Category: Cryptocurrency

US judge tightens Sam Bankman-Fried’s bail, will consider jailing him

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A US judge on Wednesday tightened Sam Bankman-Fried’s bail conditions by restricting his ability to communicate publicly, and said he will consider jailing him before the trial over the collapse of his FTX cryptocurrency exchange.

At a hearing in Manhattan federal court, prosecutors asked US District Judge Lewis Kaplan to detain Bankman-Fried now, saying he had “crossed a line” by sharing his former romantic partner Caroline Ellison’s personal writings with a reporter, in what they said amounted to a second instance of witness tampering.

Kaplan imposed a “gag order” previously requested by prosecutors for the 31-year-old Bankman-Fried, and gave both sides until Aug. 3 to explain their views on whether jail is necessary for the former billionaire.

“I’m very mindful of the government’s interest in this issue, which I take seriously,” Kaplan said. “Mr. Bankman-Fried, you’d better take it seriously too.”

Mark Cohen, a lawyer for Bankman-Fried, said his client was trying merely to protect his reputation by communicating with journalists, and that it “really would be almost impossible” to prepare for the Oct. 2 trial if Bankman-Fried were jailed.

Bankman-Fried has been largely confined to his parents’ home in Palo Alto, California, since his extradition in December from the Bahamas, where he was arrested and where FTX was based.

He has pleaded not guilty to charges he stole billions of dollars in FTX customer funds in part to plug losses at his crypto hedge fund, Alameda Research.

Ellison, who was Alameda’s chief executive, is one of three former members of Bankman-Fried’s inner circle who pleaded guilty to fraud charges and agreed to cooperate with prosecutors. She is expected to testify against Bankman-Fried.

More than 1,000 calls with reporters 

Last Thursday, the New York Times published an article containing excerpts from Ellison’s personal Google documents prior to FTX’s collapse.

She described being “unhappy and overwhelmed” with her job and feeling “hurt/rejected” from the break up of her personal relationship with Bankman-Fried.

Though Bankman-Fried acknowledged sharing Ellison’s writings with a Times reporter, prosecutor Danielle Sassoon from the Manhattan US Attorney’s office said it constituted the second time he had tampered with a witness.

She cited a January 2023 email to FTX’s US general counsel, in which Bankman-Fried proposed entering a “constructive relationship.”

Sassoon said Bankman-Fried has had more than 1,000 phone calls with journalists.

She said this alone did not constitute tampering, but said Bankman-Fried’s strategy for rehabilitating his reputation appeared built on discrediting and blaming Ellison.

“This latest incident is an escalation of an ongoing campaign with the press that has now crossed a line,” Sassoon said, referring to the Ellison writings. “This isn’t a First Amendment issue.”

Sassoon also expressed concern about what Bankman-Fried might have told the best-selling author Michael Lewis, who plans to publish a book about FTX around when the trial begins.

Bankman-Fried had previously consented to a gag order, but asked that it also apply to other witnesses such as current FTX Chief Executive John Ray. Ray, a veteran bankruptcy specialist who was named CEO after FTX filed for bankruptcy in November, has since been a strong Bankman-Fried critic.

Sassoon said at Wednesday’s hearing that prosecutors did not expect to have Ray testify.

Later in the day, prosecutors said in a court filing that they would no longer include a charge accusing Bankman-Fried of violating U.S campaign finance laws at his upcoming trial.

Also Read: Crypto bill passes US congressional committee in victory for industry

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Crypto bill passes US congressional committee in victory for industry

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A key US congressional committee on Wednesday advanced a bipartisan bill that aims to develop a regulatory framework for cryptocurrencies, a milestone for Capitol Hill in its efforts to codify federal oversight for the digital asset industry.

The crypto industry has been in the regulatory crosshairs since investors were burned last year by sudden collapses of Celsius Network, Voyager Digital, FTX and other companies.

The bill passed by the House Financial Services Committee would define when a cryptocurrency is a security or a commodity and expand the Commodity Futures Trading Commission’s (CFTC) oversight of the crypto industry, while clarifying the Securities and Exchange Commission’s jurisdiction, as many crypto advocates complain of the agency’s perceived overreach.

