Sam Bankman-Fried
The outcome of SBF’s prosecution could determine how the IRS treats your FTX losses
FTX founder Sam Bankman-Fried has received official criminal charges after the collapse of his cryptocurrency exchange, which is more than just a moral victory for the exchange’s roughly 1 million individual investors. While not locked in yet, things appear to be on track for these investors to take a more favorable tax position as SBF’s fate continues to unravel. What kinds of losses can FTX investors claim on their taxes? Earlier this fall, it appeared that assets lost in the FTX collapse would be considered a capital loss under the United States tax code for the tax year 2022. This capital loss can be used to offset capital gains. But in a year in which the crypto market took a beating as a whole, most investors will not have capital gains to offset in 2022. A capital loss can also be u...
SBF’s Bahamian prison reported for ‘harsh’ conditions and ‘degrading treatment’ — US State Dept
After being denied bail in a Bahamas Magistrate Court, former FTX CEO Sam Bankman-Fried could spend up to two months in the country’s Fox Hill Prison, a facility with reported cases of physical abuse against prisoners and “harsh” conditions. Authorities in the Bahamas reportedly remanded Bankman-Fried to the medical wing of Fox Hill following a Dec. 13 hearing. SBF’s counsel said he had been taking medication prior to his arrest on Dec. 12, including Adderall and anti-depressants, but it’s unclear if the former CEO will serve his time at the correctional facility, its medical unit, or an alternative location. According to a 2021 human rights report from the U.S. State Department, conditions at Fox Hill were “harsh.” Investigations determined that the facility was overcrowded, prisoners had...
Will FTX’s ill wind reach the Global South? Maybe not
With the crypto world still reeling from the FTX collapse, Brazil recently passed legislation that legalized cryptocurrency use for payments in the country. How to reconcile this with all those declarations in the West that crypto is having its “Lehman moment”? Brazil may have inadvertently revealed a cleft between the developed world and emerging markets with regard to the uses and misuses of cryptocurrencies. (The legislation still requires a presidential signature before it becomes law.) Unquestionably, FTX’s Nov. 11 bankruptcy filing hurt crypto exchanges and other crypto-focused enterprises in Brazil, as well as many crypto-based companies all through Latin America (LATAM). But this latest gale in the crypto winter is generally not seen as an existential threat — as it is someti...
White House silent on whether it will return $5.2M in donations from SBF
White House press secretary, Karine Jean-Pierre, declined to answer questions from a reporter on whether United States president Joe Biden will return the $5.2 million in campaign donations previously given by FTX founder Sam Bankman-Fried. “Will the president return that donation?” Associated Press reporter Zeke Miller asked in a Dec. 13 press briefing, “does he call on all politicians who got campaign donations that may have come from customer money to return those funds?” “I’m covered here by the Hatch Act,” Jean-Pierre responded, adding she was “limited on what I can say.” ”Anything that’s connected to political contributions, from here I would have to refer you to the DNC,” she said in reference to the Democratic National Committee — the governing body of the U.S. Democrat...
Bahamian securities regulator slams new FTX CEO over ‘misstatements’
The Securities Commission of Bahamas has slammed the current CEO of bankrupt crypto exchange FTX John J. Ray III for his statements regarding the ongoing investigation into FTX. In a press release sent to Cointelegraph, the Bahaman regulator didn’t directly point toward the exact statements of the CEO, but addressed recent reports that suggest the Bahamas’ government asked former CEO Sam Bankman-Fried to create a new multi-million token and hand over the control to them. The said report also alleged Bahamas officials tried to help Bankman-Fried regain access to key computer systems of the FTX. According to United States lawyers, Bahamas officials were “responsible for directing unauthorized access” to FTX systems in order to take over control of digital assets under the s...
Breaking: FTX founder Sam Bankman-Fried arrested, set to be extradited to US
Sam Bankman-Fried, the founder and former CEO of the FTX cryptocurrency exchange and founder of trading firm Alameda Research has been arrested by authorities in The Bahamas. A Dec. 12 statement from the Bahamas Attorney General (AG) and Minister of Legal Affairs, Ryan Pinder, states Bankman-Fried was arrested by the Royal Bahamas Police Force following a formal notification from the United States government that it has filed criminal charges against the FTX founder. The U.S. will likely request the extradition of Bankman-Fried. Pinder states The Bahamas will “promptly” process any extradition request by U.S. authorities. Bahamian Prime Minister Philip Davis said in a statement both countries have “a shared interest in holding accountable all individuals associated with FTX who may h...
