The founder of cryptocurrency exchange FTX has tentatively withdrawn hundreds of thousands of dollars under house arrest. How?
Following his release on arraignment and a potential $250 million bail, former CEO of bankrupt cryptocurrency exchange FTX Sam Bankman-Fried preliminarily cashed in over $684,000 in digital assets. In doing so, one of the conditions of Sam’s detention was that he could not make any transactions worth more than a thousand dollars without obtaining permission. So how did he manage to exchange so much money, and where did he get it in the first place? We tell you the details of the situation in more detail.
Note that earlier, analysts noticed the movement of crypto assets from wallets that are preliminarily owned by Alameda Research, also founded by Sam Bancman-Fried. In theory, such a move could be handled by the company’s liquidators, who need to find money to compensate former FTX customers. However, in this case, the coins were also sent to cryptomixers, which are typically used to cover their tracks in the blockchain.
Amusingly, Sam Bankman-Fried reacted to what was happening on Twitter. Here’s his rejoinder.
None of these transactions relate to me. I do not and cannot move any of these crypto-assets as I no longer have access to them.
I suppose it’s likely that the various legal divisions of FTX have access to these funds. I hope that’s what’s going on here. If not, I’d like to believe it will happen soon. I would be happy to help advise the regulators on this, if necessary.
Sam Bankman-Fried, founder of cryptocurrency exchange FTX
Naturally, no sympathy has been generated for Sam with these tweets. After all, his actions have already caused billions of dollars in user losses, well, there’s nothing left of Bankman-Fried’s reputation.
What Sam Bachman-Fried does
Suspicious movements of funds associated with Bankman-Fried’s wallet were noted on Twitter by a crypto-enthusiast under the nickname BowTiedIguana. Sam’s publicly known address (0xD5758) sent all remaining ETH on it to a newly created address (0x7386d) on December 28.
The first mentioned address (0xD5758) originally belonged to the creator of the decentralised platform Sushiswap, a developer under the pseudonym Chef Nomi. It was given to Sam in August 2020, which Sam Bankman-Fried confirmed in an archived tweet. The entry reads as follows.
Tweet about SushiSwap wallet being handed over to Sam
Within hours 0x7386d received transfers totaling $367k from 32 addresses identified as Alameda Research wallets, and another $322k was sent from other wallets. All funds were moved to a centralised cryptocurrency exchange in the Seychelles and the RenBridge blockchain.
A total of 519.5 ETH or about $629 thousand was sent from 0x7386d to address 0x64e9B, which also received funds from wallets owned by Alameda Research. BowTiedIguana in addition revealed five separate transactions of less than 51 ETH or $61 thousand, which transferred coins to newly created wallets and then “further to an exchange in the Seychelles”.
In addition, Sam-affiliated wallet 0x64e9B sent three transfers of 200 thousand USDT each to the FixedFloat exchange. BowTiedIguana believes that government authorities should have stepped in and traced all the flows of funds from the Bunkman-Friede wallets and determined whether he is allowed to use the money.
😈 YOU CAN FIND MORE INTERESTING THINGS ON OUR YANDEX.ZEN!
As FTX management’s illegal practices continue to surface and be uncovered by prosecutors, many more interesting details have come to light. According to Cointelegraph’s sources, customers of the bankrupt crypto exchange were sending money to the account of a fake online shop that Sam Bunkman-Fried himself started.
In the complaint, SEC officials mentioned North Dimension Inc, a subsidiary of Alameda, which was an important part of FTX’s financial fraud. Without the customers’ knowledge, their money was sent to North Dimension’s bank account. In this way Bankman-Fried concealed the fact that some of the funds were automatically diverted to Alameda.
Fake shop website
But the most unusual fact about the company, registered at the same address in California as FTX US, is its fake website. Only the archived version of the site is now available – it’s an electronics shop. You can’t actually buy anything from North Dimension.
Feedback form
When you go to the page of any product – for example, a MacBook Pro with a 13-inch display for $1199 – a feedback form opens where you can leave your message and contacts on the site. Naturally, no one will contact the potential customer about selling the MacBook. The “cherry on the cake” is the “About Us” section of the site, which could have been written by a not-so-smart artificial intelligence.
Looks like Sam Bunkman-Fried has been caught in yet another lie. It is unlikely he remembered the public disclosure of his own wallet on Twitter in September 2020, so it has now played against him. Here we can assume that prosecutors and the court will turn their attention to Sam's actions under arrest. If his relation to the transactions is proven, it could be considered a breach of the conditions of being temporarily "at large". And cause for further problems.
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