Sam Bankman-Fried co-founded FTX in 2019 and is its CEO. Photo FTX
Federal prosecutors now allege that Sam Bankman-Fried sent messages by email and the encrypted messaging app Signal this month to the general counsel of the U.S. arm of FTX and that this was an attempt to interfere with his prosecution. Also, in a sign that he may be delusional, Sam Bankman-Fried told Forbes he had a very different view of what prison would be like.
In an interview with Forbes, Sam Bankman-Fried said, “I thought that it was going to be like The Shawshank Redemption.” Maybe he meant that he could escape through a tunnel dug over a twenty year period like Tim Robbins did in the 1994 Oscar nominated movie. Or maybe he was just not grounded in reality, which explains, as he told Forbes, why he was so surprised to be sharing a cell with five other people.
As for possible charges of obstruction of justice, In a court filing cited by the New York Times, the U.S. attorney’s office for the Southern District of New York said that Sam Bankman-Fried ‘s actions were “suggestive of an effort to influence Witness-1’s potential testimony,” and that “This is particularly concerning given that the defendant is aware that Witness-1 has information that would tend to inculpate the defendant.”
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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.
Based in the Bahamas, FTX was a cryptocurrency exchange that said it was built by traders, for traders. FTX offers industry-first derivatives, options, volatility products and leveraged tokens. FTX had more than one million traders using its services when it failed.
When FTZ crashed, Sam Bankman-Fried himself lost 94% of his total wealth, or about $14.6 billion and was forced to sell whatever was left of FTX to chief rival Binance.
FTX, it seems, was nothing more than a house of cards built upon its own assets. The company’s net worth was based on ownership of its own tokens. This means that FTX claimed to be wealthy because it owned the same crypto tokens the company issued. And these tokens had no tangible net worth. Last week the house came down.
