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Jan. 2, 2023 - MyronGainesX
01:33:33
Former Fed Explains FTX Collapse! It's WORSE Than You Thought...
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Time Text
And we are live.
What's up, guys?
Welcome to the Fresh Fit.
No, just kidding.
Welcome to Fed 1811, guys.
Today we're going to talk about the Sam Bankman Freed FTX collapse.
Guys, we got a lot to go through, and it's a lot worse than you think.
Holy, let's get into it.
I was a special agent with Homeland's investigations.
Okay, guys.
HSI.
The cases that I did mostly were human smuggling and drug traffic.
No one else has these documents, by the way.
Here's what FedEx covers.
Dr. LaFredo confirmed lacerations due to stepping on glass.
Murder investigation.
You don't know.
And he's positioning.
You're facing two council to litigate a new.
Raceteering and Rico conspiracy.
Young slime life here and after referred to as YSL to the 6ix9ine.
And then this is Billy Seko right here.
Now, when they first started, guys, 6-9 ranch.
I'm a fed, I'm watching his music video.
You know, I'm bothering my hella.
Hey, this shit lit.
But at the same time, I'm pausing.
Oh, wait, who this?
Right?
Well, who's that in the back?
Firearms and violence.
AKA, Blue Shacky violated.
In order to stay away from the victim.
This is a rapper Blue Shacky arrested after shooting at King of Diamonds, Miami strip club, injured one person.
This is the one that that's gonna fuck him up because this gun is not traceable.
Well, it happened at the gun range.
Here's your boy 42 Doug, right here on the left.
Okay.
Sex trafficking and sex priorities.
They can effectively link him to paying an underage girl.
I'm gonna look like 501, right?
And the first bomb went off right here.
Check out a backpack.
Second Explore inspired by Al Qaeda.
Two terrorists brothers, the Zohkar Sarnev and Tamerlan Sarnev.
And the cartel ships drugs into the country.
As this guy got arrested for um espionage, okay.
Trading secrets with the Russians for monetary compensation.
The largest corrupt police bust in New Orleans history.
So he was in this daffour.
We're going to go over his past, the gang time, so that this all makes sense.
We're going to go over his past.
All right, we are back.
What's up, guys?
Welcome to FedEt Man.
Uh today's gonna be a very important episode.
We're gonna take a break from the serial killers and the terrorists and the bank robberies.
We're gonna actually talk about a financial case.
We're gonna talk about fraud, guys.
And this probably for me doing the research and everything, probably one of the biggest fraud cases in recent history, man.
This is really big, and uh your boy SBF is dealing with a lot more than just criminal uh charges.
He's dealing with some other stuff as well, which we're gonna go into detail.
But before I get into it, I got a special guest with me.
I mean, I mean, she's not really that special.
Y'all know her already.
Hi.
So if you guys want us to do any cases, contact Edit 1811 and IG.
That's it.
Bam.
Nice and nice and brief.
And uh just so you guys know, we're waiting on some documents to come back in the young Dolph case.
As you guys know, we had went and got some documents over in Memphis.
We did not forget about that case.
It's just that there's some court proceedings that's happening this month that we want to go ahead and get the documents on.
That way we can give you guys the full picture of what's going on.
But we do got some information that no one else knows, which I don't want to disclose yet for y'all, but all I'm gonna say is that case is a lot bigger than we thought it was.
Okay.
So um, yeah.
Anyway, so today, guys, uh, we're gonna go ahead and cover the FTX collapse.
All right, and without further ado, as you guys know, SBF got arrested a couple of weeks ago.
I'm gonna go through systematically what he's looking at, what the charges are, and how we got here.
All right.
And uh, I got a couple videos to play for y'all, right?
So that I don't make it boring and just talk the whole time.
Uh, this was one of the press releases that came out right after he got arrested uh in mid-December.
FTX founder Sam Bankman Freed is under house arrest in California after being released on 250 million dollars bail.
Prosecutors allege the 30-year-old defrauded investors out of billions in his cryptocurrency exchange.
Lilia Luciano has more.
In a span of 24 hours, Sam Bankman Freed was whisked by federal agents in the Bahamas to New York City, where he faced a judge and walked out of a federal courthouse after posting bail on a 250 million dollar bond, which prosecute Holy, that's a lot of money.
Oh shit, oh shit, which means he had to come up with at least 10%, aka 25 million.
And yeah, guys, I mean it's your mainstream media.
You know they're gonna be on some BS.
I don't really watch the news anyway, but this is just to give y'all a glimpse of what the hell's going on, and we're gonna get into more detail.
Watch out of my call.
That bond will be secured in part by the equity in bankman Freed's parents' California home where he will remain under house arrest.
We continue to work and we're gonna talk about his parents here in a little bit.
I'll give you all a little bit of background and how we got here.
Work around the clock, and we are far from done.
Prosecutors say bankman freed swindled FTX customers out of billions in deposits in order to enrich his hedge fund, Alameda Research and himself.
It was a bit of a classic fraud case, uh, where cryptocurrency on deposit with an exchange was being used as alleged once again to fund uh essentially this hedge fund.
On Wednesday, is bankman freed awaited so yeah, so he was in the Bahamas guys, they went over there with the extra data in him.
So we're gonna talk a little bit more as far as um what went down, you know, how they're able to identify him, how uh they were able to identify the scheme that he had running, which if you look at it, it's somewhat complex, but it isn't something that hasn't been done before.
So I'm gonna go ahead and play for y'all this video from uh Moon, who I thought did a really good job.
Shout out to him.
I'm gonna subscribe and like his video, which you guys also need to go ahead and do to this channel and this channel as well, because when people make great content, you gotta go ahead and give them that love.
His video is linked below.
Um, but this does a really fantastic job of summarizing the entire situation with FTX.
I'm gonna stop it and uh you know, add some context and/or give you guys some sauce on what the hell is really going on if something comes off confusing.
But we're gonna run through this video, and then we got some other stuff that we're gonna cover as well.
And I got all the legal documents um with his indictment, so we can really bring this thing uh to light.
All right, so let's go ahead.
In January 2022, FCX was worth 32 billion dollars.
Its founder and CEO, Sam Bammy Freed, was regarded as one of the most charitable billionaires out there.
The guy you see next to me is the most generous billionaire in the world.
He was seen as a genius, revolutionizing the crypto industry, but not even a year later, there's nothing left, with most of the major figures in the company having now been arrested on charges of major fraud after FTX was found to have lost billions of his customers' money.
So, what happened here?
Well, there's so much out there on this topic.
And so in this video, we're gonna be going over the full story of what really happened here and what the future for Sam is.
You see, Sam came from an incredibly privileged background.
Both of his parents are Stanford Law professors, and they gave him now, guys.
Stanford, just so y'all know, one of the best schools in the United States for all my international people out there, okay.
Stanford University, they consider it the West Coast Ivy League, all right.
Stanford University officially Leland Stanford Junior University is a private research university in Stanford, California.
The campus occupies uh 8,180 acres, huge, among the largest in the United States, and enrolls over 17,000 students.
Stanford is considered amongst the most prestigious universities in the world.
And both of his parents, guys, are professors there, okay?
And not only are they professors, but they're also uh they practice law as well.
Okay, this is gonna come uh in handy very uh later on.
Everything he needed to build a successful career, but instead of going into academia like his family, Sam is much more interested in finance.
He graduated from MIT with a degree in physics in 2014.
But even before that's that's an understatement, guys.
MIT also want to let y'all know, very good school, Massachusetts Institute of Secnology is a private land grant research university in Cambridge, Massachusetts, established in 1861.
MIT has played a key role in the development of modern technology and science and is one of the most prestigious and highly ranked academic institutions in the world.
Now, why do I go ahead and let y'all know this?
The reason why, guys, is because I want you guys to understand that this guy is not stupid.
And you're gonna see when they run the scheme and how they did this.
Uh, that even though he made some really stupid mistakes, but the guy is definitely book smart, very bright, and he wasn't able to make this money by accident.
Okay, he's not one of these like typical crypto guys that just pumped up Doge and made a bunch of money and like, oh yeah, woo!
I just you know uh bought and sold at the right time.
Like, no, this guy actually is very bright.
You can't go to MIT and be a moron, right?
Uh, and I know this because I went to Northeastern.
A lot of the guys that went to uh because MIT was right over the bridge in Boston.
Yeah, remember when I used to do my run route, I'd run over the Massav Bridge.
Uh, and then MIT's right there, and then I go ahead and loop around uh back on onto the red line over the bridge the other way around.
And uh it was like a six-mile loop that I would take.
But yeah, I spent quite a bit of time at MIT, and even though a lot of them are uh strange and awkward sometimes, they're very bright.
Okay, you can't be a moron and go to that school.
Yes, Christina.
No, they're like really like you gotta talk into Mike.
Sorry.
No, they're like really um, because my brother went to Wentworth.
And so like one worth is where the retards go.
Oh, yeah.
We're sorry.
That explains a lot.
MIT is like really like just really like shook on everything.
Yeah, it's not easy to get into that school.
All right, cool.
So now y'all kind of know that the guy isn't a moron, right?
Let's keep going.
Uh, you know, we don't need this tab open no more.
For this, Sam was interning at a trading firm.
Soon after, he would join the James Tree Capital, learning the ropes and getting to grips with the financial world.
James Street specialized in international money exchange and figuring out how to profit from these transfers.
And these skills would become incredibly useful later on.
But after a few years, Sam was just tired of organized finance.
It was boring, it was corporate.
There was no room for progression.
Instead, his attention had now been captured by the exploding world of crypto, a completely new financial world where the frontiers were endless.
The price of Bitcoin went through 10,000 US for the very first time 24 hours ago.
But sorry, that's old news because overnight the price of Bitcoin went through 11,000 for the very first time.
Yep, a thousand bucks at night overnight.
Which is why just three years after starting his career, Sam quit Jane Street and founded his own trading firm, Alameda Research.
Okay, guys, this is very important.
Alameda is gonna be a critical component to this entire investigation.
Alright.
Sam owned 90% of this new company and used it to facilitate million dollar crypto trades.
One of the key ways he found major success was by exploiting differences in value between international markets, where Sam could make millions in profits with one of his first schemes to buy Bitcoin from vendors in the US at lower prices, then sell it onto Japanese exchanges for much more.
To do this, Sam had to jump through lots of hoops to make these trades happen.
Because at first he even needed people with dual Japanese American Jew nationality to queue up in person and send money between countries.
Although Sam's experience in Jane Street.
So as you guys can see, pretty innovative, pretty pretty smart here.
Okay, he's buying it low in the US, and then going ahead and profiting significantly in another market, and namely Japan in this case.
All right.
All right.
And that's where it begins, guys.
That greed always kicks in at some point.
Well, he chose the name Alameda Research to hide the company's true intentions.
A fact that he would be forced to admit in an interview last year.
Especially in 2017, if you named your company like we do cryptocurrency, Bitcoin arbitrage, multinational stuff.
No one's gonna give you a bank account.
That's your company name.
But everyone wants to.
Why is that?
Well, because that's extremely risky.
Guys, banks typically don't like cryptocurrency because it's a volatile market.
