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Founder of anti-fraud firm US Probes FTX, examines cash flows into the Bahamas

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(Bloomberg) — U.S. prosecutors, laying the groundwork for a possible fraud case against Sam Bankman-Fried and others implicated in the collapse of cryptocurrency giant FTX, are scrutinizing how funds held by the exchange operator moved outside the United States as it headed toward bankruptcy, according to a person familiar with the matter. command.

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Prosecutors are closely examining whether hundreds of millions of dollars were improperly diverted to the Bahamas around the time of FTX’s Nov. 11 bankruptcy in Delaware, said the person, who asked not to be named without permission to discuss the case publicly.

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As DOJ officials embark on a thorough investigation into how FTX handles clients’ money and assets, this week they met with FTX’s court-appointed supervisors to discuss the material they aim to collect, the person said. They are also looking into whether FTX broke the law by funneling money to Alameda Research, the bankrupt investment firm also founded by Bankman-Fried, a previously reported area of ​​investigation.

Bankman-Fried, who is in the Bahamas and has not been charged with any crimes, admitted to serious administrative errors at FTX, but vehemently denied that he knowingly misused client funds. A Bankman-Fried spokesperson declined to comment on Friday.

The New York Times reported this week that federal prosecutors are also looking into whether Bankman-Fried engaged in market manipulation by orchestrating deals that led to the collapse of the TerraUSD ecosystem earlier this year.

Prosecutors for the Southern District of New York, including Assistant US Attorney Nicholas Ross, met for about two hours this week in a conference room in lower Manhattan with dozens of people investigating the collapse of FTX. Possible fees were not discussed at the organizational meeting. A spokesman for the southern region declined to comment.

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The meeting included officials from that office and the Department of Justice in Washington, agents from the FBI, and a bankruptcy team led by John J. Ray III, who was named CEO of FTX last month. The people said FTX attorneys from Sullivan and Cromwell, including former SEC enforcement director Steve Peiken and former Manhattan federal prosecutor Nicole Friedlander, were also in attendance.

Ross helped prosecute Nikola founder Trevor Milton, who was convicted in October of misleading investors in the electric truck company.

Bankman-Fried gave a series of media interviews last month describing accounting errors that obscured the extent of FTX’s ties to Alameda and the risks that resulted. On Friday, he said on Twitter that he is ready to testify at a December 13 hearing before the US House Committee on Financial Services about the disintegration of his crypto empire.

Read more: Inside Sam Bankman-Fried’s Bahamian penthouse after FTX’s fall

Bahamas-based FTX and more than 100 related entities, including the company’s US arm, sent shock waves through the cryptocurrency ecosystem with their bankruptcy filing last month. The group and its founder now face scrutiny from regulators and attorneys general in the US and abroad.

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MicroStrategy is at its lowest level since 2020 after the sales were revealed

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(Bloomberg) — Shares of MicroStrategy touched their lowest level since August 2020 after the enterprise software company, which in recent years has been known as the largest buyer of bitcoin, revealed its first sale of the token.

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The stock fell 1.1 percent to $136.63 on Thursday, down 75 percent this year. Bitcoin rose less than 1% to around $16,590 and is believed to have fallen 64% since the start of the year.

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In a filing on Wednesday, MicroStrategy said it acquired approximately 2,395 Bitcoin between the beginning of November and December 21 through its subsidiary MacroStrategy, and paid out approximately $42.8 million in cash. It then sold 704 of the tokens on Dec. 22 for a total of about $11.8 million, citing tax purposes, before buying another 810 of them two days later.

Matt Malley, chief market strategist for Miller Tabak + Co. Step down as CEO. This news means they don’t seem to want to do that anytime soon.”

Overall, MicroStrategy held about 132,500 bitcoins worth over $4 billion USD as of December 27th. The company paid an average purchase price of $30,397 per bitcoin.

“Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have a lot of leverage over Bitcoin, and may face some liquidity risk,” Jefferies analyst Brent Thiel wrote in a note on Wednesday. Thill has an “underperform” rating on the stock and a price target of $110.

Over the years of the pandemic, MicroStrategy has become well known for its Bitcoin takeovers, largely led by Saylor. Earlier this year, Saylor stepped down from that role and now serves as CEO at the company and continues to lead its bitcoin strategy.

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MicroStrategy was trading around $120 before Saylor first announced the company’s Bitcoin purchases in 2020. The stock reached an all-time high of $1,315 in February 2021.

(Updates to include the stock’s closing price in the second paragraph.)

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Bankman-Fried May File Petition in New York Federal Court Next Week Before Judge Louis Kaplan By Cointelegraph

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Former FTX CEO Sam Bankman-Fried is set to appear in court on the afternoon of January 3 to enter a lawsuit over two counts of wire fraud and six counts of conspiracy against him related to the collapse of cryptocurrency exchange FTX, according to Reuters. mentioned on December 28, citing court records. Bankman-Fried will appear before District Judge Lewis Kaplan in Manhattan.

Judge Kaplan was appointed to hear the case on December 27 after the original judge in the case, Ronnie Abrams, Resigned herself because of connections between FTX and the law firm Davis Polk & Wardwell, where her husband is a partner. The company provided advisory services to FTX in 2021.