he said FTX defrauded all of its
customers I don't think I I you know
tried to commit fraud anywhere here I
was trying to do the best I could
obviously that wasn't nearly as good as
I thought it was I mean there's going to
be this trial and the lawyers are going
to tell two stories and so there's a
story war going on in the courtroom and
I think neither one of those stories is
as good as the story I
have November 2nd 2022 a sus document
would be released the balance sheet of a
mysterious trading firm called Alam
research Alam research was the sister
firm of the famed cryptocurrency Empire
that was FTX and at first glance this
document was actually reassuring it
showed that Alam research had $14.6
billion worth of assets a testament to
the pure size and scale of the FDX
Empire but on closer examination there
were a few concerning line items
specifically alam's unusually large
stake in ftt an altcoin created by FTX
not only did ftt account for 3.66
billion but it was the single largest
asset on their balance sheet and the
third largest asset on their balance
sheet was 2.16 billion dollar worth of
collateral on ftt this made it clear
that alamaa research and FTX were far
more connected than anyone initially
expected but this itself didn't
implicate FTX all we need knew was that
FTX was likely using their sister
company to pump up the price of their
own token but all of this would change
Just 4 days later when the CEO of
binance CZ announced that they would be
liquidating their entire stake in FDT
due to recent Revelations just 15
minutes later Alam research who was
scrambling would announce that they
would buy binance's entire stake in a
behindth scenes deal to soften the sales
impact on the market price of ftt now
this in itself was a red flag why was
Alam so scared of an open market sale
how dependent really were they on ftt we
didn't get the answer to this
immediately but we would hear some more
unexpected news on November 8th 2022
binance announced that they were
entering a non-binding contract to buy
out FTX to help them with their
liquidity crunch now this was really
concerning up until this point FTX was
the one that was bailing out other
exchanges and now FDX themselves needed
a bailout this couldn't be good news and
as expected just one day later Bloomberg
announced that us Regulators were
investigating FTX for mishandling
customer funds this was the beginning of
the end for Sam bankman freed and FTX
here's what happened
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once Regulators got involved Sam would
throw in the towel almost immediately he
would announce that alamaa research was
shutting down and just one day after
that FTX would file for bankruptcy
themselves in retrospect it's obvious
why Sam decided to do this but at the
time this was far more concerning this
was the first indication from Sam
himself that there was more going on
than what met the eye if all FTX needed
was just funding there was no no need to
throw in the towel so early as they may
have still been able to get funding
given their size and reputation but if
there was something more Sinister going
on it was better that Sam came clean
sooner rather than later given that this
would no longer be about saving FTX it
would be about saving himself and just
as people worried ftxs users worst
fearce would come to fruition just 2
Days Later $1 billion worth of client
funds were missing and just when you
thought thought that things couldn't get
worse FTX would get hacked leading to
$477 million moving off the exchange the
walls were quickly closing in on Sam and
he knew it on November 15th a class
action lawsuit would be filed against
FTX and all of its celebrity influencers
including the likes of Kevin oir
Shaquille O'Neal and Stephan Curry
Congress would also soon get involved
announcing that they would be holding
hearings regarding the FTX implosion in
December but despite all of this Sam
would play it off rather cool at least
publicly while he admitted that he had
screwed up big time his biggest regret
was actually having filed for bankruptcy
he went on to argue that he may have
been able to raise the required funds
and that this entire crisis could have
been avoided if he hadn't filed for
bankruptcy but while there may have been
some reality in which this may have
worked this isn't exactly making
customers whole rather this would just
extend the deception
Not only would customers be getting
fooled but so would investors who would
all be covering for what at best was
gross negligence and ignorance and what
at worst was straight up financial fraud
from samide and make no mistake those
are the only two options as it's highly
unlikely that this was actually just an
honest mistake you see even before the
whole ftt token thing Alam research had
lost $3.7 billion between 2019 and 2021
so the core of Ft X was really never as
strong as Sam portrayed and people were
starting to realize this in a last
Stitch effort to save face Sam would try
pulling off a massive publicity stunt
starting at the end of November Sam
would constantly appear on financial
news networks crypto podcasts
conferences and Community Town Halls his
goal with all of this was crystal clear
he wanted to paint his own narrative yes
he had messed up with FTX but it wasn't
because of militia's intent or
deliberate wrongdoing it was because he
just didn't know and hey maybe that is
his truth but the reality for everyone
else doesn't get any better whether he
did it on purpose or not and soon enough
he too would understand this reality as
his Congress hearing was rapidly
approaching on December 13th but this
hearing would never take place as Sam
bankman would be arrested in the Bahamas
on December 12th
2022
Sam would continue holding strong to his
story but the same could not be said
about his business partners or should I
say accomplishes less than 10 days after
Sam's arrest FDX co-founder Gary Wang
and Alam research co-ceo Caroline
Ellison would both plead guilty and
agreed to cooperate with prosecutors
Wang pled guilty to conspiracy to commit
wire fraud wire fraud conspiracy to
commit commodities fraud and conspiracy
to commit Securities fraud and Ellison
pled guilty to two counts of wire fraud