Hell, let me tell y'all something about the banks, okay?
If I went to Bank of America tomorrow and it said, yo, guys, listen, I want $10,000 so that I can buy stock in Bank of America.
You know what they'll tell me?
They'll look at me like, nope.
Get the fuck out of here.
We're not giving you no money to buy stock in our own bank.
However, if I went to that bank and said, hey, guys, can I have a hundred thousand dollars to buy a house?
They're gonna be like, sure, we'll go ahead and give you a loan for real estate, but we will not give you a loan for a stock.
So guys, stocks are risky to the banks, let alone cryptocurrency.
So you guys can see here from his mindset, I can't open I can't even open a bank account with that name because a cryptocurrency has that negative connotation of being extremely volatile, which it is, but um, you gotta understand that banks are in a game of making money, not losing money.
So that is why he structured the and it's gonna make sense why he made it called Alameda Research, okay?
Which was the first of his fuck-ups.
Server research institute.
Using this willingness to play Darty and his knowledge of the crypto loopholes, Sam was able to give his new trading firm a head start.
And it wouldn't take long for him to be making millions of dollars every single day.
But instead of publicly indulging in luxury yachts and cars like other crypto millionaires, Sam put his money into a carefully designed PR campaign.
In a series of publicized donations, Sam painted himself as the white knight of crypto, using his immense wealth to help others.
Despite owning a fleet of luxury cars and living in the Bahamas, Sam would drive around and toy to Corolla.
And this outward image and this And you guys are gonna see that this image wasn't necessarily uh true if you know what I'm saying.
Okay, but he's putting himself out there as kind of like the Robin Hood.
Hey, I'm a good guy, I'm a hardcore minimalist.
I don't really, you know, I'm not all about spending money and being a certain way, but he did this strategically to get investors on board, and you guys are gonna see about that here in a second.
It was a facade, my friends.
Company's crazy profits impressed investors, and soon everyone wanted a piece of Alameda.
But Sam was streaming even bigger.
He wanted to make international trades and deals that once supported by the platforms of the time.
So in 2019, Sam founded FTX, a cryptocurrency trading platform that offered features and more complicated products.
His history Okay, so guys, some of you guys that are just joining us, we got 1000 y'all watching right now.
Please like the video, subscribe to the channel.
Then also shout out to Moon, who I linked below.
We're watching his video right now, and he did a fantastic job of summarizing this entire situation.
Guys, so he started with Alameda Research, right?
Has 90% ownership of that.
Then he creates FTX in 2019.
So these are the two big companies you need to understand, guys, for this entire scheme to make sense.
Change Street was vital in setting up the sophisticated modern platform.
It looked just like a conventional exchange platform, which attracted investors that were usually too risk averse to get involved in the chaos of early crypto.
And this approach fooled investors around the world.
And soon they were all pouring money into FTX.
Companies like SoftBank, BlackRock and Secure Capital were among the investors.
But even pension funds were getting involved.
So everyone is hey, they're they're just going to SBF.
Yo, take my money.
Take my money.
You know what I mean?
So this is this is a big W right now for FTX and for Alameda.
A large part of this money went towards the image of the company in an effort to attract new users and new investments.
Adverts in the Super Bowl.
It's FTX.
Pictures on the covers of Fortune and Vogue.
Some even bore the name of an NBA stadium in Miami, with Sam Bangman Fried becoming the second biggest donator to the Democrats.
And with all of this, FTX growth snow.
Hold on.
Whoa!
Biggest donator to the Democrats.
Yes, guys, he donated quite a bit of money.
I think somewhere between 50 to 100 million dollars, he donated to the Biden administration.
So that, my friends, is a big which might explain why he was able to operate the way he did for as long as he did, doing a lot a lot of the mistakes that he did.
More publicity stunts, more cash injections.
The crypto markets were booming, allowing FTX to become one of the largest cryptocurrency trading platforms almost overnight.
And at the top of this pyramid sat Soundbanking freed, skimming the profits of the top of his companies and making billions in the process.
Although there were some people that were starting to get nervous about FTX and what was really going on behind the scenes.
Sam and appeared on countless podcasts professing his altruistic ideology and how he'd give 99% of his wealth away.
Everyone was so enamored by his image that they failed to see past all of the glaring red flags, with one of these being the unusually close relationship between Sam and an employee at Alamander Research.
Caroline Elson had met Sam when they were both This girl is going to be a part of the end, my friends.
Okay.
Caroline Nelson, this is her right here.
Yeah, I know, not the most attractive, but here she is, guys.
She is born in 1994, an American former business executive and quantitative trader.
She is the former CEO of Alameda Research, the trading firm affiliated with the cryptocurrency exchange FTX.
In December 2022, Ellison pleaded guilty to two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy commit securities fraud, and conspiracy to commit money laundering.
Okay, okay.
According to an anonymous source cited by the Wall Street Journal in November 2022, Alameda Research owed 10 billion to FTX.
The source said FTX had led the trading firm money from customer funds at FTX.
Ellison was terminated from her position after FTX and El Alameda filed for bankruptcy.
Holy so um she is going to definitely be a part of your boy SBF's demise coming very shortly, but here she is, okay?
let's keep going worked at jane street capital at some point the two sparked up a romance and went into business together their chaotic on again off again relationship was an unusual ftx and amanda as sources say this was just part of the company's culture but what was even more concerning were caroline's deep tweets professing her love for amphetamine use What the bumbuka?
Nothing like regular amphetamine used to make you appreciate how dumb a lot of normal non-medicated human experiences.
So hold on, you got the president of your your firm, your research company using meth using speed using Molly?
Like what the hell is going on here?
And putting this on Twitter?
Oh man.
Stupid.
Let's keep going.
Adding in things like Sam's habit of playing League of Legends during meetings, and you get a picture of the disorganized and childish company that they were running.
Like, what the fuck is going on over here?
As y'all can see, they're not the most uh well-run company going on here.
It's like, yo, uh playing League of Legends, doing speed and meth.
It's like, bro, what the fuck?
You stupid.
So it shouldn't be any surprise that Ellison was eventually made CEO of Elameda Research in April of 2022.
But there were also Oh, so you're using meth.
Remember, guys, that tweet was from April 2021.
A year later, she gets promoted to president.
Oh man.
That is the beginning of the end.
Signs that something much more dangerous and criminal was playing out.
In a now infamous interview, Sang Pac-Man Free describes his business plan in a way that sounded suspiciously similar to a Ponzi scheme.
Now a Ponzi scheme isn't anything new.
It's one of the All right, guys, they're gonna explain how a Ponzi scheme works.
So pay attention to this because this is going to be the foundation from which these criminal charges are going to stem.
The oldest tricks in the book.
The first step is to make up an investment opportunity that promises wild returns with little risk.
It doesn't have to be real.
It just needs to sound enticing.
Then you create hype around the opportunity, putting in some money to start it off and get the ball rolling.
And then once enough people fall for the scam, use their investments to pay the first investors.
This process keeps going and going with the owners of the scam constantly skimming profits off the top by misusing the investors money.
And Sam gave his business a very similar description.
First, he made up a product.
Sam says that it has no value, but he gives it a $20 million valuation out of thin air to entice investments.
X token has some market cap, right?
It's probably not zero.
But let's say it's, you know, $20 million market cap.
Then he markets the boxes.
So he just said, hey, randomly, it's 20 million dollars.
So you guys gotta remember.
So it's basically like uh a money leapfrog.
It's like, okay, I take money from investors, right?
Into my company or whatever it may be, and then I'm paying back the investors that came first, and I just keep doing that over and over and over again.
Okay, but at some point, you can only maintain this facade for so long, correct?
So this is where things start to get crazy.
An investment opportunity trying to entice people into putting money into the box.
Using his reputation in companies, the value of the box rises and rises based on his interests and this interest alone.
Right, so they go, they they pour another 300 million dollars in the box, and you get a psych, and then it goes to infinity, and then everyone makes money.
So Sam had literally described how he was scamming people in front of the world, and soon people were calling him and him doing those interviews, guys.
I ain't gonna lie, you stupid describing all these things on public, you know, forums with people.
Yeah Not the most intelligent way to run things Coffee Zeta in particular noticed this And made a video about it which now has over 2 million views Yeah, that really definitely hurt him as well, man.
Frontality.
But these dire warnings were jammed out by FTX's hype machine.
Because despite the trouble brewing, Sam's Krota Empire had grown into a massive billion dollar enterprise.
FTX was attracting new users every day and was turning into one of the largest exchanges in crypto.
And public opinion of the company just so you guys know, because I know some of you guys might not be into crypto, whatever.
We talked about this when we had uh Miguel from Dollar Cost Crypto and Charlie from Cultivate Crypto.
Basically, guys, an exchange is a medium that you use to purchase the cryptocurrency.
So, for example, me, I'm on Coinbase, right?
But when you got Binance, you got FTX, and what these guys basically do is they're a portal to allow you to purchase cryptocurrency or you know, whatever type of uh coin you want to get.
All right, so FTX was in there with the top three Coinbase, Binance, and FTX, right?
Well, FTX is fallen now, but that's what it essentially allowed you to do.
In layman's terms, keeping it simple for y'all.
I mean, it's way more complex than that.
But for all my guys out there that you know just want a basic overview of what a cryptocurrency exchange is, that's what it is.
Everyone in the crypto world saw FTX as strong and stable.
This reputation came in handy when the value of the cryptocurrency market started to take a turn for the worst.
The great crash of 2022 saw multiple crypto companies and firms plunge into bankruptcy.
Crypto obviously right now getting crushed.
It's investors getting jolted by volatility rippling through the crypto world.
Tonight, a massive sell-off of cryptocurrency, erasing more than 200 billion dollars from the entire market in a single day.
However, Sam, being the kind, generous, charitable billionaire that he is, stepped in to save the day, promising to bail out crypto failures like Voyager by contributing hundreds of millions to buy out their digital assets.
And well, that sounds noble on paper, but let's see if he's able to actually do it, and we're gonna see that in a second.
This was a genius move in lots of ways, because by taking care of struggling competitors, Sam was making his company seem strong.
Oh yeah, by the way, FTX's arena is literally right down the street from you, guys.
It's in Miami.
It's uh the former airline uh airlines arena, if I'm not mistaken, was what it used to be called where the Miami Heat play.
Stronger than it really was.
On top of this, he helped prevent crypto prices plunging even further, which would have sunk him as well.
Not to mention this all added to Sam's charitable billionaire status.
However, during these hard times, FTX didn't really have enough capital To complete his deals.
Recklessly splashing the cash to become crypto savior wasn't really a good long-term strategy for FTX.
And these risky investments would soon turn sour.
And on top of these sour investments, Sam might be making tons of enemies along the way to his billions.
The most dangerous and important of these, Chiang Peng Zao, the founder of Binance.
Oh man, this is a bitter rivalry that's going to be explained here in a little bit, guys.
So um pay attention to this Binance and FTX beef because um it's gonna be very critical towards the end here.
Now Binance is the largest crypto exchange in the world and was in fact a very early investor in FTX.
But as the business took off, the relationship between the two men very much soured, leaving them as bitter rivals.
And it was this feud that would ultimately become a key part of FTX's collapse.