A handful of Democrats, including Reps. Jim Himes and Ritchie Torres, joined committee Republicans in voting for the bill. The House Agriculture Committee is scheduled to consider the same bill Thursday.

“As other jurisdictions like the UK, the [European Union], Singapore and Australia have moved forward with clear regulatory frameworks for digital assets, the United States is at risk of falling behind. We intend to change that today,” said Representative Patrick McHenry, the Republican chair of the House Financial Services Committee, at the markup.

The markup – where legislation is debated and brought to a vote, paving the way for a full vote by the House of Representatives – is the first time a crypto regulatory bill was put to a vote in Congress, a victory for crypto lobbyists who have pushed lawmakers to provide regulatory clarity for the industry.

“Obviously we’ve had some important decisions come from the courts in the past, but this is by far the most significant legislative moment that we’ve had,” said Kristin Smith, CEO of the Blockchain Association.

The bill has galvanized many in the crypto industry, who say that with Democrats’ support, the bill could have a shot in the Senate.

“For anything to be sticky, it’s going to need some bipartisan backing,” said Miller Whitehouse-Levine, CEO of the DeFi Education Fund, a lobbying group focused on decentralized finance.

But some Democrats, including Representative Maxine Waters, the top Democrat on the Financial Services committee, fiercely oppose the bill.

Waters said the bill would create more confusion and offer consumers and investors fewer protections than they have currently.

“This bill heeds the calls from the crypto industry while disregarding the views of the administration, the Securities and Exchange Commission and consumer and investor advocates,” she said.

The measure may also face obstacles in the Democratic-led Senate, where the head of the Senate Banking Committee, Sherrod Brown, has said he is unsure if additional legislation to regulate crypto is necessary.

Clarity on tokens

Crypto companies started out in a regulatory gray area, but the SEC has steadily asserted its authority over the industry, arguing that most cryptocurrencies are securities and subject to investor protection rules. That effort escalated last month when the SEC sued crypto exchanges Coinbase and Binance for failing to register some crypto tokens. The pair deny the allegations.

Most crypto companies dispute the SEC’s jurisdiction, and have pushed Congress in recent months to write laws clarifying that cryptocurrencies are more akin to commodities than securities.

Lawmakers are also set to consider on Thursday a bill that would have the Federal Reserve write requirements for issuing stablecoins while preserving the authority of state regulators.

The bill was modified to address concerns from some Democrats, including Waters, that stablecoin issuers could evade stricter oversight by opting to be regulated under a state regime.

While McHenry in an interview this month told Politico he remained hopeful that he and Waters would reach an agreement on the bill, he also said a federal stablecoin regime is “not essential,” adding that there are state frameworks already in place.

McHenry on Wednesday said he had “no news” on discussions with Waters on the stablecoin bill, but that the two were continuing negotiations.

Also Read: Web3 industry pushes for robust regulation of crypto assets

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Web3 industry pushes for robust regulation of crypto assets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Dilip Chenoy, Chairman of Bharat Web3 Association, has called for a twin approach to law enforcement on tokenisation of land assets and NFTs for cultural aspects — an SRO (self-regulatory organisation) and government oversight.

Terming the whole gamut of Web 3 and each use-case as complex and different, Chenoy said what people are worried about in the Web3 space is cryptocurrency, money laundering, terror funding, and the threat of the dark web. Stating that the industry is supportive of focusing on these concerns, he added that “throwing the baby out with bathwater” is not the right approach.

Citing the European Union’s Markets in Crypto Assets (MiCA) legislation on addressing the issue of financial instability, Chenoy told CNBC-TV18 that the legislation puts a cap on overall volumes and trades for an individual. Pointing out that Indonesia has whitelisted 250 tokens and Europe’s system deems white papers issued by tokens as acceptable, he added that the European regulation is also evolving in nature and can be looked at while framing regulations for India.

Also read: Okto, a new AI-driven Web3 wallet, promises to let users earn passive income on crypto assets

Describing the challenge of regulatory uncertainty in the Web3 space as the one pushing people overseas who want to create a market in this space, he added that the challenges are not only limiting the number of new initiatives coming up in the startup space but also stopping users and potential drivers of the ecosystem from aggressively moving forward.

Stressing on the importance of ensuring customer protection, decentralisation, and risk management; he said that the industry wants to prepare an SRO document after due stakeholder consultation, adding that Web3 applications can potentially reduce the budgetary need for many central ministries by up to 10 percent.

