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FTX’s Bankman-Fried Is Allegedly Using Alameda Funds to Pay for Legal Defense – Bitcoin News

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FTX’s Bankman-Fried Is Allegedly Using Alameda Funds to Pay for Legal Defense – Bitcoin News


According to two sources close to FTX, Sam Bankman-Fried, the disgraced co-founder, gave his father, Stanford Law professor Joseph Bankman, millions of dollars. The funds are reportedly being used to pay for legal costs. The sources said that Bankman-Fried allegedly gave “at least $10 million” from the now-defunct quantitative trading firm Alameda Research to his father.

Sources Claim SBF’s Legal Defense Is Paid for by Alameda Loot

After the latest revised indictment charges against Sam Bankman-Fried (SBF), Forbes reports that funds tied to Alameda Research may be paying for SBF’s legal defense. Forbes contributors Sarah Emerson and Steven Ehrlich explained that two unnamed sources disclosed that SBF directed “at least $10 million from Alameda” to his father, Joseph Bankman. The duo is accused of using a “lifetime estate and gift tax exemption” for the funds, which were allegedly given to Bankman in 2021.

SBF has pleaded not guilty to his indictment charges, and last year, he publicly stated that he had only $100,000 in his bank account. According to Forbes reporters, “it had remained unclear, until now, how the former billionaire would afford his pricey defense.” At the end of 2022, it was disclosed that SBF would be represented by white-collar lawyer Mark Cohen. Cohen and his litigation firm, Cohen & Gresser, are well-known for representing Ghislaine Maxwell, a convicted sex trafficker and confidant of Jeffrey Epstein.

The two sources informed Forbes that in 2021, SBF made a large monetary gift to his father, funded by a loan derived from Alameda Research. The Forbes reporters, Emerson and Ehrlich, noted that Cohen & Gresser “did not respond to a request for comment,” and “Bankman-Fried declined to comment” on the matter. The reporters also stated that SBF’s father “did not respond to a list of questions” sent to him. They further added that despite it being a gift, the funds still need to be filed with the Internal Revenue Service (IRS).

The Forbes article follows federal prosecutors’ addition of bribery charges to SBF’s indictment, accusing him of paying off Chinese government officials. The new charge alleges that the former FTX CEO utilized $40 million to influence “one or more Chinese government officials” in 2021. Prior to the latest charges, bank fraud charges were added to SBF’s indictment at the end of February 2023. Joseph Bankman has not been charged with any wrongdoing. However, current FTX CEO John J. Ray III told members of the U.S. Congress that Joseph Bankman and “the family certainly received payments” from FTX.

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alameda, Alameda Research, Bank Fraud, Bankman-Fried, bribery, business, ceo, Charges, Chinese officials, Confidant, Congress, Ethics, Exemption, Family, Finance, Forbes, Former FTX CEO, ftx, FTX CEO, Funds, Ghislaine Maxwell, GIFT, hearing, indictment, Investigation, IRS, Jeffrey Epstein, Legal Defense, loan, millionaire, news, Payments, Professor, Prosecutor’s, Quantitive, Sam Bankman-Fried, sbf, SBF FTX, Sex Trafficker, Stanford Law, Tax, testimony, trading, U.S. Government, White-Collar Lawyer

What are your thoughts on the latest developments in the SBF case? Share your thoughts about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Ethereum’s Shanghai Hard Fork Is Nearing, But When Can I Withdraw My Staked Ether (ETH)?

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Ethereum’s Shanghai Hard Fork Is Nearing, But When Can I Withdraw My Staked Ether (ETH)?



Full withdrawals, on the other hand, are when you remove the entire balance, including the 32 ETH, from the blockchain. This means that your validator will stop participating in the block validation process. Full withdrawals won’t happen automatically because the validator needs to send a message to the blockchain to add itself to the exit queue. This takes time and will be released gradually.

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More Banks Will Fail Without Crypto, Says Tim Draper

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More Banks Will Fail Without Crypto, Says Tim Draper



Amid the recent banking turmoil, BeInCrypto talked to renowned investor Tim Draper. We discussed how Bitcoin can prosper from this financial crisis, and what makes a weak leader.

The recent banking crisis has led to growing distrust in once-solid banks. The acquisition of Credit Suisse by UBS has added to this climate of uncertainty and distrust of the banking system. There have been significant withdrawals from Silicon Valley Bank, First Republic Bank, and Deutsche Bank has come under scrutiny. 

