One nagging question about Sam Bankman-Fried and his FTX Crime Family has always been – what was the endgame? Given the incredible extent of the theft taking place, how did Bankman-Fried and his inner circle of co-conspirators foresee escaping their giant con with their freedom and dignity intact?
New charges filed Thursday against the disgraced effective altruist support the idea that he hoped to curry enough favor in Washington, D.C. to somehow escape the consequences of his actions. This strategy doesn’t withstand scrutiny – but then again, neither do most of Sam Bankman-Fried’s apparent goals or strategies.
This helps drive home a tricky but important point about many of the crypto wunderkinds who ascended to the heavens in 2021 and fell to Earth in 2022. Bankman-Fried represented himself, and was lauded in the media, as some kind of genius.
Same goes for Terra con artist Do Kwon and Su “Bitcoin will only go up forever” Zhu, CEO of Three Arrows Capital. In fact, though, these people were putting on an act – an impression. They leveraged credentials, relationships and theatrical self-representations to create what you might call “a dumb person’s idea of what a smart person looks like.” This helped attract huge amounts of money.
But it’s now clear Bankman-Fried and the rest were and are not just unlucky but remarkably dumb.
Thursday’s superseding indictment from the U.S. Department of Justice adds very serious new charges, including investment fraud, banking fraud, wire fraud and election fraud, to Bankman-Fried’s already-long rap sheet. Sources told CNBC that Bankman-Fried could face an additional 40 years in prison based on the new charges, on top of the existing allegations.
The documents detail Bankman-Fried’s various false public statements about FTX’s risk management and custodial practices, which support both the investment and wire fraud allegations. Bankman-Fried is also accused of misrepresenting FTX’s operation and the purpose of fiat bank accounts to U.S. regulated banks, which is an extremely serious allegation more associated with Mexican cartels and global terrorists than tech startups.
Though, the most significant new charges address his “unlawful political influence campaign, which involved flooding the political system with tens of millions of dollars in illegal contributions to both Democrats and Republicans made in the names of others in order to obscure the true source of the money and evade federal election law.”
It might not be obvious, but this is a big, big deal. U.S. lawmakers, prosecutors and judges are understandably not huge fans of attempts to illegally subvert U.S. democracy (after all, they’ve created plenty of convenient, legal methods for doing so). The charges describe in depth the use of so-called “straw donors” to funnel FTX money (really, FTX user funds) to political campaigns by fraudulently representing them as donations from individuals, including two unnamed FTX executives.
Read the full article here.
– David Z. Morris
@davidzmorris
david.morris@coindesk.com