However, for a while, all was quiet for FTX.
It seemed like they had weathered the crypto crash and were looking towards consolidating their position in the market.
But in November, everything started to come crashing down, and one would come out of the next month, would see Sam and his cronies in jail and billions of dollars vanishing into thinner.
But before we continue, I want to tell you about our video sponsor masterworks.
Hey, fuck you, Masterworks.
We all care what y'all think.
All right, we're gonna we go keep going.
But hey, you you gotta do what you gotta do with the with the sponsors, right?
I get it.
I'm fast forwarding it.
Okay.
So documents end up leaking, right?
That Sam Bankman Fried use of fundraise uh in 2021 and 2022 show why uh venture capitalists may have ignored due uh diligence and scramble to invest nearly two billion dollars.
And this comes out, guys.
What November 15, 2022.
So right around early to mid-November is when things start start to get crazy, all right, as far as um FTX.
So yeah, I'll see could see, right?
The volatility in the in the crypto market leads SBF to say, okay, well, you know what?
I'm gonna make sure that investors get paid back, I'm gonna prop them back up, even though the crypto market is uh volatile right now, people are losing money because you guys know crypto basically crashed uh you know a large portion of 2022.
In contrast to last year, when I remember Bitcoin, right, was $60,000.
You know, I'm in crypto myself, and you know, my Ethereum, my Bitcoin, it was high up, and then this year it went down, and I was like, ah, god damn it.
So um SPF was like, all right, let me pay some back some of these investors.
Let's you know keep the money flowing so that it doesn't crash all the way.
And you know, noble move, but he didn't necessarily have the funds to do it, and you guys are gonna see that here in a second.
Relationship between Alameda Research and FTX.
Everyone knew the company's works in tandem, but nobody suspected how interlinked the two really were.
Yeah, see, remember we talked about Alameda before I told you guys to memorize that.
So people don't really know what the hell's going on behind the scenes, but this is about to come to light right now as far as how tight they really were.
And my friends, that is not legal, okay.
And it turned out that lots of Alameda's assets were held in FTT, a crypto token created for and used on FTX.
Now, this was incredibly dubious, as whilst FTT was worth around $25 at the time, it had still been created by FTX and its value was completely tied to FTX's worth as a company.
And what so wait, they have made their own token that they held money in?
What?
Whilst this technically counted as an asset for the company, it was impossible to turn into real money in a very short time.
If Alameda tried to liquidate their assets, the sheer amount of FTT released would lead to a plunge in demand and price, making the billions worthless.
FTX and Alameda were meant to be separate companies, so people didn't have enough time to figure out how illegal this truly was.
However, the floodgates had now been opened, and soon it was gonna be all over for Bangman Free's crypto empire.
As in the few days after this news came out, FTT dropped by over 10%.
And Sam's longtime rival, Chiang Peng Zao, saw his moment to strike, announcing on Twitter that he would be selling off billions.
Oh, here we go.
As part of Binance's exit from FTX equity last year, Binance received roughly 2.1 billion USD equivalent in cash, right?
Due to recent uh revelations that have come to light, that came to light, we have decided to liquidate any remaining FTT on our books one for guys.
That right there, holy oh shit!
Oh shit, that's going to further destroy the value of FTX, right?
So you got your enemy, your op basically literally has you buy the balls.
Ellison, having only been CEO for a few months, panics and offered to buy now.
Here's a girl, right?
That we talked about before, goes, CZ Binance.
If you're looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22.
Okay.
So the the Miss uh Methaphetamine, Miss Miss Speed over here, is saying, Yo, we'll buy it.
Don't worry about it.
Uh, this is what happens uh when you put uh women that like to use speed as the leaders of your company, guys.
That is a big I mean anybody for that matter that likes to use that you know bullshit drugs.
Buy it off of him to keep FTT stable, but it was too late.
FTT's price plummeted upon the announcement, dropping 80%.
And so just in a few short days, Sam, FTX, and Alameda had lost billions.
Their make-believe empire had gone up in smoke, and so immediately everyone rushed to withdraw whatever assets they had on the platform.
But the thing is, FTX didn't have this money available, and so they would freeze withdrawals.
And this is what's known as a liquidity crunch.
FTX needed to find a way to pay, so their investors needed their money back, but they couldn't get it.
Because everyone tried to get their money out at the same exact time, thanks to Binance making that announcement.
These people their money and fast.
Chiang Peng even sneakily offered to buy out the company after selling off all of his FTT coin.
But he knew what he was doing.
Sam was his longtime rival.
He hated Sam.
This was his way of destroying the empire that tried to destroy Binance.
And it only so he literally sold it, destroyed the value of the tokenslash coin or whatever the hell it is, and then when the value of it went down, he said, you know what?
Maybe I'll just buy my competitor out.
Maybe I'll just buy my competitor out.
Oh shit, the boys are here.
FBI open up, everything is crashing.
So Chiang Pain and Binance pulled out of the deal, and FTT's value fell even further.
And over the next So he sees that the FBI, SEC, and we're gonna talk about that investigation, guys, because it's not just a criminal case, by the way.
So he sees that the government is now involved and they want to go after this guy, so he pulls out the deal, that takes them down even further.
So think about this.
They lost 80% of their value, right?
Then um the CEO of Binance is like, you know what?
Maybe we'll buy y'all.
Then he finds out that the government is involved, and he's like, uh, yeah, no, thanks.
Nope.
And it drops it down even further, guys.
So we're talking about going up in fucking flames right now.
Few weeks, things just quite even worse and worse with Bangor and freed when the scale and depth of his crimes came to light.
And one of the largest cases of fraud ever recorded was, Sang Bang Moon Freed and his accomplices had created possibly the largest Ponzi scheme of all time.
And here's why.
You see, first FTX would print new FTT token.
Okay, guys, so this is uh how the scheme works.
So please pay attention to this because what's gonna happen is we're gonna go over the actual charges, okay?
So you gotta understand this concept for the charges to make sense.
Because he not only does he have a criminal case against him, he also has civil cases against him as well.
Man, three different agencies are going after this guy, and I'm gonna explain that in detail very soon.
But before we get into the how this scheme worked, guys, do me a quick favor and like the goddamn video.
We got 15 uh 1600 of y'all watching right now.
Like the video, subscribe to the channel, okay.
Check me out on FedE 1811 on Anchor, Anchor.fm slash FedE 1811.
I do my podcast on there as well, so you guys can listen to it on audio.
And uh, damn it, what else?
Oh, and then Fed 1811 on Instagram.
If you guys got a case that you guys want us to go ahead and cover, um, and a lot of people ask for it.
We always take a poll.
Um, we'll cover it next.
Um, and Christina runs that, so she'll go ahead and you know, she's been keeping track of what you guys have been requesting.
So do me a favor, please like the video, guys, subscribe to the channel, and let's get it up to 1,000 likes, right?
So that this video can get pushed in the algo, and uh, yeah, more people can figure out what the hell's really going on here because I see so many videos on this FTX stuff, and no one really clearly and concisely points out what's going on here.
And don't worry, after this is done, I'm gonna make sure I put extremely detailed timestamps in here for y'all.
So this will be our one-stop shop to figure out what the hell is actually going on from a former Fred that did financial investigations.
Anyway, without further ado, let's get into how the FTX scheme worked.
Like the video guys, please.
So, in a move that would bring down his empire, FTX would take money from his own customers' pockets, and to be precise, around 10 billion dollars was reportedly stolen from the public.
Oh Lee!
Oh shit, oh shit, and move straight into Alameda's control.
Something that's completely against the law and FTX's policies.
It was at this moment that Sam's rivalry with Chiang Peng Zhao came to a head.
And in an incredibly stupid move, Bangman Freed had let Chiang Peng own billions in FTT tokens as a result of their messy falling out.
This essentially meant that their top competitor had a button that he could press at any time and cause a liquidity crunch at FTX.
Chiang Peng had full control over FTX.
And oh man, you know what Shane Bit is this.
You know what he's thinking.
He just went for the kill shot.
Yeah, Sang Bangwin Freed was testifying against him.
He was doing everything he could to sabotage Binance.
And so when Chiang Peng found the perfect time, he pressed the button and FTX exploded.
Oh shit.
FATALITY.
In the wake of the crash, FTT fell to under a dollar, and both Alameda and FTX filed for bankruptcy.
They're a dollar.
And protect them from the feds who cracked down hard on Bankman Free's cartel.
And as they prepared the arrest warrants, it somehow got even worse for FTX.
In what appears to have been an inside job, hundreds of millions in crypto assets vanished from FTX's wallets.
By now, FTX were $9 billion in the hole, with less than $1 billion that they could actually But it only got worse.
Sam just couldn't stop making stupid mistakes.
As leave messages between him and the news reporters laid out all of it.
Oh, this even more shit coming to the light, man.
That is not good.
You stupid.
So the ethics stuff, mostly up front, people will like you if you win and hate you if you lose.
That's how it all really works.
Yeah, I mean, that's not all of it.
He admitted that his charitable persona was fake.
So the ethics up mostly up front, and he says, Yeah.
Yo, what the hell is going on, bro?
Woo.
So remember how I told you guys that he ran that, you know, that minimalist, you know, I care about you know everybody else, and I'm gonna donate and all this other stuff.
I'm gonna give to the pool democratic political party so they can go ahead and give y'all more stimmy checks and all this other crap.
It was all capped to create a certain image, man.
You know, it I mean, marketing, it is what it is.
It's it's marketing.
So, yeah.
Oh my god.
And that he virtually signaled all this woke nonsense or to help I was trying to figure out like if it was kind of the PR off the cuff answer.
Man, all the dumb shit I said, it's not true.
Not really.
Yeah, I thought it might not be.
God damn.
Everyone goes around pretending that perception reflects reality.
It doesn't.
Oh man.
And then it says here some of this decade's greatest heroes will never be known, and some of its most beloved people are basically shams.
Man, his perception in the media.
He would then leap on to a world ramble on the horrors of regulation and how there's no no one really out there making sure good things happen and bad things don't.
Usually there's only one toggle, do more or do less.
Yeah, just PR.
Fuck regulators.
They make everything worse.
They don't protect customers at all.
Oh, like you do, my friend.
Take it there, buddy.
A month ago, CZ, the owner of Pi uh Binance was walking example of uh don't do ethical shit or your money is worthless.
Now he's a hero.
Is it because he's virtuous or because he had the bigger balance sheet?
And so he won't.
And then by early December, Sam was in cuffs along with his co-conspirators, Caroline Ellison and Gary Wang, who had both Okay, guys, this is very important.
Memorize those two songs uh two songs.
Those two people, right?
We got Caroline, right?
Ellison, this chick that we talked about before, aka Miss Speed, and then we got Gary Wang, who is the co-owner of FTX.
Gary Wang is an American executive before co-founding cryptocurrency exchange.
FTX, he worked at Google.
Prior to FTX's collapse, he was ranked the 227th richest American in the Forbes 400 and the 431st richest person in the world today by the world's billionaires.
And he grew up in New Jersey, attended USA Canada math camp, where he met his future classmate and co-founder Sam Bankman Freed.
