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FTX Files Motion to Control SBF’s $440M Robinhood Shares

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On Thursday, FTX, led by new CEO John J. Ray III, filed a motion in a U.S. Bankruptcy Court seeking to impose an automatic stay or lengthen the stay orders on Sam Bankman-Fried’s $440 million worth of Robinhood Markets shares.

According to an investigation, Robinhood stocks are the asset of the crypto exchange firm and its affiliates.

FTX wants to take over SBF’s Robinhood shares

56 million shares of the brokerage possessed by Emergent Fidelity Technologies Ltd. are in question; this company was established in Antigua and Barbuda, and according to the filing, Sam Bankman-Fried, the former CEO of FTX, controls 90% of it.

According to the filing, BlockFi, a lender that SBF’s exchange assisted in supporting earlier this year, Yonathan Ben Shimon, an FTX creditor who was assigned as a receiver in Antigua and given permission to sell the shares while being supervised by a court there, and Bankman-Fried himself have all attempted to gain control of those shares (who has legal bills).

Around the time the Chapter 11 case started on November 11, FTX’s bankruptcy estate instructed the brokerage where the shares are docked, ED&F Man Capital Markets, to freeze the stock. According to FTX, Emergent only “nominally” owns the shares; in reality, FTX actually owns them.

The cryptocurrency exchange stated in the filing that “Emergent is a special-purpose holding company that appears to have no other business.”

The exchange argued in the filing that the shares should be ordered to remain frozen while it tries to come up with a plan to pay off all of its creditors.

“The fact that multiple prepetition creditors of different Debtors and Mr. Bankman-Fried are all seeking to obtain possession of the Robinhood Shares demonstrates that the asset should be frozen until this Court can resolve the issues in a manner that is fair to all creditors of the Debtors.”

The exchange said

SBF was released on a $250 million bond bail on Thursday, but the FTX debtor is still attempting to take control of assets connected to FTX and Alameda Research. The bail was prearranged, and SBF was put under house arrest in the Palo Alto home owned by his parents, eminent Stanford University law professors Joseph Bankman and Barbara Fried.

SBF’s Desperate Bid; Files Another Bail Application

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SBF, the former CEO of the now-defunct exchange FTX, has submitted a new bail application after having a previous one denied two days prior, local media on Dec. 15 reported.

In a clear sign of desperation, the disgraced founder submitted a second bail request, which is set for a court hearing on January 17, 2023.

Following his arrest on Dec 12, SBF was being held at Bahamas’ sole penitentiary, Fox Hill Prison. The next day a bail was set at $250,000. Bankman-Fried’s lawyers argued that he should be released as he had no prior convictions and was depressed and sleep-deprived.

The presiding judge rejected the appeal on the grounds of a flight risk. Since then, he has been in the prison’s sick bay where his health and risk of self-harm are being monitored.

However, conditions at Fox Hill prison infamous for its “harsh” conditions and there have been incidences of physical abuse against inmates by correctional officers that have been documented, according to 2021 human rights report.

Investigations shed light on the overcrowded inmates living in the facility along with poor sanitation and lack of adequate medical care.

That said, SBF’s own legal strategy is probably going to make his stay at Fox Hill longer. Here’s why.

SBF Set For A Long-Drawn Legal Battle

Bankman-Fried declined to give up his right to challenge his extradition to the US, where he faces eight criminal accusations, including money laundering, conspiracy, and wire fraud.

The jailed entrepreneur might have to prepare himself for a drawn-out judicial battle that could last months or perhaps over a year by refusing to surrender that right. And for that entire period, he’ll probably be detained at Fox Hill.

On the other hand, Bankman-Fried could not fare much better in the American prison system if he gives in to extradition.

The crypto executive would be lodged at either the Metropolitan Correctional Center in Manhattan or the Metropolitan Detention Center in Brooklyn while awaiting trial in New York City, where federal charges had been brought against him.

Further, it has been also claimed that those facilities have unsanitary conditions, rodent and bug infestations, poor medical care, and guard aggression and abuse. To add more misery, the conditions have been criticized as being “worse than Guantanamo” and “soul-negating.”

Till then, SBF will likely remain incarcerated in the Bahamas till February 2023 as extradition proceedings with the US continue. 

SBF to be Held in Fox Hill Prison, Known for Physical Abuse and Harsh Conditions

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FTX’s Sam Bankman-Fried (SBF) might spend up to two months in the country’s Fox Hill Prison after being denied bail in a Bahamas Magistrate Court. This prison is known for its “harsh” conditions and reported cases of physical abuse against inmates.

