Tag Archives: Gary Wang

Sam Bankman-Fried Convicted : Guilty Of FTX Fraud!

Sam Bankman-Fried, who is also known simply as SBF, has been found guilty on all counts of defrauding the customers of his crypto-exchange, FTX, on Thursday, 2 November 2023.

The former crypto billionaire stood and faced the jury that delivered its verdict after just four hours of deliberations. He was found guilt on all seven counts of wire fraud and conspiracy to launder money, and now faces decades in prison at a separate sentencing hearing set for 28 March 2024.

The jury verdict brought an end to nearly a month of court proceedings, which saw his closest friends and partners turn witness against the former crypto king, and one of cryptocurrency’s most public faces.

Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history – a multibillion-dollar scheme designed to make him the King of Crypto. This case has always been about lying, cheating, and stealing, and we have no patience for it.

– Manhattan US Attorney Damian Williams

SBF maintained his innocence right to the end, maintaining that while he made mistakes, he acted in good faith. After his conviction, his lawyer issued this statement:

We respect the jury’s decision. But we are very disappointed with the result. Mr Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him

– Sam Bankman-Fried’s lawyer, Mark Cohen

It is currently unknown if SBF plans to appeal the verdict. In any case, this won’t be the last we see of him, as Bankman-Fried is also set to go on trial on a second set of charges brought by prosecutors earlier this year, for alleged foreign bribery and bank fraud conspiracies.

Sam Bankman-Fried Conviction : Warning To Other Fraudsters

After the jury convicted SBF, Manhattan US Attorney Damian Williams warned other fraudsters to take note of his fate.

When I became US attorney, I promised we would be relentless in rooting out corruption in our financial markets. This is what relentless looks like. This case moved at lightning speed – that was not a coincidence, that was a choice.

This case is also a warning to every fraudster who thinks they’re untouchable, that their crimes are too complex for us to catch, that they are too powerful to prosecute, or that they are clever enough to talk their way out of it if caught.

Those folks should think again and cut it out. And if they don’t, I promise we’ll have enough handcuffs for all of them.

Sam Bankman-Fried Conviction : All But Guaranteed

Sam Bankman-Fried’s conviction was all but guaranteed after three of his former close friends and colleagues, including former on-off girlfriend, Caroline Ellison, pleaded guilty and agreed to testify against him in hopes of reducing their own sentences. They are to be sentenced at a later date.

They helped convict SBF by presenting evidence that the crypto-trading firm Alameda Research received deposits on behalf of FTX customers from the early days of the exchange, when traditional banks were unwilling to let it open an account.

Bankman-Fried was accused of swindling FTX customers out of some $10bn. Prosecutors said that his fraud extended from 2019 to November 2022, when FTX collapsed under the weight of a liquidity crisis, caused by the lending of customer funds to Alameda Research, without FTX customer’s knowledge or approval.

Instead of safeguarding FTX customer funds, SBF used the money to repay Alameda lenders, buy property and make investments, as well as political donations. When FTX went bankrupt in November 2022, Alameda owed it US$8 billion.

He took the money. He knew it was wrong. He did it anyway, because he thought he was smarter and better and that he could figure his way out of it.

– Assistant US Attorney Nicolas Roos

Before FTX’s collapse of his companies, Sam Bankman-Fried was known for appearing frequently in Washington and in the media to promote cryptocurrency. Despite a market downturn, the rapid growth of FTX earned him the moniker – king of crypto, which now appears to be a mirage.

Caroline Ellison testified that Sam Bankman-Fried directed her to shuttle customer funds into Alameda after the spring 2022 crypto downturn. Alameda was saddled with billions of dollars in open-term loans, and lenders started demanding their money back that summer. Alameda couldn’t repay the loans, and Bankman-Fried blamed Ellison for not hedging the fund’s money earlier that year.

Wang similarly implicated his former friend, naming “Sam Bankman-Fried, Nishad Singh and Caroline Ellison”, when the prosecution asked, “Who are the main people you committed these crimes with?”

Wang also told jurors that Sam Bankman-Fried wasn’t shocked by FTX’s massive debt. After telling him about the debt, SBF said “that sounds correct” with “a neutral demeanor”.

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SBF Released On “No Cash” $250 Million Bail Bond!

SBF Released On “No Cash Up Front” $250 Million Bail Bond!

FTX co-founder Sam Bankman-Fried, better known as SBF, has been released on a $250 million bond, but guess what – it does not actually require him to come up with the cash.

Instead, the release agreement showed that SBF was being released on a $250 million personal recognisance bond that was secured by his parents’ five-bedroom home in Palo Alto.

If SBF fails to appear in court, or violate other conditions of his bail, then the property would be seized. That property is estimated to be worth only $4 million.

In addition to his two parents, the bond must be signed by two other people (one of whom cannot be a relative) by January 5, 2023; and they would all be on hook for the $250 million bail.

This “no cash up front” bail deal was worked out between SBF’s legal team and US prosecutors, which included his agreement to be extradited to the United States.

New York federal court Judge Gabriel Gorenstein released him, subject to detention at his parents’ home while wearing an electronic monitoring bracelet, with mandatory mental health counselling and substance abuse treatment.

SBF had to surrender his passport under the bail agreement, and was stricter to travel to the Northern District of California, or the Southern and Eastern districts of New York for court appearances.

This was a fraud of epic proportions. If that was the only test, detention would likely be appropriate. But he voluntarily consented to extradition. That should be given weight.

