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    Trump launches new cryptocurrency venture but declines to share details

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    Donald Trump launched his family’s cryptocurrency venture, World Liberty Financial, on a livestreamed interview on the social media platform X on Monday. The Republican presidential nominee gave few details about the venture but did offer his first public comments on the apparent assassination attempt against him a day earlier.Trump did not discuss specifics about World Liberty Financial on Monday or how it would work, pivoting from questions about cryptocurrency to talking about artificial intelligence and other topics. Instead, he recounted his experience on Sunday, saying he and a friend playing golf “heard shots being fired in the air, and I guess probably four or five.“I would have loved to have sank that last putt,” Trump continued. He credited the Secret Service agent who spotted the barrel of a rifle and began firing toward it as well as law enforcement and a civilian who he said helped track down the suspect.World Liberty Financial is expected to be a borrowing and lending service used to trade cryptocurrencies, which are forms of digital money that can be traded over the internet without relying on the global banking system. Exchanges often charge fees for withdrawals of bitcoin and other currencies.Other speakers after Trump, including his eldest son, Don Jr, talked about embracing cryptocurrency as an alternative to what they allege is a banking system tilted against conservatives.Experts have said a presidential candidate launching a business venture in the midst of a campaign could create ethical conflicts.“Taking a pro-crypto stance is not necessarily troubling, the troubling aspect is doing it while starting a way to personally benefit from it,” Jordan Libowitz, a spokesperson for the government watchdog group Citizens for Responsibility and Ethics in Washington, said earlier this month.During his time in the White House, Trump said he was “not a fan” of cryptocurrency and tweeted in 2019: “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.” However, during this election cycle, he has reversed himself and taken on a favorable view of cryptocurrencies.He announced in May that his campaign would begin accepting donations in cryptocurrency as part of an effort to build what it calls a “crypto army” leading up to election day. He attended a bitcoin conference in Nashville this year, promising to make the US the “crypto capital of the planet” and create a bitcoin “strategic reserve” using the currency that the government currently holds.Hilary Allen, a law professor at American University who has done research on cryptocurrencies, said she was skeptical of Trump’s change of heart on crypto.skip past newsletter promotionafter newsletter promotion“I think it’s fair to say that that reversal has been motivated in part by financial interests,” she said.Crypto enthusiasts welcomed the shift, viewing the launch as a positive sign for investors if Trump retakes the White House.Meanwhile, Kamala Harris’s campaign has not offered policy proposals on how it would regulate digital assets like cryptocurrencies.In an effort to appeal to crypto investors, a group of Democrats, including New York senators Chuck Schumer and Kirsten Gillibrand, participated in an online Crypto 4 Harris event in August. Neither Harris nor members of her campaign staff attended the event. More

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      Bitcoin price hits six-week high after Trump backs cryptocurrency

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      Bitcoin has hit its highest level in more than six weeks after Donald Trump said at the weekend he would end the “persecution” of the crypto industry if he wins the US presidential election.The cryptocurrency’s price rose by more than 3% on Monday to peak at about $69,745, the highest since 12 June when the currency changed hands at more than $69,800.The increase comes after supportive comments from Trump at the Bitcoin 2024 convention in Nashville, Tennessee, where he said on Saturday he would make the US the world’s cryptocurrency leader and embrace a more pro-bitcoin stance than his rival, Kamala Harris.The former president said: “I pledge to the bitcoin community that the day I take the oath of office, Joe Biden and Kamala Harris’s anti-crypto crusade will be over … If we don’t embrace crypto and bitcoin technology, China will, other countries will. They’ll dominate, and we cannot let China dominate. They are making too much progress as it is.”He also said he would sack the chair of the US financial watchdog the Securities and Exchange Commission (SEC), on the first day of his presidency if he won the election. “On day one, I will fire Gary Gensler,” Trump said, to cheers of approval from the audience.Gensler is a noted sceptic about cryptocurrencies, despite aiding them in January by approving exchange-traded funds (ETFs) – a basket of assets that can be bought and sold like shares on an exchange – that track the price of bitcoin.The SEC chair said in a statement approving the ETFs that bitcoin was a “speculative, volatile” asset used for illegal activities including ransomware and terrorist financing. Since 2023 the SEC has launched more than 40 crypto-related enforcement actions.Speaking at the bitcoin convention, Trump said he would establish a crypto presidential advisory council and create a national “stockpile” of bitcoin using cryptocurrency the US government held that was largely seized in law enforcement actions.skip past newsletter promotionafter newsletter promotion“Never sell your bitcoin,” Trump said. “If I am elected, it will be the policy of my administration, the United States of America, to keep 100% of all the bitcoin the US government currently holds or acquires into the future.”The Financial Times also reported on Saturday that Harris’s advisers had approached top crypto companies to try to “reset” the relationship between the Democratic party and the sector. Approaches had been made to the Coinbase crypto exchange, the stablecoin company Circle and the blockchain payments group Ripple Labs, the FT said. More