After a hearing on December 13, according to Bahamas authorities, Bankman-Fried was sent to Fox Hill’s medical wing. It is unknown whether the former CEO will serve his sentence at the correctional facility, its medical unit, or some other location.

SBF has been taking meds prior to arrest

SBF’s legal representative claimed that he had been taking meds prior to his arrest on December 12 including Adderall and anti-depressants.

Conditions at Fox Hill were “harsh,” according to a 2021 human rights report from the U.S. State Department. Investigations revealed that there were too many inmates living in the facility and that there was also poor sanitation and poor medical care. Additionally, physical abuse by correctional officers was claimed in the report.

“Maximum-security cells for men measured approximately six feet by 10 feet and held up to six persons with no mattresses or toilet facilities.” “Inmates removed human waste by bucket. Prisoners complained of the lack of beds and bedding. Some inmates developed bedsores from lying on bare ground. Sanitation was a general problem, and cells were infested with rats, maggots, and insects.”

the report said

The only jail in the Bahamas is Fox Hill, while the Carmichael Road Detention Center was designed for transient detainees. However, according to reports, Doan Cleare, the commissioner of correctional services for the Bahamas, stated that none of the facilities had “issues with rodents” because most had been renovated in response to the State Department report.

Fox Hill is the only prison in the Bahamas, and the Carmichael Road Detention Center was designed for short-term stays. However, Doan Cleare, the Bahamas’ Commissioner of Correctional Services, reportedly stated that most of the facilities had been renovated in response to the State Department report and had no “issues with rodents.”

SBF will most likely be detained in the Bahamas till February as extradition proceedings with the US continue. The former FTX CEO is being investigated by the Justice Department, the Commodity Futures Trading Commission, and the Securities and Exchange Commission for defrauding investors and lenders.

When It Rains, It pours: SBF To Face Separate Charges from SEC

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Sam Bankman-Fried (SBF), the disgraced founder of the cryptocurrency exchange FTX, is still in for more bad times.

Sam Bankman-Fried will face charges from the United States Securities and Exchange Commission (SEC), which will be distinct from the ones that led to his most recent detention in The Bahamas, on December 12.

The SEC tweeted a remark from Gurbir Grewal, the director of its division of enforcement, indicating that the organization has “authorized separate charges relating to his violations of securities laws.”

Grewal stated that the Southern District of New York would get the charges “tomorrow,” on December 14. (SDNY).

Only a few hours have passed since Sam Bankman-Fried was detained in The Bahamas on December 12 before the SEC made its announcement.

Attorney General of the Bahamas, Senator Ryan Pinder said in a statement that the arrest came as a result of receiving official notice from the US that it has charged SBF with crimes and will likely ask for his extradition.

Although specifics about the allegations have not been confirmed, it is believed that they relate to money laundering, conspiracy to commit money laundering, and wire and securities fraud.

Grewal praised the “law enforcement partners” of the SEC in his most recent statement for securing Bankman-arrest Fried’s on federal criminal charges.

News of SBF’s Arrest Floods Crypto Twitter

Crypto Many people were shocked that Sam Bankman-Fried had been arrested in the Bahamas so swiftly, and Twitter has gone crazy over the surprising news.

The disgraced FTX founder was detained by the Royal Bahamas Police on December 12 after they learned that the US government had charged him with a crime.

Within a few hours, influencers, lawmakers, and crypto executives were all logged into their Twitter accounts to post reactions to the former CEO’s arrest.

The arrest of Bankman-Fried was a step toward “justice being served,” New York Democratic Representative Alexandria Ocasio-Cortez told her 13.4 million Twitter followers. However, she added that the arrest would delay Bankman-testimony Fried’s before the House Financial Services Committee, which was scheduled for December 13.

In a tweet, U.S. Senator Cynthia Lummis expressed her satisfaction with the prosecution’s choice to charge Bankman-Fried with the “good, old-fashioned fraud” that she believed he had committed.

Elizabeth Warren, a fellow senator from the United States and a crypto skeptic, concurred, saying in a tweet to her 7 million followers on December 13 that the U.S. Department of Justice needs to hold more criminal business CEOs accountable.

