Tuesday 31 January 2023
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Hours before his arrest, SBF denied being part of ‘Wirefraud’ chat group

Merely hours before news of his arrest by Bahamian police, Sam Bankman-Fried took to Twitter to deny his involvement or knowledge of a secret group chat named “Wirefraud” — which allegedly involved former FTX and Alameda ranking executives.

In a Dec. 12 response to a report from the Australian Financial Review (AFR), Bankman-Fried used Twitter to deny involvement in or knowledge of a “Wirefraud” group chat on messaging app Signal, which reportedly included members of Bankman-Fried’s inner circle, including FTX co-founder Zixiao “Gary” Wang, FTX engineer Nishad Singh and former Alameda CEO Caroline Ellison.

The AFR report said the chat was used to send secret information about FTX and Alameda's operations in the lead-up to its failure.

Bankman-Fried however said on Twitter that if the group chat was “true” he “wasn't a member” and was “quite sure it's just false” as he had “never heard of such a group.”

Until very recently, Bankman-Fried was expected to appear remotely before a United States House Committee hearing on Dec. 13 to explain the collapse of the FTX exchange. But he was taken into custody by Bahamian authorities on Dec. 12, to face U.S. charges that reportedly include wire and securities fraud and money laundering.

Committee Chair Maxine Waters on confirmed later on Dec. 12 that the panel “will not be able to hear” SBF's testimony hearing due to the arrest.

Bankman-Fried was also requested to attend a separate hearing on Dec. 14 with the Senate Committee on Banking but had never confirmed his attendance, with his lawyers reportedly refusingto accept a subpoena compelling his testimony, according to a Dec. 12 joint statement from Senators Sherrod Brown and Pat Toomey.

Related: $75M worth of FTX’s political donations at risk of being recalled due to bankruptcy: Report

Chief restructuring officer and FTX CEO John Ray, in written testimony released ahead of his appearance at the House Committee hearing, said FTX customer assets were “commingled” with Alameda’s funds.

Ray asserted that Alameda “used client funds to engage in margin trading which exposed customer funds to massive losses” and the trading firm's business model required it to deploy those funds to “various […] exchanges which were inherently unsafe.”

Original Article

About Jude Savage

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