Sam Bankman-Fried cofounded FTX in 2019 and is its CEO. Photo FTX
Is Sam Bankman-Fried guilty of committing one of the biggest financial frauds in history, on the level of Bernie Madoff’s Ponzi scheme, with his crypto firm FTX? Or was he just an incompetent CEO in over his head who made some really bad mistakes? Well, the SEC and U.S. prosecutors want a jury to believe that it is the former and Bankman-Fried hopes to convince one that it is the latter that is true.
After changing his mind about fighting extradition and agreeing to be sent home from the Bahamas to face the music, Sam Bankman-Fried is expected to appear in a court in that country on Monday to declare such. There is no official word about why Bankman-Fried changed his mind on extradition. Perhaps it was because of the deplorable conditions in the Bahaman jail that he had been complaining to the world about – so far from the five star accommodations he had been use to. Or maybe it was because mommy and daddy Bankman-Fried – who are now paying his legal bills – can’t afford to pay the extra cost of fighting the extradition.
As of now, Sam Bankman-Fried stands accused of eight counts of fraud and conspiracy. If convicted on all counts, he could be sentenced to as much as 115 years in jail. The charges came after his FTX crypto currency exchange company went bust a few weeks ago. The big question over the fall of FTX is “what happened to all of the money that people left with the company?” FTX was a crypto bank, so to speak, a place where people could park their virtual assets. But unlike with banks, there is no regulation over the handling of cryptos and FTX is said to have moved people’s cryptos around, basically that the company spent their money.
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And after FTX crashed creditors found that about $1 billion in funds were missing. Sam Bankman-Fried was accused of secretly moving $10 billion in FTX funds to trading firm Alameda research, which was founded by Bankman-Fried and thought of as a sister company to FTX. American prosecutors would like to prove that this was a case of embezzlement, while Bankman-Fried’s lawyers will surely try to claim it was simply an attempt to invest the funds to make more money.
