Rob Bankman-Fried, the former CEO, was arrested by the Bahamian government on December 12th after the bankruptcy of various digital currency exchanges FTX in November 2022. Just that day, the Foreign Securities and Exchange Commission and the Commodity Futures Trading Federation sued her on suspicion of defrauding investors and violating securities laws.

On December 22nd, Bankman-Fry was granted bail because his family paid $250 million in debt pledged by shares in their house. The bail order added that he must have "strict pre-trial supervision", including physical and mental health treatment and assessment. The former CEO has been charged in eight criminal cases abroad and could face 115 years in prison if convicted.

Bankman-Fried has been detained at his parents' home in California since December 22, but later returned to New York City to participate in the surrender hearing system. Then, at a court hearing on January 3, he pleaded not guilty to all criminal charges related to the bankruptcy of the password exchange. The charges include telecom network fraud, securities fraud and violation of election accounting laws and regulations.

In addition to the collapse of Bankman-Fry,FTX sister business Alameda Research Center (Alameda Research) former CEO Caroline Ellison (Caroline Ellison) and former Bankman-Fry,FTX founder Stephen Green are also tested for fraud. SEC claims that Ellison controls the price of FTX dynamic password (FTT), which is described in the document as a data encryption security token. The above controls are carried out by a number of purchases in open market operations to support its price and take effect from 2019 to 2022.

Ellison and Wanda Wang Jianlin later pleaded guilty to fraud charges and are cooperating with each other in the judicial investigation and analysis of Bankman-Fry. Ellison also reached a plea deal under which she can only be prosecuted for violating the requirements of a criminal tax case.

Doug Brooks, a consultant at Sinn Finn, told Cointelegraph that Ellison had brought direct evidence to prosecutors that it was clear that she would become a strong witness in the Bankman-Fry case. Brooks added:

This is also the most common response adopted by US prosecutors in some high-profile cases, that is, bottom-up investigation. This includes salvaging smaller fish and buying and selling them if necessary, thus clearly providing the most effective reasons for the main tasks. Since Ellison had already turned herself in and offered to cooperate, it would not be surprising if, after saying she was really sorry, she escaped relatively unharmed and punished a lighter punishment for a lesser charge-even if the evidence she provided was as combustible as we had expected.

With the involvement of the US authorities and the arrest of Bankman-Fry, many FTX clients and investors I hope you can take practical actions to draw up a plan to get some of the money back. However, the changes in the bail of Bankman-Fried, its plea of not guilty and Ellison's plea deal have raised doubts among many people. But Richard Demiko, chief legal officer of Banxa, a provider of password infrastructure services, told Cointelegraph that prosecutors were careful about Bankman-Fry:

"his bail alone-an astonishing $250 million-shows the prosecutor's authority over the case." In addition, regulators did not protect Rob from potential consequences. Although SBF cooperated tacitly with regulators before he was left out in the cold, both CFTC and SEC were right after he initiated a civil case.

Mico stressed that there is a lot of data showing that SBF mismanaged customer assets, and although "it is frustrating to see SBF being released on bail, I believe justice will eventually be seen in the password world."

The operation of funds puzzles the password community.

Investor uncertainty is growing as multimillion dollars are being introduced into Alameda-related wallets a few days after Bankman-Fry was released on bail. A total of $1.7 million has been relocated, but what is more important is how the business is carried out, which surprised many people. Such assets are transferred by fragmented exchanges and mixed services to cover the source of trading.

It is reported that some of this money was later traced back to Bankman-Fried himself. According to online research by BowTiedIguana, a decentralized financial educator, he gave a password of $684,000 to an exchange in Seychelles on suspicion of being detained.

On December 28th, according to BowTiedIguana's interpretation, Bankman-Fry 's public Ethernet Square detailed address sent all of its remaining Ethernet Square (ETH) to a created address. BowTiedIguana claims that SBF will be allowed to take over the detailed address in August 2020, which was originally owned by Nomi, the founder of SushiSwp.

Within hours, the latest address received a cumulative transfer of $367000 from 32 addresses identified as Alameda scientific research wallets, in addition to $322000 from other wallets. Any assets are sent to the password Exchange and password Bridge RenBridge in Seychelles.

Richard Calf, CEO of Internet financial infrastructure company MODULUS, told Cointelegraph that incidents after bail need to be taken into account, he explained:

This person is the concept of escape risk, and bail should be impossible. You have to take into account that, given his political contributions, there are some key people whose fate is closely related to SBF. I think there is an overwhelming feeling that the masses want to uphold justice for the collapse of FTX. But her friends in politics are likely to help him put his thumb on the scale.

The former CEO made it clear on Twitter that he had nothing to do with the growing rumors that Bankman-Fry was behind the operation of the money.

Can the FTX case open up an example for the cryptographic ecosystem?

Bankman-Fry will face a four-week trial on October 2nd, which could cause long-term damage to the cryptographic ecosystem. A trial focusing on one of the largest cryptographic exchanges of the time could be a critical moment, at least for intermediate entity lines and service providers.

Some observers believe that Bankman-Fried expects help rather than giving priority to the overall goal of the cryptographic world, coupled with leverage for him, making him the ultimate puppet of prosecutors.

Alibaba Redbold, head of laws, regulations and government affairs at TRM Lab, a digital currency risk management company, told Cointelegraph that FTX represents a central agency failure, not a password failure, he explained:

"the most important thing to know is that in the case of FTX, this is also about corporate fraud and corporate dereliction of duty, not about passwords. FTX's situation is more similar to Xinran, Lehman Brothers or WorldCom. The fraud here does not occur in the blockchain, but in opaque centralized financial companies, and it is important to separate technology from business.

When talking about the possible impact of the Bankman-Fry lawsuit, R.A., the technical director of the password exchange 1GCX. Wilson told Cointelegraph,FTX that the impact is likely to only harm the intermediate entity line, but will open up an example for future regulation:

In good times, regulation is delayed as much as possible, beneficial to market trading, and only for real investors. I estimate that, in fact, taking full account of the fact that regulators have been looking for ways to gain geographical jurisdiction over the application of this new technology, this is probably not the case. "