Bankman-Fried Released on $250 Million Bond, Must Live With Parents in Palo Alto

Sam Bankman-Fried to Be Released on $250 Million Bond

FTX founder Sam Bankman-Fried will be released on $250 million bond and restricted to confinement in his parents Palo Alto, Calif., home, a federal magistrate judge said Thursday, in the former executive’s first appearance in a New York federal court after he was extradited from the Bahamas.

Mr. Bankman-Fried, charged with engaging in criminal conduct that contributed to the cryptocurrency exchange’s collapse, came to court shackled by the ankles and wearing a charcoal gray suit. He sat quietly at the defense table, flanked by his lawyers.

Mr. Bankman-Fried at a later date will enter a plea on charges that he engaged in fraud and other offenses, the judge said.

Keeping US CPI Inflation Data Secret Involves NDAs and Plain Facial Expressions

The data are so important, staff were once instructed to have no facial expressions when walking the reports into the West Wing of the White House.

And yet, a surge in trading last week in the minutes before the release of the consumer price index — a closely watched US inflation measure — spurred concerns the figures fell into the wrong hands.

FTX Investors’ Loss Is Wall Street Lawyers’ Gain

With founder Sam Bankman-Fried in FBI custody, his senior lieutenants cutting deals with prosecutors, and as many as 1 million creditors still waiting to get their money back, there seem to be few winners from the collapse of the FTX crypto exchange.

However, one group is definitely set to gain – the many law firms and consultants that will have to untangle the mess left by Bankman-Fried.

Even After FTX, S.E.C. Chair Sees No Need for New Crypto LawsThe swift collapse of the cryptocurrency empire FTX is prompting urgent calls in Washington for legislation to rein in the digital asset industry.

But after two top executives tied to FTX pleaded guilty to fraud charges on Wednesday, Gary Gensler, the chair of the Securities and Exchange Commission, is pushing back on calls for new laws, arguing that existing S.E.C. rules and Supreme Court decisions suffice and that crypto issuers and exchanges simply need to come into compliance.

“The roadway is getting shorter,” Mr. Gensler said in an interview on Thursday, warning other crypto issuers and exchanges that are not registered with the agency that they could soon find themselves facing enforcement actions.

SEC’s Crypto Crackdown Is Just Getting Started After FTX Blowup

Gensler chided platforms for not walling off the different parts of their business, such as custody and market-making functions. He also said client funds often aren’t being properly segregated — a problem that’s gained a lot of attention following the failure of FTX.

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On Thursday, Gensler also took issue with so-called proof-of-reserves reports, which some crypto firms publish to prove they have enough funds on hand to back customer deposits. Gensler said the practice, which has been used by major crypto firms including Binance Holdings Ltd., falls short of the disclosures needed to protect investors.

“Proof of reserves is neither a full accounting of the assets and liability of a company, nor does it satisfy segregation of customer funds under the securities laws,” Gensler said.

Caroline Ellison Plea Agreement: $250,000 Bail, Surrender of Travel Documents, Forfeiture of Assets

Former Alameda Research CEO Caroline Ellison will not be allowed to leave the continental United States, and must forfeit any proceeds derived from the commission of the offenses she has been charged with, according to a recently unsealed plea agreement with the U.S. Attorney’s Office of the Southern District of New York.

She will also need to pay restitution of an amount determined by the court.

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The agreement states that if Ellison fully cooperates with the SDNY’s investigation, as well as any other law enforcement agency designated by the office, she won’t be further prosecuted criminally except for possible criminal tax violations with regard to the wire and commodity fraud charges that resulted from commingling funds between FTX and Alameda accounts. The deal does not guarantee that other agencies will not pursue prosecution at a later date.

A court would need to agree to the plea deal for it to be in effect.

Stanford professor pays $29M in fraud case

Prominent Stanford geneticist Stan Cohen has paid $29.2 million in damages after losing a lengthy court battle. Cohen was found to have intentionally misled investors into a biotechnology company he founded in 2016 and also admitted to providing inaccurate testimony to the court.

Cohen, a professor in the School of Medicine, was the first geneticist to transplant genes from one living organism to another. The award-winning scientist claimed to have found a cure for the neurodegenerative and ultimately fatal Huntington’s disease. He also claimed the treatment he’d discovered had already been approved by the FDA for use in unrelated treatments. Chris Alafi, a longtime family friend of Cohen and biotech investor, believed him, and invested $20 million into the company Cohen formed to capitalize on the discovery.

What Cohen failed to tell Alafi, according to a June 25 opinion issued by the Superior Court of California in Santa Clara, was that the drug had been withdrawn by the FDA in 1976 for its “potentially deadly side effects” and placed on the “DO NOT COMPOUND” list after causing the loss of limbs and death.

FTX US auditor Armanino defends work for failed crypto exchange

The auditor of FTX’s bankrupt US exchange business said it stood by its work for Sam Bankman-Fried and was proud of having provided services for a cryptocurrency industry that needed to improve trust and transparency, but it would ditch its digital assets practice by the end of next month.

In the first interview by a leader of the accounting firm Armanino since the collapse of FTX last month, chief operating officer Chris Carlberg said “market conditions” had changed and it would stop providing financial statement audits and so-called proof of reserves reports for the crypto industry.

California-based Armanino gave a clean bill of health to 2020 and 2021 financial statements from FTX US, a branch of the Bankman-Fried crypto empire that offered trading for US residents. FTX US collapsed into bankruptcy along with FTX’s larger international exchange business last month.