a shift towards a more favourable regulatory framework, instilling optimism in institutional and retail investors alike.
The Rise of Spot Bitcoin ETFs
In early 2024, the U.S. SEC approved multiple spot Bitcoin ETFs; a significant breakthrough for the cryptocurrency industry then. By year-end, assets under management for these ETFs grew from $28.8 billion to $110 billion. Among them, BlackRock’s IBIT ETF stood out, achieving record-breaking $30 billion AUM in under 300 days.
This development not only validated cryptocurrencies as a mainstream investment class but also paved the way for wider institutional participation. The integration of cryptocurrency into traditional finance is seen as a key step toward standardisation – an issue which has plagued the industry since its inception.
Liquidity and Risk Appetite Fuel Growth
Macroeconomic conditions, including the Federal Reserve’s shift towards an easing monetary policy, contributed to increased market liquidity and higher risk asset valuations. Cryptocurrencies, known for their high-risk, high-reward profile, inevitably emerged as a preferred choice for portfolio diversification, further driving their adoption and price momentum.
2025 Will Be A Year of Regulatory Clarity and Technological Innovation
Looking ahead, the cryptocurrency sector is poised for greater regulatory clarity and broader market acceptance globally:
United States: Expected legislation on stablecoins and other crypto assets will a establish a clear regulatory environment.
European Union: The upcoming implementation of the Markets in Crypto-Assets Regulation (MiCA) will enhance transparency and compliance.
Asia-Pacific: Singapore and Hong Kong are set to strengthen their positions as regional crypto hubs, promoting Web3 development and reopening licensing opportunities for exchanges.
Emerging Markets: Countries like Brazil, the UAE, Australia, and South Africa are advancing efforts to legitimize cryptocurrencies, potentially becoming regional leaders in the sector.
A New Era for Mainstream Cryptocurrency Adoption
The VT Markets’ Research Desk suggests that the confluence of supportive policies, transparent regulations, and robust market conditions will accelerate the mainstream adoption of cryptocurrencies.
They believe that this transition from speculative assets to recognised investment products will be a pivotal moment in financial innovation.
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An up-and-coming player in the world of cryptocurrency is looking to revolutionize the industry through its unique processes that highlight sustainability.
According to Be3, cryptocurrency XRP, developed by Ripple Labs, could have a “transformative impact on both finance and environmental sustainability” thanks to its unique consensus mechanism that does not require mining and uses a negligible amount of energy even as it scales.
It generates a minuscule amount of pollutants per transaction while producing 1,110 pounds of electronic waste and impacting just over 8 cubic miles of natural resources.
This approach separates XRP from its contemporaries, which often rely on the notoriously power-hungry proof-of-work systems and hulking mining centers that can destabilize the grid.
Statistics provided by TRG Datacenters show that XRP is the second-most eco-friendly cryptocurrency behind IOTA, consuming just 0.0079 kilowatt-hours per transaction. Comparatively, bitcoin ranks last at a staggering 707 KWh per transaction.
Furthermore, the cryptocurrency became the first major global blockchain to achieve carbon net zero by purchasing enough renewable energy to offset its minimal energy requirements, per the XRP Ledger.
Be3 also noted other features that make XRP an attractive option for institutions focused on environmental responsibility, as it takes just three to five seconds to settle at fractions of a cent per transaction.
It’s a welcome addition to a sector that desperately needs more sustainable options. A study by the International Monetary Fund found that crypto mines, in conjunction with artificial intelligence data centers, accounted for 2% of global electricity demand and 1% of carbon dioxide pollution in 2022.
The United Nations found that the bitcoin mining network used 173.42 terawatt-hours of electricity between 2020 and 2021, resulting in a carbon footprint equivalent to burning 84 billion pounds of coal.
Coal and natural gas also supplied 66% of the energy for mining operations during this period, polluting the planet with planet-warming gases.
Luckily, the sector has made significant strides in recent times in an effort to become more eco-friendly.
Alephium, which utilizes a proof-of-work blockchain, has partnered with Gigatons to implement a proof-of-less-work consensus that is significantly more energy efficient.
Meanwhile, Ethereum has transitioned to a proof-of-stake system that has cut its energy consumption by nearly 100%.
“In a world increasingly attentive to environmental impact, XRP’s innovative technology not only promises efficiency but also a greener future,” Be3 wrote.
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Zagreb, Croatia–(Newsfile Corp. – January 12, 2025) – ZIUM, a cutting-edge agency founded to tackle some of the most pressing challenges in social media and digital marketing, is now officially open for business. Specializing in Instagram username claims, account unbans, and cryptocurrency marketing, ZIUM has positioned itself as a trusted partner for individuals and businesses seeking innovative solutions in the digital age.
The agency operates at the intersection of technology, social media, and blockchain marketing, empowering clients to unlock their full potential online. With a dedicated team of experts and a results-driven approach, ZIUM is redefining the way people navigate the ever-changing online landscape.
ZIUM
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A New Era of Digital Problem Solving
ZIUM’s services address real-world challenges in today’s digital ecosystem. Instagram, one of the largest and most influential social platforms, has become a critical tool for personal branding, business promotion, and community engagement. However, issues such as unavailable usernames or unfair account suspensions can hinder growth and cause frustration. ZIUM steps in to provide solutions that are fast, efficient, and tailored to each client’s needs.
Additionally, ZIUM excels in cryptocurrency marketing, offering projects and startups a strategic edge in the fast-paced blockchain industry. By combining deep knowledge of crypto trends with cutting-edge marketing strategies, the agency helps blockchain projects stand out in an increasingly crowded market.
Core Services Offered by ZIUM
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Instagram Username Claims
In the crowded social media space, having the perfect Instagram username can make all the difference. Whether it’s for a brand, influencer, or business, ZIUM specializes in acquiring sought-after usernames to align with clients’ goals and identities. The agency handles the process from start to finish, ensuring a smooth and hassle-free experience. -
Instagram Account Unbans
Account suspensions on Instagram can be devastating, especially for businesses and influencers relying on the platform for engagement and revenue. ZIUM offers expert account recovery services, helping clients navigate Instagram’s policies to regain access to their accounts quickly and effectively. -
Cryptocurrency Marketing
The cryptocurrency space is highly competitive, and visibility is key. ZIUM provides end-to-end marketing strategies tailored to blockchain projects, ensuring they reach the right audience. From brand development to targeted campaigns, ZIUM helps crypto ventures grow and thrive in an ever-evolving market.
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