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      The trials of SBF and DJT: Trump isn’t clean on crypto but he did warn us about it

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      The New York fraud trial of Sam Bankman-Fried kicked off this week. The 31-year-old former crypto billionaire faces two substantive counts of wire fraud, for acts allegedly perpetrated against the customers of FTX, the crypto-futures exchange he founded, and five related counts of conspiracy. If convicted on all charges, he faces up to 110 years in prison.As fate would have it, his case is being heard a few buildings away from where one Donald J Trump sits on trial for fraud. Like the 45th president – DJT, if you will – SBF has a tough row to hoe.Even if Bankman-Fried is acquitted, he stares at another trial, slated for March 2024, on five more counts of fraud. The men’s paths remain entwined. At that same moment, Trump will be both deep into the Republican primary and likely standing trial in connection with January 6.Furthermore, filings show that as of early August, Trump held $2.8m in a cryptocurrency wallet, with as much as $500,000 in ethereum, a cryptocurrency. On top of that, his collection of non-fungible tokens generated $4.87m in licensing fees. The NFTs are a collection of virtual trading cards, featuring illustrations of Trump as superhero, cowboy or astronaut. Really.Not that Trump has always been in favour of crypto.“I am not a fan of bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” he tweeted in 2019.Sound familiar? Prosecutors say Bankman-Fried relied on smoke and mirrors to gain access to political power. According to his indictment, he used customers’ assets “to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow”.He is also alleged to have “misappropriated customer money to help fund over $100m in political contributions in advance of the 2022 election”, while seeking to “conceal the source of the funds used for the contributions”.Trump and his party, however, were not the chief recipients of such largesse. Bankman-Fried tended to donate to Democrats. Conservatives were therefore annoyed. They sought to portray Bankman-Fried as a leftist, on top of being a crook. Once upon a time, though, he met Ron DeSantis for no apparent reason other than the fact Florida’s hard-right governor wanted to meet. Now, as a presidential candidate, DeSantis has emerged as a crypto advocate. His campaign continues to sink, however.We know more about such meetings now, thanks in large part to Going Infinite: The Rise and Fall of a New Tycoon, a new book by Michael Lewis, the author of Moneyball, The Big Short and other bestsellers about how capitalism works – and doesn’t.For instance, Jerry Jones, a Republican and owner of the Dallas Cowboys NFL team, showed up at a Beverly Hills party also attended by Hillary Clinton, a passel of Kardashians, Doug Emhoff, the husband of the vice-president, Kamala Harris – and Bankman-Fried.Bankman-Fried had allure. Exactly why continues to puzzle political players. His money doesn’t explain everything. But it does shed light on plenty.In summer 2022, Lewis writes, Bankman-Fried met Mitch McConnell, the Senate minority leader, with the goal of stopping Trump-aligned extremists snagging Republican nominations. It was a high-level meeting – high enough that for one evening, Bankman-Fried even swapped his beloved cargo shorts for a suit.“At that moment, Sam was planning to give $15m to $30m to McConnell to defeat the Trumpier candidates in the Senate races,” Lewis writes.Bankman-Fried also explored paying Trump $5bn not to run in 2024, Lewis writes. Nothing came of that.Now, as Bankman-Fried sits in court, McConnell, 81, remains in the minority, his health in public decline. But McConnell remains a reliable soldier, his hold on his caucus unchanged.skip past newsletter promotionafter newsletter promotionThe crypto industry, meanwhile, scrambles to salvage its image from the damage done by Bankman-Fried.“The idea that one man and one company dictated an entire industry was frustrating for a lot of people,” Kara Calvert, head of US policy at Coinbase, recently told Politico. “At the end of the day, the industry is so broad-based. Nobody wants to let the whole future of technological development in the United States be dictated by a criminal.”Bankman-Fried has not been convicted of anything. But it does seem extraordinary that he rose so high so fast, and that so many political leaders were so eager to help.“From the beginning, I had thought that crypto was pretty dumb,” wrote Zeke Faux, an investigative reporter for Bloomberg and a fellow at New America, in Number Go Up, his unflattering take on crypto and Bankman-Fried. “And it turned out to be even dumber than I imagined.“There was no mass movement to actually use crypto in the real world … from El Salvador to Switzerland to the Philippines, all I saw were scams, fraud, and half-baked schemes.”In September 2021, El Salvador made bitcoin legal tender, the first country to do so. The rightwing Heritage Foundation ranks the country’s economy the 114th most free. Freedom House, more mainstream, rates El Salvador partly free. It’s not a flattering ad for crypto.In the US, major advocates include Eric Adams, the mayor of New York; Robert Kennedy Jr, a conspiracy theorist and likely third-party presidential candidate; and Cynthia Lummis, the Wyoming Republican senator who opposed certifying Joe Biden’s 2020 win just hours after the attack on Congress.Such names should tell us something – as should Trump’s crypto holdings mentioned above. But anyone who still believes might also care to recall Trump’s earlier words.“Unregulated crypto assets can facilitate unlawful behavior, including drug trade and other illegal activity,” he tweeted, more than four years ago. “We have only one real currency in the USA … it is by far the most dominant currency anywhere in the world, and it will always stay that way. It is called the United States Dollar!”Strange as it seems to say it, the man had a point. More

