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Maybe they don't need a cooprerating witness or special deals. Apparently the companies were really badly run, with lots of clear-cut violations, making it very

Maybe they don't need a cooprerating witness or special deals. Apparently the companies were really badly run, with lots of clear-cut violations, making it very easy to file charges. From The Verge article about the arrest of Bankman-Fried ( https://www.theverge.com/2022/12/12/23506483/sam-bankman-fried-arrest-us-extradition-ftx-crypto https://www.theverge.com/2022/12/12/23506483/sam-bankman-fri... ) : John J. Ray III, who has taken over for Bankman-Fried as CEO of FTX and whose credentials include supervising the corporate cleanup after Enron imploded, has already said, 'Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.'

throwaway2037 4y ago
John J. Ray III is a star. The board did right to hire him for the clean-up. I am sure he is cooperating closely with US and Bahamian authorities for criminal evidence gathering. And, he is being paid ~2.6M USD annualised (1,300 USD per hour, 2,000+ hours per year). Seems cheap to clean-up that mess. It might take 5-10 years for full clean-up and wind-down. As the mess is so extensive, I wonder if some board members will also be under investigation. While board member normally have liability insurance, it won't help if crimes were committed. Source on pay: FT.com -> https://www.ft.com/content/5d826ca9-389e-41ec-a38b-da43211da974 https://www.ft.com/content/5d826ca9-389e-41ec-a38b-da43211da... FTX disclosed in court papers that Ray was billing his time at $1,300 an hour and had been paid a $200k retainer fee.
- shapefrog 4y ago
  FTX's Board of Directors actually consisted of just one person: the controlling shareholder, Mr. Bankman-Fried
  - throwaway2037 4y ago
    The last press release I could find is here: https://www.prnewswire.com/news-releases/ftx-us-derivatives-announces-board-of-directors-301463938.html https://www.prnewswire.com/news-releases/ftx-us-derivatives-... FTX US had (at least) nine board members. FTX International (non-US entity) was private, as I understand, and essentially unregulated, so who cares about the board.
    - shapefrog 4y ago
      FTX US is a subsidary of FTX int. The board of FTX US has no power to do anything to parent co or other subsidaries of parent co. FTX US was/is also a private company.
- mike_hearn 4y ago
  Who is paying him that amount and where is the money coming from to do so?
  - throwaway2037 4y ago
    It is a good question. I assume FTX global and/or US has some cash reserves. At the very minimum they have been running a business that needs to pay cash salaries, rent, utilities, etc. Your question is partly answered by the 200K USD retainer" (no details provided). I assume that was paid upfront. He may refuse to continue work if paychecks do not arrive in a timely manner. This guy is very experienced cleaning up bankrupt companies. I'm sure he will get paid, or not work.
seanhunter 4y ago
Maybe all the evidence they need is on chain. That would be interestingly ironic.
- Tepix 4y ago
  One of the problems of these centralized exchanges is that so much stuff happens off-chain. The DEX don't have these problems (some of them have other problems)
  - rtkwe 4y ago
    One of the major charges though is that they misdirected funds to Alameda Research or had people deposit directly to them instead which would be happening on chain. The failed arbitrage would have also required a lot of on-chain activity.
    - seanhunter 4y ago
      Indeed. It's emerged that there are screenshots of a signal chat group called (in what must have seemed at the time to be an amusing joke) "Wirefraud" with SBF, the CEO of Alameda (Caroline Ellison) and two of the other top folks from FTX/Alameda.[1] So one of them (probably Ellison as everyone is speculating) almost certainly turned to provide that. That's the sort of off-chain evidence that is somewhat awkward when you're trying to defend (amoung other things) a charge of wire fraud. [1] https://futurism.com/the-byte/sbf-caroline-ellison-allegedly-secret-groupchat https://futurism.com/the-byte/sbf-caroline-ellison-allegedly... and elsewhere
      - rtkwe 4y ago
        Yeah I think they're absolutely hosed here. Beyond anything they did or said before the collapse SBF kept talking and to all appearance lying while trying to get people to reinvest which is a whole new set of possible crimes about misleading investors as well as basically admitting to several crimes.
dereg 4y ago
A great deal of internal communication apparently occurred within ephemeral Signal Chats. While JJRIII is witness to failure, Ellison was witness to intent.
3327 4y ago

