Wednesday, December 14, 2022

Michigan, native tribes reach new Great Lakes fishing deal

FILE - In this photo provided by the Great Lakes Fishery Commission, a lake trout swims off Isle Royale, Mich., in Lake Superior, Sept. 12, 2018. Four Native American tribes have agreed with Michigan and federal officials on a revised fishing policy for parts of three of the Great Lakes, officials said Monday, Dec. 12, 2022. 
(Andrew Muiri/Great Lakes Fishery Commission via AP, File) 


JOHN FLESHER
Mon, December 12, 2022 

TRAVERSE CITY, Mich. (AP) — Four Native American tribes have agreed with Michigan and federal officials on a revised fishing policy for parts of three of the Great Lakes, officials said Monday.

The tentative deal involves contentious issues for groups wanting shares of a valuable resource as populations of some species — particularly whitefish and salmon — have fallen over the past two decades.

A proposed order submitted to a federal judge would extend for 24 years a system overseeing commercial and sport fishing in areas of lakes Michigan, Huron and Superior covered by an 1836 treaty. Those sections of the lakes are entirely within the U.S. and under Michigan's jurisdiction.

Under the treaty, the Odawa and Ojibway nations described collectively as Anishinaabek ceded lands that would comprise nearly 40% of Michigan's eventual territory, while retaining hunting and fishing rights.

Rising tensions between tribal commercial operations and sport anglers led to a fishery management pact in 1985, which was updated in 2000. That version was due to expire two years ago but was extended to allow continued negotiations.

“We believe this agreement has clear benefits for all the parties,” said David Caroffino, tribal coordination unit manager for the fisheries division of the Michigan Department of Natural Resources.

In addition to the state and federal governments, participants include the Bay Mills Indian Community, the Grand Traverse Band of Ottawa and Chippewa Indians, the Little River Band of Ottawa Indians and the Little Traverse Bay Bands of Odawa Indians.

The Sault Ste. Marie Tribe of Chippewa Indians, which has joined the previous deals, hasn't signed this one, Caroffino said. The tribe has filed a motion with U.S. District Judge Paul Maloney, who is overseeing the case, seeking the authority to regulate its own fishing. Officials from that tribe didn't immediately respond Monday to messages seeking comment.

Maloney has scheduled a conference for Friday to review where the case stands and consider the Sault tribe's proposal.

The agreement, like its predecessors, sets zones where tribal fishing crews can operate and areas where commercial fishing is off limits. It deals with topics such as catch limits and which gear tribal operations can use.

Particularly controversial is tribes' use of large-mesh gill nets, an effective tool that hangs in the water column like a wall. Critics say they indiscriminately catch and kill too many fish. The new deal let tribes use the nets in more places, with restrictions on depth in the water they're placed, the times of year they're used and how much netting is deployed.

State biologists are confident that the limited expansion of gill netting won't harm fish populations and will have “minimal impacts" on sport fishing, Caroffino said.

Sport fishing groups believe otherwise, said Amy Trotter, executive director of the Michigan United Conservation Clubs. Under the 2000 consent decree, she said, Michigan spent more than $14 million paying tribal operations to transition from gill nets to trap nets, which are more selective.

More gill netting will upset a roughly 50-50 balance between harvesting opportunities for tribes and state-licensed sport anglers, Trotter said. The consent decree appears to tilt in the direction of tribal interests at the expense of sport anglers, charter boat operators and tourism-dependent communities, she said.

“We've lived in relative harmony for the past 22 years,” Trotter said. But if sport anglers struggle to find fish or encounter nets stretched across bays as they try to reach open waters in boats, “we definitely will have conflicts in the future.”

Caroffino said tribal crews' need for gill netting to improve harvests has risen with the collapse of whitefish populations, which have suffered as invasive quagga mussels have gobbled up plankton and unraveled food chains.

The nets are particularly important for landing lake trout, which have become a more important commercial species as whitefish have plummeted. Lake trout, once devastated by parasitic sea lamprey, have bounced back in recent decades because of lamprey controls and trout restoration efforts.

Grand Traverse Band attorney Bill Rastetter said the overall structure and balance between tribal and sport interests remain intact under the new agreement, although one side or the other might do better in particular areas.

“We've reached an agreement that's consistent with what's been in place for 37 years but reacts to a changed fishery,” Rastetter said. “It won't create any burden on state-licensed fishers. The harvest limits will remain in place.”
WW3.0
Vietnam in big push to expand South China Sea outposts - U.S. think tank
A ship of Chinese Coast Guard is seen near a ship of Vietnam
Wed, December 14, 2022

By David Brunnstrom

WASHINGTON (Reuters) - Vietnam has conducted a major expansion of dredging and landfill work at several of its South China Sea outposts in the second half of this year, signaling an intent to significantly fortify its claims in the disputed waterway, a U.S. think tank reported on Wednesday.

Washington's Center for Strategic and International Studies (CSIS) said the work in the Spratly Islands, which are also claimed by China and others, had created roughly 420 acres (170 hectares) of new land and brought the total area Vietnam had reclaimed in the past decade to 540 acres (220 hectares).

Basing its findings on commercial satellite imagery, CSIS's Asia Maritime Transparency Initiative (AMTI) said the effort included expanded landfill work at four features and new dredging at five others.

"The scale of the landfill work, while still falling far short of the more than 3,200 acres of land created by China from 2013 to 2016, is significantly larger than previous efforts from Vietnam and represents a major move toward reinforcing its position in the Spratlys," the report said.

Vietnam's Washington embassy did not immediately respond to a request for comment on the report.

AMTI said Vietnam's midsized outposts at Namyit Island, Pearson Reef and Sand Cay were undergoing major expansions, with a dredged port capable of hosting larger vessels already taking shape at Namyit and Pearson.