He said that India is among the top 4 countries adopting virtual assets, and the virtual digital asset space is going to see significantly more consumers with the VDA industry seeing rapid growth worldwide and a CAGR of 16 percent. Pointing to expert predictions on the Web3 ecosystem in India being around $1.1 trillion by 2032, he predicted that the startups in the Web3 space may have doubled since the last NASSCOM survey pegging their number between 450 and 500.

Also read: Explained: Crypto supernets and how they work

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Okto, a new AI-driven Web3 wallet, promises to let users earn passive income on crypto assets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The man who co-founded CoinDCX, the Indian cryptocurrency exchange platform, is also the driving force behind Okto, a self-custodial Web3 wallet that is aimed at making decentralised finance (DeFi) accessible to everyone. In an exclusive interview with CNBCTV18.com, Khandelwal said Okto’s USP is its AI-driven continuous, cognitive authentication and seamless accessibility.

Khandelwal also touched upon the unique features of the Okto Wallet and how it addresses the barriers hindering wider DeFi adoption.

Edited excerpts from the interview

Q. Can you provide an overview of the Okto Wallet and its key differentiating features in the market?

A. Okto is a DeFi wallet app designed to provide users with easy access to Web3 opportunities. Its vision is to make vetted DeFi investment opportunities accessible to everyone through its user-friendly interface.

With Okto, users can explore a variety of DeFi investment opportunities and earn passive income on their crypto holdings without any hassle. Its keyless, self-custody Web3 wallet provides secure access to DeFi services, ensuring the safety of users’ funds.

Onboarding into DeFi can be challenging for investors, due to the need to comprehend risks, navigate the environment, manage different wallets, and guarantee the security of funds. To address these issues, Okto has emerged as a solution for investors across the globe, facilitating DeFi access and giving users the tools they need to overcome these barriers. Okto sets itself apart through its easy accessibility and simplified navigation, making it open to even new-to-crypto users and eliminating deterrents to DeFi adoption.

Q. How does the integration of AI technology in the Okto Wallet set it apart from other wallets available in the industry?

A. To tackle the incidents of fraud and security breaches associated with self-custodial wallets, the Okto team introduced continuous cognitive authentication powered by artificial intelligence. This approach uses AI and machine learning algorithms to verify a user’s identity based on their behaviour and cognitive patterns, rather than just relying on traditional login credentials like usernames and passwords, and that too without intruding into the privacy of the user.

The Okto team has filed for a patent for this breakthrough technology in India and will subsequently file in other jurisdictions. Driven by the principles of adaptive and continuous authentication, the new security layer utilises a cognitive monitoring model to determine suspicious activities and prevent any misuse of the wallet keys.

Q. Could you provide some insights into the patent filed for AI-based technology used in the Wallet? What benefits does this technology offer to the users?

A. A unique feature of Okto is its AI-powered continuous Multi-Factor Authentication. Okto employs patent-pending AI technology to fortify the security of self-custodial DeFi wallets, shielding users from potential compromises and fraudulent activities.

This state-of-the-art security solution leverages artificial intelligence and machine learning techniques to verify a user’s identity based on their behavioural and cognitive patterns. By analysing how users interact with their devices, applications, and websites, Okto establishes a secure and private authentication process. This approach safeguards against prevalent cyber threats such as phishing scams, account takeovers, and malware attacks.

Q. The advanced cognitive AI technology used in the Okto Wallet enables real-time monitoring of transactions and helps identify suspicious activities. How does this feature contribute to the prevention of fraudulent transactions?

A. To ensure the highest level of security, the Okto Wallet employs continuous monitoring in real-time. This means that every transaction is scrutinised instantly, if any suspicious activity is detected, it triggers additional authentication steps before proceeding. This security check process acts as a barrier against fraudulent activities, ensuring users’ information remains safe and protected.

With Okto Wallet, users can embrace the potential of DeFi without compromising on security or privacy. It sets a new standard in self-custodial wallets, utilising AI-driven technology to provide unparalleled protection against fraud and hacks. ​

Q. You say Okto Wallet aims to provide a simple CeFi-like experience to users. Can you elaborate on how this accessibility feature allows anyone to access thousands of tokens across various DEXs and discover vetted investment opportunities in one window?