After high school, he attended the Massachusetts Institute of Technology, MIT, which we talked about before, guys, is where they went to school together, right?
And uh where he studied mathematics and computer science, MIT.
He was a member of uh Epsilon Theta, a co-ed fraternity.
All right, so those are his two co-defendants slash business partners.
Caroline owned Alameda on paper, of course, right?
She owned Alameda on paper when he really was running it because he had access to the balance sheet and everything else like that, which is illegal, by the way.
And his boy Gary Wang was the co-owner of FTX, and they also got indicted in the situation.
I'm gonna show you guys Something um in the indictment in the court paperwork that is pretty damning to SBF, which I don't think anybody else is covered.
I'm gonna explain that here in a second.
But let's go back to the video so you guys understand what the hell is really going on here.
Oh, and then also, guys, do me a favor and like the goddamn video.
I hate to ask y'all for likes, but you guys never like the goddamn video, man.
We're up to uh 1700 of y'all watching right now.
So like the video.
All right, let's get to at least a thousand likes.
But when police came, they both immediately pleaded guilty to try and save their own skins.
Uh they pleaded guilty.
Then boys came in and they immediately every eye open up.
Mind you, guys, they haven't even been in jail that long.
And they just immediately like, all right, we'll cooperate and plead guilty.
They all turned their backs on Sam.
Everyone was out for themselves, leaving Sam high and drier as the charges piled up against him.
Fraud, money laundering.
In total, Sam now faces over 100 years in jail.
Whilst Ellison scam major charges through a plea deal.
And despite claiming to only have 100k in his bank accounts, Bangman Freed still managed to pay his 250 million dollar.
So he claimed he had 100,000, but again, he got he got a 250 million dollar bail, right?
But he was able to get out because he put a 10%.
So he had to put up at least 25 million, and you guys are gonna see here in a second how he came up with that money.
He defrauded people out of literal billions, and now he gets to sit comfortably home with his lawyer family while his trial drags on for what could be years.
The reason he was able to come up with that money, guys, is his family put up the money in uh they put up quite a bit of equity in their home, they put up some cash, and it was a bunch of different other um assets that his family had.
He comes from a well well uh well off family.
Um, so that's how he was able to get out, even though he only had a hundred thousand dollars in his bank account, which is probably more than likely cap.
He just doesn't want to declare how much money he really has.
He probably has it on some kind of account that no one has access to because he knows that it will be taken away by the government.
I'm Ben Frieden as Cartel aren't the only people to blame.
Despite the warning signs, celebrities like Kevin O'Leary, Tom Brady and Stephen Curry were all willing to take fat paychecks without asking any questions.
The media was also all too willing to buy into the hype as well.
We shouldn't be a surprise considering Sang Bangwin Freed was one of the second largest donators to the Democrats.
Donated second largest amount to Joe Biden's campaign.
If I'm not mistaken, guys, he donated somewhere around fifty to a hundred million dollars.
If you guys uh know uh in the chat, correct me if I'm wrong, if it's more, I know it's at least that much.
It might even be more than a hundred million, but he donated quite a bit to that party.
And you guys know Sleepy Joe has a bunch of uh strange connections between the FTX founder, Ukraine, his son.
Yeah, there's some questions there, man.
So uh L Biden, or uh or I would say in this case, Leiden.
Biden's presidential campaign, which is why politicians were very happy to turn a blind eye as well.
And who knows how much the NC this will buy him in the future.
In a world that lets his empty scam balloon to such a size, is doubtful that we'll ever see any real justice for the billions that he stole.
All right, so guys, shout out to uh once again the person that made that video, his name is Moon Man.
Uh, this was an excellent summary of what went down because as I was studying the case, I was like, Man, this is kind of dry.
Uh, because financial cases aren't that sexy, guys.
I'll just keep it a thousand with y'all.
People don't really give a shit.
So I was like, let me find a way to try to make it more engaging and more interesting so that you guys can understand the scheme.
But basically, you guys can see it.
He's taking money uh from investors, he's using FTX and Alameda and Tandem together, claiming that he doesn't own Alameda, but in reality he does.
He put some crazy uh speed uh some amphetamine head, okay, Caroline to be the quote unquote president of it.
But the reality is he's really controlling Alameda, which is completely illegal.
Now, now that we know how the scheme kind of worked, we know who SBF is, we know who his co-uh conspirators are, Gary Wang and Caroline Ellison.
Let's actually look at the legality of what the hell he's facing.
And uh for that, I got a video for y'all that is also fairly entertaining.
Shout out to uh this guy, Legal Eagle.
I like his content, he makes some pretty good stuff.
Um, and this one, uh, we're only gonna use a portion of the video, guys.
But he summarizes really well what the hell is going on here, and I'm gonna give you guys a little bit more uh insight.
But we're gonna go over not only the criminal case that he's looking at, but we're also gonna go over the civil cases looking at too.
All right.
Now, before we get into all the alleged crimes, and there are a lot of alleged crimes.
Let's do a quick factual rundown because now we have the benefit of three detailed proceedings, uh, two civil complaints and one criminal DOJ indictment.
Now, the S So civil guys, as you guys know, isn't necessarily a criminal, but typically there's gonna be money involved, and he's being sued.
And then he has one criminal case as well.
And the reason why this is a problem is all of these cases are being filed against him at the same time.
And you guys are going to see here, uh, as far as like testifying, the Fifth Amendment, etc., this can be extremely murky waters for SBF.
Okay, you guys are probably wondering who the hell are these two agencies?
All right.
The two agencies that have civil complaints against them guys are these dudes.
The U.S. Securities and Exchange Commission, okay, aka the SEC, uh, is basically an independent agency of the United States federal government, created in the aftermath of the Wall Street crash of 1929.
The primary purpose of the SEC is to enforce the law against market manipulation.
In addition to the SEC uh act of 1934, which it created it, the SEC enforces the Securities Act of 1933, the Trust and Adventure Act of 1939, the Investment Company Act of 1940, the Investment Advisors Act of 1940, the Sarbaines Oxley Act of 2002, and other statutes.
The SEC was created by Section 4 of the Securities Exchange Act of 1934, now codified as 15 USC 78D and commonly referred to as the Exchange Act or the 1934 Act.
All right, you guys are probably wondering.
Byron, please say that in English.
All right.
The SEC is there to make sure that investors don't defraud the government and defraud investors.
They're there to protect you and me, allegedly, of course, from people like SBF, Jordan Belfort, etc.
Guys that scam you.
All right.
That's what they're there for.
To regulate the U.S. market.
All right, which LOL.
But that's what they're there for.
And he's also being sued by these guys.
The Commodity Futures Trading Commission.
All right.
The C FTC.
All right.
The CFTC is an independent agency of the U.S. government created in 1974 that regulates the U.S. derivatives markets, which includes futures swaps and certain kinds of options.
The Commodity Exchange, uh CEA, 7USC 1, which is U.S. law, prohibits fraudulent conduct and the trading of future swaps and other derivatives.
The state admission of the CFTC is to promote the integrity, resilience, and vibrancy of the U.S. derivatives market through sound regulation.
After the financial crisis of 2000 and 2000 2007 and 2008, it says 2010 with the Dodd F uh Dodd Frankwall Street Reform and Consumer Protection Act.
The CFTC has been transitioning to bring more transparency and sound regulation to the multi-trillion dollar swaps market.
So guys, this is not good for your boy SBF because he has two different regulatory agencies suing him.
Okay.
And he also has a criminal case against him from these dudes.
The United States Department of Justice.
Okay.
I mean, it's pretty self-explanatory, but I'll read it for y'all real quick as well.
And namely the FBI.
Okay.
So the Department of Justice guys conducts um has the U.S. Attorney's Office of the prosecutors, and they also have uh certain law enforcement agencies.
Okay.
So you got DOJ, that's the main umbrella.
Underneath the Department of Justice, you got the United States Attorney's Office who prosecute all federal cases in the United States.
Then you got different law enforcement agencies.
You got the Federal Bureau of Investigation, FBI, you got the ATF, Bureau of Alcohol, Tobacco, and Firearms and Explosives, then you got DEA, Drug Enforcement Administration, you got the U.S. Marshal Service, okay.
Um, and then you got other law enforcement agencies as well.
You got Homeland Security Investigations, HSI, who I used to work for, and they're under the Department of Homeland Security.
But regardless, every federal law enforcement agency goes to the United States Attorney's Office to pursue federal charges against criminals.
In this case, right, DOJ has both the FBI and the U.S. Attorney's Office.
Who investigates fraud like this typically?
It is the FBI that does the criminal side, and then you got the SEC that does the civil side.
So a lot of the time, the FBI and the SEC work together in tandem to go after crooks that commit crimes like what SBF is doing, guys on Wall Street, guys like Jordan Belfort, guys like Bernie Madoff, et cetera.
All right.
So he's also looking at criminal charges from the DOJ.
Okay.
And the Department of Justice is a federal executive department of the United States government at task with the enforcement of federal law and administrative justice in the United States is the equivalent to the justice or or interior ministries of other countries.
The department is headed by the U.S. Attorney General who reports directly to the President of the United States and is a member of the president's cabinet.
The current attorney general is Merrick Garland, who was sworn in on March 11, 2021.
And just so y'all know, the attorney general of the United States is the chief law enforcement officer in the United States.
Okay, he oversees all criminal prosecution in all of the different districts of the U.S. All right.
So does that uh give me ones in the chat, guys, if that all makes sense to you as far as like the three different Agencies that are going after SBF.
Give me ones in the chat if it makes sense.
One if it makes sense, two if you're still confused as hell.
Let's let's see which I want to make sure that y'all understand this so this all makes sense.
Let's see what the chat says.
All right.
I see a lot of ones.
I see a lot of ones.
All right.
Awesome, awesome, awesome, awesome, awesome.
Perfect, perfect.
Perfect.
Okay.
Let's uh let's keep going.
And I know it's complex, guys.
So I really want y'all to understand this stuff because I, you know, financial crimes, I ain't gonna lie to you, they can get kind of dry.
I've done financial cases myself in the past, and I'll keep it a thousand with y'all.
They're boring as fuck.
I don't like them.
Uh you know, anytime I had a financial case when I was an agent myself, I would always get the IRS involved, or I had another agent do the financial side, I would never do the financial side myself, bro.
That shit is boring as hell.
Okay.
But uh it's it's a necessary component.
Anytime you're gonna do a criminal investigation, you you know, we have a saying, you follow the money and you'll find the crooks.
All right.
So it's it's a necessary component of cases, just that it's very dry, very boring, very bland, which is why I'm trying to make sure that uh I explain things very precisely, show y'all some videos, keep you guys engaged because financial cases can be boring as fuck coming from a guy that used to do them.
All right, let's go back to the video here.
Um, as far as what the hell he's facing.
So we know now that he's being uh charged by three different federal agencies, one criminal, two civil.
And guys, like the video, man.
Because y'all are not gonna get a breakdown like this anywhere else on the internet with this tight level of expertise.
Well, context to what is alleged to have gone on here.
As you probably know, Bankman Freed was the founder of Alameda Research, which he represented as a separate entity from the FTX entities, especially after Caroline Ellison and Sam Trubuco became co-CEOs of Alameda in 2021.
