SBF Arrested! crypto media corruption exposed, and crypto exchange best practices.
SBF couldn't hide in the Bahamas forever. Next stop, extradition to the USA!
It has finally happened. On December 12th 2022 Sam Bankman-Fried was arrested by the Bahamian authorities and is pending extradition to the USA to face trial. The official announcement from the Bahamian government can be seen here.
After the extradition and trial SBF could face up to life in prison with some of the charges including wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering. We will see what happens as the trial in the US begins!!
The arrest is a great relief for many FTX users who lost money, especially since SBF has been seen most recently joining twitter spaces as a free man saying he is unaware on where the $10B of customer funds has gone missing (while also mentioning he was playing League of Legends to pass the time).
This is the end for SBF!
Just a few days ago news dropped that SBF had secretly funded the crypto news media outlet called The Block,. The now ex CEO Mike McCaffrey took loans from Alameda/SBF into his private LLC without telling any of the employees or other co-founders at the block. Three loans of $12M, $15M, and $16M were all given directly to McCaffrey. According to the other executives at The Block, the CEO did not explicitly tell the other employees to make positive pieces around FTX and SBF, but
Frank Chaparro, the Editor in Chief of The Block, explains that the employees didn’t know about this funding until only 1 hour before the news dropped to the public. The CEO has since stepped down, but I doubt those funds have been returned. One of the loans SBF gave Mike he used to buy a property in the Bahamas right next to SBF’s (With FTX customer funds!!) and he’s probably pocketing the other ten’s of millions.
While FTX had jumped through the regulatory hoops inside of the US and allegedly outside, it obviously didn’t stop the massive fraud from happening. Primarily the regulations are put in place for AML Anti-Money Laundering and KYC Know Your Customer rules, which mostly prevent criminals and illicit funds from entering the exchange from the proceeds of crime.
Unfortunately, this has little to do with preventing the criminal acts of the CEO and the executive team inside the company, who can game the exchange to stack the books or hide transactions within their complex exchange infrastructure and avoid the regulations. Rules for thee, not for me.
Cryptocurrency exchanges NEED stronger internal controls, and in the case of FTX, needed an actual Board of Directors and to oversee the company and work closer with the regulators as proper broker dealers.
So I did some digging into the Cryptocurrency exchanges that act as role models in the industry, implementing proper procedures for keeping customers funds and personal information safe, but also ensuring the employees, executives, regulators, and governments are all working together to ensure they comply with all of the rules needed to maintain safe operations and are still poised for company growth and continued success.
My search came up with VirgoCX, a Canadian exchange doing so well they are now branching out to Australia and other surrounding countries. I spoke with Adam Cai, CEO of Virgo on how crypto exchanges should act, what rules exchanges should follow, and any other best practices for exchanges and cryptocurrency trading.
If you’re trading on centralized crypto exchanges still, you need to hear our conversation below:
If you are subscribed to the Crypto Coin Show on YouTube, you will have seen our other interviews this week about cybersecurity from Halborn (they just closed a $90M Series A), and HiFi Finance who just launched Crown Ribbon, for tokenizing prized horses and horse racing, a huge money business.
Other Crypto News this week:
Circle has terminated its agreement with blank check firm Concord Acquisition, thereby cancelling its plans to go public.
The first Dogecoin block was mined 9 years ago.
Ledger partners with Apple iPod creator Tony Fadell to develop its latest #crypto hardware wallet.
Ledger releases the new STAX hardware wallet on Pre-order.
Sam Bankman-Fried hires the same lawyer as Ghislaine Maxwell (sex trafficking) and El Chapo (drug lord). Good luck in your trial.
Nigeria Bans ATM Cash Withdrawals Over $225 A Week to Force Use Of CBDC
Maxine Waters says she will not subpoena SBF to join the court case this month. (This was before he was arrested).
Another puff piece was put out on Caroline Ellison, positioning her as an innocent math whiz. She was also spotted in NY getting coffee earlier this week when rumours said she had fled to Dubai.
US government launches federal investigation into Elon Musk's Neurolink company.
The FOMC and Jerome Powell FED announcements could be moving the market upwards this week according to analysis from Birb Nest trader TradingTank.
Yuga labs attempted to conspire with celebrities to make Bored Ape’s more popular
Stablecoin $USDD loses peg and is now trading at $0.97
Reuters is spreading FUD about Binance being investigated for money laundering, but it seems nothing has been proven with regards to it.
Trezor’s free shipping special is still available until December 15, with guaranteed arrival before Christmas. Always use a hardware wallet!!
Technical Analysis:
$BTC:
Bitcoin showing a little bit of strength recently. The Engineering Robo advisor is printing a Buy signal on the 12H chart. However the 1D chart still shows bearish. So When in doubt, zoom out. I think we could move up to the green line still, or around $18,000, and then reject back downwards or stay in the sideways chop.
$ETH:
Ethereum chart is looking very similar to Bitcoin. As they say, most of the time the market moves together. Engineering Robo is also printing a Buy Signal on 12H, but remains Bearish on the 1D chart. Depending on the FOMC and Jerome Powell’s comments from the FED this week, we could see the markets rise more in the near future.
If you want to try these indicators on your charts, you can get a free trial of the Engineering Robo advisor hooked right up to your TradingView account here:
Free 7 Day Trial for EngineeringRobo.
That’s all we have in Crypto this week! Tune in next week for more.
Well done in keeping us informed and up to date as usual!