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Gary

<p class="is-style-lead">FTX co-founder Gary Wang, convicted of misusing funds at a fictitious crypto exchange, may face punishment after his case goes to trial.</p>
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 <p>Table of Contents</p>
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   <li><a href="#is-the-ftx-story-nearing-its-end" rel="noopener noreferrer nofollow">Is the FTX story nearing its end?</a></li>
   <li><a href="#meanwhile-bankman-frieds-assets-are-under-threat" rel="noopener noreferrer nofollow">Meanwhile, Bankman-Fried’s assets are under threat</a></li>
   <li><a href="#meanwhile-the-new-ftx-management-is-bombarding-with-lawsuits" rel="noopener noreferrer nofollow">Meanwhile, the new FTX management is bombarded with lawsuits</a></li>
   <li><a href="#and-whats-next" rel="noopener noreferrer nofollow">And what’s next?</a></li>
  </ul>
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<p>On Nov. 13, prosecutors in the U.S. District Court for the Southern District of New York <a href="https://storage.courtlistener.com/recap/gov.uscourts.nysd.590939/gov.uscourts.nysd.590939.538.0_1.pdf" target="_blank" rel="noopener noreferrer nofollow">filed</a> a brief alleging that Wang provided significant assistance in the investigation of crimes related to <a href="https://crypto.news/tag/ftx/" target="_blank" rel="noopener noreferrer nofollow">FTX</a>, as well as in the prosecution of Sam Bankman-Fried and several other cases.</p>
<p>The government’s attorneys noted the importance of Wang’s testimony at the trial of <a href="https://crypto.news/tag/sam-bankman-fried/" target="_blank" rel="noopener noreferrer nofollow">Bankman-Fried</a>, who was sentenced to 25 years. They also suggested that if Judge Lewis Kaplan decides to sentence Wang, he could develop a tool to identify potential illegal activities in the crypto market. Prosecutors noted that Wang’s testimony was truthful and corroborated by other evidence.</p>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 <p>“Wang has also provided substantial assistance – and in the process taken steps to right past wrongs – by putting his extraordinary computer programing skills to use in detecting potential fraud in the stock and cryptocurrency markets.”</p> <cite>Court filing</cite>
</blockquote>
<p>Wang, who pleaded guilty to wire fraud, commodities fraud, and securities fraud in December 2022, is awaiting final sentencing on Nov. 20.</p>
<h2 class="wp-block-heading" id="is-the-ftx-story-nearing-its-end">Is the FTX story nearing its end?</h2>
<p>The latest updates would make Wang the fifth and final FTX or Alameda Research executive to face sentencing. Bankman-Fried was the only one to plead not guilty. In contrast, former Alameda CEO Caroline Ellison and FTX Digital Markets co-CEO Ryan Salame <a href="https://crypto.news/ftxs-ryan-salame-asks-court-for-two-month-delay-in-sentencing/" target="_blank" rel="noopener noreferrer nofollow">pleaded</a> guilty. All of them are currently serving federal prison sentences.</p>
<p>However, the Bankman-Fried case has continued to see new details and court cases emerge, even as the founder of one of the world’s once-largest exchanges is serving his time in prison.</p>
<h2 class="wp-block-heading" id="meanwhile-bankman-frieds-assets-are-under-threat">Meanwhile, Bankman-Fried’s assets are under threat</h2>
<p>Earlier, U.S. prosecutors <a href="https://www.courtlistener.com/docket/69365454/1/united-states-v-all-assets-and-funds-formerly-contained-in-binance-account/" target="_blank" rel="noopener noreferrer nofollow">filed</a> a lawsuit seeking to seize cryptocurrency, which they say Bankman-Fried used to bribe Chinese officials.</p>
<p>The lawsuit, filed on Nov. 12 in New York District Court, alleges that a Binance account, then worth about $8.6 million but later growing to about $18.5 million, was used to launder money related to bribes before FTX collapsed in late 2022.</p>
<p>Prosecutors noted that in 2021, Chinese authorities froze two <a href="https://crypto.news/tag/alameda-research/" target="_blank" rel="noopener noreferrer nofollow">Alameda Research</a> accounts on Chinese exchanges that held $1 billion in cryptocurrency. Later, on Nov. 16, 2021, Bankman-Fried was recorded transferring $40 million to a personal wallet, after which the Alameda accounts were unfrozen. Prosecutors allege that Bankman-Fried initiated additional transactions worth tens of millions of dollars in cryptocurrency to complete the bribe.</p>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 <p>“As a result of the Investigation, the Government learned that on or about November 16, 2021, at Bankman-Fried’s direction, approximately 40 million USDT (the “Bribe Payment”) was transferred from an Alameda cryptocurrency wallet hosted by FTX.”</p> <cite>Court filing</cite>
