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FTX's Inner Circle Had a Secret Chat Group Called 'Wirefraud' (afr.com) 46

An anonymous reader quotes a report from the Australian Financial Review: Members of the inner circle of power at collapsed cryptocurrency exchange FTX formed a chat group called "Wirefraud" and were using it to send secret information about operations in the lead up to the company's spectacular failure. On Monday (Tuesday AEDT) Mr Bankman-Fried denied being part of the chat 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 news of the chat group heightens concerns about the prospect of wrongdoing by Mr Bankman-Fried and his colleagues. Last week, Mr Bankman-Fried said he no longer had access to many of his own private communications. He was scheduled to testify virtually before the House Financial Services Committee on the 13th, but was arrested by the Royal Bahamas Police Force the day before. That said, Forbes published a transcript of SBF's planned testimony, where he at no point admits fraudulent behavior and does not address the (multi-)billion dollar loans that helped contribute to the collapse.

Most recently, we learned that FTX's chief engineer made a secret change to the cryptocurrency exchange's software that allowed FTX to use client money.
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FTX's Inner Circle Had a Secret Chat Group Called 'Wirefraud'

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  • by nonBORG ( 5254161 ) on Thursday December 15, 2022 @07:09PM (#63134086)
    Customer money/crypto on deposit with FTX is gone. In their TOS the money could be used for nothing just kept for the customer, that is all that needed to be said.
    • Sure. But mansions in the Bahamas, drugs, orges, and fraud chat groups are what will make the movie fun.

    • SBF is clearly FKD, but not because of the TOS. You actually think the FTX TOS will be enforceable in any way at all? Ahhh, children are so cute.

      He's gonna be in prison for a dozen real crimes. But the TOS will have nothing to do with it.
  • But where was the âoewoodnymphâ group if you wanted to page Caroline, for a drug fueled midsummerâ(TM)s nightâ(TM)s dream? And she would use those moments to get more millions for Alamedaâ¦.

    • by KlomDark ( 6370 )

      Please get a real computer so we can read your posts. I can't read that scramble from your toy.

  • by cstacy ( 534252 ) on Thursday December 15, 2022 @08:15PM (#63134210)

    The Lesson: "That won't be funny someday in the wrong context". Corollary: "That will happen."

  • by fuzzyfuzzyfungus ( 1223518 ) on Thursday December 15, 2022 @08:30PM (#63134232) Journal
    This is honestly among the more surprising elements of the story. I wouldn't expect the time he spent working for a nominally-respectable finance outfit to have made him any less likely to engage in egregious fraud; but I would have expected such a place to be one of the ones where Legal knows how to give a good "Never tell a joke that wouldn't be funny in discovery" talk.

    Even(if anything, especially) if you are doing crimes the trivial amusement you get from this sort of thing just isn't worth the risk of potentially providing someone with ammunition in the future.
  • He probably did do it, but encrypted his conversation. By the laws of the courts, if you encrypted a conversation and refuse to provide the key, it's as if they can use the evidence against you anyway. Not kidding.

    • by qeveren ( 318805 )
      Adverse inference, they can instruct the jury to interpret it in the most damning reasonable way if he doesn't provide it.
    • What you're referring to as somehow an evil conspiracy is called adverse inference.

      It only applies (in this context) to civil trials, where it is presumed that if the evidence would support your side, you would produce it, therefore an adverse inference is drawn, in a relatively rare case of law-talkers having a means of directly acknowledging the bloody obvious.

      It can also occur in the context of deliberate destruction of evidence, aka "obstruction of justice," either civilly or criminally, on a simi
  • If they find it he was actively and intentionally breaking the law. I suspect it's breaking the law and we'll find out more shortly
  • by bsdetector101 ( 6345122 ) on Friday December 16, 2022 @04:29AM (#63134720)
    FTX chief engineer Nishad Singh made changes to the FTX code in mid-2020 to avoid automatic liquidation of Alameda positions. Shouldn't he be charged also ? https://tokeninsight.com/en/ne... [tokeninsight.com]

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