Guess What? You're Likely to Hear a Lot About SBF, FTX in 2023
Good morning, and I hope you had a Merry Christmas. I know I did. But my inbox has been exploding with news about Sam Bankman-Fried (SBF) and FTX. A lot has happened since last week. Let’s have a quick review:
You already know SBF was arrested in the Bahamas. But it was revealed last week that Caroline Ellison, SBF’s on-and-off girlfriend and CEO of Alameda Research, as well as FTX Cofounder Gary Wang both plead guilty to wire fraud and other charges. Ellison plead guilty to seven charges that, together, carry a maximum of up to 110 years in prison. But do you think she’ll get that? Keep reading.
Like magic, FTX management has found $1 billion in company assets, which includes $720 million cash stored in bank accounts. This money has been sitting in bank accounts all this time and none of the banks came forward and said, “Hey, we have FTX money?” Sounds a little suspicious.
In exchange for her guilty plea and cooperation with the U.S. Department of Justice’s criminal investigation, Ellison could get out of seeing any jail time for her offenses but will likely be prosecuted on criminal tax violations. Ellison, in presenting her guilty pleas, said she knew what she was doing was wrong. Wow! Commit a crime and get off practically scot-free just for being a snitch.
After he stopped fighting extradition charges, SBF was brought to the U.S. to face trial. He was then released on a $250 million bond and will be allowed to live with his parents. But, hold on! He’s not actually paying $250 million to get out of jail. Nothing spells privilege more than this goofball arrangement. If a poor kid from the Bronx robs a liquor store and gets caught, he might be held on a $25,000 bond, but it’s not likely he’ll pay it because he doesn’t have the money. So, he’ll sit in jail until his trial. On the other hand, a privileged 30-year-old kid from Palo Alto with well-connected college professor parents can get a record-setting bail amount for a white-collar crime but can get out of paying it and still leave jail as long as something is put up for collateral against the bond. In this case, SBF’s parents’ Palo Alto home, worth substantially less, is the collateral. Long story short: Many commits fraud, gets caught, signs a document promising not to leave the country, and receives an extended stay as a vacation resort that once was his home and owned by his parents. What a beautiful justice system.
While living it up in the Bahamas, SBF paid his parents for advice using FTX money. I’m sure they enjoyed the lobster dinner.
On top of this, SBF has $450 million worth of Robinhood shares that current FTX management is trying to take from him to pay off the battered company’s debts. It seems reasonable to me that SBF should have to forfeit these shares as a personal responsibility for any crimes he committed as CEO of FTX so that those affected by his actions may be made whole.
It has come to light that FTX hid $8 billion in an obscure “customer account” and was referred to as “our Korean friend’s account.” Yikes!
Cryptocracy is a decentralized newsletter published several times a week. I curate the latest news and crypto analysis from some of the brightest minds in crypto, and sometimes offer a little insightful and snarky commentary. Always fresh, always interesting, and always crypto. Original articles on Fridays.
First published at Cryptocracy. Not to be construed as financial advice. Do your own research.
Image credit: David Dee Delgado/Getty Images via The Verge