throwaway2037 4y ago

John J. Ray III is a star. The board did right to hire him for the clean-up. I am sure he is cooperating closely with US and Bahamian authorities for criminal evidence gathering. And, he is being paid ~2.6M USD annualised (1,300 USD per hour, 2,000+ hours per year). Seems cheap to clean-up that mess. It might take 5-10 years for full clean-up and wind-down. As the mess is so extensive, I wonder if some board members will also be under investigation. While board member normally have liability insurance, it won't help if crimes were committed. Source on pay: FT.com -> https://www.ft.com/content/5d826ca9-389e-41ec-a38b-da43211da974 https://www.ft.com/content/5d826ca9-389e-41ec-a38b-da43211da... FTX disclosed in court papers that Ray was billing his time at $1,300 an hour and had been paid a $200k retainer fee.

shapefrog 4y ago
FTX's Board of Directors actually consisted of just one person: the controlling shareholder, Mr. Bankman-Fried
- throwaway2037 4y ago
  The last press release I could find is here: https://www.prnewswire.com/news-releases/ftx-us-derivatives-announces-board-of-directors-301463938.html https://www.prnewswire.com/news-releases/ftx-us-derivatives-... FTX US had (at least) nine board members. FTX International (non-US entity) was private, as I understand, and essentially unregulated, so who cares about the board.
  - shapefrog 4y ago
    FTX US is a subsidary of FTX int. The board of FTX US has no power to do anything to parent co or other subsidaries of parent co. FTX US was/is also a private company.
mike_hearn 4y ago
Who is paying him that amount and where is the money coming from to do so?
- throwaway2037 4y ago
  It is a good question. I assume FTX global and/or US has some cash reserves. At the very minimum they have been running a business that needs to pay cash salaries, rent, utilities, etc. Your question is partly answered by the 200K USD retainer" (no details provided). I assume that was paid upfront. He may refuse to continue work if paychecks do not arrive in a timely manner. This guy is very experienced cleaning up bankrupt companies. I'm sure he will get paid, or not work.

seanhunter 4y ago

Maybe all the evidence they need is on chain. That would be interestingly ironic.

Tepix 4y ago
One of the problems of these centralized exchanges is that so much stuff happens off-chain. The DEX don't have these problems (some of them have other problems)
- rtkwe 4y ago
  One of the major charges though is that they misdirected funds to Alameda Research or had people deposit directly to them instead which would be happening on chain. The failed arbitrage would have also required a lot of on-chain activity.
  - seanhunter 4y ago
    Indeed. It's emerged that there are screenshots of a signal chat group called (in what must have seemed at the time to be an amusing joke) "Wirefraud" with SBF, the CEO of Alameda (Caroline Ellison) and two of the other top folks from FTX/Alameda.[1] So one of them (probably Ellison as everyone is speculating) almost certainly turned to provide that. That's the sort of off-chain evidence that is somewhat awkward when you're trying to defend (amoung other things) a charge of wire fraud. [1] https://futurism.com/the-byte/sbf-caroline-ellison-allegedly-secret-groupchat https://futurism.com/the-byte/sbf-caroline-ellison-allegedly... and elsewhere
    - rtkwe 4y ago
      Yeah I think they're absolutely hosed here. Beyond anything they did or said before the collapse SBF kept talking and to all appearance lying while trying to get people to reinvest which is a whole new set of possible crimes about misleading investors as well as basically admitting to several crimes.

dereg 4y ago

A great deal of internal communication apparently occurred within ephemeral Signal Chats. While JJRIII is witness to failure, Ellison was witness to intent.

3327 4y ago