FTX and SBF Conspired to Keep Bitcoin Prices Down - Bombshell Trial Testimony
Plus, Bitcoin Roars Past $35,000 in Monday Rally
Trial of Sam Bankman-Fried Reveals Bitcoin Price Manipulation
In some bombshell testimony in the trial of Sam Bankman-Fried last week, Bankman-Fried’s ex-lover and appointed CEO of Alameda Research revealed that he ordered Caroline Ellison to keep selling Bitcoin if it went below $20,000, thus artificially depressing prices on the open market.
Ellison was the star witness for the prosecution last week, and has already copped to a plea deal and is cooperating with federal prosecutors.
The most damning part of Ellison’s testimony was that SBF ordered her to sell clients’ Bitcoin assets, without their approval, in order to bring down prices. This is the most serious charge that SBF is facing, the snatching of customer assets, without approval, to benefit Alameda and Sam’s other entities.
Ellison produced a document written by SBF that read “Keep selling BTC if it’s over $20K.”
Ellison also testified that Bankman-Fried intentionally pointed regulators toward Binance, FTX’s biggest competition in the cryptocurrency space. And that he had aspirations to run for president of the United States, possibly explaining his history of excessive political donations. (Per thestreet.com)
Ellison also revealed that the team at FTX and Alameda Research had improperly used $13 billion of FTX customer funds to prop up Alameda’s trading losses. This was undoubtedly the most damning portion of Ellison’s testimony. The trial is continuing this week. Bankman-Fried is expected to testify on his own behalf.
Sam Bankman-Fried faces charges of wire fraud on customers and lenders, conspiracy to commit commodities and securities fraud, one count of money laundering, and one count related to campaign finance laws. He faces up to 115 years in federal prison.
Caroline Ellison has taken a plea deal to certain charges, and also faced over 100 years in prison, before agreeing to cooperate fully with prosecutors. She has yet to be sentenced.
Prospect of Spot Bitcoin ETF Approval Propels Bitcoin Price Past $35,000
The rumors were out there.
But it was more than rumors. It was the presence of some of the giants of the investing world. After more than a dozen firms had been turned down in efforts to offer spot Bitcoin ETF products. Big-time players such as Ark Investors, Valkyrie, Gemini and others.
BlackRock and Fidelity, two behemoths of the investing world, with over 13 TRILLION dollars under management, had previously applied for SEC approval to offer spot Bitcoin products to their customers. And the rumors were out there, just recently, that one or more approvals was imminent.
The theory: If these giants applied, they must already know they will be approved. Would they apply if they thought they would be turned down?
Not likely. BlackRock had received approval on an astonishing 575 out of 576 of its ETF applications to the SEC.
It is completely feasible that such an approval will pave the way for hundreds of billions of dollars to find its way into the Bitcoin space.
The hints are everywhere. A ticker symbol of $IBTC has already appeared on the DTCC website. (The Depository Trust and Clearing Corporation DTCC.)
And on Monday, October 23rd, the price of Bitcoin took off. As some Bitcoin maxis say, Bitcoin can “melt faces.” This was almost that amazing.
WAGMI!
Twitter (excuse me, now X) erupted, predictably, with the chest pounding of the Bitcoin maximalists. Two years of holding through severe price drops were rewarded, as the price surged past $35,000. Pretty much every Bitcoin holder is now in the black!
The familiar slogans of the Bitcoin crowd could be found on social media. “HFSP: Have fun staying poor,” to those who shun Bitcoin. “WAGMI: We’re All Gonna Make It,” a confirmation that WE were right all along. “We’re all getting girlfriends!” No explanation required.
Bitcoin has a long way to go to get to a new all-time high of over $69,000. But remember, that apex was during a time of insane hysteria, in stocks, in Bitcoin, in crypto “altcoins.” (I’ll use that polite term.) The world was flush with stimulus cash, government grant money, and of course it was the time of zero-percent interest rates. Good times. Fast forward to 2023:
Most of the useless altcoins, with no purpose, have been flushed out.
Crypto fraudsters have been stopped by the dozen.
Inflation and money-printing continue to flourish.
Fiat currencies are worth less and less every day.
It could be that the peeps are waking up, and discovering a monetary technology, one with a fixed supply that may serve well as a store of value. Not investment advice, just ideas.
WAGMI? Stay tuned.
NOTE: Bitcoin has been around for fourteen years, and is selling for $34,000 per coin.
$680 Billion market cap.
Probably nothing.
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Issue No. 124, October 27, 2023
Rick Mulvey is a CPA, crypto consultant, and frequent contributor to Bitcoin Magazine. He writes about all things Bitcoin, and yells at the Yankees and Giants. He also runs marathons and makes wine, neither professionally.