Namyit Island, at 117 acres (47 hectares) and Pearson Reef, at 119 acres (48 hectares), were both now larger than Spratly Island at 97 acres (39 hectares), which had been Vietnam's largest outpost. Tennent Reef, which previously only hosted two small pillbox structures, now had 64 acres (26 hectares)of artificial land, the report said.

AMTI said Vietnam used clamshell dredgers to scoop up sections of shallow reef and deposit the sediment for landfill, a less destructive process than the cutter-suction dredging China had used to build its artificial islands.

"But Vietnam’s dredging and landfill activities in 2022 are substantial and signal an intent to significantly fortify its occupied features in the Spratlys," the report said.

"(W)hat infrastructure the expanded outposts will host remains to be seen. Whether and to what degree China and other claimants react will bear watching," it said.

China claims most of the South China Sea and has established military outposts on artificial islands it has built there. Taiwan, Vietnam, Malaysia, Brunei and the Philippines all have overlapping claims in the sea, which is crisscrossed by vital shipping lanes and contains gas fields and rich fishing grounds.

(Reporting by David Brunnstrom; editing by Jonathan Oatis)

Tech's tidal wave of layoffs means lots of top workers have to leave the US. It could hurt Silicon Valley and undermine America's ability to compete.

Paayal Zaveri
Tue, December 13, 2022

The recent layoffs across the tech industry have put many H-1B visa holders in a tight timeline to find a new job. It's just the latest challenge in the visa system.
Arnd Wiegmann/Reuters

The recent tech layoffs have put those on H-1B visas on a time crunch to find a new job.

It's the latest turbulence to a visa system that many say isn't working for employees or employers.

The challenges have immigrants looking to other countries' tech industries for opportunities.

Atal Agarwal first came to the US from India five years ago as a graduate student, eventually finding his way into the healthtech sector as a project manager. His employer sponsored his stay in the country, making him a holder of one of the United States' coveted H-1B work visas.

But when the tidal wave of layoffs in the tech industry hit his employer, Agarwal found himself without a job — setting off a stressful 60-day timer to either find a new one that would come with visa sponsorship, or return to India.

Big tech companies like Amazon, Meta, and Twitter have sponsored close to 45,000 H-1B visa holders in the last three years, according to a report from Bloomberg. It's unclear how recent tech layoffs have impacted many visa-holders, but The Information reported that Meta and Amazon's recent layoffs alone likely affected hundreds.

Agarwal, and the many other visa-holders in this limbo after losing their tech jobs, are in for a real challenge if they want to stay in the US, lawyers and other experts told Insider. There are still tech jobs available even in a market downturn. Finding one willing to go through the time and expense of sponsoring an H-1B visa, however, is more difficult.

The whole experience has soured some, like Agarwal, on the idea of continuing to work in American tech at all when the threat of having to uproot an entire life is always lingering.

"Who would want to move their lives in this way?" Agarwal told Insider.


Atal Agarwal is one of many H-1B visa holders who the tech industry's recent layoffs have affected. He's been building a life in the US for over five years, and recently participated in an Ironman race. He said the challenges in the visa system make it hard for immigrants to feel settled here.   
Atal Agarwal

This feeling of disillusionment presents a competitive threat to the American tech sector. Companies like Amazon, Meta, Google, Twitter, and Microsoft have long relied on H-1B visas to bring in the talent they need to fill positions in specialized, competitive fields like engineering and computer science. Leaders like Mark Zuckerberg, the CEO of Meta, have long advocated for reforming the H-1B system to allow more of that talent to work in the US.

If the current situation continues as the combination of job losses, scarce availability of H-1B visas, and strict rules for visa-holders, this specialized workforce could bring their talents to places with more permissive policies like Canada or the nations of the European Union.

"I do think the US is still the hub of some of the smartest, most diverse people in the world who come here for education, working, and living," Soundarya Balasubramani, an author and tech worker who lives in the US on a work visa, said. "But I also think that we might be overstating the impact of living in the US sometimes."

If that happens, experts and insiders warn, that could undermine America's vaunted competitiveness in the tech sector.

"We have laws in effect today that don't reflect the reality of the world we live in today in 2022," Jason Finkelman, an immigration attorney based in Austin, Texas, said. "This antiquated immigration system does not provide robust, flexible options for the most talented, skilled foreign nationals to come to this country and work. And it hurts not only top talent, but it also hurts US employers seeking to grow and innovate with that."
Disillusionment and frustration with working in the US

The net effect here is that the US could become less desirable as a place to live for immigrants looking to break into tech, several experts and tech workers said. Those who leave may not be interested in navigating the process for coming back, and the next generation may not be interested in the US at all.

Layoffs and bureaucracy have undermined Silicon Valley's reputation as a good place for immigrants to build a life in the US, and might encourage some to either stay in their home countries or look elsewhere to find a job abroad, the experts said. It could hurt America's ability to compete in the long run.

Indeed, some Indian immigrants to the US already see opportunities in returning home to participate in the country's booming tech sector, Shruti Rajagopalan, an investor with Emergent Ventures, wrote in a recent blog post.

The 60-day countdown to find a new job is even more stressful for those with families.

Finkelman said clients have told him they really only have two to three weeks to find new jobs, or they'll spend the rest of their time pulling their kids out of school and making arrangements to get everyone out of the country before time runs out.

"That's highly disruptive to any family," he said.

Actually finding those jobs is proving difficult for some, as well. One tech worker, who Twilio recently laid off, said that any job that might be willing to sponsor an H-1B visa now has at least ten other people interviewing at the same time. This person asked not to be named to preserve their professional-career prospects.

Many others have expressed similar experiences in Linkedin posts, saying they have a short window of time to find a new position and are open to any leads.

Some, like Agarwal, found a job with time to spare and are able to stay in the US. But not everybody who needs a visa will be so fortunate.

