The former CEO of FTX, Sam Bankman-Fried, allegedly directed his staff to misuse FTX client assets and conceal financial weaknesses from numerous lenders, as exposed by ex-Alameda Research CEO Caroline Ellison during the fraud case hearing on Wednesday.
Caroline Ellison's Continuation of Testimony
The story proceeded on its sixth day, with Ellison providing more revelations for the second day in a row. On the previous day, she had detailed how Bankman-Fried encouraged her and her colleagues to commit fraudulent actions by co-mingling FTX client funds. She also claimed that Alameda had wrongfully taken "billions of dollars from FTX clients".
Testimony Insights from Inner City Press Correspondent
Matthew Russell Lee from Inner City Press, who live streamed the court proceedings, reported on Ellison's testimony. She accused Bankman-Fried of instructing his team to use FTX client resources to settle Alameda's debts, especially when the cryptocurrency market plummeted in 2022. She believes this left FTX struggling to match $13 billion in client deposits with only $3 billion available.
Expressing her internal doubts about this strategy, she feared a massive withdrawal from FTX, which would paralyze the exchange. Quoting her, Lee reported, "I didn’t feel good. If people found out, they would all try to withdraw from FTX."
Market Slump and Alameda's Struggles
The market downturn did not just impact assets; it exacerbated Alameda's difficulties, according to Ellison. The unpredictability of the market led lenders to demand loan repayments, pushing the company towards a crisis. These loans, which Ellison referred to as "open-ended," required repayment.
Allegations of Misleading Financial Statements
The prosecution delved into claims of deceptive financial reports sent to Genesis Capital and other Alameda lenders. They believe that Bankman-Fried chose the most misleading version from seven drafts that Ellison had created in June 2022. When asked if she thought the documents were dishonest, Ellison responded, "Yes I did."
The Role of Digital Communication in Modern Trading
Ellison’s account highlighted the crucial role of digital communication in modern trading. Tools like Slack and Telegram have become more than just convenient, providing instant alerts critical for multimillion-dollar decisions, and emphasizing the digital nature of exchange interactions.
Ignoring Staff Recommendations and Potential Investment Pursuits
Furthermore, Ellison accused Bankman-Fried of disregarding staff suggestions to safeguard Alameda's investments during the crypto downturn. Instead, he increased risk and later conveniently blamed her for failing to hedge. She also alleged that Bankman-Fried pursued an investment from Saudi Crown Prince Mohammed bin Salman for FTX and had intentions of acquiring Snapchat.
FTX’s Liquidity Crisis
As client withdrawals sped up on November 7, 2022, Ellison stated that FTX only had $1-2 billion in liquid assets remaining. She expressed her terror and uncertainty about whether to finally disclose that FTX could not meet all withdrawal requests.
Misleading Reassurances and Media Relations
Ellison claimed that Bankman-Fried nevertheless instructed staff to issue misleading public statements that same day. She admitted to complying with his directive by tweeting that FTX had "hedges that aren't listed on the balance sheet," when in fact, this was not the case.
Earlier in her testimony, she stated that Bankman-Fried invested in the Semafor media startup and had commended The Block as a "great crypto news site." She implied that he purposefully fostered relationships with journalists to enhance his public image.
Defense and Accusations
Bankman-Fried, countering the allegations, denies any fraudulent activities or misappropriation of FTX client funds to cover Alameda’s losses. Along with Gary Wang and a few others, Ellison has sided with the prosecution, confessing to fraud. The motives behind these testimonies favoring the U.S. government are still unclear.
What are your views on Ellison’s accusations against Bankman-Fried? We invite you to share your thoughts and opinions on this matter.
Frequently Asked Questions
How Do You Make a Withdrawal from a Precious Metal IRA?
First, you must decide if you wish to withdraw money from your IRA account. Then make sure you have enough cash to cover any fees or penalties that may come with withdrawing funds from your retirement plan.
If you are willing to pay a penalty for early withdrawal, you should consider opening a taxable brokerage account instead of an IRA. If you decide to go with this option, you will need to take into account the taxes due on the amount you withdraw.
Next, determine how much money you plan to withdraw from your IRA. The calculation is influenced by several factors such as your age at withdrawal, the length of time you have owned the account and whether or not you plan to continue contributing to retirement plans.
Once you have determined the percentage of your total savings that you would like to convert to cash, you can then decide which type of IRA to use. Traditional IRAs allow you to withdraw funds tax-free when you turn 59 1/2 while Roth IRAs charge income taxes upfront but let you access those earnings later without paying additional taxes.
Once these calculations have been completed you will need to open an account with a brokerage. To encourage customers to open accounts, brokers often offer signup bonuses and promotions. You can save money by opening an account with a debit card instead of a credit card to avoid paying unnecessary fees.
When it comes time to withdraw your precious metal IRA funds, you will need a safe location where you can keep your coins. Some storage facilities can accept bullion bar, while others require you buy individual coins. Either way, you'll need to weigh the pros and cons of each before choosing one.
Bullion bars are easier to store than individual coins. You will need to count each coin individually. You can track their value by keeping individual coins.
Some prefer to store their coins in a vault. Others prefer to place them in safe deposit boxes. No matter what method you use, it is important to keep your bullion safe so that you can reap its benefits for many more years.
What is the best precious-metal to invest?
Answering this question will depend on your willingness to take some risk and the return you seek. While gold is considered a safe investment option, it can also be a risky choice. For example, if you need a quick profit, gold may not be for you. If you have the patience to wait, then you might consider investing in silver.
If you don't care about getting rich quickly, gold is probably the way to go. Silver might be a better investment option if steady returns are desired over a long period of time.
Should you open a Precious Metal IRA
Before opening an IRA, it is important to understand that precious metals aren't covered by insurance. If you lose money in your investment, nothing can be done to recover it. This includes investments that have been damaged by fire, flooding, theft, and so on.
This type of loss can be avoided by investing in physical silver and gold coins. These items have been around thousands of years and are irreplaceable. They are likely to fetch more today than the price you paid for them in their original form.
When opening an IRA account, make sure you choose a reputable company offering competitive rates and high-quality products. Consider using a third-party custody company to keep your assets safe and allow you to access them at any time.
Remember that you will not see any returns unless you are retired if you open an Account. So, don't forget about the future!
Statistics
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
External Links
irs.gov
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 1991 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Lawful – WSJ
investopedia.com
forbes.com
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How To
A rising trend in gold IRAs
Investors are increasingly turning to gold IRAs as a way to diversify and protect their portfolios from inflation.
The gold IRA allows investors to purchase physical gold bars and bullion. It is tax-free and can be used by investors who aren't concerned about stocks and bond.
An investor can use a gold IRA to manage their assets and not worry about market volatility. The gold IRA can be used to protect against inflation or other potential problems.
Investors also get the unique benefits of owning physical Gold, including its durability, portability, flexibility, and divisibility.
In addition, the gold IRA offers several other advantages, including the ability to quickly transfer ownership of the gold to heirs and the fact that the IRS does not consider gold a currency or a commodity.
Investors looking for financial security are increasingly turning to the gold IRA.
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By: Jamie Redman
Title: Exposing the Unseen: Ex-Alameda CEO Unveils Secret Dealings in Sam Bankman-Fried's Fraud Hearing
Sourced From: news.bitcoin.com/soliciting-the-saudi-crown-prince-and-buying-snapchat-ex-alameda-chief-reveals-covert-dealings-in-sbfs-fraud-hearing/
Published Date: Wed, 11 Oct 2023 19:30:04 +0000
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