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      Trump, Bankman-Fried and Musk are the monsters of American capitalism | Robert Reich

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      Trump, Bankman-Fried and Musk are the monsters of American capitalismRobert ReichFor them, and for everyone who still regards them as heroes, there is no morality in business or economics. The winnings go to the most ruthless If this past week presents any single lesson, it’s the social costs of greed. Capitalism is premised on greed but also on guardrails – laws and norms – that prevent greed from becoming so excessive that it threatens the system as a whole.Yet the guardrails can’t hold when avarice becomes the defining trait of an era, as it is now. Laws and norms are no match for the possibility of raking in billions if you’re sufficiently ruthless and unprincipled.Donald Trump’s tax returns, just made public, reveal that he took bogus deductions to reduce his tax liability all the way to zero in 2020. All told, he reported $60m in losses during his presidency while continuing to pull in big money.Every other president since Nixon has released his tax returns. Trump told America he couldn’t because he was in the middle of an IRS audit. But we now learn that the IRS never got around to auditing Trump during his first two years in office, despite being required to do so by a law dating back to Watergate, stating that “individual tax returns for the president and the vice-president are subject to mandatory review”.Of course, Trump is already synonymous with greed and the aggressive violation of laws and norms in pursuit of money and power. Worse yet, when a president of the United States exemplifies – even celebrates – these traits, they leach out into society like underground poison.Meanwhile, this past week the SEC accused Sam Bankman-Fried of illicitly using customer money from FTX from the beginning to fund his crypto empire.“From the start, contrary to what FTX investors and trading customers were told, Bankman-Fried, actively supported by Defendants, continually diverted FTX customer funds … and then used those funds to continue to grow his empire, using billions of dollars to make undisclosed private venture investments, political contributions, and real estate purchases.”If the charge sticks, it represents one of the largest frauds in American history. Until recently, Bankman-Fried was considered a capitalist hero whose philanthropy was a model for aspiring billionaires (he and his business partner also donated generously to politicians).But like the IRS and Trump, the SEC can’t possibly remedy the social costs that Bankman-Fried has unleashed – not just losses to customers and investors but a deepening distrust and cynicism about the system as a whole, the implicit assumption that this is just what billionaires do, that the way to make a fortune is to blatantly disregard norms and laws, and that only chumps are mindful of the common good.Which brings us to Elon Musk, whose slash-and-burn maneuvers at Twitter might cause even the most rabid capitalist to wince. They also raise questions about Musk’s other endeavor, Tesla. Shares in the electric vehicle maker dropped by almost 9% on Thursday as analysts grew increasingly concerned about its fate. Not only is Musk neglecting the carmaker but he’s appropriating executive talent from Tesla to help him at Twitter. (Tesla stock is down over 64% year-to-date.)Musk has never been overly concerned about laws and norms (you’ll recall that he kept Tesla’s factory in Fremont, California, going during the pandemic even when public health authorities refused him permission to do so, resulting in a surge of Covid infections among workers). For him, it’s all about imposing his gargantuan will on others.Trump, Bankman-Fried and Musk are the monsters of American capitalism – as much products of this public-be-damned era as they are contributors to it. For them, and for everyone who still regards them as heroes, there is no morality in business or economics. The winnings go to the most ruthless. Principles are for sissies.But absent any moral code, greed is a public danger. Its poison cannot be contained by laws or accepted norms. Everyone is forced to guard against the next con (or else pull an even bigger con). Laws are broken whenever the gains from breaking them exceed the penalties (multiplied by the odds of getting caught). Social trust erodes.Adam Smith, the so-called father of modern capitalism, never called himself an economist. He called himself a “moral philosopher,” engaged in discovering the characteristics of a good society. He thought his best book was not The Wealth of Nations, the bible of modern capitalist apologists, but the Theory of Moral Sentiments, where he argued that the ethical basis of society lies in compassion for other human beings.Presumably Adam Smith would have bemoaned the growing inequalities, corruption, and cynicism spawned by modern capitalism and three of its prime exemplars – Trump, Bankman-Fried, and Musk.TopicsUS newsOpinionUS politicsUS taxationDonald TrumpSam Bankman-FriedFTXUS economycommentReuse this content More

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      FTX seeks to claw back donations to politicians and charities

