HomeCryptoAll the news on the collapse of crypto exchange FTX

All the news on the collapse of crypto exchange FTX

The matter is still unresolved, despite various rumors the events surrounding the collapse of the powerful crypto exchange FTX continue. The situation is now at a very delicate point, although it seems to be in one of the final steps, everything is still on the line. 

As usual, all eyes are on Sam Bankman Fried, former CEO of the failed exchange, but in the article, we will also explore new figures, who despite being already known, are only now beginning to attract attention. 

From the judge’s decision to pull out of the case, to SBF’s huge bail payment, as well as analyzing the figure of Sam Trabucco. The commitment by the failing exchange to reclaim all the money paid out for political donations, here is the latest news regarding the collapse of FTX.

Who is Sam Trabucco? What is his role in the collapse of the crypto exchange FTX?

A brief interlude that takes Sam Bankman Fried out of the spotlight for a few moments and shifts to former co-CEO of Alameda Research, Sam Trabucco, after finding an important link to the FTX bankruptcy scandal. 

Although scarcely mentioned since the beginning of the affair that saw the bankruptcy of cryptocurrency exchange FTX, and crypto investment firm Alameda Research, Sam Trabucco was the co-CEO of Alameda. In fact, Sam Trabucco held the executive role until August before resigning.

The name was recently brought up by Caroline Ellison, his fellow co-CEO of Alameda Research. Trabucco was blamed by Ellison for his mismanagement of the company in 2019 when he was still CEO.

Ever since the FTX affair broke, as of 11 November, Sam Trabucco has had little exposure in the spotlight, on social media or in interviews, posting only two tweets related to the FTX scandal.  

On 8 November he tweeted: 

“Lots of love for everyone: I’m sure the last few days have been dark for many, and I hope the road ahead is brighter.”

The other tweet also featured Sam Trabucco, sympathetic and in support of executives and former colleagues at Alameda Research and FTX. Once the scandal broke out in a more concrete way, however, the former Alameda executive did not post again. The hypothesis is precisely that the silence is due to a close connection with the FTX collapse case. 

There is already more than one theory looming in the ecosystem about the link between the FTX scandal and Sam Trabucco: some think that he has already been blocked by law enforcement, some believe that authorities are already investigating Trabucco since FTX and Alameda Research executives decided to cooperate with law enforcement. 

Many former executives of SBF’s companies have turned their backs on their leader, ready to settle (such as the case of Caroline Ellison) and cooperate with the prosecution. Sam Trabucco may represent yet another figure to help the judges shed light on an affair that is all yet to be uncovered.

FTX and the attempt to recover political donations after the crypto exchange’s collapse 

One of the possibilities that the Chapter 11 bankruptcy proceedings give is to engage in recovering money paid out over the years for political donations. Donations made by Sam Bankman Fried to US politicians during elections have long been known to amount to tens of millions of dollars. 

John J. Ray III is now at the helm of the exchange as it handles the company’s bankruptcy, he said in a statement: 

“FTX intends to commence actions in bankruptcy court to seek the return of such payments, with interest accruing from the date of commencement of any such action Notice is hereby given that a payment or gift to a third party, including a charity, received by an FTX taxpayer does not preclude FTX’s debtors from seeking recovery from the recipient or any subsequent transferee.”

Bankman Fried’s donations were many and truly diverse; they were not only related to politics, but rather to entertainment, charity, and other areas that SBF deemed interesting, including climate change prevention and mitigation projects and the prevention of future pandemics.

In October this year, the FTX Foundation, a philanthropic organization created by Bankman-Fried, said it had donated $140 million. Following the collapse of FTX, the US Department of Justice alleged that the donations were the result of criminal money laundering and that the payments violated campaign finance rules.

However, recovery of donations made to politicians and charities will be fairly easy given the clarity of US bankruptcy laws.

Sam Bankman Fried out of jail, former CEO posted $250 million bail

It appears that the former CEO and founder of FTX and Alameda Research, has been released on bail until the trial is over. SBF will be able to return to his home, but he will still be under house arrest pending the completion of the trial. 

Sam Banman Fried, had been in favor of extradition from the Bahamas to the United States, most likely because he was reluctant toward the poor conditions in Bahamian prisons. 

According to the New York Times and CNBC, the former CEO of FTX was released after paying a $250 million bail, also covered in part by Bankman-Fried’s parents’ home.

Currently, Bankman-Fried is charged with eight different crimes, the founder of FTX faces a sentence comparable to life in a US penitentiary. 

Now in addition to house arrest, the former CEO of FTX will also be barred from opening new lines of credit of more than $1,000 pending trial for what the feds have called a “brazen” fraud of his now-bankrupt business.

US Attorney for the District of New York Damian Williams commented on recent events, explaining:

“last week, we announced a trial against Samuel Bankman-Fried for a fraud scheme that contributed to the collapse of the FTX exchange and for a financial scheme that sought to influence Washington politics. As I said, the investigation is still ongoing, but it is moving quickly.”