Former FTX CEO Sam “SBF” Bankman-Fried’s public trial in a New York court ended with the jury finding him guilty on all seven charges on Nov. 3, including two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy and one count of money laundering conspiracy. He will return to court for sentencing by Judge Lewis Kaplan on March 28, 2024. Government prosecutors will recommend a sentence, but Kaplan will have the final say.
Bankman-Fried’s crimes each carry a maximum sentence of five to 20 years in prison, with the wire fraud, wire fraud conspiracy and money laundering conspiracy charges carrying a maximum 20-year sentence. In a press conference outside the court, United States Attorney Damian Williams called Bankman-Fried’s crimes “a multibillion-dollar scheme designed to make him the king of crypto” and one of the biggest financial frauds in American history.
Meanwhile, the current claims pricing of FTX has reached a maximum of 57%, partly due to the valuation of artificial intelligence (AI) companies that the now-bankrupt crypto exchange previously invested in. FTX claims value has jumped to the highest spot when compared with other bankrupt crypto firms, such as Celsius with 35–40%, Genesis with about 50%, Alameda Research with 10% and Three Arrows Capital with only 7–9%.
FTX has also requested the bankruptcy court in Delaware allow it to sell certain key trust fund assets, including from crypto asset manager Grayscale Investments and custody service provider Bitwise, valued at around $744 million. The latest request by FTX debtors for the sale of trust assets comes after the court had earlier approved the liquidation of nearly $3.4 billion in crypto assets.
U.S. gets new AI safety standards
U.S. President Joe Biden issued an executive order establishing new standards for AI safety and security. Biden’s order stated it is building off previous actions taken, including AI safety commitments from 15 leading companies in the industry. The new standards have six primary points, along with plans for the ethical use of AI in the government, privacy practices for citizens and steps for protecting consumer privacy.
The first standard requires developers of the most powerful AI system to share safety test results and “critical information” with the government. Secondly, the National Institute of Standards and Technology will develop standardized tools and tests for ensuring AI’s safety, security and trustworthiness. The administration also aims to protect against the risk of AI usage to engineer “dangerous biological materials” through new biological synthesis screening standards.
FCA explains how to comply with its crypto promotion rules
Rules for crypto asset promotion that came into force in the United Kingdom on Oct. 8 have led to some confusion, judging from the low level of compliance. The Financial Conduct Authority (FCA) responded with additional guidance for crypto firms to help them fall into line. The new 32-page guidance does not create new obligations for crypto firms, but the authors noted that it reflected a new “secondary international competitiveness objective” in addition to addressing its expectations for firms’ domestic behavior. The guidance section of the text emphasized key segments of the rules and other pertinent legal documents. The second section gives detailed answers to questions submitted during the consultation phase.
Switzerland kicks off its wholesale CBDC pilot
The Swiss National Bank (SNB), six commercial banks and the SIX Swiss Exchange will work together to pilot the issuance of wholesale central bank digital currencies (CBDCs) in the nation, officially known as the Swiss franc wCBDC. The pilot project dedicated to wholesale CBDC, named Helvetia Phase III, will test the efficacy of a Swiss franc wCBDC in settling digital securities transactions. The pilot builds on the findings of the first two phases — Helvetia Phases I and II — conducted by the BIS Innovation Hub, the SNB and SIX. The Swiss wCBDC pilot project will be hosted on SDX and use the infrastructure of Swiss Interbank Clearing. According to the announcement, the pilot will run from December 2023 to June 2024.