Sam Bankman-Fried says he will testify before the US House Financial Services Committee remotely
Continuing his so-called apology tour, Sam Bankman-Fried appeared on a Twitter Spaces chat with Unusual Whales and told nearly 60,000 listeners that he intends to testify at the United States House of Representatives Financial Services Committee remotely on Dec. 13. He was previously confirmed to appear in person. Bankman-Fried, who is allegedly currently located in the Bahamas, missed the deadline to confirm his appearance before the Senate Banking Committee the following day, despite the threat of a subpoena. Despite his frequent public speaking, Bankman-Fried has gone silent on Twitter himself, not posting since Dec. 9, when he indicated his agreement to appear at the House committee hearing. 1) I still do not have access to much of my data — professional or personal. So the...
Former top SEC crypto regulator hired by Caroline Ellison
A former top crypto regulator with the United States Securities and Exchange Commission (SEC) will represent Caroline Ellison, the ex-Alameda Research CEO, in an ongoing federal probe, according to a Dec. 10 report from Bloomberg. Ellison will be represented by Stephanie Avakian and a team of attorneys from WilmerHale. Avakain is currently chair of the Securities and Financial Services department at the law firm. At the SEC, she was a director at the Enforcement Division, where she expanded cryptocurrency oversight, bringing cases against Robinhood and Ripple Lab. According to the law firm’s website, “Ms. Avakian oversaw the Division’s approximately 1,400 professionals and staff. During her four years leading the Division, the SEC brought more than 3,000 enforcement actio...
Sam Bankman-Fried’s parents no longer on the Stanford Law School roster
The domino effect of FTX CEO Sam Bankman-Fried’s actions came full circle as his reputation began impacting the professional lives of his parents — Stanford Law professors Joseph Bankman and Barbara Fried. SBF’s father, Bankman, had to cancel his winter session course on tax policy, which according to The Standford Daily, was at a time when the family was accused of acquiring an FTX-owned $16.4 million vacation home before the crypto exchange’s collapse. Stanford Law professor Joseph Bankman’s tax policy course was canceled. Source: explorecourses.stanford.edu On the other hand, SBF’s mother, Fried, was surprisingly not even listed as an instructor for any of the courses. While this event coincides with FTX’s fallout, where Fried became a focal point of discussion owing to her ...
Who’s expected to testify before Congressional hearings on FTX?
United States lawmakers have been pushing for certain witnesses — including Sam Bankman-Fried — to appear before committee hearings scheduled in December. Who should the crypto space expect to see testifying on the events leading to the downfall of FTX? On Dec. 9, Bankman-Fried, or SBF, said — under threat of a potential subpoena — that he was willing to speak at a U.S. House hearing aimed at exploring FTX’s collapse. Leadership with both the House Financial Services Committee and Senate Banking Committee had suggested that they might subpoena the former FTX CEO, prompting SBF to say on Twitter he was “willing to testify” on Dec. 13. At the time of publication, SBF’s name did not appear as a witness in the House committee’s ‘Investigating the Collapse of FTX, Part I’ hearing — suggesting m...
CZ and SBF duke it out on Twitter over failed FTX/Binance deal
Binance CEO Changpeng Zhao, or CZ, and former FTX CEO Sam Bankman-Fried, or SBF, have revealed new details about the failed agreement between the exchanges during FTX’s liquidity crisis in November. In a Dec. 9 Twitter thread, CZ referred to Bankman-Fried as a “fraudster,” saying Binance exited its position in FTX in July 2021 after becoming “increasingly uncomfortable with Alameda/SBF.” According to the Binance CEO, SBF was “unhinged” at the exchange pulling out — a claim that prompted an online response from the former FTX CEO. Bankman-Fried criticized CZ for his public admonition of FTX, adding details about the negotiations between the exchanges amid FTX’s reported “liquidity crunch” in November prior to the firm filing for bankruptcy. SBF said at the time that FTX had reached a ...
FTX hires forensics team to find customers’ missing billions: Report
The new management for bankrupt crypto exchange FTX has reportedly hired a team of financial forensic investigators to track down the billions of dollars worth of missing customer crypto. Financial advisory company AlixPartners was chosen for the task and is led by former Securities and Exchange Commission (SEC) chief accountant, Matt Jacques, according to a Dec. 7 report from the Wall Street Journal. It is understood that the forensics firm will be tasked with conducting “asset-tracing” to identify and recover the missing digital assets and will complement the restructing work being undertaken by FTX. On Nov. 11 hackers drained wallets owned by FTX and FTX.US of over $450 million worth of assets. Former CEO Sam Bankman-Fried claimed in an interview recorded on Nov. 16 with crypto blogger ...
