What a Securities Lawyer Would Ask FTX’s Bankman-Fried


As a securities litigator for over 30 years, I’ve cross-examined a number of conmen and fraudsters. Most of my instances have been concentrated within the monetary companies area the place I represented Wall Avenue, securities brokerage companies, industrial banks and nationwide inventory and derivatives exchanges – in different phrases, conventional finance.

Beginning in 2017, I pivoted my agency towards representing overseas and home crypto exchanges, in addition to a number of startup enterprises utilizing blockchain expertise to disrupt conventional monetary services.

James A. Murphy was the founder and chairman of legislation agency Murphy & McGonigle.

After I heard that Andrew Ross Sorkin was planning to interview FTX founder Sam Bankman-Fried (as a part of the New York Instances’ DealBook Summit, scheduled earlier than the Bahamian-based crypto alternate as soon as value $32 billion imploded), I reflexively went to my laptop and typed up the primary 10 questions that I’d ask SBF, if given the prospect.

See additionally: Let’s Speak Concerning the New York Instances’ ‘Puff Piece’

Clearly, if we had been going to courtroom, I’d have a top level view with a whole lot of questions and comply with up factors. Quickly sufficient, Bankman-Fried will seemingly face a choose fairly than a Instances’ columnist. However as long as he continues to disregard his attorneys’ solutions about not talking publicly, it’s value asking him powerful questions.

The ‘Authentic Sin’

Sam, the FTX Phrases of Service state very clearly that the belongings clients deposit at FTX belong to the shoppers – to not FTX.

You do notice it was unlawful so that you can misappropriate belongings out of your clients’ accounts, proper?

Probably responsible confederates

Who at FTX or Alameda knew you had been transferring these buyer funds to Alameda Analysis [a hedge fund Bankman-Fried co-founded prior to FTX]?

The brand new FTX CEO, John J. Ray, III, has said that you simply used “particular software program to hide the misuse of buyer funds.”

Who helped you try this?

Present me the cash

The New York Instances has reported that $515 million was “suspiciously transferred” from FTX wallets after the chapter submitting.

Have you learnt the place that cash may be?

Are there any FTX belongings hidden anyplace world wide, or in chilly storage wallets, that the present administration of FTX may be unaware of?

One thing fishy within the Bahamas

The Bahamian authorities have admitted they ordered the switch of sure FTX belongings to wallets below their management after the U.S. chapter was filed.

Did you assist the Bahamian authorities switch FTX belongings?

See additionally: FTX Hack or Inside Job? Blockchain Consultants Study Clues

Main clawbacks

You personally borrowed $1 billion from Alameda. And one among your corporations, Paper Hen, Inc., borrowed $2.3 billion from an Alameda affiliate.

That makes a complete of $3.3 billion you borrowed.

The place is all that cash proper now?

Will you come back these belongings to the chapter administrator instantly?

Can cash purchase you like? – From the media

Which information organizations have you ever given cash to by “grants,” “donations,” “investments” or some other means?

FTX US – not useless but?

On Nov. 15 (4 days after the chapter submitting), you tweeted that FTX US had adequate belongings to repay all its clients.

Was that assertion true?

If that’s the case, why was FTX US positioned into chapter 11?

The opposite funding: political capital

You’ve been an infinite contributor to Democratic candidates within the U.S., and also you even spoke of probably spending $1 billion to elect a Democrat as president in 2024.

What number of visits have you ever had with officers on the White Home, members of Congress and Securities and Trade Commissioner Gary Gensler? And what did you talk about with them?

Holding secrets and techniques

The FTX chapter attorneys are preventing very exhausting to maintain the names of FTX clients secret.

Have been any FTX accounts utilized by overseas or home political figures, “wealthy and well-known” individuals, oligarchs, drug cartels, terrorist teams or repressive regimes to cover their belongings or have interaction in cash laundering?

Homeward sure?

I’m certain you perceive that an infinite variety of FTX clients have been badly damage by your conduct.

Will you come back to the U.S. voluntarily to cooperate with the legal investigations of your position within the collapse of FTX?

Source link