{"id":333013,"date":"2023-01-13T07:20:25","date_gmt":"2023-01-13T12:20:25","guid":{"rendered":"https:\/\/www.sgtreport.com\/?p=333013"},"modified":"2023-01-13T00:40:41","modified_gmt":"2023-01-13T05:40:41","slug":"ftx-bankruptcy-proceedings-thus-far-show-a-shocking-miscarriage-of-justice","status":"publish","type":"post","link":"https:\/\/www.sgtreport.com\/2023\/01\/ftx-bankruptcy-proceedings-thus-far-show-a-shocking-miscarriage-of-justice\/","title":{"rendered":"FTX Bankruptcy Proceedings Thus Far Show a Shocking Miscarriage of Justice"},"content":{"rendered":"

by Pam Martens and Russ Martens, Wall St On Parade<\/a>:<\/em><\/p>\n

\"\"<\/p>\n

To grasp the severity of the miscarriage of justice that occurred yesterday at the hands of Judge John Dorsey in the bankruptcy hearing for collapsed crypto exchange, FTX, one first needs a brief bit of background.<\/p>\n

The FTX companies that the bankruptcy lawyers are attempting to resuscitate or sell off to other crypto outfits (while the law firms collect millions of dollars in billable hours for their work) are peddling a product \u2013 crypto \u2013 that is created out of thin air and has no legitimate productive purpose. (See\u00a0Over 1,600 of the Brightest Scientific Minds in Technology Have Signed a Letter Calling Both Crypto and Blockchain a Sham<\/a>.)<\/p>\n

TRUTH LIVES on at\u00a0https:\/\/sgtreport.tv\/<\/a><\/p>\n

The hundreds of billions of dollars that American investors have been dumped into crypto exchanges, crypto lenders, crypto miners, and crypto banks are not only threatening the safety and soundness of the U.S. financial system, they are threatening the global competitiveness of U.S. innovation. These failing enterprises raise capital in public markets, crowding out real companies with real innovations.<\/p>\n

In July 2019, NYU Professor and economist Nouriel Roubini said this in a Bloomberg News interview:<\/p>\n

\u201cCrypto currencies are not even currencies. They\u2019re a joke\u2026The price of Bitcoin has fallen in a week by how much \u2013 30 percent. It goes up 20 percent one day, collapses the next. It is not a means of payment, nobody, not even this blockchain conference, accepts Bitcoin for paying for conference fees cause you can do only five transactions per second with Bitcoin. With the Visa system you can do 25,000 transactions per second\u2026Crypto\u2019s nonsense. It\u2019s a failure. Nobody\u2019s using it for any transactions. It\u2019s trading one sh*tcoin for another sh*tcoin. That\u2019s the entire trading or currency in the space where\u2019s there\u2019s price manipulation, spoofing, wash trading, pump and dumping, frontrunning. It\u2019s just a big criminal scam and nothing else.\u201d<\/p>\n

The law firm that Judge Dorsey is allowing to pull a coup d\u2019etat in his courtroom is Sullivan & Cromwell \u2013 the go-to law firm for Wall Street for more than a century \u2014 which has bestowed on itself the role of lead law firm in the FTX bankruptcy. For reasons that appear to rest firmly on just two words \u2013 \u201cbillable hours\u201d \u2013 Sullivan & Cromwell has immersed itself in all things crypto. In a recent FTX bankruptcy court filing, Sullivan & Cromwell acknowledged that not only has it collected legal fees and expenses of $8,564,487.50 from FTX and its related companies over the prior 16 months, plus a $12 million retainer for bankruptcy work, but it is simultaneously outside counsel to four of FTX\u2019s major competitors: BlockFi, Coinbase, Gemini, and Kraken.<\/p>\n

The quick take on the status of those five clients of Sullivan & Cromwell is as follows: the FTX group of companies has been described by federal prosecutor Damian Williams as \u201cone of the biggest financial frauds in American history\u201d with three of its top executives now indicted on a combined 19 criminal counts; BlockFi is also in bankruptcy; Coinbase, a publicly-traded crypto exchange, has lost more than 80 percent of its market value over the past 12 months;\u00a0Gemini has had more than $900 million of client funds frozen<\/a>\u00a0at another crypto firm, Genesis; and\u00a0Kraken has fired 30 percent of its staff<\/a>.<\/p>\n

But instead of bringing some sunshine to this murky mess that exists between Sullivan & Cromwell and the crypto cabal, Judge Dorsey has opted for more darkness. FTX filed for Chapter 11 bankruptcy on November 11 \u2013 two months ago. The U.S. Trustee, which represents the Department of Justice in bankruptcy cases, together with major media outlets (Bloomberg News, Dow Jones, New York Times and Financial Times),\u00a0had filed motions asking the court to release the names<\/a>\u00a0of the customers and creditors so that the public and the press could have transparency in the matter.<\/p>\n

There have been multiple academic studies showing that the vast majority of trading on unregulated crypto exchanges is fake with an unsavory agenda of attempting to legitimize an otherwise illegitimate enterprise. Just last month,\u00a0a paper released by the National Bureau of Economic Research<\/a>\u00a0found that \u201cwash trading volume, on average, is as high as 77.5% of the total trading volume on unregulated exchanges, with a median of 79.1%\u2026.\u201d The researchers define wash trading as \u201cinvestors simultaneously selling and buying the same financial assets to create artificial activity in the marketplace\u2026.\u201d<\/p>\n

Judge Dorsey releasing the names of the customers would allow the academic community and the press to conduct an analysis into the nature of traders that used FTX as well as its interrelationships with the megabanks and hedge funds on Wall Street. A\u00a0document filed with the bankruptcy court<\/a>\u00a0by Sullivan & Cromwell has indicated that megabanks JPMorgan Chase, Bank of America, Morgan Stanley and Wells Fargo had existing relationships with FTX and\/or its affiliated companies. Details of these relationships have yet to find their way into the sunshine.<\/p>\n

Attorneys for FTX argue that the customer lists have resale value and that the customers might be poached by crypto competitors if their names are released.<\/p>\n

The reality is that any real FTX customers (outside of the potential bots, algorithms and fake traders that might be doing the trading) are very angry customers. Their accounts at FTX have been frozen for more than two months with no ability to access their cash or securities. New FTX management has testified that $8 billion of customers\u2019 money is missing. And as each day of financial distress grows among FTX customers, there is a new breaking story about\u00a0the opulent life<\/a>\u00a0that the alleged fraudsters were living with the looted funds from customer accounts.<\/p>\n

Read More @ WallStOnParade.com<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

by Pam Martens and Russ Martens, Wall St On Parade: To grasp the severity of the miscarriage of justice that occurred yesterday at the hands of Judge John Dorsey in the bankruptcy hearing for collapsed crypto exchange, FTX, one first needs a brief bit of background. The FTX companies that the bankruptcy lawyers are attempting […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[146228],"_links":{"self":[{"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/posts\/333013"}],"collection":[{"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/comments?post=333013"}],"version-history":[{"count":0,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/posts\/333013\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/media?parent=333013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/categories?post=333013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/tags?post=333013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}