Charles Morgan Bankman-Fried’s Unheard Congressional Testimony | Trump NFTs

SAM BANKMAN-FRIED ARRESTED IN BAHAMAS

The former CEO of crypto exchange FTX was scheduled to testify before the U.S. House of Representatives Committee on Financial Services on Tuesday. But late Monday afternoon, a few hours after he gave a live-streamed interview to Forbes, he was arrested in the Bahamas at the request of the U.S. government. Forbes has obtained a draft of Bankman-Fried’s planned testimony. You can also check our top takeaways and read about everyone he planned to blame for FTX’s implosion.

A magistrate judge in the Bahamas on Tuesday denied bail to Bankman-Fried and said he should remain in custody until February. Earlier that day, the former executive’s legal team had declared that he would fight extradition to the United States, where he faces charges by multiple federal agencies, including wire fraud and securities fraud, conspiracy to commit money laundering and to violate campaign-finance laws.

BINANCE TEMPORARILY HALTED USDC WITHDRAWALS AS RATTLED TRADERS PULLED FUNDS

The world’s largest crypto exchange briefly paused customer withdrawals of the stablecoin USDC Tuesday, citing a token swap involving the asset. Blockchain analytics firm Nansen said Binance had experienced the highest daily amount of withdrawals since June that day, with outflows totaling more than $3 billion. The move came after Reuters reported Monday that some U.S. prosecutors involved in Binance’s four-year investigation believe there is enough evidence to file criminal charges against the firm’s individual executives, including CEO Changpeng Zhao.

In an attempt to reassure customers about the safety of their holdings, earlier this month the exchange published its first proof-of-reserves report, an audit seeking to ensure that a platform holds enough assets to cover all its client balances. However, it left some industry insiders with more questions than answers. Former SEC regulator John Stark said that Binance’s report failed to address internal financial controls and lacked an “assurance conclusion.”      

Source: Forbes Digital Assets, powered by Nomics.  Prices as of 4:00 p.m. on December 16, 2022.

AUDITORS DROP CRYPTO CLIENTS

Accounting firms with crypto audit practices are folding under pressure from FTX’s collapse and fears of contagion. Forbes has learned that Armanino, the accountant of the exchange’s U.S. arm, is expected to end its crypto audit practice and is dropping clients. Additionally, Mazars, the firm used by Binance and several other crypto exchanges to vouch for their assets held in reserve, has reportedly halted work with these clients. According to Bloomberg, Mazars said it had suspended work for crypto firms because of indications that markets haven’t been reassured by the proof-of-reserves reports it had published so far. The firm was also concerned about intense media scrutiny, the report claims. Amid growing concerns, venture giant Sequoia Capital told fund investors that it will require even early-stage startups’ financial statements to be audited by a Big Four accounting firm, according to the Wall Street Journal.   

TRUMP NFTS OFFER ADORING 45,000 VIEWS OF FORMER PRESIDENT

With his approval ratings at their lowest since 2015, Donald Trump announced a series of $99 non-fungible tokens (NFTs) on Thursday linked to a collection of digital art portraying the former president in a number of flattering ways—if you can go by the images on the collecttrumpcards.com website, which might or might not be part of the collection. The NFTs come with a chance to win “1000’s of prizes,” including a guaranteed dinner with the Donald if you pony up for 45 cards, though it is not clear how many other people will attend.

The collection sold out by early Friday, according to the website. Although he made a video to support the sale, Trump himself is not directly behind it. A company called NFT INT has licensed the former president’s name and image from an entity named CIC Digital.        

ELSEWHERE

Crypto Firm Amber Raises $300 Million To Tackle Damage From FTX [Bloomberg]

Bankman-Fried Lieutenant Alerted Regulators To Misuse Of Customer Funds [The Block]

Senators Propose Bill To End Privacy In Crypto [Axios]  

Nina Bambysheva
Reporter
Forbes Money & Markets

Steven Ehrlich
Editor 
Forbes CryptoAsset & Blockchain Advisor

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