Uh they use QuickBooks multi-billion Dollar company using QuickBooks QuickBooks QuickBooks day one of the FTX Crypto Hearing in Congress was wild from AOC getting into conspiracy theories to Brad Sherman grandstanding on why Bitcoin should die the information that Came out of this hearing was big for Example new FTX CEO John J Ray has been Clear this level of fraud is so much Worse than the Enron fraud any details Just how amateur the business of FTX was Mr Ray you have compared FTX as worse Than Enron Can you please elaborate on some of the Specific ways FTX is worse than one of The largest corporate frauds In history The the FDX group is unusual in the Sense that you know I've done probably a Dozen large you know scale bankruptcies Over my career including Enron of course Uh Every one of those entities had some Financial problem or another they have Some characteristics that are in common Uh this one is unusual and it's unusual In the sense that literally you know There's no record-keeping whatsoever It's in the absence of record keeping Employees would communicate you know Invoicing and expenses on on slack which Is you know essentially a uh you know a Way of communicating for chat rooms uh
They use QuickBooks multi-billion dollar Company using QuickBooks QuickBooks QuickBooks Uh nothing against QuickBooks very nice Tool just not for a multi-billion dollar Company Now I watched all nearly four hours of This so you don't have to I pulled the Best clips and while Sam bankman freed Was not able to testify today as we Discussed yesterday SPF has been Arrested here are his charges for the New York Times why your fraud why your Fraud conspiracy Securities fraud Securities fraud conspiracy and money Laundering new FTX CEO John Ray Confirmed what we've all known that There was obviously co-mingling of funds And the separation between Alameda and FTX was virtually nothing the operation Of uh valameda really depended uh based On the way it was operated for the use Of customer funds that that's the major Breakdown here funds from ftx.com which Was the exchange for Uh non-us citizens Those funds were used at Alameda to make Investments and other disbursements There were virtually no internal Controls and no separateness whatsoever And while I'll play this AOC clip in a Second as well as maybe the creepiest Clip to come out of today's hearing the Real question is just how much money
Does FDX have left because they're in The hole between 10 billion and 50 Billion what's left and who gets paid Back first between US versus International uh we've been able to to Secure you know over a billion dollars Of assets we've secured those to uh cold Wallets in a secure location Uh it's an ongoing process though which Uh which we'll we'll take you know weeks And perhaps months to secure all the Assets Our most Predators located in the U.S or Foreign jurisdictions The the majority of the creditors trade Through the.com Silo and are outside of This jurisdiction although there are Some foreign customers that are on the U.S Silo uh and vice versa Representative Brad Sherman chose to Spend his five minutes almost all of it Not questioning the people but instead Grandstanding on why cryptocurrency is Evil as if he's been waiting his whole Career for this for five years I've been Trying to ban American investments in Crypto I'm the only member of the house to get An F from the only crypto promoting Organization that rates members of Congress My fear is that we'll view Sam bankman Freed as just one big snake in a crypto Garden of Eden
The fact is Crypto is a garden of snakes Now from the outside Crypto just looks like a non-fungible Token An electronic pet rock for the 21st Century something that might be good to Invest in even though it has no apparent Value because you might get somebody Else to buy it from you for even more But in reality the hope of crypto Is to be a currency To compete with the U.S dollar and to Announce its advantage over the U.S Dollar in that competition It puts the advantage right in the name Crypto hidden currency now Sam bankman Freed or should I say inmate 14372 Um had one purpose in all of his efforts Here in Congress Was well-known figure Uh only one wearing shorts His one purpose was to keep the SEC out Of crypto to provide a patina of Regulation baby regulation from the cftc And I'll have one comment from my Colleagues Don't trash Sam bankman freed and then Pass his bill Now for every anti-crypto Senator we Have more and more Pro crypto Senators Popping up representative Tom emmer Chose to spend his five minutes Defending decentralization as well as
Questioning the new FTX CEO just how Involved was SEC chair Gary Gensler in All this how much did Gary Gensler know We know that chair Gensler had more Meetings with FTX than anyone else in The crypto industry we understand that What was being negotiated was a Framework for digital asset exchange Registration and token registration with The SEC that would benefit both parties It would expand the sec's jurisdiction In exchange for the sec's preferential Treatment of FTX over other industry Participants we understand there was a Lot of activity to move this idea Forward including the circulation of Draft short form disclosures that would Enable filers to get tokens listed on This newly formed bespoke exchange Mr Rate I know you're handicapped with the Information you currently have obtained But chair Gensler refuses to answer our Questions or testify before this Committee will you commit to sharing With this committee any internal Documents you come across regarding Communication between FTX and Mr Gensler Or others at the SEC We'll fully cooperate you know with the Committee and the regulatory authorities With respect to our investigation again Specifically I just want copies that This committee will want copies of those Communications to the extent they exist