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      FTX seeks to claw back donations to politicians and charitiesCollapsed cryptocurrency exchange had reputation for corporate philanthropy to tune of hundreds of millions of dollars FTX, the collapsed cryptocurrency exchange founded by Sam Bankman-Fried, has started trying to claw back payments made by its former management to politicians, celebrities and charities, as it continues to progress through bankruptcy proceedings in the US.FTX “intends to commence actions before the bankruptcy court to require the return of such payments, with interest accruing from the date any action is commenced”, the company said, sharing an email address – FTXrepay@ftx.us – that recipients could use to voluntarily return money.“Recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment received from a FTX contributor does not prevent the FTX debtors from seeking recovery from the recipient or any subsequent transferee,” FTX added in a statement.Bankman-Fried, other members of FTX leadership and a number of members of the FTX group all developed reputations for corporate philanthropy to the tune of hundreds of millions of dollars.FTX billionaire Sam Bankman-Fried funneled dark money to RepublicansRead moreHe was one of the largest political donors in the United States, giving directly to Democratic politicians and to Republican causes. Other members of the FTX inner circle were also high-profile donors, such as Ryan Salame, the co-chief executive of FTX’s Bahamian subsidiary.As well as political causes, Bankman-Fried donated large sums to charities, endowing the FTX Foundation and FTX Future Fund to promote his interests.The FTX Foundation had given away $140m (£115m), the organisation reported in October, of which $90m had gone to the Future Fund.In criminal charges filed in the state of New York, the Department of Justice has alleged that the donations were the result of criminal money laundering, since the money was effectively taken from customer accounts.The charges also allege campaign finance violations, arguing that Bankman-Fried “and others known and unknown” broke donation limits by making contributions in the names of other people.Clawing back payments made to politicians and charities is likely to be one of the easier parts of the bankruptcy process.Under US law, payments or transfers made within 90 days of bankruptcy are presumed to be preferential if they result in a creditor getting more than it would have been entitled to at the end of the bankruptcy process, and a “clawback” can attempt to recover the difference in the payments.With FTX, which lost more than $8bn from customer withdrawals in a day less than a week before it declared bankruptcy, there could be billions of dollars that the court decides were distributed unfairly.Retail depositors, however, will be hoping that they aren’t treated as typical creditors. In FTX’s terms of service, the company said depositors didn’t hand over ownership of their deposits, which has led some creditors to argue that the crypto they placed in the exchange should not be used to pay the company’s bills.In another crypto bankruptcy, for BlockFi, a shadow bank that went bust after FTX, the court is now ruling on that question.BlockFi filed a motion on Monday with the New Jersey bankruptcy court arguing: “The BlockFi Wallet terms of service are clear. They provide that ‘title to the cryptocurrency held in your BlockFi Wallet shall at all times remain with you and shall not transfer to BlockFi.’“The debtors have no legal or equitable interest in cryptocurrency that was present in the Wallet accounts as of platform pause, and clients should be able to withdraw such assets from the platform if they choose.”As such, normal retail depositors should be able to withdraw their assets, the shadow bank said.TopicsSam Bankman-FriedFTXCryptocurrenciesE-commerceUS politicsnewsReuse this content More

