HomeCryptoFTX: latest court decisions about the founder's fraud

FTX: latest court decisions about the founder’s fraud

After the severe blow it suffered, FTX has now been in bankruptcy for some time due to the founder’s fraud. Needless to deny, its demise has caused huge disruptions and a serious impact on the entire market. However, justice has been partially served after the arrest of Sam Bankman-Fried

In any case, SBF was granted $250 million bail and is currently under house arrest. While his parents were part of this bond, the other two guarantors have remained in hiding. But this condition is not necessarily immutable. 

In fact, according to sources, US District Judge Lewis Kaplan has ordered that details about these people can be made public. This is confirmed by Watcher.Guru‘s official Twitter profile, which reads: 

Judge Kaplan’s decisions regarding founder SBF and the FTX fraud 

The identities of SBF’s guarantors were concealed after SBF’s parents were subjected to threats. However, it does not end there, as it has been pointed out that the two may be dragged to media scrutiny and “harassment” despite having no connection to the FTX case

In this regard, Judge Kaplan stated: 

“The information in question is only entitled to a weak presumption of access, but the offsetting factors are not persuasive enough to overcome even that presumption.”

It is worth noting that the judge believes that both sides of the argument do not contain much weight. However, he went ahead with the claims for the limited purpose of enforcing the public’s alleged right of access to the identities of SBF guarantors.

To allow an appeal, US District Judge Lewis Kaplan pushed enforcement of his order until 7 February. 

In addition, several media houses including Associated Press, Bloomberg, CNBC, Dow Jones, The Financial Times, Insider and the Washington Post have previously written a letter to Judge Kaplan regarding the same. 

Lawyers for these media companies stated:

“The public’s right to know Bankman-Fried enforcers superseded their rights to privacy and security.”

The crypto community’s assumptions about SBF’s guarantors 

During this time, the crypto community tried to guess who SBF’s guarantors were. Most of them speculated that it was Kevin O’Leary. In fact, from time to time, “Mr.Wonderful” had defended SBF in public after the bankruptcy. 

O’Leary had also called out rival exchange Binance during the same period. Therefore, some users suggested that it might be him, despite having suffered a $15 million loss.

O’Leary specifically has made many comments about FTX lately. However, appearing in an interview with CNBC, the Shark Tank host said:

“The total deal was just under $15 million, I invested about $9.7 million in cryptocurrencies. I think that’s what I missed. It’s all zero, I don’t know why my account was canceled a couple of weeks ago. All data, all coins, everything.”

The name of American billionaire investor Bill Ackman has also emerged, as he previously supported SBF during the fall. In addition to these names, the community jokingly suggested that SEC Chairman Gary Gensler might be one of them. 

FTX before bankruptcy was under surveillance by Australian authorities 

Based on the Guardian‘s findings, it appears that FTX was under surveillance by Australian regulators for six full months before its bankruptcy and bankruptcy filing, according to documents obtained. 

The report states that the country’s regulators expressed concern about the platform’s operations before the eventual collapse. As we know, FTX’s collapse was the biggest cryptocurrency story of 2022, as the Australian branch of the platform went into voluntary administration after its bankruptcy in November. 

In addition, the report states that nearly 30,000 Australian customers owed the company amounts ranging up to $1 million. According to the report, FTX operated in-house through an Australian Financial Services License (AFSL). 

This was achieved through FTX’s acquisition of a company that had already been granted such a license. In contrast, when the platform went into receivership, the license was suspended by the Australian Securities and Investments Commission (ASIC).

The ASIC emails were collected by The Guardian through “Australia’s Freedom of Information Laws” and show that regulator officials shared concerns about how FTX would operate in Australia. 

The concerns were reportedly raised by an Australian Financial Review article published in March 2022. Within that story, FTX co-founder and CEO Sam Bankman-Fried spoke about the Australian launch of the platform. 

Subsequently, investor protection regulators said: 

“I am concerned about a claim in the article that FTX would allow traders to buy cryptocurrencies with margin loans of up to 20x their investment.”

Alessia Pannone
Alessia Pannone
Graduated in communication sciences, currently student of the master's degree course in publishing and writing. Writer of articles from an SEO perspective, with care for indexing in search engines.