During the lengthy hearing, SBF’s parents, Joseph Bankman and Barbara Fried, attended the proceedings. Toward the end of the hearing, Judge Ferguson-Pratt denied SBF’s request for bail and remanded Bankman-Fried to the Bahamas jail until February 8, 2023.
Bankman-Fried’s media tour comes to an end, an AFR report states that FTX insiders had a secret discussion group called ‘Wirefraud’.
In the first week of November, FTX co-founder Sam Bankman-Fried (SBF) had his world turned upside down. It all started when Coindesk published an expose on Alameda Research, SBF’s quantitative trading firm, and the huge balance of FTT tokens it holds. After the report, FTX and Alameda came under fire and Binance CEO Changpeng Zhao (CZ) revealed that his exchange would be getting rid of all of its FTT tokens.
Both events fueled speculation that FTX and Alameda were insolvent, and on November 8, 2022, Binance said it would buy FTX after conducting due diligence on the company’s finances. However, the deal never came to fruition, and on November 9, 2022, at 4 p.m. ET, the world’s largest cryptoasset exchange by trading volume announced that it was backing out of the purchase of FTX.
At this point, all digital assets in FTX’s vaults were either withdrawn by customers (many of whom were from the Bahamas) or simply disappeared. Two days after Binance pulled out of the deal, SBF announced that FTX and Alameda had filed for Chapter 11 bankruptcy protection, along with some 130 associated companies.
SBF also revealed that he had resigned as CEO of FTX and that John J. Ray III had taken the position to handle the bankruptcy and restructuring process. Since the bankruptcy filing, SBF embarked on a media tour conducting a large number of interviews, while a significant amount of disturbing evidence was reported by numerous media publications.
Prior to SBF’s arrest in the Bahamas, a report published by the Australian Financial Review (AFR) detailed that FTX’s SBF and his inner circle used a secret discussion group called “Wirefraud“. AFR’s U.S. correspondent, Matthew Cranston, said “AFR has learned that FTX founders Sam Bankman-Fried and Zixiao ‘Gary’ Wang, along with FTX engineer Nishad Singh and former Alameda Research CEO Caroline Ellison, used a newsgroup on Signal in hopes that the information would remain hidden.“
24 after the AFR report was released, Bankman-Fried was arrested. The FTX co-founder was also indicted by a federal grand jury in Manhattan, and charged with eight counts of financial fraud by U.S. Attorney Damian Williams of the Southern District of New York (SDNY). SBF was also indicted by the U.S. Securities and Exchange Commission (SEC) and prosecuted by the Commodity Futures Trading Commission (CFTC).
SBF’s legal team tries to get the co-founder out of jail, Bahamian judge denies bail, FTX co-founder is escorted out of court in handcuffs.
That same day, SBF appeared in court and his legal team tried to get him released on bail. A reporting person notes that Joseph Bankman and Barbara Fried, SBF’s parents, attended the hearing. SBF’s mother reportedly laughed out loud every time her son was referred to as a “fugitive,” and his father put his fingers in his ears. His attorney, Mark Cohen, the attorney who represented Ghislaine Maxwell in her sex trafficking trial, attempted to have SBF released on $250,000 bail.
SBF’s father, Joseph Bankman (pictured left). SBF’s parents, Joseph Bankman and Barbara Fried (pictured at right during Tuesday’s court hearing). Although SBF said his parents were not involved in FTX transactions, the New York Times (NYT) reported that “SBF’s parents were not involved in FTX transactions.[Joseph Bankman] was a paid FTX employee who traveled frequently to the Bahamas.” The NYT report also states that SBF’s parents became “the subject of gossip on the Stanford campus.” “I had a friend who said, ‘You don’t want to be seen with them,'” a former Stanford dean and close friend of the Bankman-Fried family told the NYT reporter.
Cohen is Quoted on as saying that his client “suffered from depression, insomnia and attention deficit disorder for over ten years“. During the hearing, prosecutors argued that SBF was a “flight risk” because of all his financial connections. However, Judge Ferguson-Pratt did not seem swayed by the allegations that SBF suffered from mental problems and the fact that SBF had surrendered his passport.
Judge Ferguson-Pratt told the court that bail was denied and that SBF should remain in custody until his February 8, 2023 hearing. After the ruling, the New York Post reports that SBF bowed his head and gave his parents a hug before being escorted out of court in handcuffs.