{"id":1786545,"date":"2022-12-26T06:01:02","date_gmt":"2022-12-26T11:01:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1786545"},"modified":"2022-12-26T06:03:32","modified_gmt":"2022-12-26T11:03:32","slug":"judge-kept-ftx-executives-plea-deal-secret-to-get-sam-bankman-fried-to-u-s","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/judge-kept-ftx-executives-plea-deal-secret-to-get-sam-bankman-fried-to-u-s\/","title":{"rendered":"Judge Kept FTX Executives\u2019 Plea Deal Secret to Get Sam Bankman-Fried to U.S."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fjudge-kept-ftx-executives-plea-deal-secret-to-get-sam-bankman-fried-to-u-s%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1786545&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>NEW YORK\u2014A judge kept secret that two of Sam Bankman-Fried\u2019s closest associates had turned against him so the cryptocurrency entrepreneur wouldn\u2019t get spooked and fight <a href=\"https:\/\/www.theepochtimes.com\/t-extradition\">extradition<\/a> from the <a href=\"https:\/\/www.theepochtimes.com\/t-bahamas\">Bahamas<\/a>, according to court transcripts made public Friday.<\/p>\n<p>U.S. prosecutors in New York waited until Bankman-Fried, the founder of the collapsed crypto exchange <a href=\"https:\/\/www.theepochtimes.com\/t-ftx\">FTX<\/a>, was in FBI custody before revealing that his business partners, Carolyn Ellison and Gary Wang, had secretly pleaded guilty to fraud charges and were cooperating, which can earn them leniency at sentencing.<\/p>\n<p>U.S. Attorney Damian Williams announced the guilty pleas when Bankman-Fried was in the air late Wednesday.<\/p>\n<p>Prosecutors had been concerned that if Bankman-Fried found out his friends were cooperating, he might try to fight extradition from the Bahamas, where he had been arrested at the request of U.S. authorities.<\/p>\n<p>Ellison, 28, and Wang, 29, entered their guilty pleas in Manhattan federal court Monday to charges that carry a potential penalty of decades in prison.<\/p>\n<p>At that hearing, Assistant U.S. Attorney Danielle Sassoon told the judge prosecutors had expected Bankman-Fried to consent to extradition Monday before there were \u201csome hiccups in the Bahamian courtroom.\u201d<\/p>\n<p>\u201cWe\u2019re still expecting extradition soon, but given that he has not yet entered his consent, we think it could potentially thwart our law enforcement objectives to extradite him if Ms. Ellison\u2019s cooperation were disclosed at this time,\u201d Sassoon told U.S. District Judge Ronnie Abrams.<\/p>\n<p>The judge got assurance from Ellison\u2019s lawyer that there was no objection to the request before granting it.<\/p>\n<p>\u201cExposure of cooperation could hinder law enforcement officials\u2019 ability to continue the ongoing investigation and, in addition, may affect Mr. Bankman-Fried\u2019s decision to waive extradition in this case,\u201d Abrams said.<\/p>\n<p>Bankman-Fried, 30, appeared in court in New York on Thursday. He was released on the condition that he live under house arrest with his parents in Palo Alto, California, while awaiting trial.<\/p>\n<p>The home where he was staying was protected Friday by heightened security, including a Stanford University security guard posted about 50 yards from the home to keep passersby away. The school\u2019s president lives nearby.<\/p>\n<figure id=\"attachment_4943502\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/12\/security-guard-1200x800-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"lazy size-large wp-image-4943502\" src=\"https:\/\/www.theepochtimes.com\/assets\/themes\/eet\/images\/white.png\" data-src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/12\/security-guard-1200x800-1.jpg\" alt=\"security guard\" width=\"640\" height=\"427\"   style=\"display:none\"><figcaption class=\"wp-caption-text\"><noscript><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-4943502\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/12\/security-guard-1200x800-1.jpg\" alt=\"security guard\" width=\"640\" height=\"427\" \/><\/noscript><\/figcaption><\/a> A guard closes barricades to a street near the family home of FTX founder Sam Bankman-Fried in Palo Alto, Calif., on Dec. 23, 2022. (Jeff Chiu\/AP Photo)<\/figure>\n<p>Late Friday, Abrams recused herself from presiding over the case, saying she had learned that the law firm Davis Polk &#038; Wardwell LLP, where her husband is a partner, had advised FTX in 2021 and had represented parties that may be adverse to FTX and Bankman-Fried in other proceedings.<\/p>\n<p>She said her husband has had no involvement in any of the representations and she has no knowledge of the confidential matters, but decided to recuse herself \u201cto avoid any possible conflict, or the appearance of one.