Others seized the chance to make fun of everything. Using ChatGPT, Benjamin Cowen, the CEO and founder of the crypto-analysis channel Into The Cryptoverse, wrote poetry about Bankman-Fried’s most recent situation.

Memes are currently trending on Twitter in the meantime.

Since FTX’s shocking collapse in November, a lot has been said about Bankman-Fried’s Twitter messages and media appearances.

Trung Phan, the co-host of Not Investment Advice, stated to his 538,000 Twitter followers on December 13 that SBF’s erratic public behavior will make it more difficult for his defense lawyer to represent him. Others think that after being arrested, SBF will likely point the finger at coworkers and people connected to the FTX scandal, including those who received his sizable political donations.

When asked about the potential during what is probably his final Twitter Spaces interview, with Unusual Whales on December 12, SBF responded, “I don’t think I’ll be arrested.”

According to a Dec. 12 press release by the Bahamas’ Office of the Attorney General, the Royal Bahamas Police Force made the arrest after receiving official information from the US that it has charged Bankman-Fried.

FTX: SBF’s Arrest Sets The Stage For Extradition To US

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FTX’s former CEO Sam Bankman-Fried or SBF would likely be extradited to the US to face criminal charges after the arrest by the Royal Bahamas Police Force.

Confirming the news, attorney Andre Damian Williams Jr stated, the Bahamian authorities took Samuel Bankman-Fried into its custody at the request of the U.S. Government, based on a sealed indictment filed by the Southern District of New York [SDNY].

“We expect to move to unseal the indictment in the morning and will have more to say at that time,” he added.

Prior to his arrest, Bankman-Fried turned down a request to testify virtually before the House Financial Services Committee on Dec 13.

His reluctance to appear at the scheduled date irked many in the community as they felt he was simply evading to dodge the authorities.

As reported by TronWeekly, Rep. Maxine Waters, D-Calif., has earlier extended an invitation to the embattled founder for a hearing on Capitol Hill.

Waters expressed disappointment that Congress will not be able to hear from him and expressed her “surprise” at his arrest.

The 30-year-old crypto billionaire and son of Stanford law professors continued to maintain innocence and deny fraud charges. He recently reached out to the BBC inviting them to his current residence in the Bahamas and said he hoped to find a way to make FTX users whole.

I’m going to be thinking about how we can help the world and if users haven’t gotten much back, I’m going to be thinking about what I can do for them. And I think at the very least I have a duty to FTX users to do right by them as best as I can.

When asked if he intended to launch a new business to generate the funds needed to repay investors, SBF replied: “To be able to do that, I would do anything. And I’ll make an effort if I can.”

With his arrest, SBF’s aim of recovering his customers’ assets is now a distant dream.

SBF Might Face Life In Prison Per Lawyer

FTX’s collapse was sparked by a CoinDesk report which uncovered a highly concentrated holding in self-issued FTT coins, which SBF’s fund Alameda Research utilized as collateral for billions in cryptocurrency loans.

The trading firm froze assets and declared bankruptcy days later. According to legal experts, Bankman-Fried might face life in prison without the chance of supervised release if the federal government pursues accusations of wire or bank fraud. It would be rare but not extraordinary to impose such a harsh penalty.

SBF Denies Involvement in Wirefraud Chat Hours Before His Arrest

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Sam Bankman-Fried (SBF) took to Twitter just hours before reports of his arrest by Bahamian police to deny any involvement in or knowledge of a secret group chat called “Wirefraud” that allegedly included former FTX and Alameda ranking executives.

FTX co-founder Zixiao “Gary” Wang, FTX engineer Nishad Singh, and former Alameda CEO Caroline Ellison were reportedly included in a “Wirefraud” group chat on the messaging app Signal. In a Dec. 12 response to an AFR report, Bankman-Fried used Twitter to deny knowledge of or participation in the group chat.

SBF denies being a part of Wirefraud that send secret information

According to the AFR report, the chat was used to transmit top-secret information about FTX and Alameda’s operations in the months before the company’s collapse.

However, SBF claimed on Twitter that he “wasn’t a member” of the group chat if it were “true” and that he was “quite sure it’s just false” because he had “never heard of such a group.”

Sam Bankman-Fried was scheduled to appear remotely before a United States House Committee hearing on December 13 to discuss the failure of the FTX exchange, but he was detained by Bahamian authorities on December 12 and is likely to be extradited to the United States shortly after.

His testimony at the House Committee hearing “will not be able to hear” due to the arrest, Committee Chair Maxine Waters later confirmed on December 12.

