🐻 Inside SBF’s (suspicious) arrest 🚓

Plus, a top secret crypto chat group

Author

Build in Bear
December 15, 2022

Good news folks, CPI report results are in and we came in at 0.2% lower than expected. Don’t get it twisted though, annual inflation is still sitting at 7.1%, which is the highest we’ve seen in a decade, but nowadays, this is considered bullish. What a strange world we live in 🤦.

This week, the plot thickened in the ongoing FTX drama series. We're breaking it down into 3 parts:

  • Part 1: The strange arrest of SBF

  • Part 2: The top-secret chat group

  • Part 3: Inside the FTX hearing

1/ The strange arrest of SBF

Nearly a month after crashing the market and revealing the loss of over $8 billion in customer funds, Sam Bankman-Fried (SBF), the orchestrator behind the FTX fraud shop was finally taken into custody Monday evening by the Bahamian authorities.

The media was sure to capture the best footage of the charade for all the future documentaries they’ll be milking out of this.

Here’s what we know so far about the arrest:

  • The U.S. filed criminal charges against SBF and issued the request for Bahamian authorities to arrest him.

  • The laundry list of charges includes money laundering, wire fraud, and securities fraud.

  • If he is found guilty of all 8 charges filed against him, he could spend up to 115 years in prison.

  • He was denied bail and will likely be extradited to the U.S.

  • The DOJ, SEC, CTFC and several state regulators are all pursuing charges against SBF.

Despite SBF’s effort to convince us that he’s a young and dumb CEO that “messed up big time”, the evidence was clearly stacked up against him. So what took so long for the arrest and why now?

Call it a coincidence, but SBF was set to testify under oath to Congress this past Tuesday. Conveniently, the arrest happened the evening before the hearing, excusing him from appearing in court. Are you following yet?

The timing is rather suspicious, to say the least. With SBF’s deep political entanglements and donations, it wouldn’t be surprising if the people up top wanted to silence him from speaking out further (just saying 🤷).

1/ The top-secret chat group

So if SBF couldn’t speak at the scheduled FTX court hearing, what happened? For one, SBF’s testimony that he was supposed to deliver in front of Congress was conveniently “leaked”.

It’s 16 pages long, but for the most part, it’s nothing we haven’t already heard him rambling on in Twitter Spaces. TL;DR he continues to assert that FTX US is completely solvent and pushes the blame onto the Chapter 11 process 🤡.

Okay, great moving on to the actual juicy part. Within his testimony, SBF also took the chance to take shots at CZ of Binance and submitted some interesting screenshots.

As revealed by SBF, a private Signal chat group existed, which included folks like SBF (FTX), CZ (Binance), Jesse Powell (Kraken), Paolo Arduino (Tether) and Justin Sun (Tron). This was known as the “Exchange Coordination” group.

Let’s not all act surprised that major crypto folks, even competitors, would be “coordinating” behind the scenes. But what are they coordinating about?

Well, in the specific screenshots submitted by SBF, it reveals CZ accusing SBF of trying to depeg the stablecoin, which would cause major ripple effects across the industry.

CZ even requests to have SBF removed from the chat group so that the rest of them could “work together to help stabilize and restore confidence for the market”. Well that’s interesting…🤔

Message to SBF: don’t tease us with a few chat messages, at this point, just drop the whole group chat log. Show us what you were all really coordinating about 👀.

3/ Inside the FTX hearing

While we were all distracted by the shenanigans around SBF’s arrest, the actual FTX hearing carried on without the man of the hour. Here are some of the folks that testified:

1/ Kevin O’LearyAfter admitting that he took a $15 million sponsorship deal from FTX, we’re not sure why Kevin would still be asked to testify when he’s clearly compromised 🤡.

Like right out of the SBF playbook script, Kevin goes on to put the blame on CZ and accuses him of driving FTX out of business.

2/ John Ray IIICleaning up the mess that SBF made is John Ray III, aka, a real CEO. He confirms a few things that we already knew:

  • There was indeed comingling of assets between FTX and Alameda.

  • Alameda used FTX client funds for risky margin trades.

  • They spent over $5 billion from 2021-2022 on businesses and investments that saw a significant loss.

Some other fun, new pieces of information we found out was that the multi-billion dollar company used Quickbooks for accounting. If you’re unfamiliar, QB is meant for small businesses 🤦.

So, what about SBF’s donations to political parties? Are we just not going to talk about that 🤔?

All we’re saying is that the timing of everything is rather…interesting. But what do we know 🤷?

In other news 🗞

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