However, the SEC and CFTC say the bankman free did not hand off Alameda research at all, and that he remained the ultimate decision maker at Alameda.
The NC and that's a big problem.
Okay.
So he claimed that he wasn't the president of Alameda, but he really did.
He just put a dummy in there, aka Caroline, to run it.
But the reality is he was telling her what to do, which is completely illegal.
Boom.
And this is a part of the uh civil suit.
Okay, bankman free directed investments and operational decisions frequently communicated with Alameda employees and had full access to Alameda's records and databases.
All right.
Physicians frequently communicated with Alameda employees and had full access to Alameda's records and databases.
And the CFTC says that Bankman Freed operated all of these entities as a common enterprise, which is no surprise given the allegations that we've seen in the news where basically they were commingling all of these funds.
So, in other words, FTX, Alameda, and many of their related businesses were all run by Bankman Freed and Alameda without any corporate controls or separation that bankman freed promised.
And that is a big violation, guys, against the SEC and the CFTC, because you're not supposed to do that.
You're not supposed to have control of all these different companies and move money around them because I I mean, you could you could see how problematic that can be taking investor money and putting them into different um into different businesses and how that would cause issue because the investor is getting fucked because he doesn't know what's going on with his money.
He's supposed to have some level of transparency with where their money is going.
And uh, this definitely broke quite a bit of rules.
Guys, uh, like rules on Wall Street that guys typically would go to jail for a significant amount of time for doing, but obviously, since this is a crypto world, it took a little bit more time for the government to figure it out, but they were able to eventually figure it out.
TC said that all this was baked into the cake.
Quote FTX trading executives also created other exceptions to FCX's standard processes that allowed Alameda to have an unfair advantage when transacting on the platform, including quicker execution times and an exemption from the platform's distinctive auto liquidation risk management process.
Now, all of this started coming out in November.
You can check out my earlier video on how this came to be.
Uh, in uh in December, just before Bankman Freed was going to testify in Congress, he was arrested in the Bahamas where he lives.
The U.S. attorney's office for the Southern District of New York presented evidence to a grand jury, the grand and also I want to let you guys know when it comes to the Bahamas, because I've done cases of I've arrested many Bahamians myself, okay, when I was an agent uh here in Miami.
And uh, we have a very good relationship with the Bahamian government man.
We work with them very well.
Anytime someone is arrested over there and we need them extradited, it's it's a very simple process to get them back over here in the United States because a lot of crime uh occurs in the Bahamas.
A lot of the drugs that are smuggled into the United States come in through the Bahamas.
Uh, as you guys know, back in the day when Pablo Escobar was running all the drugs into the United States, he had bought he had owned uh some land, if I'm not mistaken, out there in the Bahamas, where they're able to land the drugs and then uh trans and then go ahead as kind of like a staging set uh uh area to go ahead and then move fly them into the United States after the fact.
So there's been a long standing uh agreement and working Relationship between the United States and the Bahamas because the Bahamas is a huge transition point for many criminal organizations to smuggle things into the United States, namely, namely typically through South Florida, somewhere between Miami, all the way to West Palm Beach.
And uh that's just how it goes.
So we've always had a good relationship with the Royal Bahamian Police Force.
Uh, I've worked with them in the past.
So I'm not surprised that as soon as they had the arrest warrant for SPF, they got him over here so quickly.
Jury indicted him.
And then the U.S. Attorney's Office made provisional requests for his arrest with the Bahamas.
The U.S. has an extradition treaty with the Bahamas, and that extradition treaty will take a while, but eventually he will be transferred.
He got here in a couple weeks, as y'all know.
I mean, he filmed uh, you know, legal eagle filmed this video uh before he had been brought to the United States, but they got him over here extremely quickly.
He's already here in the States, he's been here probably for like two weeks now at this point.
And the reason why is because of our fantastic working relationship with the Bahamian government.
Um, and I know this from experience because I brought people from the Bahamas into the United States, and it's fairly easy to do compared to other foreign countries whenever you have a fugitive and/or some criminal over there.
And you guys got to also keep keep in mind that SBF is an American citizen.
Anytime you're an American citizen and you're committing crimes somewhere else, it's gonna be a lot easier for the United States to extradite you over.
Now, things get tricky when you are not necessarily a citizen of the United States and they're trying to extradite you in, and or you might be a citizen of the country from which they're trying to extradite you from.
That's when things get a little bit murky, because then they're basically giving up their own citizen to the United States to be prosecuted, which can be deemed as you know unfavorable.
But in this case, he's an American citizen, he committed fraud, he's doing a bunch of bullshit over there in the Bahamas.
So the Bahamas gonna be like, oh, take him on.
We don't care.
And next thing you know, boom muka.
He's going to jail.
All right.
So uh to the custody of the American authorities.
That means that Bankman Fried faces a three-headed monster because the SEC and the CFTC cases will have broad discovery procedures, which will force Bankman Fried to Well, I'm gonna rewind this for y'all real quick because this is actually really important.
So, as I explained to you guys before, he's not only going that not only is the Department of Justice and the FBI going after him, but you got the SEC coming after him and the CFTC coming after him.
Okay.
Now keep in mind, these two agencies right here, guys, is civil, means not criminal.
All right, and then this one is criminal.
Now, when you go through a civil case, guys, they when they for them to prove you guilty or culpable, all right, or liable, I guess in this case, all they had to do is prove 51% of 51 to 49% that you are culpable.
So the threshold of proof is far lower versus on the criminal side, you have to be proven guilty beyond a reasonable doubt.
So if let's say the Department of Justice can't do nothing to him, right?
And and they don't have enough evidence to actually criminally prosecute him, it doesn't matter because these two right here can go ahead and still go after his money and find him civilly liable, and they only got approved 51% versus 49%.
So he's facing two different monsters here.
And the thing that's scary is that the information he provides here in the civil case might jam him up over here in the criminal case.
All right.
And we're gonna talk about here real quick as far as the uh Fifth Amendment goes and everything else like that, um, and why he's in a very tricky position.
All right.
So play guys, pay attention to this part right here.
And I'm gonna I'm gonna let it play out fully, and I'm gonna explain to you guys the severity of this.
All right.
This is a three-headed monster because the SEC and the CFTC cases will have broad discovery procedures, which will force Bankman Fried to turn over documents.
He'll have to give a deposition testimony, which could incriminate him in the criminal case.
And his lawyers will probably ask the court to stay the civil cases while he defends the criminal case.
The judge has the discretion to decide whether to grant that motion, though don't be surprised if Bankman Fried ends up taking the fifth on a lot of this stuff.
So in the civil proceedings, uh taking the fifth can be used against you and adverse inferences can be drawn by your assertion of the Fifth Amendment.
So the SC Boom, okay.
Uh I don't want to say I told you so.
But uh, did you know the Fifth Amendment to the US Constitution guarantees that a person cannot be compelled by the government to provide incriminating information about himself, okay?
Yes, this is true, but that the that does not save you, right, from potentially being charged with in uh contempt of court, obstruction of justice, etc.
Especially if you don't have if if you don't for if it's not reasonably foreseeable that you could be prosecuted.
Now, this is why Hassan, quite frankly, is very stupid and doesn't know what he's talking about because you said anybody could take the fifth.
Yeah, that's true.
Anyone could take the fifth.
But if you don't actually have some reasonable expectation that you're gonna provide statements that's gonna go ahead and get you incriminated and get you in jail, the Fifth Amendment doesn't apply to you, and you can be held in contempt of court, you could be charged for obstruction of justice, etc.
That does not mean that you are not free from consequence from asserting the fifth, especially when it doesn't apply to you.
Now, let's go back to SPF, besides Hassan being an idiot.
The reason why this is a problem, guys, is because while he's trying to defend himself in the civil case, they're gonna do something called depositions.
And a deposition, guys, is when you come in, they sit you down, and they swear you in.
Hey, do you do you swear everything you say is about to be the truth and nothing but the truth, blah, blah, blah?
Yes.
So he takes an oath and he sits down.
Now he's under oath.
When you're under oath, you cannot lie.
All right.
So they're going to ask him questions, right?
About FTX, Alameda, his partners, etc.
In the civil case.
Okay.
Now, here's the problem.
When he testifies in the civil case, he's going to have to watch what he says because what he says can absolutely be used against him in the criminal case.
So more than likely, what's going to have to happen is he's in there under oath in the deposition for the civil case.
They're going to ask him questions.
He's going to be like, well, if I answer that question, that's going to incriminate me in the federal case.
So I'm just going to take the fifth, which he can actually do.
He could take the fifth amendment in that situation because he's not compelled to incriminate himself because he is a target of an active criminal investigation as well.
Here's the problem with that.
The civil case doesn't have to prove him guilty beyond a reasonable doubt.
They just need preponderance of the evidence, which is a way lower threshold.
51% over 49%, like I told you guys before.
So by him taking the fifth and saying, I don't want to talk, they're gonna be like, oh, you don't want to talk?
Cool.
Stupid.
We're just gonna find you civilly liable, and we're gonna take the money that we're trying to get from you in the first place.
All right.
But let's say he does talk and he proves, okay, I'm not liable for this.
It was Caroline, it was it was Gary, etc.
Well, that's going to incriminate him in the criminal case.
So do you guys see here how he is royally fucked?
He's in a very, very bad spot.
And then on top of that, like legal described, the discovery procedures, okay, between in the civil case are far broader than the criminal case.
What the hell does he mean by that in English?
Guys, the discovery process is nothing more than the two different legal entities sharing information with each other.
So the government requests discovery.
Hey, we need all the documents, right?
Or or well, in this case, the civil the civil side, they're gonna say, yo, we need all of SBF's documents, his financial documents, so that we can see what the hell we got going on here.
And then also the government in turn also has to give SBF everything that they have as well on him.
So the civil case can get more documents from him that are that he's compelled to give.
The criminal case has to go through is subpoenas, uh, grand jury subpoena, regular admin subpoenas, grand jury subpoenas, and search warrants, okay.
But that does not necessarily mean that the criminal case, aka the FBI, can't get information from the SEC and the CFTC that they gained during the course of their civil case that they can use in their criminal case against bankman freed, because they have way broader terms under which the civil case can gather those documents.
You see what I'm saying here?
So basically, the FBI could just let the SEC and the CFTC gather the documents that they need from Sam Bankman Freed because their burning report proof is far less, and then use that against Sam Bankman Freed in the fucking criminal case.
Give me a one in the chat if that makes sense as to why SBF is in such deep trouble.
Give me ones in the chat.
I hope I explained that well.
Well, I get a simple water here.
I've been talking a lot.
And we got almost 2,000 of y'all watching right now.
Please like the video, guys.
Awesome, awesome, awesome.
I love that you guys uh understand it.
Boom.
Yeah.
So the government basically is with a one-to-punch, where if we can't get you criminally, we're definitely gonna get you civilly.
And they can use the civil stuff in the criminal case, and SPF is in a bad spot because if he answers stuff in the civil case to kind of limit his uh his culpability, so to speak, that can absolutely and more than likely will be used against him in the criminal case.