A. With its comprehensive Self-Custodial Wallet, Okto delivers a streamlined experience akin to centralised finance (CeFi), enabling users to conveniently access a diverse range of tokens across decentralised exchanges (DEXs). By serving as an aggregator of DEX aggregators, Okto simplifies the exploration process and guarantees users access several options and an extensive selection of tokens.

Users are able to trade thousands of tokens and deposit idle funds into high-yield generating pools, ensuring they can maximize their earnings.

Moreover, Okto is truly multi-chain, aggregating the best opportunities from over 20 chains and 100 protocols. With this seamless user interface, users can easily navigate the world of DeFi without the need to manage multiple wallets.

The all-in-one Web3 app eliminates the need for safeguarding seed phrases ensuring full control of funds with users.  Furthermore, Okto eliminates the risk of a single point of security failure by leveraging custom-built Multi-Party Computation (MPC) technology driven by consensus. Through the use of MPC, the private keys utilised to access and manage funds are never fully revealed, ensuring that users’ funds remain entirely secure at all times.

Q. Self-custodial wallets are known for providing users with a more secure and decentralized way to interact with DApps. How does Okto Wallet ensure the security and decentralisation of user interactions?

A. Striking the right balance between privacy and transparency is an ongoing challenge, with advancements such as privacy-preserving techniques and zero-knowledge proofs being explored.

On the Okto app, we offer self custody which means you have full control over your funds, your keys, and your account.

While DEXs are doing their bit on an individual level, these challenges require collaboration and innovation from various stakeholders, including developers, researchers, regulators, and the crypto community as a whole, to drive progress in the crypto world.

Improving the user experience of crypto wallets, exchanges, and decentralized applications (dApps) is crucial for mass adoption. Simplifying complex concepts, enhancing user interfaces, and providing intuitive onboarding processes are ongoing challenges.

With Okto, simplifying the user experience is one of our major focuses.

Q. What is your perspective on the current state of DeFi? Can you highlight the potential and opportunities that DeFi offers to users and investors?

A. Although more than 60 percent of the global population now has access to the internet, the adoption of DApps and self-custody wallets still faces significant challenges. In the past couple of years, adoption has seen some progress, but it is still in its early stages, and the scope to expand and proliferate is significant.

DeFi has grown rapidly in recent years, and it is expected to continue to grow in the coming years. DeFi TVL (total value locked) is up by 20 percent since the start of 2023, at $44.76 billion. The growth of the DeFi market is estimated to happen at a compounded annual growth rate (CAGR) of 42.5 percent until 2030. These numbers are a testament to the growth of DeFi. India ranks in the top countries when it comes to the value of DeFi transactions for individuals and retail-sized transactions with Ethereum accounting for about 40 percent of the total received crypto value.

Q. What are the major accessibility barriers hindering wider adoption of DeFi? How does Okto Wallet address these challenges, such as complexity in user interfaces, high gas fees, and the technical knowledge required to participate in DeFi protocols?

A. The safety of users’ funds and the security of wallets have been long-standing concerns in the Web3 industry. This has led to the development of self-custodial wallets, which allow users to hold their digital assets themselves. However, security remains a pressing issue in the DeFi ecosystem, and incidents of fraud and security breaches associated with self-custodial wallets have been common.

While self-custody is a good approach for those who want privacy and control over their funds, it can be challenging to manage the long passwords and security keys required to access and secure the assets.

Additionally, many people attempting self-custody may not store their security keys securely or back them up correctly, potentially leading to a loss of their assets. The team at Okto recognized the importance of self-custody in Web3, but they also understood that the current state of self-custody was complex and challenging for even advanced users. Okto is easily accessible and simple to navigate even for novices – that is what sets us apart from other DeFi platforms that primarily cater to users who are well-versed in the space. This easy accessibility and simple UI will enable millions of new users to join the platform, thereby paving the way for mass adoption.

Q. Discoverability of various DeFi projects and protocols can be challenging for users. How does Okto Wallet tackle this issue? Are there any features or resources in place to simplify the discovery process for users?