According to a joint statement from Senators Sherrod Brown and Pat Toomey on December 12, Bankman-Fried was also asked to attend a different hearing with the Senate Committee on Banking on December 14 but had never confirmed his attendance, and it was also reported that his lawyers had reportedly refused to accept a subpoena compelling his testimony.

John Ray, the chief restructuring officer and CEO of FTX, claimed that FTX customer assets were “commingled” with Alameda’s in written testimony provided prior to his appearance at the House Committee hearing.

Alameda “used client funds to participate in margin trading that subjected customer funds to massive losses,” according to Ray, and the trading firm’s business model needed it to deploy those funds to “various […] exchanges that were inherently unsafe.”

SBF Hopes to Begin a New Venture, Would Like to Pay Investors Back

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The 30-year-old SBF is the subject of numerous federal inquiries into the financial management of his former company. The former billionaire says he was “not nearly as competent as I thought I was” but denies fraud while speaking in a luxury complex in the Bahamas.

However, it was discovered last month that FTX and SBF’s separate businesses, Alameda Research, were both in financial trouble. Everything fell apart in just eight days, and bankruptcy papers were filed.

A million and more FTX users are reportedly unable to access their funds stored on the crypto exchange.

SBF hopes to pay back FTX users

Mr. Bankman-Fried extended an invitation to the BBC to his current residence in the Bahamas and said he hoped to find a way to make FTX users whole.

“I’m going to be thinking about how we can help the world and if users haven’t gotten much back, I’m going to be thinking about what I can do for them. And I think at the very least I have a duty to FTX users to do right by them as best as I can.”

SBF

When asked if he intended to launch a new business to generate the funds needed to repay investors, he replied: “To be able to do that, I would do anything. And I’ll make an effort if I can.”

The FTX scandal has been referred to as “one of the most abrupt and difficult collapses in the history of corporate America” by bankruptcy attorneys. They claim that Mr. Bankman-Fried has treated the business like “his own personal fiefdom.”

The former CEO agreed on Friday to appear at the hearings into the collapsed exchange that the US Senate Banking Committee has requested he testify at next week.

His team claims that due to “security concerns,” they were forced to move to an undisclosed location within the opulent resort where he resides.

Telephoto reporters have captured images of him in his apartment from the water, and at least two YouTubers have gained entry to the building to record videos.

With no exposure to his bank accounts and “less than $100K left,” Mr. Bankman-Fried, who emerges from a wealthy family, asserts to be worried about his own personal finances.

Terra Do Kwon Tweets About How Genesis and SBF Triggered the Fall of Terra Ecosystem

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Do Kwon, a co-founder of Terra blames Genesis and former FTX CEO Sam Bankman-Fried for the Terra-LUNA crisis. He is convinced that Sam Bankman-Fried or Alameda received $1 billion in TerraUSD (UST) stablecoins from Genesis Trading prior to the UST depeg.

A market manipulation investigation into whether FTX and Alameda Research contributed to the Terra-LUNA crisis has been launched by federal prosecutors looking into the FTX crisis and its connection to Alameda Research.

Do Kwon wants everyone to come clean

Do Kwon, the founder of Terra, revealed how Genesis Trading, Sam Bankman-FTX, Fried’s, and the hedge fund Alameda contributed to the demise of TerraUSD (UST) stablecoin and Terra in a series of tweets on December 8. (LUNA).

Do Kwon claims that before the USD depeg, Genesis Trading acquired billions in UST from Luna Foundation Guard (LFG) and moved it to FTX or Alameda. SBF took advantage of the funds to manipulate prices in favor of companies like FTX and Alameda Research.

Do Kwon also questioned why, during the UST depeg, Alameda borrowed more than $1 billion in Bitcoin from Voyager. Additionally, Alameda requested an additional $10 billion in Bitcoin from other significant businesses. He wants SBF to make public the details of these significant transactions.

He thinks Alameda, a cryptocurrency trading company run by Sam Bankman-Fried, made a significant wager that the price of LUNA would decline.

Additionally, he discloses that Alameda was responsible for the “significant currency contraction that UST underwent in February 2021.” In order to deplete the Curve liquidity pools during the Magic Internet Money (MIM) crisis, Alameda sold 500 million in UST in a matter of minutes.