And if he takes the Fifth Amendment, he's gonna get found liable in the civil case because they can use the fact that you take the Fifth Amendment against you in a civil case.
One more time, I need y'all to understand this.
When you take the Fifth Amendment in a civil case, they can absolutely use it against you to make you see to approve their standard of uh preponderance of the evidence.
You don't get the same protections in a civil case that you do in a criminal case.
An example of this, OJ Simpson, as y'all know, he walked.
If the glove doesn't fit, you must acquit.
Criminally, he walked and he didn't get charged with murder, even though we all know that he was involved in decapitating his ex-wife and Ron Goldman.
However, the civil case came in and they're like, nope, we know that you're Guilty, and they were able to actually find him culpable for uh the crime, the murder, in the civil case, and now he owes something like 30 million or something like that to them because the threshold of proof was far less in the civil case, and that is why he got found um he got found uh I don't want to say guilty, but he was found culpable in the civil case, whereas in the criminal case where the threshold was made way higher, they couldn't find him guilty.
All right, beyond a reasonable doubt.
So there you guys go.
That is the explanation.
Dom Domonco as to why your boy SBF is in so much goddamn trouble because he has two different entities going after him and they can attack him from two different angles, and he can't necessarily protect himself from one without hurting himself in the other.
All right.
Like the goddamn video.
Y'all ain't getting sauce like this anywhere else.
Let's keep going.
Adverse inferences can be drawn by your assertion of the Fifth Amendment.
Though the SEC has more power than the criminal court to immediately freeze actions by the entities that are under the Alameda FTX banner.
And the plea agreements from Sam Bankman Freed's compatriots paint a damning picture.
Okay, so Carolina Ellison and your boy Gary Um Wang, I think it was Wang.
They both pled guilty and are cooperating with the government, guys.
All right.
So if we didn't think that it was bad already between the fact that a criminal agency, the criminal investigative agency, the FBI, and then two civil investigating agencies, the SEC and the CFTC, working together wasn't bad enough.
He also has two people that work closely with him testifying against him.
l for real alameda research ceo caroline ellison and ftx co-founder gary wing have now pleaded guilty to federal fraud charges and are cooperating with the justice department's investigation i want to make two announcements first i'm announcing that the southern district of new york has filed charges against caroline ellison the former ceo of alameda research and gary wong a co-founder of ftx And I just want to let y'all know real fast.
I've described this before I'm gonna describe it again, though, because a lot of you guys are new to Fed it.
The Southern District of New York, guys, is probably one of the most aggressive, best, and most winning prosecutorial offices for the US for the United States attorney's office in the United States.
They're responsible for indicting and charging the La Cosa Nostra.
They're responsible and for indicting the most popular terrorists.
They have prosecuted some of the United States' worst criminals in federal court and almost always win.
So if you get indicted by the SDNY, aka the Southern District of New York, it is going to more than likely be an L for you.
That is one of the best U.S. attorney's offices in the fucking country.
They're extremely aggressive.
So this is just bad all around for SBF, man.
In connection with their roles and the frauds that contributed to FTX's collapse.
Both Miss Ellison and Mr. Wong have pled guilty to those charges.
The Justice Department made the announcement on December 22nd, the same day that Bankman Freed waived extradition to the U.S. Uh Bankman Freed is now out of jail and back in his mom's basement as a result.
Uh the federal court set bail at 250 million dollars, and bankman freed was bonded out.
Now a bail bond is usually about 10% of the total bail amount, so he probably had to come up with around 25 million dollars in assets.
Uh the court record shows that his parents will need to post equity interest in their home by January 12th, 2023.
And this comes just weeks after Bankman Fried told George Dephanopoulos that he only had about a hundred thousand thousand dollars left in his bank account.
Then the bail disposition said the two non-parent surities would also sign bonds for lesser amounts.
The terms of the release require bankman freed to surrender his passport, and he'll be confined to detention at his parents' home in Palo Oh man, that's it, bitch.
Waldo, California, where he will have to wear an ankle monitor.
Bankman Freed's parents co-signed the bond, and bankman freed is barred from starting a business or operating new lines of credit more than one thousand dollars.
Oh, yeah, well, of course.
I mean, that's a fucking given.
They're not gonna let him do nothing.
That has to do with money.
Plus approved by the government or the court.
The court records show that he'll need to undergo a mental health evaluation and may request to leave the house for exercise.
Now, Caroline Ellison's unsigned plea agreement says that she admitted to seven counts, including committing wire fraud on FTX customers and lenders of Alameda Research, conspiracy to commit commodities fraud and securities fraud, and conspiracy to commit money laundering.
Now the maximum sentence of incarceration on those counts is 110 years, but she's not going to face anything like that, especially because she Oh, yeah, she ain't gonna face none of that time, guys.
She cooperated with the government immediately.
So she's not gonna face any of that time.
Her and Gary Wang, more than likely, in my professional opinion from doing these types of cases in the past, financial cases, whoever comes to the table first, a lot of the times, gets the best deal.
And the fact that both of them came to the table first and said, Yo, we'll get you guys SPF, they're gonna not, they're gonna barely do any time.
Hell, they might do less than five years, uh, more than likely, especially if they're willing to testify against SBF, assuming he goes to trial.
But I predict that he's gonna plead guilty.
He actually has a another court hearing, I think, on January 3rd or 4th, uh, where he's gonna enter in his plea.
I think that's his arraignment.
Okay, and some of you guys might be wondering what the fuck is an arraignment.
Okay, when you're arrested, guys, break this down.
When you're arrested by uh the police, I'm gonna talk about this in the federal system.
The state system has this as well, but to keep things simple, I'm gonna keep it federal.
When you're arrested by the feds, the first thing that has to happen is you got to go see a magistrate judge within 24 to 72 uh 72 hours of you be you being arrested.
Most of the time it's within 24 hours, right?
Once you are brought in front of that judge, the judge reads you what you're being charged with, whether it's by an indictment or a criminal complaint.
They read your charges, and at that point he tells you uh you have the rights of an attorney, blah, blah, blah.
He gives you a Miranda rights and he assigns you an attorney if you cannot afford one.
Then you get remanded to the um to either the marshals or they give you a bond.
All right.
If they give you a bond, then you go ahead and you can, you know, get ready and post that bond.
Then, somewhere between a week to two weeks later, you get arraigned.
And when you get arraigned, right?
It's just like an initial appearance.
They read the charges against you again.
If you had maybe a superseding indictment hit you or something else, he gives you the updated charges if the government added any and lets you and once again tells you, hey, you know, you have the rights and returning, all that other stuff.
The difference is this you enter a plea.
At this point, you more than likely have an attorney, and your attorney will go ahead and either to enter in a plea of guilty or not guilty.
95% of the time, your defense attorney's gonna say not guilty, even if you pretty much damn near are guilty because it gives them time to prepare.
Because at this point, the defense attorney's probably only been your defense attorney for a period of time.
He's still getting discovery, which is the process of sharing information between the two different legal entities, and he's trying to build your defense.
So he's gonna say not guilty up front, typically, so that he can go ahead and look at all the legal documents and posture for you to get a better plea agreement in this situation.
Now, the issue with SBF is he's a top guy on the total poll as far as the government is concerned.
His two counterparts have already went to the government and secured deals.
So that leaves him with very little to actually get in return for pleaing.
So what I foresee is gonna happen is the government is going to try to nail him to the fucking cross because they other they got the other two charged.
Now, I want to say this.
Okay, and this is I'm gonna give y'all some sauce right now.
This is how you can tell cooperating.
This is how you can tell if someone is snitching.
I'm gonna go ahead and share a screen with you guys real fast.
We're gonna actually go through the legal um paperwork on these guys.
All right.
So this right here, guys, is Pacer.
Okay.
Now, as y'all can see, right?
These are these are the different cases that are being filed against your boy Samuel Bankman Freed, right?
He has he's a defendant in four different cases, all right?
Large that for y'all.
And Pacer guys is uh pay uh the basically public access court records electronic.
Whatever.
Moving a million uh miles per hour right now.
Public access to court uh electronic records, pacer, okay, pacer.gov.
All right.
So here you guys can see you got USA versus bankman free, then you got Samuel Bankman free.
This is the same exact case, guys.
The only difference here is that this dash one is because he's the first defendant in the case.
But the which because he's the file title, he's the main target.
And then you got USA versus bank bankman free.
This is the entire case.
Notice how there's no dashes here, okay?
Then you look and you got one, two, two C V. This C V guys means civil.
So you got the SEC case against him, and now you got the CFTC case against him, okay?
Commodity Futures Trading Commission at all versus bankman freed at all.
Then you got the Security Exchange Commission versus Bankman Freed, and then CR, guys, means criminal, okay?
So now, whenever you see a federal case, it's gonna go the fiscal year and then C R or C V. If you see CR, that means he is being criminally charged by the feds, and then this is the actual case number, and then LAK.
And then same thing here, CV means civil, right?
So those are the cases that are against him at this moment.
Now, we're gonna go ahead and look at the actual criminal case docket.
Okay, this is what he's getting charged with.
He's known as defendant one, right?
And he's being charged with attempted conspiracy to commit wire fraud, uh, fraud by wire, radio, or television on customers, attempted conspiracy to commit wire fraud on lenders, fraud by wire, radio, or television, okay?
Uh conspiracy to commit commodities fraud, conspiracy to commit securities fraud, money laundering, fraud, other conspiracy, and then conspiracy to fraud the United States and violate the campaign uh finance.
Now, you guys can see here's his co-defendants.
You got Gary Wang, right?
And he has pretty much similar charges him to conspiracy commit uh to commit wire fraud, etc.
Very similar to your boy SBF, and then you got Caroline Ellison also being charged with similar charges as well.
Now, here's where we see the big difference, though, okay.
I'm gonna you can see here that a sealed indictment was filed on December 9th, 2022, okay.
But notice this is the indictment right here, guys.
United States of America versus Samuel Bankman Freed.
But hmm, hold on one second.
You only see him on the indictment.
Why aren't his co-defendants on this indictment?
Where the hell is Gary Wang and Caroline?
Well, I'll tell y'all where they are.
They are right here, my friends.
They got charged by something called an information, okay?
Right here.
You can see here information felony filed as a Zhao Gary Wang, and then information felony filed as a Caroline Ellison.
All right.
Now you guys are probably wondering what the fuck is the information?
What's the difference?
Guys, for me to sum it up for you guys without it being too legal and boring.
And information is the federal prosecutor, aka the AUSA filing a document that formally charges the defendants.
However, when you get hit with the information, that is one of the telltale signs that you are snitching and cooperating with the fucking government.
One more time for y'all.
Any time you see a defendant get hit with an information, there is an extremely high likelihood that they are cooperating with the government.
Okay.
There's two, there's three main ways to arrest someone in the federal system.
They're number one is a criminal complaint, which I've read for you guys before.
A criminal complaint is an affidavit written by a federal agent and or a task force officer that has federal authority alleging the crimes and giving you the facts and circumstances that led some to develop the probable cause to arrest the individual.
That's number one.
Number two is an indictment, which is the formal way under which you are charged in the United States.
Okay.
You must be indicted to get uh a criminal case against you.