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      Warren pushes bipartisan bill to regulate crypto firms after FTX collapse

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      Warren pushes bipartisan bill to regulate crypto firms after FTX collapseMove co-sponsored by Republican Roger Marshall aims to crack down on money laundering after arrest of Sam Bankman-Fried Elizabeth Warren is pressing Congress to adopt new bipartisan legislation which would force crypto firms to abide by the same regulations as banks and corporations in an attempt to crack down on money laundering through digital assets.The Democratic US senator from Massachusetts is pushing for the new controls on the crypto industry in the wake of the spectacular collapse of the cryptocurrency exchange FTX. On Tuesday its founder and former CEO Sam Bankman-Fried was charged with eight criminal counts including conspiracy to commit money laundering.Five things we know about the collapse of FTX and Sam Bankman-FriedRead moreWarren’s bill is being co-sponsored by the Republican senator from Kansas Roger Marshall. The Digital Asset Anti-Money Laundering Act would essentially subject the world of crypto to the same global financial regulations to which more conventional money markets must conform.Under current systems, crypto exchanges are able to skirt around restrictions designed to stop money laundering and impose sanctions. Should the bill be enacted into law it would authorize the Financial Crimes Enforcement Network (FinCen) to reclassify crypto entities as “money service businesses” which would bring them under basic regulations laid out in the Bank Secrecy Act.In a statement to CNN, Warren said that the “commonsense crypto legislation” would protect US national security. “I’ve been ringing the alarm bell in the Senate on the dangers of these digital asset loopholes,” she said, adding that crypto was “under serious scrutiny across the political spectrum”.Bankman-Fried, 30, was indicted by prosecutors at the southern district of New York and is being held in custody in the Bahamas. The US Securities and Exchange commission (SEC) has also brought civil charges against him, accusing him of creating a firm that was a “house of cards”.An ongoing area of interest to investigators was the vast political contributions made by Bankman-Fried to the Democratic party, as well as to Republicans in the form, he has said, of secretive dark money donations. The Wall Street Journal has calculated that he gave more than $95,000 in direct campaign donations to the same members of the US House financial services committee who are now investigating him.Even before the implosion of FTX, the treasury department was focusing on the feared risks to national security posed by relatively unregulated digital currency exchanges. In August it moved against Tornado Cash, a virtual currency mixer which it accused of laundering more than $7bn in virtual currency since 2019.The Treasury said that Tornado Cash was attractive to launderers of the proceeds of cybercrime, including the Lazarus Group, a hacking group sponsored by North Korea. The entity’s appeal to cybercriminals was that it could move digital assets around anonymously, obscuring the origin and destination of transactions and hiding the parties involved.Warren is a former Harvard law professor and expert on consumer protection and economic inequality. She entered the Senate in 2013, where she established herself as a leading progressive critic of corporate largesse and a spirited opponent of Donald Trump.She made an unsuccessful bid for the White House in 2020.TopicsElizabeth WarrenCryptocurrenciesUS politicsFTXSam Bankman-FriednewsReuse this content More