"There's no scenario in which everyone that got laid off, specifically those that are dependent on work authorization, are gonna get a job," Manan Mehta, the founder of Unshackled Ventures, which helps immigrants found companies in the US, said.
Experts said immigration reform is needed to turn things around

The entire situation has reignited calls for reform to the H-1B visa system, which has seen a turbulent past few years. The Trump administration tried to suspend much of the program in mid-2020. That effort, combined with the ongoing COVID-19 pandemic, has slowed the approval process and added layers of bureaucracy.

Mehta suggested that a good start would be to lay a path for laid-off H-1B workers to go the entrepreneurial route and let them found their own startups.

Another useful area of reform would be to give visa-holders more flexibility to switch jobs without getting mired in bureaucracy, Romish Badani, the CEO of Bridge, a startup that helps employers manage the immigration process, said. His company provides legal aid and services for companies not familiar with the H-1B process so they can have the option to hire people who need visa sponsorship. Agarwal suggested that just more than 60 days to find a new job would help.

What the experts all agreed on, ultimately, is that some kind of change to the H-1B is necessary and overdue if the US wants to continue being an attractive market for specialized tech talent.

"These people are great builders," Agarwal said. "So they are going to start building things in their own country, which impacts the economy of America."
OOP$
Walmart rolled out self-checkout to streamline operations and reduce labor
– but employees and customers say it's causing a surge in thefts
A Walmart store.Bruce Bennett/Getty Images
  • Walmart CEO Doug McMillon said stores could close if the rising tide of theft isn't stemmed.

  • Customers and employees blame self-checkout, which Walmart has increasingly relied on, for theft.

  • A theft expert said automation "inherently means there's going to be less eyes on a transaction."

Walmart's CEO has warned that the retailer may need to close down stores due to theft – but many of the company's customers and employees blame one growing feature of the store for enabling shoplifting: self-checkout.

Walmart CEO and President Doug McMillon told CNBC earlier this month that theft "is higher than what it has historically been" and there will be consequences "if that is not corrected over time." Since McMillon made those comments, more than 100 Walmart customers and former and current employees reached out to an Insider reporter imploring the retailer to rely less on self-checkout.

"They need to hire cashiers again and do away with so many self-checkout," said Mindy Stanley, a Walmart customer from Ashland, Kentucky. "I'd say they are losing so much due to that."

To be sure, Walmart still utilizes cashiers at stores across the nation. But the Bentonville, Arkansas-based retail giant, like so many other retailers, has increasingly relied on automation as a means of improving customer experience and reducing labor cost.

Walmart even put out a press release in June 2020 to extol the virtues of its "manned checkout experience," where there is a round area for self-checkout registers and Walmart employees monitoring and assisting with the process.

Walmart declined to answer questions on its ratio of self-checkout kiosks to traditional checkout lanes, staffed by cashiers, across the country; what surveillance tools it uses to prevent theft; if self-checkout has posed additional risks of theft, and how much Walmart has lost in theft this year. Reuters reported in 2015 that the world's largest retailer likely was losing about 1% of its US revenue — or roughly $3 billion every year — to stealing by customers and employees.

"While we don't discuss details related to illegal activity in our stores, we're continually exploring effective ways to protect merchandise, keep prices low and provide a safe environment for the millions of customers we serve weekly," a Walmart spokesman told Insider in a statement.

The best way to protect against theft and make customers happy is to eliminate self checkouts, according to Polly Kearns, a Walmart shopper from Gulfport, Mississippi.

"Get rid of the self checkouts and watch the thefts decrease," she said. "I don't use them because it is taking a job away from someone.  I'd much rather see a person checking me out than an cold-hearted machine."

A Walmart employee at a store in Spokane, Washington, who asked to be anonymous for fear of retaliation, told Insider that her store went down to six staff-operated registers a few months back, with the rest of the machines being self-checkout.

"Theft is horrible at my store," the employee said. "If corporate actually visited at the store level and spoke with actual employees that deal with the theft, they might see how to fix the problem. They are converting stores to more self checkouts with less employees. Self checkout is where most theft happens."

Security experts concur that self-checkouts make it harder to deter theft. Matt Kelley, a loss-prevention expert at security solutions company LiveView Technologies, told Insider that it's "definitely very valid" that self-checkout, which he said most big-box retailers have implemented in some form, has led to more thefts.

"For the most part, retailers have been thinking about self checkout through a financial-savings and customer-experience perspective," said Kelley, who previously served as a senior manager of asset protection at Home Depot. "But inherently that means there's going to be less eyes on a transaction. And there's going to be more of an opportunity for the dishonest people to be dishonest."

CRIMINAL CRYPTO CAPITALI$M 3.0

Binance boss CZ reportedly warns the coming months will be 'bumpy' for the crypto exchange, as it unfreezes USDC withdrawals

Zahra Tayeb
Wed, December 14, 2022 

Changpeng Zhao, CEO of Binance.

REUTERS/Darrin Zammit Lupi

Binance's CEO warned staff of "bumpy" times ahead, after it resumed withdrawals on Tuesday.


FTX's collapse has drawn scrutiny on Binance, he said, after it faced billions of dollars of outflows in a matter of days.


Changpeng Zhao welcomed the "stress test" of withdrawals however, saying it builds credibility.

Binance CEO Changpeng Zhao warned staff of difficult times ahead as the crypto exchange weathers scrutiny over its reserves.


In a company memo sent to employees seen by Bloomberg, Zhao, commonly known as "CZ" said the crypto industry is experiencing a "historic moment" in the wake of FTX's shocking collapse, but reassured staff that Binance "will survive any crypto winter."

"While we expect the next several months to be bumpy, we will get past this challenging period — and we'll be stronger for having been through it," he wrote. He added that FTX's problems have invited "a lot of extra scrutiny and tough questions" on Binance, referring to over $2 billion in customer withdrawals it faced on Tuesday. The bank-like run forced Binance to halt USDC withdrawals.

The large outflow of customer funds came amid concerns over the exchange's proof of reserves report published last week, and allegations that Binance has been involved in money laundering practices.

