The former boss of one of the world’s biggest cryptocurrency exchanges has been criticised after he was charged with defrauding investors out of $1.8bn (£1.5bn).
Sam Bankman-Fried, the founder of FTX, was charged by the US Securities and Exchange Commission (SEC).
John Ray, who was named Chief Executive of FTX after Bankman-Fried stepped down and the company filed for bankruptcy on 11 November, criticised the founder’s leadership and explained what led to the collapse of FTX.
Giving evidence in a congressional hearing in Washington, Mr Ray said there was “virtually no distinction” between the operations of FTX and Alameda Research – Bankman-Fried’s first business.
According to the SEC complaint, Bankman-Fried diverted customer funds to Alameda, without telling it.
Mr Ray said the FTX group’s collapse appears to stem from “absolute concentration of control in the hands of a small group of grossly inexperienced, non-sophisticated individuals.”
He added that there was “literally no record-keeping whatsoever” and said employees would communicate invoicing and expenses on Slack.
Congressman Brad Sherman also raised concerns about crypto and said: “My fear is that we’ll view Sam Bankman-Fried as just one big snake in a crypto garden of Eden. The fact is crypto is a garden of snakes. From the outside crypto looks like a non-fungible token…But in reality, the hope of crypto is to be a currency to compete with the US dollar.”
Image: The value of FTX’s FTT token has collapsed over the past month. Pic: CoinMarketCap
Bankman-Fried was arrested in the Bahamasafter authorities there received formal notice that separate criminal charges had been filed against him in the US.
The funds amassed at Alameda were allegedly used to make undisclosed venture investments, lavish property purchases, and large political donations.
Founder built a ‘house of cards on a foundation of deception’
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” said SEC chair Gary Gensler.
He has been charged with eight counts, including conspiracy to commit money laundering.
Bankman-Fried is also charged with counts tied to wire and securities fraud, as well as conspiracy to defraud the United States and violate campaign finance laws.
Image: John Ray at a US House Financial Services Committee hearing
How did we get here?
Regarding the separate charges which led to his arrest in the Bahamas, those are expected to be revealed later.
Bankman-Fried has the right to contest his extradition to face them.
The charges came a day before he was due to testify before America’s House Financial Services Committee.
Bankman-Fried has been the focus of investigations by both US and Bahamian authorities since the collapse of FTX, which ran out of money in the crypto equivalent of a bank run.
It had been the world’s second-largest cryptocurrency exchange, but was left teetering on the brink of insolvency in early November when larger rival exchange Binance dramatically withdrew from a non-binding bailout offer.
Binance also indicated it would sell the $529m (£430m) of FTT, the native token of FTX, on its books.
It led other investors to rush to withdraw funds, but FTX could not meet all the requests, as it apparently used its customers’ deposits to cover bad bets at Alameda.
During a string of recent media appearances, Bankman-Fried has insisted he did not “knowingly” misuse customers’ funds and has denied defrauding investors.
However, he has admitted that “clearly I didn’t do a good job” at running FTX.
The IDF has admitted to mistakenly identifying a convoy of aid workers as a threat – following the emergence of a video which proved their ambulances were clearly marked when Israeli troops opened fire on them.
The bodies of 15 aid workers – including eight medics working for the Palestine Red Crescent Society (PRCS) – were found in a “mass grave” after the incident, according to the head of the UN Office for Coordination of Humanitarian Affairs Jonathan Whittall.
The Israeli military originally claimed an investigation found the vehicles did not have any headlights or emergency signals and were therefore targeted as they looked “suspicious”.
But video footage obtained by the PRCS, and verified by Sky News, showed the ambulances and a fire vehicle clearly marked with flashing red lights.
In a briefing from the IDF, they said the ambulances arrived in the Tel Sultan neighbourhood in Rafah shortly after a Hamas police vehicle drove through.
Image: Palestinians mourning the medics after their bodies were recovered. Pic: Reuters
An IDF surveillance aircraft was watching the movement of the ambulances and notified troops on the ground. The IDF said it will not be releasing that footage.
When the ambulances arrived, the soldiers opened fire, thinking the medics were a threat, according to the IDF.
The soldiers were surprised by the convoy stopping on the road and several people getting out quickly and running, the IDF claimed, adding the soldiers were unaware the suspects were in fact unarmed medics.