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      Five things we know about the collapse of FTX and Sam Bankman-Fried

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      ExplainerFive things we know about the collapse of FTX and Sam Bankman-FriedCompany founder was arrested and charged with running a ‘house of cards’ in ‘one of the biggest financial frauds in US history’ It has been another crazy 48 hours in the collapse of FTX, once the second-largest cryptocurrency exchange in the world.On Monday, the company’s now-infamous founder, Sam Bankman-Fried, was arrested in the Bahamas, a day before he was set to give testimony before Congress. On Tuesday US authorities issued damning charges that the 30-year-old former billionaire ran a “house of cards” and was behind “one of the biggest financial frauds in American history”.Lawmakers went ahead with the hearing without Bankman-Fried, who was otherwise occupied, in what looks set to be a series of heated hearings about the collapse.Here are five things we learned about FTX after two days of whirlwind of events.1. What happened at FTX appears to be ‘old-school fraud’While FTX was billed as a behemoth of cryptocurrency, with all the technical complexities that implies, officials on Tuesday alleged that FTX’s downfall is a classic case of fraud.Republican representative and incoming House finance committee chair Patrick McHenry said in Tuesday’s hearing that FTX appears to be “old school fraud, just using new technology”.In a statement, Gary Gensler, chair of the Securities and Exchange Commission (SEC), which charged Bankman-Fried of fraud against investors, echoed this sentiment by saying Bankman-Fried “built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.“FTX operated behind a veneer of legitimacy,” he said. “But we allege in our complaint that the veneer wasn’t just thin, it was fraudulent.”John Ray III, FTX’s current CEO who was brought in to restructure the company, called it “really old-fashioned embezzlement” when testifying in front of the House Financial Services Committee on Tuesday.When asked to contrast the liquidation of Enron in the early 2000s, which Ray oversaw, he said the crimes of the former energy giant were “highly orchestrated financial machinations by highly sophisticated people to keep transactions off balance sheets”.FTX, in contrast, was “just taking money from customers, and using it for your own purpose,” he said. “Not sophisticated at all.”2. Little is known about where all the money wentRay told lawmakers that there is an “excess of $7bn” in lost FTX funds from 7.6m accounts, with 2.7m based in the US. It is unclear exactly how much money is lost.“There were no corporate controls, no corporate oversight, no independent board,” he said. “The owners, business and senior management had virtual control of all the accounts and could move money or assets as they desired, undetected by customers.”Ray said he had “never seen such an utter lack of record keeping” and there were “absolutely no internal control whatsoever”. FTX – which helped Bankman-Fried amass a personal fortune once valued at $26bn – used QuickBooks to manage its finances. “QuickBooks, very nice tool, not for a multibillion-dollar company,” Ray said.3. Prosecutors believe Bankman-Fried was lying from the beginningWhile Bankman-Fried built a reputation off his philosophy of effective altruism, saying he wanted to use his wealth to make a major positive impact on the world, prosecutors are alleging that Bankman-Fried was defrauding investors since he founded FTX in 2019.“Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire,” the SEC said in its complaint.The complaint describes how Bankman-Fried postured himself as a “responsible leader of the crypto community” and “touted the importance of regulation and accountability”.“But from the start, Bankman-Fried improperly diverted customer assets to his privately-held crypto hedge fund, Alameda Research LLC, and then used those customer funds to make undisclosed venture investments, lavish real estate purchases, and large political donations,” the complaint reads.4. What’s next for Bankman-Fried?The criminal indictment that led to Bankman-Fried’s arrest was unsealed on Tuesday, revealing exactly what charges federal prosecutors have charged him with.Bankman-Fried faces eight criminal counts, including wire fraud on customers and lenders, conspiracies to commit wire fraud on customers and lenders and conspiracies to commit commodities fraud, securities fraud and money laundering.Bankman-Fried could face hefty prison time for the charges but legal experts say it is too early to say yet what sentence he will receive if convicted. Sentencing in white-collar crime is highly influenced by the scale of the fraud, said Duncan Levin, managing partner at Levin & Associates and a former federal prosecutor. Given that FTX’s losses “seem to be close to $2bn, that could drive sentencing to the absolute max,” he said.But at the moment, said Levin, it’s hard to say whether if convicted Bankman-Fried is facing an “Elizabeth Holmes [11 years] or a Bernie Madoff [150 years]”.5. Prosecutors are likely closing in on Bankman-Fried’s inner circle – and the scandal is spreadingThough Bankman-Fried is the only FTX associate who has been charged, US authorities are investigating others who were involved with the company.At a press conference Damian Williams, United States attorney for the southern district of New York, said this was only the beginning. “This investigation is very much ongoing,” he said. “We are not done.” Officials advised anyone involved in the alleged fraud “to come to us before we come to you”.But while US authorities are after FTX insiders, Washington faces its own reckoning. Bankman-Fried and his peers gave millions to politicians of both sides in the hope of steering crypto regulation. The political fallout of FTX’s collapse looks set to be one of the big stories of 2023.TopicsSam Bankman-FriedFTXCryptocurrenciesUS politicsexplainersReuse this content More

