Canada Adopts International Crypto Tax Reporting Standard
Canada is aimed at having the OECD standard for crypto asset tax reporting in place by 2027, as agreed with 46 countries.
Following an investigation detailing probable leverage and solvency issues concerning FTX-affiliated trading firm Alameda Research, FTX crashed in early November 2022. The collapse of FTX shook the already unstable cryptocurrency market; at the time, it lost billions and was valued at less than $1 trillion.
In November 2022, FTX experienced a liquidity difficulty and sought financial assistance; rival exchange Binance briefly discussed purchasing the company but swiftly backed out of the deal.
The CEO of FTX resigned on November 11, 2022, and the business declared bankruptcy.
In the following hours, FTX may have been the victim of a hack in which tokens valued at hundreds of millions were stolen. Sam Bankman-Fried, the founder and former CEO of FTX, was detained in the Bahamas and extradited to the United States in late December 2022. As of January 3, 2023, he pled not guilty to the charges.
Why did Sam Bankman-Fried plead not guilty?
Bankman-Fried entered a plea of not guilty in a New York court on January 2, 2023, and the judge set the trial for the erstwhile crypto tycoon to start in the fall.
The trial will start on October 2, 2023, according to the ruling made by US District Judge Lewis Kaplan on Tuesday during the hearing. The trial may last up to four weeks, according to estimates.
During his court appearance, Bankman-Fried reportedly spoke with his attorneys in private rather than the judge, according to a Reuters story.
What will Bankman-Fried’s jail sentence be?
Federal prosecutor Danielle Sassoon, who spoke during the hearing, made it clear that she thinks Bankman-Fried is guilty and should be held accountable for the theft of customer investments at FTX.
Sassoon hinted that the government has a ton of evidence against the former head of a crypto exchange: “Customer monies were […] used and laundered through political donations, charitable gifts, and a variety of venture investments.”
If found guilty in the trial, Bankman-Fried could spend up to 115 years in jail. He has already acknowledged the faults he made while leading FTX, but he has vehemently denied any criminal responsibility.
What is Bankman-Fried’s bail?
The judge used the occasion to establish the trial’s start date in addition to adding further restrictions to Bankman- Fried’s unheard-of $250 million bond.
The FTX founder is not permitted to access assets owned by FTX or the related trading company Alameda Research under the revised terms, despite rumours to the contrary. Even though there is no proof that Bankman-Fried made the asset transfers from Alameda after the collapse, prosecutors claim they are already under investigation.
Bankman-Fried’s attorney Mark Cohen stated in court on January 3, 2023, that his client “did not make” the transfers. That was in response to remarks made by Bankman-Fried in December 2022, in which he clarified that he no longer has access to the funds. He stated: “I think it’s conceivable that different legitimate branches of FTX can access these monies; ideally, that’s what’s happening in this case. If not, let’s hope somebody comes up soon to do it. If any regulators requested it, I would be pleased to help them with this advice.“
The judge allowed Bankman-Fried to redact the identities of the two co-signers for his $250 million bail during his most recent court appearance.
Lawyers claim that Bankman-Fried’s parents have already received threats; therefore, the decision to withhold the names of the other co-signers is an effort to prevent the same incident from happening.
Current order of the Bankman-Fried trial
Bankman-Fried will be subject to electronic surveillance at his parent’s house in California as per the terms of his initial bail.
A charming residence on the outskirts of Stanford University’s campus in Palo Alto, California, the home’s equity was used as a part of the bail’s collateral.
On December 13, 2022, Sam Bankman-Fried was taken into custody in The Bahamas, where his exchange was based. He was initially detained at the country’s notorious Fox Hill detention facility before being extradited to the US and granted bail.
What FTX collapse means for the rest of crypto
FTX is neither the first cryptocurrency exchange to go down nor the industry’s first scandal. OneCoin, for instance, was a multi-billion dollar hoax that duped thousands of investors before it was proven that there was no cryptocurrency to start with.
As rising interest rates and other cost-of-living pressures bite, the bankruptcy of a big player like FTX has damaged trust in a volatile market that was already in peril. Concerning cryptocurrency, the same lessons from financial scandals must be applied. Crypto gurus recommend that eliminating fraud in crypto can be achieved by reporting, governance, and conflict of interest regulations that are given priority. But because so many individuals want a global currency, cryptocurrency will persist.
In what prosecutors have dubbed an immense scam, Bankman-Fried is accused of illegally taking funds from FTX customers to fund his Alameda Research hedge fund, purchase real estate, and donate millions of dollars to political campaigns. A long list of other legal difficulties, such as avoidance litigation, fraudulent transfer litigation, preference litigation, and insurance litigation, might prolong the case for years. We can only hope that justice is done and that cryptocurrency is regulated.