Tausi Insider

Sam Bankman-Fried, the chief executive of FTX, during a panel at Crypto Bahamas conference in Nassau, Bahamas, on April 27. ERIKA P. RODRIGUEZ/The New York Times News Service More than one million direct creditors are estimated to suffer from FTX’s demise, but the cumulative pain from yet another crypto collapse is raising the spectre of something much more pernicious: financial contagion. FTX is the third crypto exchange to formally file for bankruptcy protection in the past six months, following Celsius Network and Voyager Digital, and a growing number of crypto firms have either wound up or lost their relevance this year, including Three Arrows Capital, a hedge fund, and Terraform Labs. The cumulative effect conjures nightmares from the 2008-09 global financial crisis. Because FTX is such a central player in the crypto ecosystem, the fear is that containing the fallout will be impossible. Like a forest fire that has jumped a highway, FTX’s collapse has the potential to amplify con...

FTX founder Sam Bankman-Fried left the Bahamas on Dec. 21 on a U.S.-bound flight to face fraud charges as federal prosecutors announced that two of his former associates had pleaded guilty to similar charges and were now cooperating with the government. Reuters Federal prosecutors on Wednesday said they have charged Caroline Ellison, the former CEO of Alameda Research, and Zixiao (Gary) Wang, the former Chief Technology Officer of FTX Trading Ltd. (FTX) with defrauding investors in the crypto trading platform. U.S. Attorney Damian Williams said in a video statement that both Wang and Ellison have pleaded guilty to the charges and have agreed to co-operate with prosecutors. He said that Sam Bankman-Fried, founder of FTX, is now in FBI custody and is on his way to the United States. The U.S. Securities and Exchange Commission (SEC) said in a separate statement that it has also charged Ellison and Gary Wang for their roles in a multiyear scheme to defraud equity investors of FTX. Elliso...

Sam Bankman-Fried, the founder and former CEO of crypto currency exchange FTX, is escorted out of the Magistrate Court building in Nassau, Bahamas, Dec. 21, 2022. DANTE CARRER/Reuters Crypto exchange FTX invented a currency, repeatedly propped up its price, then used the inflated value to orchestrate wide-scale fraud, according to the U.S. Securities and Exchange Commission. In charges laid late Wednesday against Caroline Ellison and Gary Wang, two former top officials in the FTX ecosystem, the SEC painted the clearest picture yet of how exactly FTX co-founder Sam Bankman-Fried orchestrated what the regulator alleges was “a massive, years-long fraud.” The scheme, according to the SEC , involved “diverting billions of dollars of the trading platform’s customer funds for [Mr. Bankman-Fried’s] own personal benefit and to help grow his crypto empire.” FTT, a cryptocurrency that FTX invented, was central to the alleged fraud, according to the SEC. In the crypto world, FTT is known as an e...

Former FTX chief executive Sam Bankman-Fried walks from the Manhattan federal court after securing bail, on Dec. 22. JEENAH MOON/Reuters A judge kept secret that two of Sam Bankman-Fried’s closest associates had turned against him so the cryptocurrency entrepreneur wouldn’t get spooked and fight extradition from the Bahamas, according to court transcripts made public Friday. U.S. prosecutors in New York waited until Bankman-Fried, the founder of the collapsed crypto exchange FTX, was in FBI custody before revealing that his business partners, Carolyn Ellison and Gary Wang, had secretly pleaded guilty to fraud charges and were cooperating in the investigation. U.S. Attorney Damian Williams announced the guilty pleas when Bankman-Fried was in the air late Wednesday. Prosecutors had been concerned that if Bankman-Fried found out his friends were cooperating, he might try to fight extradition from the Bahamas, where he had been arrested at the request of U.S. authorities. Ellison, 28, an...

Former FTX chief executive Sam Bankman-Fried leaves Manhattan federal court, in New York, on Jan. 3. ED JONES/AFP/Getty Images Sam Bankman-Fried said he did not steal money and blamed the collapse of his now-bankrupt FTX exchange on a broad crash in cryptocurrency markets, in a highly unusual blog post on Thursday, a month after his arrest on U.S. fraud charges. Federal prosecutors in Manhattan in December said Mr. Bankman-Fried stole billions of dollars from FTX customers to pay debts for his crypto-focused hedge fund, Alameda Research, purchase lavish real estate and donate to U.S. political campaigns. He has pleaded not guilty. The Substack blog post – a rare public statement by a U.S. criminal defendant – amounts to a preview of the defence case Mr. Bankman-Fried may present when his trial begins on Oct. 2. “I didn’t steal funds, and I certainly didn’t stash billions away,” Mr. Bankman-Fried wrote. Defense lawyers typically advise clients to stay silent before trial because pros...