On Wednesday however, Binance announced it unfroze customer withdrawals, while Zhao noted deposits are returning to the exchange in a sign of stability.

"Things seem to have stabilized. Yesterday was not the highest withdrawals we processed, not even top 5. We processed more during LUNA or FTX crashes. Now deposits are coming back in," Zhao tweeted.

The crypto billionaire even welcomed the "stress test" of withdrawals, saying: "I actually think it is a good idea to 'stress test withdrawals' on each CEX on a rotating basis." He added it helps build the credibility for exchanges that pass the test.

Crypto exchange Binance freezes withdrawals of stablecoin USDC as rattled investors pull $2 billion in funds

George Glover
Tue, December 13, 2022 

Crypto exchange Binance has paused withdrawals of the key stablecoin USDC, chief executive Changpeng Zhao said Tuesday.

Patricia De Melo Moreira/AFP/Getty Images

Leading crypto exchage Binance temporarily halted withdrawals of the USDC stablecoin on Tuesday.


Customers have pulled over $2 billion in funds in 24 hours as concerns about its stability grow.


Questions about Binance's reserves and a potential investigation are in focus after FTX's collapse.


Binance has temporarily paused withdrawals of a major stablecoin after customers pulled over $2 billion in funds, as worries about the crypto exchange's stability grow after the collapse of FTX.

The world's largest crypto exchange will freeze all withdrawals of USD Coin while it conducts a "token swap" to boost its holdings of the dollar-pegged token, CEO Changpeng Zhao said Tuesday.

"On USDC, we have seen an increase in withdrawals," the Binance boss, commonly known as "CZ", tweeted.

Binance has faced questions over transparency about its reserves and reports of an imminent investigation by US prosecutors in recent days, which have rattled some crypto investors in the wake of the collapse of now-bankrupt rival FTX.

Binance requires traditional fiat currency held by a New York bank to swap some of its Paxos Standard and Binance USD stablecoins for USDC, so that it has sufficient holdings of the token for withdrawals to continue, Zhao added.

"The banks are not open for another few hours," he said. "We expect the situation will be restored when the banks open."

USDC has its value fixed at $1, and it is used by some crypto traders as a place to park their cash at times of high uncertainty or volatility.

The stablecoin maintained its dollar peg Tuesday, while Binance Coin — a native token that is seen as reflecting customers' trust in the exchange — had slipped 5.12% to trade at just under $269 at last check Tuesday.

Binance halted USDC withdrawals after customers pulled over $2 billion worth of cryptocurrency from the exchange Monday, according to data from blockchain intelligence platform Nansen.

Those withdrawals came after top accountants and legal experts slammed a proof of reserves report published last week, where Binance claimed its bitcoin holdings were overcollateralized – which would mean it held more than enough of the token to cover its losses in case of a default.

US prosecutors are revving up to charge CZ's crypto group for violating anti-money-laundering regulations from 2018 onwards, Reuters reported Monday. The report said Binance processed over $10 billion worth of illegal payments in 2022.

In follow-up tweets Tuesday, CZ called on Binance customers to avoid acting based on "FUD" – an acronym for the feelings "fear, uncertainty, and doubt" that crypto bulls believe drive some traders away from the digital asset space.

Crypto investors are on alert for any sign that the problems that helped pull down FTX could spread to other platforms. The now-bankrupt crypto exchange collapsed after facing a liquidity squeeze, and over 1 million customers may have lost money, according to NPR.

At the request of the US, authorities in the Bahamas arrested FTX's founder and former CEO Sam Bankman-Fried on Monday. He faces allegations he illegally misused billions of dollars in FTX customer funds to prop up sister trading firm Alameda Research.

Binance representatives declined to comment further on this story.

Read more: Nouriel Roubini slams Binance boss CZ as a 'walking time bomb' and says crypto is totally corrupt

Binance’s proof-of-reserves is just another black box




Nate DiCamillo
Mon, December 12, 2022 

When the crypto market melted down, Binance appeared as both the main antagonist and market savior. The exchange started the run that felled its rival, FTX, and has since promised to help bail out struggling crypto firms.

Binance also led the way in offering to prove to its customers and the broader market that it has the assets it says it does, which is known as proof-of-reserves. Specifically, Binance claims that it performed a “Merkle tree” proof-of-reserves audit, which is a cryptographic way of collecting blockchain data and making it more easily accessible

At first glance, the breakdown of Binance’s assets and liabilities shows a $245 million hole. However, Binance’s auditor Mazar claims that this is because Binance holds collateral for lent out bitcoin that was out of the audit’s “scope.”

Former SEC regulator John Stark told Decrypt that there were several red flags with the audit, including using Mazar, instead of a big-four auditing firm, and being able to dictate the terms of the audit. Mazar also did not issue an official opinion on the effectiveness of the audit it performed.

The future of Binance’s finances are also in question as the US Department of Justice (DOJ) weighs charging the exchange with anti-money laundering and sanctions violations, according to a new report in Reuters.

The exchange’s lawyers are allegedly talking with the DOJ about the possibility of entering into plea deals for exchange executives, including CEO Changpeng Zhao, instead of fining the exchange. Binance didn’t immediately respond to a request for comment from Quartz.

How did we get here?

November 2: CoinDesk published a story revealing that a chunk of Alameda’s balance sheet was made up of FTX’s native exchange token FTT.

November 6: Binance sells its FTT tokens, pushing down the price of FTT and starting a run on FTX.

November 8: Binance offers to buy rival FTX.

November 9: Binance rescinds the buyout offer.

November 11: FTX files for Chapter 11 bankruptcy.

November 25: Binance says it will set up a $1 billion recovery fund for the industry.

CRIMINAL CRYPTO CAPITALI$M TOO
Sam Bankman-Fried was charged with defrauding investors. His defense was a terrible attempt at saving himself and lacked accountability.