The New York Times reported on Wednesday that U.S. federal prosecutors are looking into whether Sam Bankman-Fried, the founder of FTX, manipulated the market for two cryptocurrencies in May, causing their demise and the demise of his own cryptocurrency exchange.

According to the report, the prosecutors are investigating whether Bankman-Fried manipulated the prices of two interconnected currencies, TerraUsd and Luna, to the advantage of the companies he controlled, including FTX and Alameda Research.

The investigation is still in its early stages, the newspaper reported, adding that it is unclear whether or when prosecutors started looking into the TerraUSD and Luna trades, or whether they have found evidence of Bankman-Fried’s wrongdoing.

FTX Saga: SBF To Attend Hearing On 13th?

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Sam Bankman-Fried (SBF), the former CEO of FTX, was recently prompted to appear before the US House Committee on Financial Services by US Representative Maxine Waters. FTX was required to appear before the Committee on December 13, according to Waters. To talk about “what transpired” at the problematic exchange, SBF was invited.

The former CEO of FTX stated that it was his obligation to go before the committee and address the matter a day earlier. But he also made it clear that he wouldn’t do that until he had finished “learning and reviewing what happened.” He added that he wasn’t sure if he’d be able to show up on the 13th.

Congresswoman Maxine Waters Compels SBF To Testify

Maxine Waters reportedly used Twitter once more to persuade SBF to show up to the House Committee hearing on the collapse of FTX. She said it was “obvious” the data SBF had up until this point was “adequate” for testifying.

She tweeted to emphasize the significance of the testimony and said, 

“As you know, the collapse of FTX has harmed over one million people. Your testimony would not only be meaningful to Members of Congress, but is also critical to the American people.“

Waters went on to say that SBF’s attendance at the upcoming hearing was “imperative.” The committee would schedule additional hearings if and when new information became available, she further stated. She tweeted about the same, explaining,

“It is imperative that you attend our hearing on the 13th, and we are willing to schedule continued hearings if there is more information to be shared later.“

Billy Markus, the creator of Dogecoin, commented on the same post and questioned whether the committee could summon the former FTX CEO. Ryan Wyatt, CEO of Polygon Studios, however, stated,

“Maxine, glad you are starting to listen to the people and community and not your donor.“

SBF Seeks More Time To Appear Before US Congress

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SBF, former CEO of FTX is now seeking more time to appear before the US congressional hearing that is slated to take place on Dec 13 in Washington, D.C. On 5 Nov, Bankman-Fried tweeted that once he is done with “finished learning and reviewing”, he would testify.

Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain. I’m not sure that will happen by the 13th. But when it does, I will testify.

The tweet was in response to a post from U.S. Rep. Maxine Waters on Twitter who extended an invitation for a hearing on Capitol Hill. Waters wrote,

“We appreciate that you’ve been candid in your discussions about what happened at #FTX,” the Congresswoman wrote. “Your willingness to talk to the public will help the company’s customers, investors, and others.”

Although SBF did not outrightly deny the invitation, his reluctance to appear at the scheduled date has irked many in the community as they felt he is simply evading to avoid arrest.

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SBF Seeks More Time To Appear Before US Congress 2

The disgraced crypto entrepreneur is in the limelight after the fall of his crypto empire which many thoughts was too big to fail.

What acted as the final nail to the coffin is that Bankman-Fried was accused of misappropriating customers’ funds in risky market investment schemes.

On the other hand, he was also the second largest donor to the Democratic Party, after billionaire George Soros, in the 2021-2022 election cycle.

As per details from Opensecrets, SBF donated $39 million to Democrats before FTX imploded and had to file for bankruptcy.

An estimated one million customers and investors lost billions of dollars in the exchange collapse. FTX is currently being investigated for mishandling customer funds.

After being snubbed by the current FTX CEO, Bankman-Fried continued to maintain innocence and appeared in several high-profile media coverage including the controversial WSJ.

Wall Street Journal Coverage on SBF Was Criticized By Many

The Wall Street Journal, in particular, ran a story titled ‘Sam Bankman-Fried’s Plans to Save the World Went Down in Flames‘ which was harshly criticized by many industry big players who compared it to giving a ‘foot massage to a criminal.’

Again on Nov 30, SBF gave his first live public appearance during the New York Times’ DealBook Summit. The next day, he appeared in a Good Morning America interview and a Twitter space hosted by IBC Group founder and CEO Mario Nawfal.

On these occasions, SBF reiterated that he didn’t purposefully mix up customer payments.