U.S. Attorney’s Spokesperson: FTX Founder SBF Faces Up to 115 Years in Prison

Six main questions:

One is that the founder of FTX has committed too many crimes. FTX founder Fried faces up to 115 years in prison, US Attorney’s spokesman said. Fried was guilty of a string of financial crimes, knowingly defrauding customers and investors for extortionate profits for himself and others, while playing a central role in the firm’s bankruptcy. Prosecutors say Freed orchestrated one of the largest financial frauds in U.S. history. Prosecutors allege Freed stole billions of dollars in client funds while misleading investors and lenders. Freed was charged with eight counts of fraud. Prosecutors allege that Fried misappropriated funds from FTX.com customers to pay fees and liabilities of Alameda Research, an affiliated trading firm. Fried is also charged with defrauding the U.S. government and conspiring to make illegal political contributions in violation of campaign finance rules. It can be said that Fried is the real version of Madoff and Enron, even worse.

Second, it is very difficult for investors and customers to recover funds. The FTX debacle, which resulted in losses of over $7 billion, was the result of months, if not years, of poor decision-making and poor financial control. FTX’s new CEO, John J. Ray, told Congress that FTX’s debacle was caused by “seriously inexperienced and immature individuals” who lacked oversight and control. During Tuesday’s congressional hearing, John said bluntly: “We will never get all of these assets back.” John also said: “The funds of all customers of FTX.com, FTX.US and Alameda are mixed , the exact scale of FTX’s financial breach is still unclear, and I don’t yet know how much or when customers will get their money back, but this should be a problem that can take months to resolve.” It can be seen that due to the considerable difficulty of recovering funds Big, so, actually, a lot of people have lost their funds.

The third is that the former management of FTX made eight major mistakes. On December 13, local time in the United States, the Financial Services Committee of the US House of Representatives will hold a hearing on the FTX incident. John, the new CEO of FTX, pointed out eight major mistakes of the previous management: 1. There are flaws in system management, and senior management can access the storage system of customer assets, and there is no proper security mechanism to prevent them from transferring these assets. 2. There are deficiencies in asset management, and the private keys that store hundreds of millions of dollars in encrypted assets have not been effectively controlled or encrypted. 3. Alameda can lend funds from FTX.com for trading without any effective restrictions. 4. Assets are confused. 5. FTX’s nearly 500 investments lack complete transaction documents. 6. No audited and reliable financial statements. 7. Lack of dedicated financial and risk management staff, which is basically standard in any company close to the size of FTX. 8. The subsidiaries under the entire FTX Group lack independent management.

Fourth, it is very difficult for investors and customers to recover funds. The FTX debacle, which resulted in losses of over $7 billion, was the result of months, if not years, of poor decision-making and poor financial control. FTX’s new CEO, John J. Ray, told Congress that FTX’s debacle was caused by “seriously inexperienced and immature individuals” who lacked oversight and control. During Tuesday’s congressional hearing, John said bluntly: “We will never get all of these assets back.” John also said: “The funds of all customers of FTX.com, FTX.US and Alameda are mixed , the exact scale of FTX’s financial breach is still unclear, and I don’t yet know how much or when customers will get their money back, but this should be a problem that can take months to resolve.” It can be seen that due to the considerable difficulty of recovering funds Big, so, actually, a lot of people have lost their funds.

Fifth, who is the most gullible “fool”. Fried deceived some people, how these people took the bait, and those people have already seen through Fried’s deception. These are all questions worthy of consideration, and currently, there are already analytical materials in this regard.

Sixth, regulators have a long way to go to supervise the “currency circle”. Affected by the FTX incident, the “currency circle” will soon face the strict scrutiny of the “microscope, telescope, and demon mirror” of supervision. It can be expected that with the deepening of strict supervision, the FTX case may only be the tip of the iceberg of the “currency circle”. The fire cannot be contained, and the truth of other shady activities in the “currency circle” will definitely be revealed in the future.

The core members of FTX, that is, the decision makers who have the right to use funds, are only two people, Sam Bankman Fried and his co-founder Gary. Even though institutional investors have injected $2 billion in capital, since the company has no board of directors, investors and major shareholders do not have an extra seat in the company’s decision-making.

You may be curious: Isn’t it illegal to use the company’s funds without a board of directors? Yes, this is illegal in SEC compliance, but FTX’s company is registered in Panama, a financial law that is completely irregular, and there is not even any digital currency regulations, extradition clauses, no man’s land.