Alexandra York
Tue, December 13, 2022 

Sam Bankman-Fried, the founder and CEO of FTX.Alex Wong / Getty Images

The SEC charged Samuel Bankman-Fried with defrauding investors in FTX.

Bankman-Fried was interviewed at the DealBook Summit about his company's collapse on November 30.

The FTX founder said he "didn't know exactly what was going on."


Sam Bankman-Fried, the once-billionaire founder of the cryptocurrency exchange FTX, has been charged with defrauding investors by the SEC and was arrested on December 12.

Weeks earlier, he told Andrew Ross Sorkin of The New York Times that he wasn't aware of the details that led to his company's implosion in November.

"I didn't know exactly what was going on," Bankman-Fried, 30, told the Times on November 30. "Obviously, that's a pretty big mistake and oversight, that I wasn't more aware."

But convicted scammer Anna Sorokin told Insider that Bankman-Fried's apology press tour is insincere garbage.

"He's just trying to save himself," she said.

Sorokin isn't the only one to balk at Bankman-Fried's explanation. Bankman-Fried's defense isn't acceptable for business leaders who should know the inner workings of their companies. However, it is an excuse that other villainized founders have tried and failed to use in the past, like Elizabeth Holmes, the founder and CEO of the now-defunct Theranos.

"Generally speaking, when you go into these types of cases, there's two types of defenses: 'I didn't know' and 'It wasn't me,'" Neama Rahmani, the president of the law firm West Coast Trial Lawyers and a former federal prosecutor, previously told The New York Times of Holmes' case.

Once valued at $32 billionFTX filed for bankruptcy and Bankman-Fried stepped down as CEO in November. Meanwhile, multiple billions are owed to creditors, and the Department of Justice and Securities and Exchange Commission are investigating FTX.

Michael M. Santiago/Getty Images
'I didn't know' was his only defense

Sorkin started his interview by noting there are two views of what occurred at FTX. The first is that Bankman-Fried is a young founder who made a series of terrible decisions. The second is that he committed a Ponzi scheme that took advantage of the relationship between FTX and Alameda Research, a trading firm that Bankman-Fried cofounded in 2017. Bankman-Fried denied the latter allegations, saying, "I did not ever try to commit fraud on anyone."

"I haven't been running Alameda. I haven't been thinking about its finances," he said. "I haven't been making those decisions. But as CEO of FTX, it was still my duty to make sure someone was doing diligence."

Holmes took a similar approach, but to no avail


Elizabeth Holmes was sentenced to more than 11 years in federal prison.
Justin Sullivan / Getty Images

Holmes, who was found guilty on four counts of defrauding investors in January 2022, told the SEC "I don't know" more than 600 times during its questioning of her in 2019. In November, she was sentenced to more than 11 years in prison.

Holmes' efforts to blame others for Theranos' mistakes while highlighting her ignorance is a common tactic among fraud defendants, Rahmani told the Times. Holmes and her team "are going to do everything they can to distance themselves from that knowledge," he said.

While denial can be a plausible defense, jurors are often too savvy to accept the strategy. Jeffrey Cohen, an associate professor at Boston College Law School, previously told The Times that a better strategy is to appeal to jurors' humanity.

"What I would expect a defendant in a high-profile case to do is try to humanize themselves and make the jury see that they're not just a corporate CEO, but a person with the flaws that any person might have who's running a large corporation," Cohen said.

Sam Bankman-Fried's arrest denies Americans who lost life savings the chance to get answers about FTX's implosion, House committee chair says

George Glover
Tue, December 13, 2022

Sam Bankman-Fried's arrest in the Bahamas could stop Americans who lost their life savings the chance to hear from the disgraced FTX founder, California Rep. Maxine Waters said Monday.

Patsy Lynch/MediaPunch /IPX/AP

Sam Bankman-Fried, disgraced former CEO of FTX, was arrested in the Bahamas on Monday.

That means he won't be able to testify to a House Financial Services Committee, its chair Maxine Waters said.

"The American public deserves to hear directly from Mr. Bankman-Fried about the actions that've harmed over one million people," she said.

Sam Bankman-Fried's arrest in the Bahamas could deny millions of Americans a chance to hear from the disgraced FTX founder about what happened in the crypto exchange's collapse, the chairwoman of the House Financial Services Committee has said.

Bahamian authorities detained the former CEO of FTX on Monday, at the request of the US government. Allegations have built that Bankman-Fried and his associates illegally misused billions of dollars in FTX customer funds to prop up sister trading firm Alameda Research.

California Rep. Maxine Waters said that Bankman-Fried would be unable to testify Tuesday, when he was due to answer the House committee's questions about the collapse of FTX.

"We received confirmation this afternoon from Mr. Bankman-Fried and his lawyers that he was still planning to appear before the Committee tomorrow, but then he was arrested," she wrote in a statement released Monday evening.

"Although Mr. Bankman-Fried must be held accountable, the American public deserves to hear directly from Mr. Bankman-Fried about the actions that've harmed over one million people, and wiped out the hard-earned life savings of so many," Waters added.

"The public has been waiting eagerly to get these answers under oath before Congress, and the timing of this arrest denies the public this opportunity."

FTX filed for bankruptcy in November, after CoinDesk reported that Alameda held a significant amount of its portfolio in its native FTT token, triggering a solvency crisis.

Over 1 million FTX customers may have lost any money they had in the exchange after the group's collapse, according to NPR.

Department of Justice investigators are reportedly pursuing multiple lines of inquiry into FTX, with charges in an indictment filed by the US Attorney's Office for the Southern District of New York set to be unsealed Tuesday.

Prosecutors will have the legal tools to extradite Bankman-Fried to the US if they succeed in bringing criminal charges against him, experts told Insider.

New York Rep. Alexandria Ocasio-Cortez also expressed disappointment at the timing of Bankman-Fried's arrest.

"Bankman-Fried was set to testify before the House tomorrow," she said on Twitter Monday. "Tonight he was arrested."