A. The Okto app was designed to make DeFi accessible for both new and advanced users by providing an easy-to-use mobile platform that allows users to access thousands of tokens across various DEXs and discover high-yield generating opportunities without any technical background.

Okto is an aggregator of DEX aggregators offering the best option among all of them and access to most of the tokens. Users are being offered a selection that is universal.

The app has a user-friendly interface that mimics Web2 financial apps but with the added benefits of decentralisation. The wallet allows users to access unlimited tokens available on multiple chains on a single mobile app. Additionally, the wallet aggregates the top liquidity pools and investment opportunities from different chains on a single screen, making it easy for users to explore and earn from.

Q. The Web3/crypto industry is evolving rapidly. How does Okto Wallet adapt to the technological evolution and ensure its compatibility with the changing landscape of the industry?

A. We recognise the dynamic and fast-paced nature of the Web3/DeFi industry, and we are fully committed to staying ahead of technological advancements. Our goal is to provide our users with the best opportunities by integrating with the latest protocols, chains, and investment options. Currently, we offer the Earn feature, allowing users to earn passive income on their crypto holdings. We have plans to expand the Okto Wallet and offer a full bouquet of Web3 offerings

To ensure that we meet the needs of our users, we actively seek feedback and listen to their suggestions, allowing us to continuously improve the Okto Wallet based on their requirements and preferences. In addition to user feedback, we closely monitor the market and keep a pulse on the latest developments in the DeFi ecosystem. Our team of experts conducts thorough research and exploration to identify solutions that enhance the capabilities of Okto Wallet. Our aim is to provide a secure and user-friendly experience that empowers our users to navigate the complexities of the Web3/DeFi industry with ease.

Also read: OpenAI CEO Sam Altman’s Worldcoin cryptocurrency project: All you need to know

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

OpenAI CEO Sam Altman’s Worldcoin cryptocurrency project: All you need to know

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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OpenAI CEO Sam Altman on Monday, July 24, launched an ambitious cryptocurrency project Worldcoin. The launch took place after onboarding more than 2 million users during the beta period. After the launch, Altman is going to scale it up to more than 35 cities across 20 countries, according to Reuters.

Worldcoin was founded in 2020 by Sam Altman. However, the main player behind Worldcoin is Alex Blania who serves as the CEO of Tools for Humanity.

The Worldcoin project has an eye-scanning ‘orb’ that can be used in person and also it gives the user a unique digital identity to get themselves verified.

According to Reuters, the core offering of the crypto project is its World ID, which the company describes as a “digital passport” to prove that its holder is a real human, not an AI bot.

The World ID will be created after a customer signs up after doing an in-person iris scan through WorldCoin’s ‘orb’. Once the orb’s iris scan verifies the person, the World ID will be created, the report added.

The token is now available through an airdrop to the users who are verified by an orb though the ones who are not verified can also secure their token by downloading the company’s app.

The launch of Worldcoin comes as a big development for the crypto world after the crisis following the collapse of the crypto exchange FTX.

Worldcoin’s price increased in early trading on Monday and it reached a peak of $5.29 from a starting price of $0.15 on Binance, Reuters report added.

After the launch of ChatGPT in November last year, the growing public awareness of generative AI and the potential threats to employment and online identity led Worldcoin to emphasise its unique iris scan verification mechanism.

Even with the launch of the token, it enters a new phase that currently has around 150 orbs in operation and around 2 million customers, who have signed for the platform.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

OpenAI CEO Sam Altman launches Worldcoin crypto project

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Worldcoin, a cryptocurrency project founded by OpenAI CEO Sam Altman, launches on Monday.

The project’s core offering is its World ID, an account that only real humans can get. To get a World ID, a customer signs up to do an in-person iris scan using Worldcoin’s ‘orb’, a silver ball approximately the size of a bowling ball. Once the orb’s iris scan verifies the person is a real human, it creates a World ID.

The company behind Worldcoin is San Francisco and Berlin-based Tools for Humanity.

The project has two million users from its beta period, and with Monday’s launch, Worldcoin is scaling up “orbing” operations to 35 cities in 20 countries. As an enticement, those who sign up in certain countries will receive Worldcoin’s cryptocurrency token WLD.

The cryptocurrency aspect of the World IDs is important because cryptocurrency blockchains can store the World IDs in a way that preserves privacy and can’t be controlled or shut down by any single entity, co-founder Alex Blania told Reuters.

