Shortly before he was arrested by Bahamian authorities for conspiracy to commit wire fraud, founder and former CEO of FTX Sam Bankman-Fried took to Twitter to deny being in or being aware of a secret group chat called ‘Wirefraud.’
The secret Signal group chat reportedly included SBF’s inner circle, including co-founder Zixiao “Gary” Wang, FTX engineer Nishad Singh, and former Alameda Research chief executive Caroline Ellison. Signal is an encrypted instant messaging service, and SBF and his ‘inner circle’ were allegedly hoping to keep the chat hidden.
The existence of the group was first reported by The Australian Financial Review. And according to the publication, it was created to “send secret information” about the company’s operations leading to its collapse early last month.
SBF was arrested on Monday, shortly after new FTX CEO John J. Ray III, who is overseeing the company’s chapter 11 bankruptcy filing, revealed that FTX embarked on a $5 billion “spending binge” in 2021 and 2022 to buy a “myriad of businesses and investments, many of which may be worth only a fraction of what was paid for them.” He added that the exchange also made numerous “loans and other payments to the tune of $1 billion to company insiders.
And contrary to SBF’s claims that he did nothing wrong, Ray also said FTX commingled its customers’ funds with those of Alameda Research to conduct margin trading, exposing their assets to extensive losses.
If proven true, the aptly named Signal group chat could prove instrumental to the investigation, particularly in determining whether or not SBF and his inner circle knowingly committed the many “mistakes” that caused the downfall of the cryptocurrency exchange.
Information for this briefing was found via Twitter, AFR, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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