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      Sam Bankman-Fried says he wants to testify before Congress on FTX collapse

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      Sam Bankman-Fried says he wants to testify before Congress on FTX collapseCryptocurrency exchange founder pledges to testify ‘once I have finished learning and reviewing what happened’ The disgraced billionaire Sam Bankman-Fried has said he wants to testify before Congress about what caused the collapse of the cryptocurrency exchange he founded – but first he wants to fully understand the chain of events and isn’t sure how long that might take.Bankman-Fried’s pledge, made Sunday on Twitter, came after the US House financial services committee scheduled a 13 December hearing about the failure of FTX and invited him to participate.“Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain,” Bankman-Fried tweeted. “I’m not sure that will happen by the 13th. But when it does, I will testify.”Rep. Waters, and the House Committee on Financial Services: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. https://t.co/c0P8yKlyQt— SBF (@SBF_FTX) December 4, 2022
      Bankman-Fried’s case is of particular interest on Capitol Hill in part because he has acknowledged that he donated money in equally large amounts to both the Democratic and Republican parties.FTX filed for bankruptcy protection in November after the failure of a possible merger with rival crypto exchange Binance. The move left investors and creditors facing billions of dollars in losses, and Bankman-Fried resigned as FTX’s chief executive officer.He has since denied allegations of potential fraud in a series of media appearances as law enforcement authorities and regulators scrutinize him and FTX’s wreckage.He told an audience at the New York Times DealBook summit on 30 November that he “screwed up”, “didn’t ever try to commit fraud” and was as “shocked” as the rest of the public by FTX’s collapse.During that appearance, Bankman-Fried addressed questions about whether FTX customer funds were misappropriated and given to the hedge fund he founded, Alameda Research. Bankman-Fried – who had reportedly been in a relationship with the hedge fund’s CEO, Caroline Ellison – said he “didn’t knowingly commingle funds” with Alameda and was surprised by “the size of their position”.He told ABC News in a separate interview that he also had been spending barely any time “trying to manage risk on FTX” and had “stopped working as hard for a bit” before the firm imploded.“What matters here is all the customers and stakeholders [who] got hurt and to help them out,” Bankman-Fried said. “What happens to me is not the important part.”For many observers, explanations given by Bankman-Fried over FTX’s collapse and its $8bn (£6bn) shortfall in assets haven’t been easy to make sense of. At one point he mused that “poor internal labeling” of accounts at FTX could have precipitated his company’s downfall.His repeated public statements about FTX likely buck the legal advice he is receiving. The leading US law firm Paul, Weiss recently dropped Bankman-Fried as a client after attorneys for FTX accused him of interfering with the bankruptcy reorganization by his “incessant and disruptive tweeting”. Bankman-Fried acknowledged at the DealBook summit that his lawyers didn’t want him to speak at the conference.Reuters contributed reportingTopicsCryptocurrenciesUS CongressUS politicsnewsReuse this content More