The project says World IDs will be necessary in the age of generative AI chatbots like ChatGPT, which produce remarkably humanlike language. World IDs could be used to tell the difference between real people and AI bots online.

Binance, the largest cryptocurrency exchange, said it will list Worldcoin with the tentative opening of trading expected to be on Monday at 0900 GMT.

Altman told Reuters Worldcoin also can help address how the economy will be reshaped by generative AI.

“People will be supercharged by AI, which will have massive economic implications,” he said.

One example Altman likes is universal basic income, or UBI, a social benefits program usually run by governments where every individual is entitled to payments. Because AI “will do more and more of the work that people now do,” Altman believes UBI can help combat income inequality. Since only real people can have World IDs, it could be used to reduce fraud when deploying UBI.

Altman said he thought a world with UBI would be “very far in the future” and he did not have a clear idea of what entity could dole out money, but that Worldcoin lays the groundwork for it to become a reality.

“We think that we need to start experimenting with things so we can figure out what to do,” he said.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

NFT of Jack Dorsey’s first tweet, originally purchased for $2.9 million, now worth less than $4

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The very first tweet of Jack Dorsey, whose non-fungible token (NFT) was sold for $2.9 million to crypto entrepreneur and Iranian investor Sina Estavi in 2021, is reportedly now only worth less than $4. At the time of purchase, Estavi tied the NFT’s value to its uniqueness and its association with a valuable company like Twitter.

Dorsey had put the tweet up for digital auction as an NFT, a digital good that lives on the Ethereum blockchain, on March 5, 2021. The tweet was first posted by Dorsey on March 21, 2006, as per IANS report.

Two years later, the value perception of the same NFT has significantly changed with the best offer currently standing at just $3.77, according to the latest data from OpenSea, one of the world’s largest NFT marketplaces.

At the time of purchase, Estavi had plans to sell the NFT for $48 million and donate half of the proceeds to charity. However, the NFT has since lost almost all of its value.

Meanwhile, an NFT is a one-of-a-kind cryptographic asset that resides on a blockchain and cannot be copied. In reality, however, this definition pales in comparison to what NFTs represent. NFTs are like art. They are a form of expression that is represented digitally, whether it’s music, drawings, characters, videos, etc.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sam Bankman-Fried faces multiple lawsuits: A look at crypto exchange FTX founder’s mounting trouble

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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There seems no end to the legal troubles of Sam Bankman-Fried, the founder of the bankrupt crypto exchange FTX. Amid the trial in high-profile multi-million dollar fraud cases against Bankman-Fried, in a fresh lawsuit, FTX has alleged that he was planning to purchase the small Pacific island nation of Nauru in case the world came to an end, according to reports.

The lawsuit was filed on Thursday, July 20, by FTX against Bankman-Fried and three other former top executives of the bankrupt crypto exchange to recover $1 billion dollar, according to a Guardian report. The lawsuit filed in a Delaware bankruptcy court in the United States, also included a memo which carried a detailed plan to buy Nauru by Bankman-Fried’s brother Gabriel.

Come the great fire or flood, he would move himself and his colleagues in the effective altruism movement into a bunker there, to wait out the apocalypse, according to the latest allegations, Quartz reported.

FTX alleged that Bankman-Fried and other executives named in the lawsuit misappropriated funds for their pet projects. The transfers happened between February 2020 and November 2022 when FTX filed for bankruptcy.

In previous charges against him, FTX had earlier alleged that Bankman-Fried and other former executives of the cryptocurrency exchange used customers’ funds to pay for their luxury apartments, political contributions, and personal projects, reported Reuters.

FTX has alleged that Bankman-Fried and his former executives’ collective fraud caused the company to collapse. FTX accused Bankman-Fried and his team members of using $546 million in May last year to buy shares of Robinhood Markets Inc., while Ellison paid herself a bonus of $28.8 million, the company claimed.

Denying all the allegations, Bankman-Fried in March pleaded not guilty in court and claimed that FTX had inadequate risk management, which is why the company failed. In May 2023, he asked US District Judge Lewis Kaplan to dismiss 11 out of 13 fraud and conspiracy charges against him, but his plea was rejected by the US court.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

FTX sues Sam Bankman-Fried, others to recoup more than $1 billion

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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FTX Trading on Thursday sued founder Sam Bankman-Fried and other former executives of the cryptocurrency exchange, seeking to recoup more than $1 billion they allegedly misappropriated before FTX went bankrupt.

