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Under House Arrest, up to His Old Tricks
The never-ending story of Sam Bankman-Fried
The story of Sam Bankman-Fried, the crypto currency whiz kid who created the Bitcoin exchange FTX, let it collapse and then allegedly defrauded his investors to the tune of a couple of billions of dollars has always been a weird one. But it is getting weirder still. Bankman-Fried, who was arrested in December and has since been under house arrest in his mother’s basement1, is reportedly up to his old tricks.
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Back during the very last days of the previous year, some Twitter sleuths discovered that someone was moving more than half a million dollars in crypto currency around the various blockchains and cashing it out via an exchange in the Seychelles. The crypto currency addresses in question belonged to someone at Alameda Research, Bankman-Fried’s company that was closely tied up with FTX. The suspicion was that Bankman-Fried was liquidating some of his remaining assets — while under house arrest.
Now, some other people on Twitter claim to have found evidence that Bankman-Fried was instigating a new crypto currency fraud: pumping up the meme-currency BALD before making it worthless. BALD collapsed on Monday after what crypto investors call a “rug pull”.
Newly-launched bald (BALD) tokens on the Base blockchain fell as much as 90% after peaking on Monday as the token's deployer removed millions of dollars worth of liquidity, data shows.
BALD held as much as $32 million ether (ETH) during European morning hours on Monday. However, the developer apparently moved millions — causing prices to fall to 1 cent from 9 cents. Prices seemed to recover to 4 cents at writing time as few traders bought the dip.
The suspicion — mostly based on substantial similarity between the online communication of Bankman-Fried and the principal BALD developer — is that Bankman-Fried, again from house arrest, instigated the rug pull to cash out some untraceable assets to use during, or after, his current legal troubles. A suspicion that is not shared by every observer in the space, though.
In other news, a judge in Bankman-Fried’s upcoming case in New York is considering to revoke his bail and send the man from house arrest to a jail cell because Bankman-Fried seems to have given the personal journals of Caroline Ellison to The New York Times. Ellison, Bankman-Fried’s former lover, ran Alameda Research with him. The Times used these journals to publish a much-criticised exposé of Ellison’s time with Bankman-Fried at the end of July2.
“I have been feeling pretty unhappy and overwhelmed with my job,” Ms. Ellison wrote in a Google document in February 2022. She added: “At the end of the day I can’t wait to go home and turn off my phone and have a drink and get away from it all.”
This is a pretty sad state of affairs, because instead of shedding light on Bankman-Fried’s shady business practices or the people that fell afoul of them for whatever reasons, it mostly deals in personal details about one of his employees who he was romantically involved with. It’s pretty tabloid-y stuff that doesn’t answer the interesting questions and instead exploits the undue curiosity of readers. It helps distract from Bankman-Fried, which is probably while he leaked the document3.
And its not like many of these internal details of the craziness that was FTX and Alameda weren’t known, and reported on, before.
The Times story notwithstanding, this whole thing is pretty fascinating and I will try to follow the court case as best as I can once it kicks off. The whole story would be utterly hilarious, were it not for what it says about the intelligence of people with too much money to invest and what that means for humanity as a whole.
Of course, you won’t be hearing much about the details of any of this in the mainstream news. For most of my colleagues, this topic is way too technical. They can hardly wrap their brain around the Wirecard scandal as it is.
A story which the paper has now defended in a filing to the court concerned with the case.
On a side note: Who the hell keeps a diary in a Google doc anyway? Aren’t diaries supposed to be private? Why are you sending yours straight to Google? Not to mention that doing something stupid like this makes it easier for other people to get access to your most intimate thoughts. People like your creepy ex-boyfriend who was also your boss.