An Israeli military official would not say how far away troops were when they fired on the vehicles.
The IDF acknowledged that its statement claiming that the ambulances had their lights off was incorrect, and was based on the testimony from the soldiers in the incident.
The newly emerged video footage showed that the ambulances were clearly identifiable and had their lights on, the IDF said.
The IDF added that there will be a re-investigation to look into this discrepancy.
Image: The clip is filmed through a vehicle windscreen – with three red light vehicles visible in front
Addressing the fact the aid workers’ bodies were buried in a mass grave, the IDF said in its briefing this is an approved and regular practice to prevent wild dogs and other animals from eating the corpses.
The IDF could not explain why the ambulances were also buried.
The IDF said six of the 15 people killed were linked to Hamas, but revealed no detail to support the claim.
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Bodies of aid workers found in Gaza
The newly emerged footage of the incident was discovered on a phone belonging to one of the workers who was killed, PRCS president Dr Younis Al Khatib said.
“His phone was found with his body and he recorded the whole event,” he said. “His last words before being shot, ‘Forgive me, mom. I just wanted to help people. I wanted to save lives’.”
Sky News used an aftermath video and satellite imagery to verify the location and timing of the newly emerged footage of the incident.
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Aid worker attacks increasing
It was filmed on 23 March north of Rafah and shows a convoy of marked ambulances and a fire-fighting vehicle travelling south along a road towards the city centre. All the vehicles visible in the convoy have their flashing lights on.
The footage was filmed early in the morning, with a satellite image seen by Sky News taken at 9.48am local time on the same day showing a group of vehicles bunched together off the road.
Ukrainian President Volodymyr Zelenskyy has hit out at the US over its “weak” response to lethal Russian attacks on his hometown on Friday.
President Zelenskyy posted a lengthy and emotional statement on X about Russia’s strikes on Kryvyi Rih, which killed 19 people.
Meanwhile Ukrainian drones hit an explosives factory in Russia’s Samara region in an overnight strike, a member of Ukraine’s SBU security service told Reuters.
In his post, President Zelenskyy accused the United States of being “afraid” to name-check Russia in its comment on the attack.
“Unfortunately, the reaction of the American Embassy is unpleasantly surprising: such a strong country, such a strong people – and such a weak reaction,” he wrote on X.
“They are even afraid to say the word “Russian” when talking about the missile that killed children.”
America’s ambassador to Ukraine Bridget Brink had written on X: “Horrified that tonight a ballistic missile struck near a playground and restaurant in Kryvyi Rih.
“More than 50 people injured and 16 killed, including 6 children. This is why the war must end.”
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Strike on Zelenskyy’s home city
President Zelenskyy went on in his post to say: “Yes, the war must end. But in order to end it, we must not be afraid to call a spade a spade.
“We must not be afraid to put pressure on the only one who continues this war and ignores all the world’s proposals to end it. We must put pressure on Russia, which chooses to kill children instead of a ceasefire.”
Grandmother ‘burned to death in her home’
Oleksandr Vilkul, head of the city’s defense council, said the missile attack, followed by a drone attack, had killed 19 people, including nine children.
“The Iskander-M missile strike with cluster munitions at the children’s playground in the residential area, to make the shrapnel fly further apart, killed 18 people.
“One grandmother was burnt to death in her house after Shahed’s direct hit.”
Russia’s defence ministry said it had struck a military gathering in a restaurant – an assertion rebutted by the Ukrainian military as misinformation.
“The missile hit right on the street – around ordinary houses, a playground, shops, a restaurant,” President Zelenskyy wrote.
Mr Zelenskyy also detailed the child victims of the attack including “Konstantin, who will be 16 forever” and “Arina, who will also be 7 forever”.
The UK’s chief of the defence staff Sir Tony Radakin said he had met the Ukrainian leader on Friday, along with French armed forces leader General Thierry Burkhard.
“Britain and France are coming together & Europe is stepping up in a way that is real & substantial, with 200 planners from 30 nations working to strengthen Ukraine’s long term security,” Sir Tony wrote.
Global financial markets gave a clear vote of no-confidence in President Trump’s economic policy.
The damage it will do is obvious: costs for companies will rise, hitting their earnings.
The consequences will ripple throughout the global economy, with economists now raising their expectations for a recession, not only in the US, but across the world.