"While I am disappointed we will not have the opportunity to present our line of questioning, we look forward to more information coming to light and justice being served in this case," Ocasio-Cortez added.

Read more: FTX's bankruptcy filings show the situation is much worse than anyone thought. From a million creditors to a stunning lack of oversight, here are the craziest details.


Sam Bankman-Fried denied he was part of a secret chat group called 'Wirefraud' alongside other top FTX executives

Sawdah Bhaimiya
Wed, December 14, 2022

Sam Bankman-Fried \

Jabin Botsford/Getty Images

Sam Bankman-Fried denied he was in a secret chat group called "Wirefraud" in a tweet on Monday.


Bankman-Fried and his inner circle shared secret information in the chat, the Australian Financial Review reported.


The former FTX CEO was arrested and charged with eight counts of fraud and conspiracy this wee
k.

Sam Bankman-Fried, founder and former CEO of now-defunct crypto-lending firm FTX, denied that he was in a secret chat group called "Wirefraud," hours before his arrest in the Bahamas on Monday.

Bankman-Fried responded to a tweet accusing him of being in the chat group saying: "If this is true then I wasn't a member of that inner circle. (I'm quite sure it's just false; I have never heard of such a group.)"

The apparent chat group, based on encrypted messaging platform Signal, included members of FTX's inner circle, the Australian Financial Review reported first.

Alongside Bankman-Fried, FTX's co-founder Gary Wang, engineer Nishad Singh, and former CEO of Alameda Research Caroline Ellison were in the group to share information that they hoped would remain hidden, according to AFR.

Although the chat group was set up to keep communications hidden, the contents of it will become public throughout legal proceedings, AFR reported.

FTX did not immediately respond to Insider's request for comment about the chat group, made outside of normal working hours.

Hours after Bankman-Fried denied involvement in the chat group, he was arrested by Bahamian authorities.

On Tuesday, it was announced that he had been charged with eight counts of fraud and conspiracy.

The Securities and Exchange Commission accused Bankman-Fried on Tuesday of "orchestrating a massive, years-long fraud."

FTX and 130 other affiliated companies including trading firm Alameda Research, all called FTX Group, filed for Chapter 11 bankruptcy in November with Bankman-Fried stepping down as CEO on the same day. The collapse of FTX exposed that Bankman-Fried was transferring billions of dollars of customer funds to prop up Alameda Research.

Shortly after the collapse, Bankman-Fried embarked on a media apology tour and interviewed with the New York Times at its DealBook Summit where he told reporter Andrew Sorkin that he "didn't knowingly commingle funds," and "didn't ever try to commit fraud."

He has now been denied bail by a judge because he poses a flight risk and is headed to a harsh Bahamian prison, while he awaits extradition to the US.


Sam Bankman-Fried Has Been Charged And Accused Of “A Massive, Years-Long Fraud"

Tom Warren

Miami Herald / TNS

Sam Bankman-Fried, the founder and former CEO of collapsed crypto exchange FTX, has been charged with fraud by US authorities. The 30-year-old, who is also known as SBF, was arrested in the Bahamas on Monday.

Today, an unsealed grand jury indictment from the US Department of Justice detailed criminal charges against Bankman-Fried. He is charged with eight counts of defrauding his customers, money laundering, and violating campaign finance laws.The indictment says that Bankman-Fried and his associates “knowingly” devised a scheme to defraud customers by misappropriating funds to “pay expenses and debts of Alameda Research,” Bankman-Fried’s private crypto fund.

Bankman-Fried was a major political donor who promised to contribute $1 billion in the 2022 US midterm elections — a commitment that he reneged on. However, the DOJ said that he violated campaign finance laws and intentionally misled the Federal Election Commission by funneling donations through other people.

In addition, the Securities and Exchange Commission this morning filed a civil complaint against Bankman-Fried, which accused him of orchestrating “a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire.”

The SEC complaint asks that Bankman-Fried pay reparations to FTX’s clients and additional fines for defrauding customers. The SEC also is seeking to bar the entrepreneur from acting as a director or officer of any company in the future.

The SEC said that Bankman-Fried diverted funds to Alameda, his privately held investment fund, while assuring clients that their money was safe and that “Alameda is a wholly separate entity from FTX.” The SEC said that he “knew or recklessly disregarded that these statements were false and misleading.”

The SEC said that once client funds were in Alameda, Bankman-Fried would lend them to himself and his executive team. These loans were “poorly documented, and sometimes not documented at all,” but, according to the SEC, between March 2020 and September 2022, he lent himself more than $1.3 billion, which he spent on large political donations and luxury property in the Bahamas.

And even when his scheme started to spiral out of control, the SEC said, Bankman-Fried “continued to mislead investors and the public.” In early November, following public allegations that FTX would run out of money, the FTX founder said, in later deleted tweets, “FTX is fine. Assets are fine” and “FTX has enough to cover all client holdings.” The SEC said that Bankman-Fried knew at the time that FTX risked bankruptcy.

The company ultimately went into bankruptcy on Nov. 11, and Bankman-Fried stepped down as CEO of FTX. His wealth fell from an estimated $16 billion to virtually nothing.

After his departure, Bankman-Fried continued to tweet about FTX and do interviews in which he apologized for the collapse of the firm while denying it was a fraud. He was supposed to appear before Congress today to testify before the House Financial Services Committee.

“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” SEC Chair Gary Gensler said in a statement. He warned that “the alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws.”

Dec. 13, 2022, 





One Of The World’s Largest Cryptocurrency Exchanges Imploded And Here's What You Need To Know
Paige Skinner · Dec. 13, 2022

5 things FTX did with its money — including customer assets — according to its new CEO

Ahead of Tuesday's U.S. House Financial Services Committee hearing on FTX, John Jay Ray III, FTX's new CEO since bankruptcy, filed written testimony which outlines several "unacceptable management practices," the new CEO uncovered at the bankrupt crypto exchange.