Tim Draper, a well-known venture capitalist and entrepreneur, and one of the biggest personalities on Wall Street, takes the view that there is a simple way to safeguard against the dangers.

“I have recommended to all CFOs as a hedge against bank or government failures to have at least two payrolls worth of Bitcoin to avoid catastrophic failure,” Draper told BeInCrypto. “I continue to advocate Bitcoin as a hedge against the current antiquated and over-regulated banking system and as a hedge against bad governments with too many regulations.”

In the recent flight to safety, depositors have moved assets to “too big to fail” banks as they have questioned the viability of smaller institutions. Unlike traditional banks, which have intermediaries, DeFi can provide financial services to anyone with an internet connection, with recorded transactions on a public ledger. In recent weeks, some people have particularly appreciated the benefit of increased accountability.

Draper told BeInCrypto that this will only accelerate the adoption of crypto as an alternative to the traditional banking system.

“I think the SVB failure was a wake-up call for the people who have been reluctant to buy Bitcoin,” he said. “Now, it is mission-critical to keep the trains on the tracks.”

Crypto Is Inevitable

Crypto adoption rates and motivations vary widely between developed and underdeveloped countries and those with stable and unstable currencies. According to a report by the United Nations, Venezuela ranked third among the countries with the most cryptocurrency adoption. Russia and Ukraine beat it in the league tables.

“Bitcoin is loved by the people from countries with weak currencies,” said Draper. “It gives the people a chance to build and store value without the risk of [the] government over-printing and devaluing their work. The US seems to be heading down that inflationary, high-interest-rate path, and I believe that more and more people will be using Bitcoin to store value now.”

“Banking crises can only really be prevented by allowing the banks to accept and operate in Bitcoin. Otherwise, banks will be operating with a smaller and smaller market as people transition to the better technology,” he added.

Cryptocurrencies have recently come under fire for their use to evade sanctions. But Draper believes the effort to stop them is futile. Much like King Canute trying to stop the tides from rolling in. “We are going through an anthropological leap forward with Bitcoin,” he said. “The landscape is shifting. During shifting landscapes, great leaders embrace the change. Weak leaders try to resist the wave. Sanctions are porous. Sanctioned countries will use the tools they can to get around them.”

Embracing Change

Draper’s thesis on economics is equally libertarian—not unlike many crypto enthusiasts. But in this interview, Draper was unafraid to take the philosophy to its logical endpoint. It’s a view that is deeply entwined with the individualism and enterprise-first values that crypto enables. “I have noticed that great leaders trust their people and set them free,” he explained. “That trust and freedom builds great economies, encourages rapid adoption of new and improved products and services. [It] creates a happy, wealthy society. Weak leaders control and regulate their people, creating a fearful, unproductive, impoverished society.”

The current banking crisis seems to have fizzled out, for now. However, Draper is convinced that without regulators bringing crypto into the tent, there is more turbulence to come. “If regulators persist in keeping banks out of the lucrative crypto market, more banks will fail, as more and more of the economy goes crypto. If they embrace the change, banks will be able to adapt, and they will thrive in the new Bitcoin economy.”

Leave It to the Market

Draper’s relentless enthusiasm for the crypto market will inevitably be a welcome tonic to some investors. 2022 was a volatile year for cryptocurrency, with values dropping over 60%. A new study of over 1,200 Americans found that awareness of cryptocurrency has increased by 9% since 2022, but ownership rates dropped from 33% to 30%. Only 1 in 3 owners turned a profit that year. Considering the choppy water of the recent past, what is the best way to ensure the future health of crypto?

“The market will ultimately arbitrate the best outcome,” said Draper. “FTX was a clear signal that centralized authority of any money supply is not as good as a decentralized system like the Bitcoin blockchain.”

Could he share examples of cryptocurrencies providing financial stability and resilience during the recent crisis? “I know that companies in the Bitcoin world that held their fiat in SVB but also held Bitcoin were not in panic mode. Since they knew they could always make payroll in Bitcoin,” Draper reflected.

Disclaimer

Following the Trust Project guidelines, this feature article presents opinions and perspectives from industry experts or individuals. BeInCrypto is dedicated to transparent reporting, but the views expressed in this article do not necessarily reflect those of BeInCrypto or its staff. Readers should verify information independently and consult with a professional before making decisions based on this content.

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