two counts of conspiracy to commit wire
fraud conspiracy to commit Commodities
fraud conspiracy to commit Securities
fraud and conspiracy to commit money
laundering and now that these two had
turned on Sam we would see a lot more
damning evidence come out about just how
involved Sam may have really been
according to Gary Wang Sam had directly
instructed him to create a secret back
door to siphon client funds from FTX
into alamaa research Gary went on to
accomplish this by hiding a single line
of code in a sea of millions giving
alamaa a total credit line of wait for
it $65
billion Alama allegedly used some of
this money to buy planes houses throw
parties and make political donations
apparently FDX owned a total of A4
billion dollar worth of Bahamian real
estate and spent as much as $6.9 million
on food and entertainment within a
matter of 9 months
officially speaking FTX wasn't stealing
any client funds they were just
borrowing it without permission of
course it looks like Sam took Mr Krab's
advice to Heart ah permission permission
you can borrow anything you want any
time as long as you get it back before
it's missed everyone knows that right
luckily for Sam though he only had to
spend 10 days in jail until he would
make bail for a whopping 2 $50 million
which is thought to be the largest bail
in history if this was 2 months earlier
Sam being able to afford $250 million
for bail by himself wouldn't have been
all that surprising but with FDX being
bankrupt you're probably wondering how
he secured the bond well a part of the
answer is that he got help from his
parents who put up their Apollo Al to
home as collateral speaking of this
Paulo Alta home after making bail Sam
would be placed under House rest at his
parents home since then Sam has mostly
flyed under the radar only talking to
the press behind the scenes but he has
made some notable appearances on
headlines here and there the first of
which was on January 3rd 2023 when he
played not guilty as expected something
that was not expected though was his
headline appearance in mid-February when
a judge ordered him to stop using vpns
to access the internet according to his
lawyers Sam was just using a VPN to
watch the Super Bowl but it's very
possible that he could have been doing
something to influence the case in his
favor which would not be all that
surprising given that he would do
exactly that just 6 months later in
August of 2023 it came out that Sam may
have been tempering with Witnesses
according to the prosecutors Sam had
shared documents with the press that
made it seem like Caroline was just a
jilted lover who had worked alone this
of course could not only influence how
Caroline testifies but may also
influence how other Witnesses testify
and as such a federal judge would revoke
Sam spale and put him back behind bars
on August 11th
2023 Sam's lawyers have tried to argue
that Sam being in jail is preventing him
from being able to prepare for the trial
but a judge knocked this argument down
saying that Sam already had several
months and extensive access to
electronic resources to prepare and all
of this leads us into Sam's trial which
officially began on October 3rd 2023
with jury selection the criminal trial
is expected to last up to 6 weeks
meaning that most of the case should
play out by mid November but that
doesn't mean that we'll get a verdict
right after juries can take anywhere
from a few minutes to even a few months
to come to a verdict also Sam may be up
for a second trial next march but we
don't yet know if that trial will ever
even see the light of day so chances are
that unless we see some sort of crazy
roadblock we should have a verdict by
the end of this year but what will that
verdict be well Sam is currently facing
these seven charges which carry more
than 100 years worth of prison time but
even if he does get convicted on all of
these charges it's almost certain that
Sam won't be spending anywhere near 100
years in prison according to Legal
experts similar charges are usually
grouped meaning that prison time will be
assigned in a concurrent manner as
opposed to a cons ative manner as such
if Sam does end up getting convicted his
total prison sentence will probably be
in the 10 to 20 year range it's still
unlikely though that he would actually
end up spending all that time in prison
for starters if the case isn't going his
way and this lawyers feel that he's
probably going to be found guilty it's
very possible that they negotiate a plea
deal with the prosecutors which could
bring his prison time to less than 10
years also if he is guilty he would
likely have a lot of dirt on the people
around him that may made all of this
possible meaning that he could cash in
this knowledge for an even shorter
sentence this is exactly what the Wolf
of Wall Street did originally he was
sentenced for 4 years in prison but by
turning on his associates he was able to
get out after just 22 months with all
that being said though it's highly
unlikely that Sam gets away with no
prison time either just due to the scale
of his disaster so the most likely
outcome is probably some amount of
prison time but not for the rest of his
life which if he is guilty You could
argue he deserves with over $8 billion
worth of customers funds missing
according to cftc it's no question that
Sam has completely ruined the lives of
countless people we're talking about
people who lost their entire life
savings college funds retirement funds
and house funds and according to Sam
himself this money is invaluable in fact
in a post he made about altruism before
all of this he posed the question just
how much impact can a dollar have his
answer was 1 12,000th of a life so if
Sam really is the reason that people
lost over $8 billion then Sam's Mistake
by his own words is worth 4 million
lives and whether he spends the rest of
his life in jail or not this damage is
something that he'll likely never be
able to make up for and that's what
happened to Sam bankman freed someone
else that's facing legal consequences is
Amazon who may be broken up check out
this video to learn more but until then
I'm Hari and I'll see you guys on the
next
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