Note that the FTX and Alameda Research proceedings are ongoing, with former Alameda executive Caroline Ellison and FTX co-founder Gary Wang now involved in the case. Authorities had earlier confirmed that the named individuals were being cooperated with, with Caroline and Gary receiving lesser sentences in exchange for their information.

Apparently Allison has decided to put FTX founder Sam Bankman-Friede directly at risk. During the course of the case the previous day it was revealed that Wang had indeed created a backdoor in the FTX exchange system that allowed funds from exchange users to be sent to the management of the trading company Alameda. Caroline Ellison, in turn, used other people’s money to trade while Sam Bankman-Fried spent it on investments, property purchases and donations to politicians.

Case file against FTX and Alameda

As noted by the prosecution, some time later Bankman-Fried and Wang sent billions of dollars of user money to the Alameda account. Sam used the giant’s account as his personal piggy bank.

Highlights of the case against FTX and Alameda

Crucially, former Alameda Research executive Caroline Allison has confirmed that it was Bankman-Fried who instructed her to take FTX users’ funds in exchange for the exchange’s native token called FTT. Sam has previously claimed that he was not privy to Alameda’s dealings, so this nuance will definitely not go down well with Bankman-Fried’s fate.

Former Alameda Research CEO Caroline Allison

Overall, while the world is watching the FTX situation unfold, news of bank fines goes largely unnoticed.

What the bank is being fined for

The promotion of news about FTX to the masses has angered Ripple CEO Brad Garlinghouse. On his Twitter account, he claimed that the public is overlooking “the really big scams”. Here’s his rejoinder, cited by CryptoPotato.

The world is relatively outraged by the fraud of Sam Bankman-Fried and FTX, but when Wells Fargo mismanages billions in customer funds, no one notices. There’s a lot to think about…

To be fair, the bankruptcy of cryptocurrency exchange FTX and the illegal actions of the platform's management have also resulted in billions of dollars in financial losses for users. That said, incidents of this magnitude have never happened to a trading platform before, so journalists' attention to what's happening at FTX is quite predictable. However, all sorts of breaches of the law by banks really could have been covered in more detail.

Brad Garlinghouse’s tweet

CFPB chief Rohit Chopra has called the fourth-largest US bank a “repeated law-breaker” that has caused billions of dollars worth of damage to its customers, including the loss of cars and homes to thousands of people. The bank has also been accused of fraudulently charging fees and interest on car and mortgage loans, “mistakenly seizing” autos and misallocating customer loan payments.

Wells Fargo even opposed any mortgage loan modifications, which members of the bureau felt should have been approved. This rejection led to some borrowers losing their homes, with the bank allegedly aware of the problem but only resolving it years later.

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The FTX bankruptcy story is replete with interesting details, and the collapse of such a large crypto exchange in terms of trading volumes itself is still unprecedented. It should therefore come as no surprise that another “rogue bank” didn’t make front-page news. Incidentally, the FTX bankruptcy lawsuit is revealing new details about the exchange’s business dealings.

According to Decrypt’s sources, it was recently revealed that the deal to buy the Blockfolio platform consisted of 94 per cent of the FTT exchange’s native tokens, which were issued by FTX itself. As a reminder, FTX acquired Blockfolio in 2020. At the time, the news stated that the deal was for fiat, crypto and securities. The acquisition amounted to $150 million.

FTT tokens almost completely devalued after FTX’s bankruptcy

The platform’s co-founder and then-CEO Ed Moncada said at the time that he was “excited about the potential of combining one of the industry’s best teams with the best exchange in the industry”. Unfortunately, Blockfolio representatives are now refusing to give any comment to journalists about their platform’s connection to FTX. And that’s hardly surprising given what’s happened in the last month and a half.

By the way, the Blockfolio app’s website is still up and running, and anyone can visit it. The platform looks like this.

Blockfolio platform website

However, the app itself does not exist in the respective shops from Apple and Google. When trying to go to Google Play, for example, the following message appears.

Absence of the Blockfolio app in the Google Play shop


Obviously, the collapse of FTX deserves the attention the bankrupt exchange is getting today. Still, crypto-assets are a convenient topic of criticism right now, given the 2022 results for coin rates. In addition, such collapses of centralised crypto platforms due to the actions of their management have not happened before. However, banks should not be forgotten either. Still, it is their representatives that regularly criticize crypto and position decentralized assets as a tool for illegal activities. Although, as current events show, banks are not missing opportunities to circumvent the law either.