Yes, someone could file a criminal complaint to arrest you, but they have to follow up with an indictment somewhere between 10 to 14 days after the criminal complaint is filed.
So in other words, a criminal complaint is kind of like uh a placeholder to get the person in prison so that you can go ahead and get an indictment in time.
For example, when I was an agent, you'd catch someone smuggling 20 kilos of cocaine coming into the border.
Well, it doesn't make sense for me when I have him in custody right there to wait two weeks to indict him.
No, I'm gonna write a criminal complaint.
Hey, you got caught with the drugs, blah, blah, blah.
Put him in jail.
I'm gonna file that criminal complaint.
The judge will sign it.
I will go ahead and get an arrest warrant to take him, right, to the prison, and then I have 10 to 14 days to get him formally charged by a grand jury.
All right.
So he has to get indicted.
The other route is an information.
And information is you being formally charged.
It has the same value like it has the same power as an indictment, where it gets you into the judicial system officially.
However, it's typically reserved for people that are cooperating with the government, which is why the USA can file it directly.
The AUSA, the assistant United States attorney, the prosecutor, can file it directly with the courts so that the person can be charged formally, but it's typically used for people that are cooperating, all right, or people that aren't the main target of the investigation.
All right, so let's go ahead and pull up what an information looks like.
We'll look at the one for your girl Caroline.
All right.
So I'm clicking on it right now.
We're gonna view the document.
All right, so here this is what uh this is what a information looks like, okay?
Uh United States uh district court, Sun District in New York, United States of uh America versus Caroline Ellison, right?
Here's count one, conspiracy to commit wire fraud on customers, right?
Where they allege the things uh they allege the dates and crimes that were committed, wire fraud on customers, count two, right?
Count three, conspiracy to commit wire fraud on lenders, and then you go into count four, wire fraud on lenders, count five, conspiracy to commit commodities fraud, right?
And uh count six, conspiracy to commit wire securities fraud, and then you keep on going here.
And this guy is filed directly with the U.S. attorney's office, all right?
Right?
The Damian Williams is the United States attorney, the guy that was in the press conference earlier.
So the US AUSA gets it signed by the U.S. attorney's office, the United States attorney, the guy that runs the Southern District in New York.
Now, that is much different than an indictment, which is this is an indictment against Sam Bankman Freed.
As you guys can see here, say very similar, right?
It has all the counts in it, but here's the big difference.
As y'all can see, right?
This indictment was filed with a grand jury.
Here's the four-person, a true bill of indictment against, and here's the four persons in uh signature.
All right.
So, in one instance, with the information, the US Attorney's Office files it on their own.
They don't need anyone else.
And the indictment, they convene a grand jury, which is basically a group of your peers, they hear the case.
The AUSA and the agent goes in, they present their case, and then the agent has asked to leave the grand jury room because I've testified in grand jury a million times, so I tell y'all how the process works.
And then the grand jury deliberates if they should return a true bill of indictment, which means we're gonna charge them.
So, not most of the time they return a true bill, bam, you get an arrest warrant, you go pick up your guy.
All right.
So the difference is this one is filed by the U.S. Attorney's Office, the other one is uh done by a grand jury with a true bill of indictment, all right.
So I hope you guys don't go that's a very thorough explanation on the differences between information and indictment.
Give me ones in the chat if that makes sense for you guys.
I told y'all that this case was a little bit gonna be a little bit more complex than the others.
Uh, but I want to make sure that y'all understand how the federal judicial system works when it comes to charging people.
All right.
But that is a telltale sign on how you know someone is snitching.
If they get hit with the information, they're definitely given information, if you know what I'm saying, all right.
If they get hit with an information, they are more than likely given information.
All right.
There you go.
Just memorize that quote.
Uh let's see here.
Let's go back to the video with your boy uh legal eagle.
Let's see if we get ones in the chat that makes sense for y'all.
All right.
So I see ones in the chat mostly.
Also, guys, do me a favor.
We got two thousand of y'all watching right now.
Hope you guys are enjoying this breakdown, giving y'all some entertainment in the process as well.
You know, simplifying how the judicial system works federally when it comes to f uh financial cases like this and fraud.
So, like the video, give me the two Kikes on this video.
Get the engagement up if you guys can.
I really appreciate it.
Let's keep going.
And don't worry, guys, I'm gonna read super chats at the end.
I just don't want to disrupt the flow of the show.
You could be charged with other crimes.
Ellison also agreed to the forfeiture charge, and the government says that it cannot agree not to prosecute her for tax fraud if those charges are appropriate.
By pleading guilty, Ellison is not guaranteed a lighter sentence, but typically defendants who cooperate completely do get a lighter sentence.
And the plea agreements also require her to make restitution.
Ellison was released on bail, but cannot leave the country.
Wang pleaded guilty to four counts of wire fraud and conspiracy to commit wire fraud, commodities fraud, and securities fraud.
The maximum sentence for those crimes is about 50 years in prison.
Wayne also agreed to restitution to his victims and agreed to the forfeiture.
Now, the same cooperation terms apply to Wang.
And it's very important that he did this under the information, not an indictment, guys.
But he was also released on bail with a condition that he not leave the country.
Both plea agreements included sections that are redacted so as not to tip off bankman freed.
Oh, that's a big red flag.
Hold on one second.
So that means that they gave a significant amount of information.
If they're over here redacting what they're saying, it was damning information that they provided.
Now the targets about specific information that Ellison and Wicked.
And just so y'all know, Sam Bankman Fried's legal team is going to get access to everything that Caroline and Gary said about him.
It's just that they're redacting it so that when you go and look at a pacer, you don't know the intricacies of the case.
They're mostly doing that for the general public, so they don't know versus Sam Bankman Fried's legal defense knowing because they have to know everything under the discovery process.
Anytime you're arrested and charged with a crime in the United States, uh, the defense is one thousand percent entitled and must receive all information pertaining to their client so they can adequately defend said client against the charges against him.
Wang shared with investigators.
And in separate actions, the SEC charged Wang and Ellison with securities fraud, and the CFTC also filed fraud charges against Ellison and Wang.
The CFTC's amended complaint against Bankman Freed adds charges against Ellison and Wang for fraud and material representations in connection with the sale of digital asset commodities in interstate commerce and the C so translation that means that Caroline and Gary are also facing civil lawsuits from the SEC and the CFTC as well.
TC hit Wang for creating the code features in the FTX trading platform That allowed Alameda to have an unlimited credit line on FTX without being detected.
And the CFTC complaint offers more details.
And just to keep in mind, uh SBF, uh Caroline and Gary Wang hid that from investors, that they had an unlimited credit line to purchase whatever the hell they wanted.
They hid that from investors, which was also a big no-no as well.
...about what happened in November when crypto declined and FTX could not keep up with customer withdrawals.
Publicly, Bankman Freed claimed that there was just a liquidity problem while privately, quote...
Bankman Freed, Ellison, and other key personnel at FTX and Alameda acknowledged internally that this shortfall was not merely a matter of having sufficient liquid assets on hand to cover customer withdrawals in the short term.
Rather, FTX customer assets were irrevocably lost because Alameda had misappropriated them.
Holy FTX customer assets were irrecu irrevocably lost because Alameda had misappropriated them.
Guys, I can't even pronounce the goddamn word.
I'm so goddamn uh excited.
This is wild that this is all coming out now.
Wild.
The C FTC says that Bankman Fried's infamous tweet threads of November 6th and 7th, the ones where he apologized for being a screw up and accused Binance of trying to sabotage FTX, were workshopped ahead of time with Ellison, Wang, and other advisors.
The CFTC says, quote, several individuals expressed concerns that Bankman Freed's tweet was inaccurate and or misleading.
And on November 9th, after Binance announced that it would acquire FTX in its entirety, Ellison held an all-Irrevocably, guys.
My bad.
I'm just so this case is just crazy to me, man.
Like you guys gotta understand.
From my training experience before, watching this happen to SBF, I'm just like, yo, this guy is done.
Because not only does he have the tentacles of the US Department of Justice coming after him, he also has the civil side coming after him, and there's no way that he can beat both.
He's gonna have to lose emphatically to one to be able to beat another.
And to be honest with y'all, he ain't even gonna beat the criminal case.
So if he can't beat the criminal case, he's 1000% gonna lose to the civil case because the civil case doesn't need as much proof as the criminal case needs.
So this is an L for your boy all the way.
I don't think I have used that fail, but I had more in any other investigation that I've done on FedItU.
You know what?
Maybe maybe the XX Senacion case I I use the that L button quite a bit because the criminals were so stupid to wear the same flip-flops that they committed the murder in as they did on Instagram posts.
But this one is pretty bad too.
Oh my God.
Hands meeting with employees of Alameda Research.
During the meeting, she provided detailed information about the year's long fraud.
Quote, Ellison stated that starting last year, Alameda was borrowing a bunch of money by open.
This is uh this is um Ellison snitching, okay?
so snitcher by the way when term loans and use those assets to make very illiquid investments ellison further explained that following the widespread decline of digital asset prices most of alameda's loans had been recalled and in order to meet those recalls alameda borrowed a bunch of funds from ftx which in turn led to ftx having a shortfall in user funds ellison informed alameda staff at ftx had always allowed alameda to borrow customer assets and did not require collateral for those loans all She also explained that Alameda did not require collateral.
What the hell?
As the structure allowed Alameda to go negative in coins in response to an employee question, Ellison also acknowledged that her November 6th tweet to the Binance CEO offering to buy his FTT holdings at $22 per token.
And you guys remember that we talked about that in the video prior.
She told the guy um from Binance, yo, I'll buy it for 22.
Uh, when he was holding a bunch of it because she holding a bunch of their FTT coins because she knew that he had them buy the balls, it can literally sell and destroy them.
Was kind of a misleading thing to tweet and expressed remorse.
Kind of a misleading thing to tweet.
What?
Stupid.
Shortly after this meeting, most of Alameda's staff resigned.
So basically, Caroline Ellison sort of admitted to, you know, like borrowing a bunch of money from FTX, being allowed to have like a negative balance, and that FTX and Alameda just kept moving stuff around until the bottom dropped out of the market, and then you know, what do you know?
There's nothing left to borrow, and the customers couldn't withdraw their money.
Classes.
One day later, FTX and 133 related entities filed for bankruptcy.
I declare bankruptcy.
It was all, you know, very cool, very progressive, very edgy until you know it wasn't.
Uh Ellison and Wang do not contest their liability to these CFTC's claims, and their testimony makes it very hard for Bankman Fried to claim that he didn't know what he was doing.
And that is why he is fucked, because those two worked very closely with him, know the details, have the records to corroborate their testimony.
So this is why SBF is in hot water, guys.
Aweshuc.
He was just a big old mistake.
Wang and Ellison also agreed to the entry of consent orders of judgment as to their liability for engaging in massive fraud.
The SEC complaint against Wang and Ellison gives us more clues about how they were cooperating against Bankman Freed.
Uh with respect to the fiat at FTX.com account, the SEC has said that some of the bank accounts, quote, were not in Alameda's name, but rather the name of North Dimension Inc.
in Alameda's subsidiary.
