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Turkiye seizes Sam Bankman-Fried assets after FTX collapse, alleged crypto fraud

Flag of Turkiye is displayed on a mobile phone screen and the symbol of Bitcoin cryptocurrency is displayed on a laptop screen in Ankara, Turkiye on May 03, 2022. [Celal Güneş - Anadolu Agency]
Flag of Turkiye is displayed on a mobile phone screen and the symbol of Bitcoin cryptocurrency is displayed on a laptop screen in Ankara, Turkiye on May 03, 2022. [Celal Güneş - Anadolu Agency]

Turkish authorities have seized assets belonging to the failed crypto currency exchange, FTX, which went bankrupt and whose founder, Sam Bankman-Fried, escaped with reportedly over a billion dollars in investors' money.

In a statement yesterday, Turkiye's Treasury and Finance Ministry announced that an inquiry has been opened into claims of fraud against Sam Bankman-Fried, the former CEO of the crypto currency exchange FTX. In the process of that investigation, Turkish authorities seized his assets under the subsidiary FTX TR, as well as those of his company's affiliates.

Bankman-Fried and FTX – which collapsed this month and reportedly went from being worth $32 billion to only $1 billion in liquid assets – were accused of conning investors out of their money and using it to finance and buy real estate for his other company, Alameda Research.

Other allegations pointing to fraud include the disgraced CEO and FTX never having any board meetings, lacking positions essential to a functioning crypto currency platform, and that many employees were fake in order to maintain the scheme.

Following FTX's collapse, Bankman-Fried fled to the Bahamas, where no extradition treaty with the United States is in place and where his parents bought property worth $121 million using the allegedly stolen investor funds.

Meanwhile, FTX's crypto currency token, FTT, and the larger crypto market have since suffered from a complete freefall, with many companies associated with FTX apparently close to also filing for bankruptcy.

Bankman-Fried has claimed that Alameda – which held $8 billion in customer funds meant for FTX – was in possession of customer funds only because it had received the money from them before the FTX exchange had its own bank account, putting it down to an unintentional failure.

Eventually issuing an apology to investors in a series of tweets, he told former FTX employees that excessive borrowing by Alameda was responsible for FTX's demise, and insisted he was unaware of the margin positions taken by the traders.

Despite the allegations of fraud against Bankman-Fried, many mainstream media outlets have been accused of sympathising with him and excusing the syphoning of customer funds as a simple case of mismanagement, allowing him to speak at The New York Times' DealBook Summit next week.

The disgraced CEO was also one of the biggest donors to the US's Democrat Party and the campaign of current President Joe Biden, and regularly spoke at events with the likes of former President Bill Clinton and former British Prime Minister, Tony Blair, leading many to speculate the FTX scandal could be associated with leading political figures and deliberately covered up by them.

In a statement, Turkish Minister of Treasury and Finance, Nureddin Nebati, has warned that the market for crypto currencies needed to be approached with "maximum caution" after this latest alleged Ponzi scheme, which surpasses that of the infamous Bernie Madoff.

READ: Cryptocurrencies may be the last hope for those in the Middle East

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Europe & RussiaNewsTurkey
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