Ray said in prepared remarks FTX's demise was due to "the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals."

Additionally, Ray, who led the liquidation of Enron, has uncovered at least five different things the company did with some of the billions it raised from investors and the billions more in client assets held on its exchanges.

Which, given the $8 billion asset hole found at the center of FTX in bankruptcy, is no doubt of interest to customers and counterparties looking to be made whole.

1. Customer assets from FTX.com were commingled with assets from the Alameda trading platform.

"I didn't knowingly commingle funds," disgraced former CEO Sam Bankman-Fried told Andrew Ross Sorkin in an interview two weeks ago, suggesting the platform's margin trading system was the source of the problem.

"You have the margin trading. You have, you know, customers borrowing from each other. Alameda is one of those. I was frankly surprised by how big Alameda's position was, which points to another failure of oversight on my part," he went on to say in the interview.

NEW YORK, NEW YORK - NOVEMBER 30: Andrew Ross Sorkin and Sam Bankman-Fried on stage at the 2022 New York Times DealBook on November 30, 2022 in New York City. (Photo by Thos Robinson/Getty Images for The New York Times)
NEW YORK, NEW YORK - NOVEMBER 30: Andrew Ross Sorkin and Sam Bankman-Fried on stage at the 2022 New York Times DealBook on November 30, 2022 in New York City. (Photo by Thos Robinson/Getty Images for The New York Times)

2. Alameda used client funds to engage in margin trading which exposed customer funds to massive losses.

In a since deleted tweet from November 8, Bankman-Fried said customer assets were backed 1:1.

When asked during a Twitter Spaces on Monday whether this statement was true, Bankman-Fried replied, "Yes, but... the problem is that that includes negative balances for some customers... net customer assets were equal to net assets on the platform... gross customer assets were not."

3. The FTX Group went on a spending binge in late 2021 through 2022, during which approximately $5 billion was spent buying a myriad of businesses and investments, many of which may be worth only a fraction of what was paid for them.

The list of investments by sibling trading firm Alameda Research alone is $5.2 billion spread across approximately 474 companies. Originally supported by both FTX's name and influence, these startups will not likely fetch the price FTX paid despite what independent success they might have, according to Ray's assessment.

4. Loans and other payments were made to insiders in excess of $1 billion.

In Ray's original declaration (Doc 24) for FTX Group's bankruptcy proceedings, he previously highlighted how Alameda lent $2.3 billion to affiliated companies such as Paper Bird Inc., one billion to Bankman-Fried, another $543 million to Former FTX Director of Engineering Nishad Singh, and $55 million to former FTX Digital Markets CEO Ryan Salame.

5. Alameda’s business model as a market maker required deploying funds to various third party exchanges which were inherently unsafe, and further exacerbated by the limited protections offered in certain foreign jurisdictions.

The market for total crypto assets has fallen by 62% from $1.4 trillion to $843 billion since the beginning of January. As cryptocurrency prices have plunged through the year, Alameda can be expected to have taken heavy losses.

In June, it lent $200 million loan to crypto lender Voyager before its U.S. subsidiary lent another $275 million to BlockFi. Both companies have filed for bankruptcy protection.

"My ability to comment on certain matters ... will be materially limited by the state of the FTX Group’s books and records, ongoing bankruptcy proceedings, and the numerous, ongoing investigations by U.S. law enforcement and regulators," Ray added.

David Hollerith is a senior reporter at Yahoo Finance covering the cryptocurrency and stock markets. Follow him on Twitter at @DsHollers


Sam Bankman-Fried attended a top Silicon Valley prep school where his senior class prank reportedly included making $100 bills with his face on them called 'Bankmans'

Morgan Chittum
Wed, December 14, 2022 

Sam Bankman-Fried is escorted out of the Magistrate Court building after his arrest, in Nassau, the Bahamas, on December 13.Dante Carrer/Reuters

SBF attended a top prep school where his senior class's prank included making $100 bills with his face on them.

The former Jane Street trader was known for being one of the school's top math students.

A new report details the disgraced founder's childhood, family ties, and more.

Long before FTX founder Sam Bankman-Fried was accused of facilitating a massive crypto fraud and in the crosshairs of regulators, he was a nerdy kid from a well-to-do family in Northern California, raised in the upper echelons of academia.

Bankman-Fried attended a top Silicon Valley prep school where his senior class's prank included making $100 bills with his face on them called "Bankmans," Puck reported.

Raised by two former Stanford Law professors, Joseph Bankman and Barbara Fried, the dethroned crypto exec attended Crystal Spring Uplands, the Hillsborough prep school.


The middle school and high school have a $56,620 annual tuition, according to its website, with alumni including Patty Hearst, the American publishing heiress, along with chess grandmaster Daniel Naroditsky, per the school's student-run newspaper The Gryphon Gazette.

Bankman-Fried and his younger brother Gabe "grew up immersed in a rotating circus of Stanford faculty members," according to Puck's report. Gabe was known as the more "socially adept" of the two.

The former crypto billionaire's mother wrote in her recent book: "When Sam was about fourteen, he emerged from his bedroom one evening and said to me, seemingly out of the blue, "What kind of person dismisses an argument they disagree with by labeling it 'the Repugnant Conclusion'?" Clearly, things were not as I, in my impoverished imagination, had assumed them to be in our household."

Elsewhere, one of Joseph Bankman's more notable law students was Paypal cofounder and billionaire Peter Thiel, who described Bankman's tax law course as "his most valuable because he was able to put a lot of his Facebook stock in an IRA," Bankman later recalled. Thiel later turned his Roth IRA, a retirement account typically for the middle class, into a gargantuan $5 billion tax-exempt piggy bank, ProPublica reported.

Bankman-Fried was known for being one of the top math students at Crystal Spring Uplands, and the leader of the "Puzzle Hunt Club," which the outlet described as "a particularly nerdy group at an already nerdy high school."

