One wonders when the FTX bankruptcy case will be resolved as more and more information about it surfaces with each passing day. With the majority of Bankman-Fried’s assets already confiscated, the government is also planning on taking custody of three of his related Binance accounts.
SBF to forfeit $700 million
In a recent court filing, the founder and former CEO of the now-defunct cryptocurrency exchange FTX, Sam Bankman-Fried, will be required to relinquish assets valued at almost $700 million, which have been confiscated by the United States government, should it be discovered that he is guilty of fraud.
According to a court filing submitted on January 20, United States federal prosecutor Damian Williams stated that the “government respectfully gives notice that the property subject to forfeiture” includes a long list of assets encompassing shares, money held at different banks, and cryptocurrency.
The majority of the assets were those confiscated by the government between January 4 and January 19. According to the court filings, the government is attempting to claim “all monies and assets” pertaining to three different Binance accounts owned by SBF.
List of Assets Confiscated from Bankman-Fried
On the list of confiscated assets, the largest holdings are 55,273,469 shares of Robinhood, which are currently valued at about $465 million. This stack of shares, which was confiscated on January 4, was allegedly bought with money stolen from FTX customers while SBF was using the stock and cryptocurrency trading application Robinhood. The shares were being held by Emergent Fidelity Technologies, a company that was established by Bankman-Fried and Gary Wang, FTX’s co-founder.
SBF, in a complaint filed in December 2022, stated that the new firm was established by himself and Wang using money lent to them by Future Exchanges’ sister company Alameda Research through a promissory note in order to purchase shares of Robinhood Markets Inc. worth $465 million.
Other assets confiscated on January 4 include $49.9 million by Farmington State Bank, which was held under FTX digital markets, and $20.7 million by ED&F Man Capital Markets, Inc., which was under the holding of Emergent Fidelity Technology.
On January 19, $94.5 million held by an account at Silvergate Bank was confiscated by the authorities. The confiscated money was linked to FTX Digital Markets, FTX’s Bahamas-based company. Over $7 million was confiscated by the Department of Justice from several Silvergate accounts linked to FTX and Bankman-Fried. Also, up to $50 million was confiscated from a moonstone bank in Washington state that belonged to FTX Digital Markets. There was no specification as to how much the confiscated Binance accounts contained.
OK – on #FTX / Alameda, here now the unsealed guilty plea transcript of Caroline Ellison – it was held in secret, and not docketed until today, once Bankman-Fried was freed on $250 mln bond. Thread then stories on https://t.co/3AcCBJNU41 and pic.twitter.com/Ptd0L1u9oL
— Inner City Press (@innercitypress) December 23, 2022
SBF has pleaded not guilty to eight of the counts brought against him even when members of his inner circle, including Gary Wang and Caroline Ellison, have confessed and worked with the prosecutors on their involvement in the collapse of FTX.
However, the government has requested that the assets be forfeited because it believes that they were obtained illegally by using customer funds.
Inflation-hedged marketing attracted African investors to FTX
A January 18 article in the Wall Street Journal stated that the exchange launched poor advertisements in Africa just before it filed for bankruptcy in November. The launched campaign highlighted the opportunity to earn 8% a year through staking rewards schemes and, in addition, highlighted USD-pegged stablecoins as less prone to inflation than local currencies.
Given the sharp decline of African currencies like the Nigerian naira and Ghanaian cedi against the US dollar, those inflationary feelings may usually be accurate, but African FTX customers who were persuaded by the marketing obviously lost money when the FTX declared bankruptcy.
Eight days before the company’s declaration of bankruptcy, FTX Services was already being offered in West Africa. In a tweet on November 3, SBF noted that the exchange had begun receiving deposits in West African CFA francs.
According to Pius Okedinachi, a former FTX education lead for Africa, the exchange managed monthly trading volumes of $500 million throughout Africa, with Nigeria accounting for the majority of that amount.