North Dimension's website does not disclose any connection to Alameda, but apparently Ellison knew that Bankman Freed had directed FTX to have customers send funds to North Dimension in an effort to hide the fact that the funds were being sent to an account controlled by Alameda.
So there you go.
More shell companies coming to light that were moving money around to disguise the connection between Alameda, which we discussed before, which is really owned by Bankman Freed, and FTX.
Okay.
This is all, by the way, guys, extremely illegal.
Okay.
FBI opened up.
And that's why they're in the hot water that they're in right now with the FBI, Department of Justice, SEC, and the CFTC.
Alameda didn't segregate those customer funds, and the North Dimension account is actually the multi-billion dollar debt referred to as the fiat at FTX.com account.
The fiat at FTX account uh was then listed as a loan on the quarterly balance sheets.
And Ellison allegedly at Bankman Freed's direction combined this liability with loans Alameda had received from third-party lenders to obscure big fucking L as well, man.
Combining money from lenders Alameda's intertwined financial relationship with FTX.
Now, this information, if true, is fairly damning evidence of the defendant's intent to mislead and conceal information from investors, lenders, and customers.com account from the portion attributable to FTX.
And when Alameda's portion was moved to a different account, it triggered a process that added interest to Alameda's debt.
Quote, Bankman Freed directed that the Alameda liability be moved to an account that would not be charged with interest.
This account was associated with an individual that had no apparent connection to Alameda.
As a result, this change had the effect of further concealing Alameda's liability in FTX's internal systems.
And when crypto started crashing, in May, causing Alameda's lenders to come calling, Bankman Fried told Ellison to hide the unlimited line of credit on the balance sheet so that the lenders didn't know about it.
And that's a big fucking L that the government is going to use against Sam Bankman-Fried.
And also keep it in mind, he told her to hide the balance sheet, right?
So that they didn't know that there was an unlimited credit line.
So what's she gonna do?
Oh, yeah, by the way, government, he told me to hide it.
Here's the proof.
Here's the text messages, here's the here's the um the bet the balance sheet, here's a credit line, etc.
This is why, guys, a lot of the times when you have co-conspirators, uh conspirators, a co-conspirator's testimony is never enough.
But if that co-conspirator also has documents, evidence, uh financial documents, proof that what they're saying is true that corroborates their testimony.
That my friends is when it's a big L for you as a defendant, because you best believe Ellison and Wang are coming with all the paperwork to show that SBF was the one that was directing them, running the businesses, running the operation to defraud investors, and he is in deep water, man.
This is not good whatsoever, because not only they're snitching, they have the documents to back up said snitching.
All right.
Ellison admitted to making statements that she knew were untrue.
For example, in a Bloomberg article from September 2022, Beckman-Fried claimed that Alameda is a wholly separate entity than FTX.
And in the same article, Ellison is quoted as stating about Alameda, quote, where at arm's length, we don't get any different treatment from other market makers.
That was a lie.
Stupid nope.
Stop the cap.
And as for the technical issues, Wang designed the so-called risk engine that Bankman Fried touted to investors.
The SEC complaint notes that Bankman Freed touted this risk protocol when he testified to Congress.
Quote, there's a complete transparency about the positions that are held.
There's a robust, consistent risk framework applied.
Of course, one of the biggest problems is the risk engine didn't apply to FTX's biggest customer, Alameda Research.
Wang knew this because he was the person who created the code exempting Alameda research from the rules, and then Ellis BAM.
So you got the guy who created the coding software for your company, which was defrauding investors coming in, and he's going to testify and provide the information and the proof that you were defrauding investors because he's the one that created the code that allowed you to do soon was aware of and took advantage of this special undisclosed benefit.
Of course, this is just scratching the surface.
There's additional juicy details about Alameda propping up the price of FTT, FTX using bots to manipulate the entire market, and then the employees and founders issuing giant loans to each other at the company's expense.
Now the SEC complaint alleges the bankman freed violated two.
All right, so we uh so and I I talked to you.
So now we know what the criminal case is.
He's gonna go into detail about the SEC and the CFTC of complaints, but you guys already pretty much know.
I summarize that for y'all as far as uh what's going on with those.
So what we'll do is uh Christina, can we pull up some of these chats right now?
Yeah, we'll go through some of the chats.
I appreciate you guys' support.
Um, guys, do me a quick favor.
If you guys enjoyed this video, subscribe to the channel, like the video.
Okay, give me the 2,000 likes.
Uh, because like I said before, this was a fairly boring and dry case.
So I had to spice it up again, make sure that I explain everything to you guys because there's a lot of moving parts, a lot of legal jargon and financial jargon here that a lot of people might not necessarily understand.
So I wanted to make sure that I simplified the best I can so it all makes sense.
And don't worry, I'm gonna make sure that I put detailed timestamps for y'all in the description below, so you guys can go ahead and follow and know what the hell is really going on in this case.
Kim chilling five bucks goes.
Let's go.
Uh, who else we got here?
Um digital dankness goes five bucks to ties.
He has shows all the trail to the corruption.
Absolutely, man.
And it doesn't help that his two um that his two counterparts in the investigation are snitching against him.
Uh that helped him with you know, quite frankly, they have intimate knowledge of the scheme.
And anytime you got a conspirator that has intimate knowledge of the scheme, you're and they're testifying against you, it's gonna be a bad day for you.
Mr. Shandon goes, Happy New Year, Team Fed it.
Let's go.
Thank you so much, Mr. Shandon.
Appreciate that greatly.
Band goes, Caroline looks like a substitute ghost on Halloween.
Oh, yo.
Yeah, she's uh she's a little weird looking.
I ain't gonna lie.
What else do we got here?
All right, I got some of these other chats here.
I'll pull them up.
Okay, uh, okay.
Samantha Laurie goes, Oh, okay, umbasa five forty nine four five bucks basically from Great Britain goes.
Fun fact, just like FTX, if all customers at any bank try to withdraw their money at the same time, they wouldn't actually be able to pay up.
That's absolutely true because uh I think it's called Franksley French fractional reserve banking, which means the bank guys only has a small amount of the money that it's supposed to have actually in cash in hand.
Uh this is somewhere between I think the that they're mandated to hold somewhere between I think five to ten percent of all the money that they're supposed to have.
So let's say, for example, the bank is supposed to have a million dollars allegedly, they might only have somewhere between around a hundred thousand dollars in the actual bank.
So if everyone in there at the same time said, yo, give me the money, they'd they they'd fucking not be able to give it to you because the banks don't necessarily actually have the money, it's just on paper that they have the money.
But the reality is they're lending that money out to investors, right?
So they can go ahead and buy assets.
They give money to people like me that go buy real estate property, and then they charge me an interest rate to have that loan.
Uh I'm at H goes two bucks.
Damn, they're tag D teaming that boy.
Yes, they are, bro.
Yes, they are.
That's why this is so dangerous for him.
Uh, Popskaya goes, OJ got out because of his uh of this used because of I think he means they use his deposition from a civil lawsuit against him, but they made a deal saying one was used against him and criminal uh they did he out.
I don't really understand what you're trying to say there, but I think you're trying to say that they used information from the criminal case against him in the civil case because the civil case came after the fact.
Um, this guy's free at Andrew Tate is locked up.
Yeah, bro.
I'm bro, real talk.
This guy took billions of dollars, 10 billion to be exact, and you know, and they're over here trying to say that Andrew is human trafficking chicks.
Fucking cap.
Happy New Year.
Odds Biden pardons SBF.
Uh I don't think Biden would pardon SPF, and the reason why I don't think he would pardon him is because it will look too bad for him politically to do that, even though he was because you think about it, he received all this money from him.
If he pardons him, it's gonna look like a grand conspiracy.
I mean, not that it isn't bad already that he's received a bunch of money, but a lot of people already think that Biden is up to some some BS along with his son and all the other uh nefarious uh financial and um background stuff that they got going on.
Uh he don't love you five.
Byron, what was your final thoughts on 9-11?
Uh go ahead and watch it on the uh on the conspiracy show, man.
I got a whole part on 9-11.
Uh Lamaire, 10 bucks.
Sam Trabuco, former Alameda CEO, is still on the run, though he has not been charged.
Yeah, he knows the indictment is coming under uh coming uh for him soon.
So he got the hell out of here.
Uh who else?
That's it.
Okay, here's some other ones I think that we might have missed.
Have been uh let me see here.
I'm going through the chats.
I want to make sure that I didn't miss any of y'all.
That's always from the beginning.
Uh all right, yeah.
I think I think we got him.
All right.
Cool.
Um guys, so that is basically the um SPF debacle for y'all.
Um, so you guys know exactly what's going down.
Um, an overview of the entire case.
What do I think is gonna happen?
Well, guys, personally, my prediction on this is SBF is gonna go to jail for a very long time.
He's gonna have to definitely pay some restitution, and uh there's no way that he could beat this.
I'll be honest with y'all, because the issue here is that they're hitting him with two different um two different weapons.
They're hitting him with a civil case and they're hitting him with a criminal case, and there is it's basically gonna be impossible for him to be both uh at the same time.
If he loses in one, more than likely he's gonna lose in the other.
And my my thing is they have more than enough to charge him criminally.
And by the fact, and the reason the fact that they have enough to charge him criminally inevitably means that they already have way more than enough to destroy him civilly because a civil uh burden of proof, guys.
Remember, is only 51% versus the criminal one is beyond a reasonable doubt.
And they've already reached that, so they're gonna be able to do this easy mode for the civil case.
Uh fun fact Citadel is a marketer, is also a hedge fund.
Okay, fair enough.
Um just came in.
Okay, anything else coming?
Nope, that's it.
Alright, cool.
Hey guys, hope you guys enjoyed that breakdown, man.
Uh, I try to make it entertaining for y'all and simplify it.
Uh, but I'll be back tomorrow for money Monday for you with you guys, and we're also gonna have an after hours.
So make sure to like the video, guys, subscribe to the channel if you haven't already.
Shout out to Legal Eagle and shout out to Moon uh for making great videos summarizing this stuff.
I'll brought some of their content.
I'll put their links uh below for their videos.
And uh, yeah, love you guys.
We'll catch you back here for Fresh and Fit tomorrow at 7 p.m. Eastern Standard Time.
Peace.
I was a special agent with Homeland's investigation, okay, guys.
HSI.
The cases that I did mostly were human smuggling and drug traffic.
No one else has these documents, by the way.
Here's what Fed it covers.
Dr. Lafredo confirmed lacerations due to stepping on glass.
Murder investigation.
And he's positioning.
Racketeering and Rico conspiracy.
Young slime life here and after referred to as YSL to the uh 6-9.
And then this is Billy Seiko right here.
Now, when they first started, guys, 6-9 ranch.
I'm upset.
I'm watching this music video.
You know, I'm bobbing my hella.
Hey, this shit lit.
But at the same time, I'm pausing.
Oh, wait, who this?
Right?
Oh, who's that in the back?
Firearms and violent crime.
This is the one that that's gonna fuck him up because this gun is not traceable.
Well, it happened at the gun range.
Here's your boy 42 Doug, right here on the left.
Okay, sex trafficking and sex crime.
They can effectively link him paying an underage girl.
And the first bomb went off right here.
Second explorer fired by Al Qaeda.
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