More than a decade after his high school graduation, Bankman-Fried, a MIT grad and former Jane Street trader, has been arrested following the collapse of FTX, which he has chalked up to accounting errors rather than any sort of fraud or misuse of funds.

US prosecutors are accusing Bankman-Fried of orchestrating a years-long scheme to defraud investors. FTX secured $1.1 billion from around 90 US-based investors, according to a US Securities and Exchange Commission complaint, which alleges he raised $1.8 billion total.

"We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto," SEC Chair Gary Gensler said in a statement on Tuesday.


Meet Sam Bankman-Fried's family: His parents are Stanford Law professors, his aunt is a dean at Columbia, and his brother is the founder of a nonprofit


Huileng Tan
Wed, December 14, 2022 

The FTX cofounder Sam Bankman-Fried was arrested in the Bahamas Monday.
Alex Wong / Getty Images

Sam Bankman-Fried was arrested in the Bahamas Monday. The US SEC has charged him with fraud.

Bankman-Fried's law-professor parents were spotted Tuesday at their son's hearing in the Bahamas.

As his troubles unravel, his high-profile family is under the spotlight.

Sam Bankman-Fried was raised in an academic family in Silicon Valley. He grew up playing games like chess and bridge.


Bankman-Fried cofounded FTX in 2019 and was its CEO.FTX

The FTX founder Sam Bankman-Fried was arrested in the Bahamas Monday, in a spectacular fall from grace after his crypto exchange collapsed last month.

Bankman-Fried — whose wealth peaked at an estimated $26 billion in March, according to the Bloomberg Billionaires Index — has been charged with fraud by the US Securities and Exchange Commission. A judge in the Bahamas denied him bail Tuesday.

As his troubles unravel, Bankman-Fried's high-profile family has been in the spotlight. His parents were spotted Tuesday at their son's hearing in the Bahamas and have been living with him on the island nation for over a month.

In November, Reuters reported a $16.4 million house in the Bahamas listed Bankman-Fried's parents, Joseph Bankman and Barbara Fried, as signatories. The house is in a gated community with beach access and was described in property records as a vacation home.

Last month, Bankman-Fried told Andrew Ross Sorkin at the New York Times DealBook Summit that he called his parents when FTX was collapsing. He added that his parents "bore no responsibility" for FTX's downfall.

"Anyone close to me, including my parents and employees and coworkers, who fought with the company to push forward, they were hurt by this," Bankman-Fried said. "They bore no responsibility for that. I feel really bad about that. I feel really grateful for the support my parents are still giving me throughout all of this."

We rounded up some of the prominent members of Bankman-Fried's family. Bankman and Fried did not immediately respond to a request for comment sent to a spokesperson outside regular business hours. His brother, Gabriel Bankman-Fried, and aunt Linda Fried also did not immediately respond to requests for comment sent outside regular business hours.

His father, Joseph Bankman, is a Stanford Law professor who's also a clinical psychologist.


Joseph Bankman has postponed his class that was set to start in January amid the FTX fallout.
Stanford University

Bankman, a law professor at Stanford University, is Bankman-Fried's father.

Described in his official biography as a "leading scholar in the field of tax law," Bankman teaches mental-health law and is a scholar who writes about law and psychology.

Bankman was also a paid FTX employee for nearly a year before the exchange collapsed, a spokesperson for Bankman and Fried told The Wall Street Journal Monday. He was mostly working on charity projects at FTX, the spokesperson told the media outlet.

Bankman had a law class that was scheduled to start in January, but that has been pushed back until the spring as he remains in the Bahamas with his son, according to The Journal.

The lawyer earned a Juris Doctor from Yale Law School in 1980, according to his biography on Stanford's website.

His mother, Barbara Fried, is a professor emerita of law at Stanford.


Barbara Fried cofounded Mind the Gap, a super PAC.
Stanford University

Bankman-Fried's mother is also a law professor at Stanford University.

Her scholarly interests are "at the intersection of law, economics, and philosophy," according to her biography on the university's website.

Fried cofounded Mind the Gap, a super political action committee that uses statistical analysis to determine the dollar-value influence of donations on Democrats running for the House of Representatives. She resigned from Mind the Gap in November, The New York Times reported. The Times did not specify why she resigned.

Fried retired from teaching in September and didn't have plans to teach this year, a spokesperson told The Journal.

She graduated from Harvard with a Juris Doctor in 1983, according to her biography on the Stanford site.

His younger brother, Gabriel Bankman-Fried, founded and ran a nonprofit called Guarding Against Pandemics — which was in part funded by his sibling.


Gabriel Bankman-Fried stepped down as the director of Guarding Against Pandemics in mid-November.
FP Global Health Forum

Gabriel Bankman-Fried is Sam Bankman-Fried's younger brother.

In 2020, Gabriel Bankman-Fried founded and ran the nonprofit Guarding Against Pandemics, which aims to prevent another pandemic. The nonprofit was partly funded by Sam Bankman-Fried, Puck reported.

The two brothers have spent at least $70 million since October 2021 on research projects, campaign donations, and initiatives that hope to boost biosecurity and pandemic prevention, The Washington Post reported.

Gabriel Bankman-Fried stepped down as the director of the nonprofit in mid-November, The Post said.

His aunt Linda Fried is the dean of the public-health school at Columbia University.


Linda Fried is a public-health expert.
Columbia University

Fried, the dean of Columbia University's public-health school, is Sam Bankman-Fried's aunt, according to The Washington Post.

Described on the school's website as a "leader in the fields of epidemiology and geriatric medicine," Fried was trained in cardiovascular and chronic disease, epidemiology, and geriatrics.

Fried graduated from Rush Medical College in 1979 with a doctor of medicine and got a master's in public health from the Johns Hopkins Bloomberg School of Public Health in 1984, her biography on the Columbia website says.