</blockquote>
<p>The account contained five linked deposit accounts, obscuring the origin of the bribe funds. They described a “flood” of deposits and withdrawals from the account and regular transfers of Bitcoin (<a href="https://crypto.news/price/bitcoin/" target="_blank" rel="noopener noreferrer nofollow">BTC</a>) and <a href="https://crypto.news/tag/stablecoin/" target="_blank" rel="noopener noreferrer nofollow">stablecoins</a> to five wallets. Ellison <a href="https://crypto.news/caroline-ellison-turns-in-all-her-assets-in-ftx-lawsuit-settlement/" target="_blank" rel="noopener noreferrer nofollow">testified</a> that the total amount of bribes was about $150 million.</p>
<p>Bankman-Fried was initially charged with additional charges related to financial fraud and bribery of foreign officials, which were later dropped. On Sept. 13, his defense team filed an appeal, arguing that Bankman-Fried’s trial was unfair.</p>
<p>You might also like: <a rel="noopener noreferrer nofollow" href="https://crypto.news/here-bitcoin-reserves-have-changed-since-ftx-collapse/"> How Bitcoin reserves of the largest exchanges changed since the FTX collapse </a></p>
<h2 class="wp-block-heading" id="meanwhile-the-new-ftx-management-is-bombarding-with-lawsuits">Meanwhile, the new FTX management is bombarded with lawsuits</h2>
<p>FTX’s new management, meanwhile, is once again preparing lawsuits and demanding money. This time from Binance.</p>
<p>FTX bankruptcy trustees have <a href="https://crypto.news/ftx-sues-binance-and-cz-for-nearly-1-8b-over-alleged-sbf-transfer/" target="_blank" rel="noopener noreferrer nofollow">filed</a> a lawsuit against Binance and its former CEO, Changpeng Zhao, demanding a return of about $1.8 billion. The plaintiffs claim that <a href="https://crypto.news/tag/binance/" target="_blank" rel="noopener noreferrer nofollow">Binance</a> obtained the funds in a fraudulent transaction in 2021.</p>
<p>According to court documents, FTX and its trading subsidiary Alameda Research were probably insolvent from the start and were certainly insolvent on their balance sheets by early 2021. Therefore, the plaintiffs allege that the share buyback deal was fraudulent.</p>
<p>The lawsuit is one of many filed by FTX and Alameda against their former investors, affiliates, and customers as part of the bankruptcy case. On Nov. 9, the companies filed 23 lawsuits. Among them are <a href="https://crypto.news/ftx-sues-crypto-com-to-recover-millions-linked-to-alameda-research/" target="_blank" rel="noopener noreferrer nofollow">claims</a> against U.S. exchange Crypto.com and the political group FWD.US founded by Mark Zuckerberg.</p>
<p>FTX has also filed claims against Anthony Scaramucci and his hedge fund, SkyBridge Capital. The exchange’s lawyers claim that in 2022, Bankman-Fried invested $67 million in various SkyBridge projects since Scaramucci was “seeking financial assistance.” However, these investments “brought virtually no benefit,” the plaintiffs say. According to court documents, FTX is now trying to recover more than $100 million in damages from the company.</p>
<p>Alameda has also <a href="https://crypto.news/ftx-tied-alameda-research-files-lawsuit-against-waves-founder/" target="_blank" rel="noopener noreferrer nofollow">filed</a> a lawsuit against Sasha Ivanov, the founder of the Waves blockchain. The company intends to return the $90 million invested in Vires Finance. This liquidity platform then operated on Waves.</p>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 <p>“To divert attention from his involvement in the fraud, Ivanov attempted to publicly blame Alameda for destabilizing the Waves ecosystem, tweeting that Alameda had manipulated the WAVES price and organized FUD (“Fear, Uncertainty, and Doubt”) campaigns to trigger panic selling.”</p> <cite>Alameda lawsuit</cite>
</blockquote>
<h2 class="wp-block-heading" id="and-whats-next">And what’s next?</h2>
<p>In general, the history of the FTX and exchange executives are two different stories. While the platform executives serve their sentences, FTX creditors are frantically trying to return the money they wasted.</p>
<p>The debt to creditors is about $11.2 billion, and the funds available to cover the debt is $14.6-16.3 billion.</p>
<p>Thus, there is very little time left before the end of the scandalous exchange story – to decide on punishment for Wang and repay everyone’s debts.</p>
<p>You might also like: <a rel="noopener noreferrer nofollow" href="https://crypto.news/ftx-%d1%81reditors-reveal-compensation-details-whats-wrong-with-it/"> FTX сreditors reveal compensation details: What’s wrong with it? </a></p>

The FTX co-founder proved ‘outstanding assistance’ to the US authorities. What awaits him now?

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