The complaint filed in Delaware bankruptcy court also names as defendants Caroline Ellison, who led Bankman-Fried’s Alameda Research hedge fund; former FTX technology chief Zixiao “Gary” Wang; and former FTX engineering director Nishad Singh.

FTX said the defendants continually misappropriated funds to finance luxury condominiums, political contributions, speculative investments and other “pet projects,” while committing “one of the largest financial frauds in history.”

The alleged fraudulent transfers occurred between February 2020 and November 2022 when FTX filed for Chapter 11 protection, and can be undone — or “avoided” — under the US bankruptcy code or Delaware law, FTX said.

A spokesman for Bankman-Fried declined to comment. Lawyers for the other defendants did not immediately respond to requests for comment.

FTX is now led by John Ray, who helped manage Enron after the energy trader’s 2001 bankruptcy.

US prosecutors have called Bankman-Fried the mastermind of a fraud that led to FTX’s collapse, and included the misappropriation of billions of dollars of customer funds.

Bankman-Fried has pleaded not guilty to several criminal charges. Ellison, Wang and Singh have pleaded guilty and agreed to cooperate with prosecutors.

According to Thursday’s complaint, the fraudulent transfers included more than $725 million of equity that FTX and West Realm Shires, an entity that Bankman-Fried controlled, awarded “without receiving any value in exchange.”

FTX said Bankman-Fried and Wang also misappropriated $546 million to buy shares of Robinhood Markets, while Ellison used $28.8 million to pay herself bonuses.

It also said some of Bankman-Fried’s criminal defense is being funded from a $10 million “gift” he gave his father.

“The transfers were made when (FTX-related entities) were insolvent, and defendants knew it,” FTX said.

Federal law lets bankruptcy trustees avoid transfers of property made in the two years before Chapter 11 filings, if the transfers are made for less than their value and with an intent to defraud a bankruptcy estate.

The case is FTX Trading Ltd et al v Bankman-Fried et al, U.S. Bankruptcy Court, District of Delaware, No. 23-ap-50448. The main bankruptcy case is In re FTX Trading Ltd et al in the same court, No. 22-bk-11068.

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Economic Affairs Secretary: Follow a ‘minimum level of regulation’ on crypto assets with ‘more stringent norms’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India in its Presidency note on Crypto assets in the Gandhinagar round of the G20 Finance Ministers & Central Bank Governors meet has pushed for a minimal standard of regulation, Economic Affairs Secretary Ajay Seth told CNBC-TV18.

In an exclusive interaction, Seth said, “The building blocks of a good policy are getting into place; we need to follow a minimum level of regulation on cryptos. If countries want more stringent norms they can do so.” 

On being asked if this would address the RBI’s concerns on the macroeconomic risks arising out of crypto assets and if they can be banned by individual countries, Seth said, “Every country should have a base level of policies and regulations and protect its financial sector from crypto assets. Countries, especially emerging economies, if they want to be more stringent, can do so.”

RBI has been unequivocal in pushing for an outright ban on cryptocurrencies. “RBI’s position is very clear, all cryptos should be banned. However, the technology of blockchain needs to be supported as it has so many other applications,” RBI Governor Shaktikanta Das has been quoted on several occasions as saying. 

Highlighting India’s proactive role in cryptocurrencies on the global stage, Seth said, “India has facilitated very significant work on cryptocurrency. It was India that asked the IMF to come up with a macroeconomic approach to cryptos … There has been a good discussion on how to deal with crypto assets. India also said the synthesis paper of the G20 due in September should focus on a roadmap and the way forward. So, India has given major inputs on this issue.” 

Ajay Seth added the Organisation for Economic Cooperation and Development (OECD) has made recommendations on the taxation of crypto assets and the sharing of information. And the Financial Stability Board has given recommendations on backed and unbacked crypto assets as well. 

“There is consensus on money laundering, terror financing using crypto assets. A policy and regulation approach to cryptos is being considered,” Seth told CNBC-TV18. 

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