We can certainly work with your staff to Get you what you need thank you and Mr Ray I appreciate you mentioning your Concerns in the beginning of my question About the concentration of power in a Small group of individuals with no Oversight that is the exact problem that Open and permissionless Technology like Crypto and blockchain solve it solves For the problems of centralization you Stated in your testimony that you've Never seen such a quote utter failure of Corporate controls at every level of an Organization from the lack of financial Statements to a complete failure of any Internal controls or governance Whatsoever close quote fortunately the Immutable characteristics of public Blockchains that some people would care Not to understand in this committee Allowed the crypto Community to reveal San and bankman Freed's fraud and the On-chain public record will assist law Enforcement moving forward I encourage My colleagues to understand Sam bankman Freed's con for what it is a failure of Centralization a failure of business Ethics and a crime it is not a failure Of technology Decentralization is the point And that brings us to AOC who I thought Actually asked a poignant question why Did Sam bankman freed only get arrested The day before he was going to testify
Does anybody else smell something fishy About sambang manfred's arrest AOC Starts by questioning the role of the Bahamian government in terms of Bankruptcy and then asks about the Timing of the SBF arrest Um I want to put together a little bit Of a timeline of this collapse between November 12th and yesterday On November 2nd we have coindesk leaking These balance sheets on the eighth Binance signs a non-binding letter to Acquire FTX and bankman freed freezes or Pauses withdrawals from FTX I would like To submit to the record your declaration To the U.S bankruptcy court or ftx's Declaration to ux bankruptcy court that Was filed yesterday Um now on November 9th the day after Those assets were frozen binance Announced it would not go through the Purchase and according to this filing The same day bankman freed emailed the Bahamanian Attorney General with an Offer that offer stated Uh that he would offer to unfreeze Withdrawals just for bahamanian Customers on FDX quote so they can Tomorrow fully withdraw all their assets Correct is that correct yes now on November 10th ftxdm the next day was Placed into a foreign provisional Liquidation in the Bahamas correct Correct the next morning
Now after that bankman freed then made Good on his offer on his previous day's Offer in that email to the bahamanian AG Opening withdrawals just in the Bahamas For a period of 25.5 hours is that Correct correct now during that period 100 million dollars was was withdrawn in The Bahamas from FTX by 1500 individuals Correct correct and this was before this Was the day before you were set to take Over so he was still in control this was Like right before he was supposed to Hand this off And then on November 16th The bahamanian appointed joint Provisional Liquidators did something Very interesting they came here to the United States Bankruptcy Court and Sought an entry to recognize the Bahamanian liquidation as the main Foreign proceeding With that additional control be of any Potential value to Mr bankman freed for That bahaminian proceeding to be the Main one Well clearly you know there seemed to be An effort Um by the behaving commission to get Control of of the bankruptcy process and I think that was evident by their filing Which by the way was made up in New York Not Delaware oh thank you thank you for That correction Um now did you uncover any evidence that
Demonstrates that this window that 25.5 Hour window opened in exchange for any Consideration offered to Mr bankman Freed by the bahamanian attorney general Or any state official including a Promise to initiate liquidation Proceedings which might offer a path Towards Mr bankman freed retaining some Control or influence over ftx.com we Intend to investigate everything thank You very much now I'd like to dig into a Little bit of the timeline of yesterday Yesterday you filed uh that same Declaration uh that revealed some of This explosive information What time did you file this Uh that was around what time yeah three Or four o'clock around three or four O'clock now when you file this Information that requires that Essentially discloses that you are Sharing this information and it Discloses that to opposing Council Correct yes we docket it and the world Knows about it now If opposing counsel Essentially becomes notified of this Um that would mean that bankman freed And potentially bahamanian officials Would have been potentially privy to That information starting around three Or four pm correct correct What time was Um Mr bankman freed arrested yesterday
Uh I I believe it was uh in the early Evening hours after four o'clock about I Think I believe it was in the evening After that filing six seven o'clock yes I would like to submit to the record the Statement from the Attorney General of The Bahamas issued yesterday on the Arrest of Mr Samuel bankman freed And after submitting that to the record I would like to note that this that in This statement they stated at such time As a formal request for extradition is Made presumably by the by the southern District of New York but they do not State when That request for extradition was made Do you believe that information is Important for us to understand in order To piece together a timeline Mr Ray yes Sir I I certainly don't have uh that Full timeline and that's something that We look forward to learning This is an ongoing story with day two of The hearing beginning tomorrow including A testimony from Kevin O'Leary and Others be sure to click subscribe so you Can stay informed also be sure to grab Your tickets for the largest crypto Conference in existence Bitcoin 2023 use Code altcoin daily for 10 off now ticket Prices do increase in three days so use Code altcoin daily 10 off grab your Tickets and like always I leave you with This your Moment of Zen I wonder if you
Would support A resolution that I've been thinking About introducing Um changing the name of cryptocurrency To a creepy dough Currency Um I'm going to discuss this with my Colleagues I think it's It's an appropriate name I just wanted To know whether you would support Changing it to creepy dough I'll I'll leave that skill set to to the Committee