FTX Update: SBF Case Changes Judge due to Conflict of Interest, US Department of Justice Launches Criminal Investigation into FTX Hackers

Although SBF was released as expected upon returning to the U.S., subsequent news released has been unfavorable to SBF, especially the testimonies of Caroline Ellison and Gary Wang. Lawyers believe that SBF can be convicted even without his cooperation at this point.

Reuters: SBF Case Reassigned to U.S. Judge Lewis Kaplan

According to a court document cited by Reuters, Judge Ronnie Abrams in the SBF case has recused herself from the trial, and the case has now been reassigned to another judge, Lewis Kaplan.

Judge Ronnie Abrams' husband is a partner at Davis Polk & Wardwell, a law firm that provided counsel to FTX in 2021. The judge publicly stated, "My husband did not participate in these representations. But to avoid any potential conflicts, I have recused myself from this litigation."

Lawyer: Testimonies of Caroline Ellison and Gary Wang Could Significantly Impact SBF Case

According to CoinDesk, Ian McGinley, a partner at the law firm Akin Group, stated that the testimonies of former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang could work against SBF as he battles criminal charges.

McGinley mentioned that last week, Ellison and Wang admitted they were aware of the loose relationship between the trading firms owned by SBF, Alameda Research, and FTX, as well as alleged mismanagement of user funds. This makes the defense for SBF more challenging, as SBF's lawyers are finding it "difficult to persuade" the two cooperating witnesses.

U.S. Justice Department Initiates Criminal Investigation into FTX Hack

According to reports from Bloomberg, the U.S. Justice Department has launched a criminal investigation into assets stolen from FTX in a hack that occurred just hours after the exchange filed for bankruptcy last month, resulting in over $372 million being taken from FTX. This is separate from the fraud case against FTX co-founder SBF. Sources confirmed that U.S. authorities have managed to freeze some of the stolen funds.

Insiders state that the investigation is led by the Justice Department's National Cryptocurrency Enforcement Team, a network of prosecutors focused on digital asset investigations. The hacking theft could lead to charges related to computer fraud, carrying a maximum sentence of 10 years in prison.

FTX Users File Class-Action Lawsuit, Seek Declaration that Digital Assets Held by the Company Belong to Users

As reported by Reuters, FTX users have filed a class-action lawsuit against the cryptocurrency exchange FTX and its former executives, including SBF, seeking a declaration that the digital assets held by the company belong to the users. The proposed class aims to represent over one million FTX users in the U.S. and abroad, seeking a declaration that traceable user assets are not FTX's property.

According to the complaint, users also seek a court determination that assets held in Alameda traceable to users are not Alameda's property. If the court determines it belongs to FTX, users will seek a ruling that they have priority repayment rights over other creditors.

SBF Borrowed $546 Million from Alameda to Purchase Robinhood Shares

According to CoinDesk, court documents reveal that former FTX CEO SBF and FTX co-founder Gary Wang jointly borrowed $546 million from Alameda Research through promissory notes in April and May. They injected this money into Emergent Fidelity Technologies Ltd to purchase a 7.6% stake in Robinhood.

These shares held by Alameda Research were used as collateral for the loan. BlockFi, which filed for bankruptcy, claims ownership of the Robinhood shares held by Alameda through a deal reached with SBF in early November. Currently, BlockFi, FTX Group, and SBF are all vying for ownership of these shares valued at around $440 million.

This article is authorized to be reprinted from Foresight News，Foresight News is a Chinese content platform in the Web3 vertical domain, committed to the basic principles of "objectivity and neutrality," and dedicated to establishing a Chinese gateway to the Web3 world.