\u201d<\/p>\n<p>Ellison is the former chief executive of Bankman-Fried\u2019s cryptocurrency hedge fund trading firm, Alameda Research. Wang co-founded FTX, the crypto exchange. Both agreed to testify at Bankman-Fried\u2019s trial.<\/p>\n<p>They and Bankman-Fried are accused of defrauding customers and investors by illegally diverting massive sums of customer money from FTX to make lavish real estate purchases, donate money to politicians, and make risky trades at Alameda.<\/p>\n<p>In court Monday, Ellison said since FTX and Alameda collapsed in November, she has \u201cworked hard to assist with the recovery of assets for the benefit of customers and to cooperate with the government\u2019s investigation.\u201d<\/p>\n<p>\u201cI am truly sorry for what I did. I knew that it was wrong. And I want to apologize for my actions to the affected customers of FTX, lenders to Alameda, and investors in FTX,\u201d she said, according to a transcript.<\/p>\n<p>Ellison said she was aware from 2019 through 2022 that Alameda was given access to a borrowing facility at FTX.com that allowed Alameda to maintain negative balances in various currencies.<\/p>\n<p>She said the practical effect of the arrangement was that Alameda had access to an unlimited line of credit without being required to post collateral and without owing interest on negative balances or being subject to margin calls or liquidation protocols.<\/p>\n<p>Ellison said she knew that if Alameda\u2019s FTX accounts had significant negative balances in any currency, it meant that Alameda was borrowing funds that FTX\u2019s customers had deposited into the exchange.<\/p>\n<p>\u201cWhile I was co-CEO and then CEO, I understood that Alameda had made numerous large illiquid venture investments and had lent money to Mr. Bankman-Fried and other FTX executives,\u201d she said.<\/p>\n<p>Ellison said she understood that Alameda had financed the investments with short-term and open-term loans worth several billion dollars from external lenders in the cryptocurrency industry.<\/p>\n<p>When many of those loans were recalled by lenders in June, she agreed with others to borrow several billion dollars from FTX to repay them.<\/p>\n<p>\u201cI understood that FTX would need to use customer funds to finance its loans to Alameda,\u201d she said. \u201cI also understood that many FTX customers invested in crypto derivatives and that most FTX customers did not expect that FTX would lend out their digital asset holdings and \u2026 deposits to Alameda in this fashion.\u201d<\/p>\n<p>From July to October, Ellison said, she agreed with Bankman-Fried and others to provide misleading financial statements to Alameda\u2019s lenders, including quarterly balance sheets that concealed the extent of the company\u2019s borrowing and the billions of dollars in loans it had made to FTX executives and others.<\/p>\n<p>\u201cI agreed with Mr. Bankman-Fried and others not to publicly disclose the true nature of the relationship between Alameda and FTX, including Alameda\u2019s credit arrangement,\u201d Ellison said.<\/p>\n<p>During his plea earlier Monday, Wang said that he made changes to computer code to enable the transactions with Alameda.<\/p>\n<p>\u201cI knew what I was doing was wrong,\u201d he said.<\/p>\n<p><em>By Larry Neumeister<\/em><\/p>\n<div class=\"author_wrapper\">\n<div class=\"one_author_block round\">\n<div class=\"top_row\">\n\t\t\t\t\t<a href=\"https:\/\/www.theepochtimes.com\/author-associated-press\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/10\/AP-logo-square-1080.jpg\" alt=\"The Associated Press\" \/><\/a>\n\t\t\t\t\t<\/div>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>NEW YORK\u2014A judge kept secret that two of Sam Bankman-Fried\u2019s closest associates had turned against him so the cryptocurrency entrepreneur wouldn\u2019t get spooked and fight extradition from the Bahamas, according to court transcripts made public Friday. U.S. prosecutors in New York waited until Bankman-Fried, the founder of the collapsed crypto exchange FTX, was in FBI &hellip;<\/p>\n","protected":false},"author":1,"featured_media":1786548,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[6962,7176,5458,3715,4363,7334,10988,5387,5566,6418,3819,6912,6323,7238],"class_list":["post-1786545","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report","tag-the","tag-bankman-fried","tag-bongino","tag-deal","tag-executives","tag-ftx","tag-get","tag-judge","tag-kept","tag-plea","tag-report","tag-sam","tag-secret","tag-u-s"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1786545","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1786545"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1786545\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1786548"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1786545"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1786545"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1786545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}