FTX's Bankman-Fried "Wasn't Even Trying" to Manage Risk

Sam Bankman-Fried ‘Wasn’t Even Trying’ to Manage Risk at FTX, He Says

FTX founder Sam Bankman-Fried said he made no effort to manage risk at the digital-asset exchange that filed for bankruptcy in November, part of a blitz of public statements about major oversight failures at the company.

“I wasn’t even trying, like, I wasn’t spending any time or effort trying to manage risk on FTX,” Mr. Bankman-Fried said in an interview with George Stephanopoulos of ABC News that was broadcast Thursday on “Good Morning America.”

“I don’t know what to say,” he said. “What happened, happened—and, if I had been spending an hour a day thinking about risk management on FTX, I don’t think that would have happened.”

Opinion | Blockchains, What Are They Good For?A year ago Bitcoin and other cryptocurrencies were selling at record prices, with a combined market value of around $3 trillion; glossy ads featuring celebrities — most infamously Matt Damon’s “Fortune Favors the Brave” — filled the airwaves. Politicians, including, alas, the mayor of New York, raced to align themselves with what seemed to be the coming thing. Skeptics like yours truly were told that we just didn’t get it.

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No doubt I’ll hear from many people still insisting that I don’t get it. But it really looks as if there never was an it to get.

FTX Collapse Draws Senate Scrutiny as Lawmakers Push for Crypto Oversight

Lawmakers should pass legislation that would impose strict rules on cryptocurrency exchanges, including rules to limit or prohibit the conflicts of interest that contributed to FTX’s collapse, Commodity Futures Trading Commission Chairman Rostin Behnam said Thursday.

Speaking to members of the Senate Agriculture Committee, Mr. Behnam said he still supported a bill that would give his small agency authority to police trading in bitcoin, ether and other digital assets classified as commodities. FTX and its founder Sam Bankman-Fried also lobbied in support of the legislation before the firm’s collapse last month.

Crypto Industry a Disaster in Need of Rebranding, UK Lawmaker Says

The crypto industry is “a complete disaster” at the moment, said Godfrey John Bewicke-Copley, a member of the House of Lords, at an All-Party Parliamentary Group (APPG) meeting on Wednesday.

In fact, he advised that the industry “ditch” the word “crypto” altogether.

“Please, if we are going forward, let’s not call it crypto anymore. Please, don’t call it criminal money. Just call it digital currency or something. Just ditch the crypto,” he said.

Ex-Theranos President Ramesh “Sunny” Balwani Faces 15 Years in Prison

Ex-Theranos Inc. President Ramesh “Sunny” Balwani should spend 15 years in prison for defrauding investors and patients, prosecutors said. His lawyers countered he should be spared jail entirely.

The recommendations were filed at federal court in San Jose, California, one week before Balwani’s sentencing by US District Judge Edward Davila. Last month, the judge handed ex-Theranos chief executive officer Elizabeth Holmes an 11 year jail term.

SEC Charges Additional Parties in Fraudulent Office Space Investment Scheme

The Securities and Exchange Commission today filed charges against James Robinson and David Kennedy in connection with an investment scheme that defrauded investors out of more than $57 million. The SEC previously charged the principal of the scheme and associated entities with securities fraud.

The SEC alleges that between approximately September 2015 and July 2016, Robinson and Kennedy raised over $7.5 million from over 100 investors in the fraudulent scheme. The complaint further asserts that Robinson and Kennedy recruited a network of sales agents to sell investments in co-working spaces operated by Bar Works, Inc. and Bar Works 7th Avenue, Inc. using false and misleading offering materials. According to the SEC’s complaint, the materials falsely touted the background of Bar Works’ purported CEO, “Jonathan Black,” and omitted any mention of Renwick Haddow, the actual individual controlling the entities. According to the complaint, Robinson and Kennedy knew that “Black” was fictitious, that Haddow secretly ran the Bar Works companies, and that Haddow had previously been charged by the United Kingdom’s securities regulator for an unrelated investment scheme. In return for their roles in the Bar Works scheme, Robinson and Kennedy, through a company they jointly owned called United Property Group, received at least $2 million from Haddow and the Bar Works companies.

JPMorgan Gold Trader’s Spoofing Wasn’t Illegal, Lawyer Says

Former JPMorgan Chase & Co. gold and silver trader Christopher Jordan used a technique known as “spoofing” to gain an edge against high-speed computer algorithms because at the time, there were no rules against it, his lawyer told a federal court jury in Chicago.

“Chris traded according to the rules as he understood them, and he did so openly because he had nothing to hide,” defense attorney Parvin Moyne said during opening statements Thursday. “You have to be careful not to apply today’s standards” to Jordan’s trading from 2008 to 2010, she told jurors. Spoofing — placing orders with no intent to trade — became illegal in 2010.

CFTC Chairman Suggests ‘Pause’ to Overhaul Senate Bill Following FTX Debacle

The collapse of crypto exchange FTX may not have happened if the firm was under the Commodity Futures Trading Commission’s watch, the agency’s head argued Thursday.

CFTC Chairman Rostin Behnam, testifying in the first of several congressional hearings on FTX before the Senate Agriculture Committee, said his agency couldn’t have prevented the collapse because FTX wasn’t an entity regulated by his agency. He asked the lawmakers for broader authority to directly oversee spot cash market exchanges, which aren’t regulated by any federal agency now (tokens that are deemed securities are overseen by the Securities and Exchange Commission).