Alameda Was SBF’s Money Laundering Façade: Ex-SEC Lawyer Claimed

Alameda Was SBF’s Money Laundering Façade: Ex-SEC Lawyer Claimed

In a recent news report, John Reed Stark, a former law expert at SEC, has described Alameda Research as Sam Bankman-Fried’s Money Laundering passage, disagreeing with the claims that Alameda served as FTX’s market maker.

According to new developments, John Stark has raised his voice, criticizing the recent defense argument stated by the legal team of the former FTX exchange’s CEO, Sam Bankman-Fried, in the ongoing fraud trial. The law expert was reportedly particular about the defendant’s claims that Alameda Research was the market maker for the collapsed exchange, FTX.

Stark vehemently opposed the assertion as he claimed that it is absurd to call Alameda a market maker. He argued that the asset management firm was in actual sense created to serve as a passage for the money laundering scheme designed by Bankman-Fried. In his speech, the lawyer talked about the standard requirements that make up a legal market maker.

Wang Testified Against SBF For 6 Hours

According to Stark, typical market makers are brokerage firms legitimately endorsed by the Financial Regulatory Authority and the Securities and Exchange Commission. The lawyer pointed out that Alameda Research falls short of these requirements, hence, misleading the public for claiming to be a market maker.

Meanwhile, Sam Bankman-Fried, the former CEO of the now-collapsed FTX exchange, is currently facing trial as the primary suspect behind the failure of the crypto exchange. The trial which began on October 3rd, 2023 saw Gary Wang, co-CEO of FTX, posit as the key witness of the prosecution team as he testified against SBF for about six hours.

Under the court’s oath, Wang claimed that Bankman-Fried directly ordered all activities of the firm that misled and lured customers to invest in the project and the misappropriation of the investors’ funds. In exchange for testifying, Wang pleaded not guilty to the allegations the Department of Justice leveled against him and other defendants in the case. He claimed that he was carried away by the rapidly evolving crypto ecosystem. However, his legal representative in the case, chaired by lawyer Mark Cohen, has not filed any case yet.

Ellison To Disclose FTX And Alameda Relationship

As the SBF trial continues, reports revealed that the prosecution team is set to call upon the former Alameda Research CEO, Ellison, to the witness box as their prime witness. The report also showed that Ellison too had pleaded not guilty to the allegations the DoJ filed against her. Furthermore, she is expected to throw more light on the obscure dealings and events that occurred within the FTX wall before the firm collapsed, especially Alameda Research’s involvement.

In addition, updates regarding the ongoing SBF trial revealed that two top executives of FTX revealed in their testimony on October 3rd that FTX exchange and Alameda Research have an intricate financial connection. According to them, both firms were established by Sam Bankman-Fried and interestingly, they have a deep financial connection that is not open to FTX’s creditors.

Furthermore, the top executive pointed out that Alameda Research somehow has access to the bank account of the FTX exchange which supported the issuing of a massive loan of $65 billion from FTX to Alameda with creditors’ and customers’ awareness. Defending the misappropriation act, SBF’s legal representative revealed that the loan was issued to support Alameda’s role as FTX’s market maker.

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Jesse Rosenbalm
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Jesse Rosenbalm

Jesse Rosenbalm stands out in the crypto journalism realm, seamlessly blending intricate blockchain concepts with accessible prose. Known for his deep dives and accurate forecasting, Jesse's articles are a must-read for both novices and experts. As crypto trends shift, his insightful writings remain a beacon in the digital currency space.

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