If he had resisted, we would have opposed release. But his assets have diminished. This is a financial crime and he no longer works for FTX or Alameda. So the risk to the community is a marginal consideration. We propose a restrictive bail package.

– Assistant US Attorney Nick Roos

Sam Bankman-Fried faces up to 115 years in prison if convicted on all eight counts of wire fraud and conspiracy to commit securities fraud, money laundering, and violating campaign finance laws in his cryptocurrency exchange company, FTX.

His next hearing is set for January 3, 2022, and his defence is expected to be complicated by the fact that two of his chief lieutenants – Caroline Ellison and Gary Wang pleaded guilty and are now cooperating with investigations.

But until that he is convicted, SBF will be free to enjoy life at home, catching up on Netflix or the computer games he loves to play. Living with his parents may not be what every 30+ young man likes, but it sure beats jail in the Bahamas!

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Caroline Ellison, Gary Wang Plead Guilty To FTX Fraud!

Caroline Ellison and Gary Wang – two close partners of Sam Bankman-Fried, plead guilty to criminal charges related to the collapse of the FTX cryptocurrency exchange. They are now helping investigators with their investigations, in exchange for reduced sentencing.

The charges, guilty pleas and their cooperation with investigators occurred earlier, but was kept quiet until Sam Bankman-Fried (better know as SBF) was safely on a flight to the US from the Bahamas after he agreed to voluntary extradition.

SBF landed in New York at 10 PM local time on December 21, and Southern District of New York attorney Damian Williams announced that Caroline Ellison and Gary Wang pleaded guilty to charges “related to their roles in the fraud that contributed to FTX’s collapse”.

As I said last week, this investigation is ongoing and moving very quickly. I also said last week’s announcement would not be our last and let me be clear once again, neither is today’s.

I’m announcing that SDNY has filed charges against Caroline Ellison […] and Gary Wang […] in connection with their roles in the frauds that contributed to FTX’s collapse. Both Ms. Ellison and Mr. Wang have plead guilty to those charges and both are cooperating with the SDNY.

Caroline Ellison was the head of Alameda Research – the trading firm started by SBF, which allegedly had “a virtually unlimited line of credit” funded by FTX customers. A former Google employee and MIT graduate, Gary Wang co-founded FTX with Sam Bankman-Fried.

Ellison plead guilty to seven charges, which could result in up to 110 years of jail time. Gary Wang plead guilty to four charges. However, more charges could follow if investigators find evidence of other crimes.

Caroline Ellison, Gary Wang Also Faces SEC Charges

These criminal charges were paired with civil charges by the US Securities and Exchange Commission (SEC), which accused Ellison, Wang and Sam Bankman-Fried of securities violations related to FTX’s cryptocurrency, FTT.

The SEC also noted that both Ellison and Wang are cooperating with its ongoing investigations.

Washington D.C., Dec. 21, 2022 — The Securities and Exchange Commission today charged Caroline Ellison, the former CEO of Alameda Research, and Zixiao (Gary) Wang, the former Chief Technology Officer of FTX Trading Ltd. (FTX), for their roles in a multiyear scheme to defraud equity investors in FTX, the crypto trading platform co-founded by Samuel Bankman-Fried and Wang. Investigations into other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.

According to the SEC’s complaint, between 2019 and 2022, Ellison, at the direction of Bankman-Fried, furthered the scheme by manipulating the price of FTT, an FTX-issued exchange crypto security token, by purchasing large quantities on the open market to prop up its price. FTT served as collateral for undisclosed loans by FTX of its customers’ assets to Alameda, a crypto hedge fund owned by Wang and Bankman-Fried and run by Ellison. The complaint alleges that, by manipulating the price of FTT, Bankman-Fried and Ellison caused the valuation of Alameda’s FTT holdings to be inflated, which in turn caused the value of collateral on Alameda’s balance sheet to be overstated, and misled investors about FTX’s risk exposure.

In addition, the complaint alleges that, from at least May 2019 until November 2022, Bankman-Fried raised billions of dollars from investors by falsely touting FTX as a safe crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets and by telling investors that Alameda was just another customer with no special privileges; meanwhile, Bankman-Fried and Wang improperly diverted FTX customer assets to Alameda. The complaint alleges that Ellison and Wang knew or should have known that such statements were false and misleading.

The complaint also alleges that Ellison and Wang were active participants in the scheme to deceive FTX’s investors and engaged in conduct that was critical to its success. The complaint alleges that Wang created FTX’s software code that allowed Alameda to divert FTX customer funds, and Ellison used misappropriated FTX customer funds for Alameda’s trading activity. The complaint further alleges that, even as it became clear that Alameda and FTX could not make customers whole, Bankman-Fried, with the knowledge of Ellison and Wang, directed hundreds of millions of dollars more in FTX customer funds to Alameda.

The SEC is calling for a civil penalty, and a ban for Ellison and Wang to ever serve as a company director or officer, as well as “disgorgement of their ill-gotten gains”, and an injunction against future securities violations and limiting them to only buy and sell securities for their own accounts.

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Name : Adrian Wong
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Dr. Adrian Wong has been writing about tech and science since 1997, even publishing a book with Prentice Hall called Breaking Through The BIOS Barrier (ISBN 978-0131455368) while in medical school.

He continues to devote countless hours every day writing about tech, medicine and science, in his pursuit of facts in a post-truth world.

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