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      FTX billionaire Sam Bankman-Fried funneled dark money to Republicans

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      FTX billionaire Sam Bankman-Fried funneled dark money to RepublicansThe crypto entrepreneur was thought to be a big donor to Democrats but now acknowledges he gave equally to GOP The fall of crypto billionaire Sam Bankman-Fried has been painted as a big blow to the Democratic party, whose candidates were major beneficiaries of his largesse. But in a new interview, Bankman-Fried has claimed he gave equally large amounts of money to Republicans.“I donated to both parties. I donated about the same amount to both parties,” Bankman-Fried told the crypto commentator and citizen journalist Tiffany Fong.“All my Republican donations were dark,” he said, referring to political donations that are not publicly disclosed. “The reason was not for regulatory reasons, it’s because reporters freak the fuck out if you donate to Republicans. They’re all super liberal, and I didn’t want to have that fight.”Bankman-Fried’s undisclosed donations were made possible by the supreme court’s 2010 decision in the Citizen’s United case, which allowed donors to give anonymously and has led to more than $1bn being poured into federal elections since 2010.The revelation comes as a political battle over the collapse of FTX, Bankman-Fried’s crypto exchange, is shaping up in Washington.Bankman-Fried was the second-largest donor to Democratic politicians in the last election cycle. The Republican senator Ted Cruz has called FTX “a Bernie Madoff style fraud that cost investors BILLIONS”.“Will Joe Biden and Democrats who cashed Bankman-Fried’s checks give that money to the people SBF screwed?” he wrote on Twitter earlier this month.On Thursday the Senate will hold the first in what is expected to be a series of hearings into FTX’s collapse, with Republicans keen to hold Democrats responsible for a lack of oversight before its collapse.Public data shows that some parts of Bankman-Fried’s empire gave equally to both parties. Data from OpenSecrets, a non-profit that tracks data on campaign finance and lobbying, shows FTX US, the company’s US operation, gave equally to both parties.But Bankman-Fried’s public donations went largely to Democrats. The FTX founder gave more than $990,000 to candidates in the last election cycle, according to OpenSecrets, and another $38.8m to outside groups. Only about $235,000 of his public political giving went toward Republican candidates.The money helped Bankman-Fried position himself as an influential voice in crypto regulation in Washington. In February he testified before the same Senate agricultural committee that will hold the first hearing into FTX’s collapse this Thursday.At the February hearing, Bankman-Fried argued for clarity in regulating the crypto market and outlined “FTX’s key principles for ensuring investor protections.” They included:● Maintaining adequate liquid resources to ensure the platform can return the customer’s assets upon request;● Ensuring the environment where customer assets are custodied, including digital wallets, are kept secure; and● Ensuring appropriate bookkeeping or ledgering of assets and disclosures to protect against misuse or misallocation of customer assets.Bankman-Fried was ousted after the company filed for bankruptcy. The new chief executive, John Ray III, who has overseen some of the biggest bankruptcies ever, including the collapse of the energy giant Enron, said FTX suffered an “unprecedented and complete failure of corporate controls”.According to FTX’s new management, a “substantial portion” of assets held by FTX may be “missing or stolen” and the company did not even keep accurate records of who worked there.TopicsCryptocurrenciesUS politicsnewsReuse this content More