Instead of going to jail for fraud and theft of billions, Bankman-Fried was invited to the New York Times’ DealBook Summit.
“How did this dude steal billions of dollars and is now speaking at a summit as a free man? Make it make sense.” — the internet.
This is the question that millions of people are asking after weeks have now passed since Sam Bankman-Fried’s FTX scandal unfolded. Bankman-Fried is accused of treating FTX as a ‘personal fiefdom’ as he squandered billions in cash and digital assets of his former clients.
According to a Bloomberg News report, customer funds were seemingly used to buy real-estate while Bankman-Fried himself took a $1 billion loan out from Alameda Research, a trading firm founded by Sam Bankman-Fried. The firm was trading billions of dollars from FTX accounts and leveraging the exchange’s native token as collateral, according to reports.
Essentially, Bankman-Fried was taking assets from his customers, without their permission, and squandering them on risky trades. According to U.S. securities law, mixing customer funds with counterparties and trading them without explicit consent — is against the law.
Galaxy Digital CEO Mike Novogratz is one of the folks throwing his hands up and demanding to know why Bankman-Fried has not been arrested or even charged.
“If you read your contract when you deposit your crypto or your dollars on his exchange, they’re your coins and you have title to them, and lending them to his family office was not part of the deal. So, you know, nobody who participated in that exchange signed a contract that Sam could take your coins and run a hedge fund with them. That’s fraud,” Novogratz said in an interview with CNBC recently.
“I had some young kids break into my apartment four years ago, they stole a couple of laptops, and within three days the NYPD had arrested them and they were in jail,” Novogratz said.
“Maybe I’m not a judge or a lawyer, but I read my contract and [Bankman-Fried] certainly did things with our coins that were illegal. And he’s running around the Bahamas, giving press conferences, going on TV.”
Instead of going to jail for fraud and theft of billions, as Novogratz points out, Bankman-Fried was invited to the New York Times’ DealBook Summit to be interviewed by journalist Andrew Ross Sorkin.
The 29-year-old mega criminal will be appearing alongside Larry Fink, chairman and CEO of BlackRock, Reed Hastings, Netflix founder and CEO, Andy Jassy, Amazon.com’s president and CEO, Treasury Secretary Janet Yellen and Ukraine President Volodymyr Zelensky.
Though fact-checkers have come out in force to dispel claims that Bankman-Fried was laundering money back to the Democratic Party through Ukraine, the company he is keeping and the charges he is not facing have many folks scratching their heads in disbelief.
In comparison, in 2008, Bernie Madoff was charged and arrested within 24 hours of his fraud scheme being revealed. But Bankman-Fried remains free. If we compare Bankman-Fried’s case to Ross Ulbricht, who is serving two life sentences for building a website, the disparity becomes enraging.
Those who don’t follow his case closely often claim that Ulbricht was convicted for attempting to pay for the murder and torture of people who’d stolen from or threatened him. That is not true at all.
He was never convicted of hiring a hitman to murder anyone. Bogus charges were brought, but they were dropped. Despite the murder allegations being dropped because there was no evidence to support them, however, they still served to muddy the waters of his case, and helped prosecutors obtain the extremely cruel and unusual double life sentence for creating a website.
Before Bitcoin became the newest tech and investment craze, it was seen as the currency of the black market, which was used to buy and sell drugs on the infamous “dark web.” In fact, Ulbricht was one of the early adopters of Bitcoin and he created one of the first websites that popularized the cryptocurrency. It was called The Silk Road.
The Silk Road was an anonymous online marketplace that became a target for politicians and law enforcement because of the large volume of drugs that were being sold through the site. On the Silk Road, drug users and vendors were able to trade anonymously using Bitcoin, making it one of the first major commerce platforms to adopt the cryptocurrency.
This constant reinvention of the Silk Road brand and the myriad of spin-off marketplaces is reminiscent of the battle that took place between online file-sharing websites and the global record and film industries. Whenever the government took down a file-sharing site, ten more would spring up in its place, making it very difficult for authorities to keep up with the overgrowing connectivity that the internet provides.
Even though Ulbricht did nothing but create a website—just like the famous billionaires Mark Zuckerberg or Jeff Bezos—he was treated like El Chapo in court because his invention worked against the system, instead of for it.
One important point that was heavily overlooked by the media during the Ulbricht trial was the fact that the Silk Road actually made the world a safer place by undermining prohibition. Even though drugs are illegal, large numbers of people still use them on a regular basis and these people are often put in dangerous situations because of these prohibitions.
The Silk Road allowed people to purchase drugs from the comfort of their living rooms to avoid the risk of getting mugged in a dark alleyway. It also allowed them to read reviews of the products that their potential dealer was selling, saving them from tainted drugs and dirty batches that could put their lives at risk.
Ulbricht should have gotten the Nobel Prize for his visionary application of new and revolutionary technology, but instead, he was arrested in October 2013 and has been sitting in federal prison ever since, awaiting a break in his case, or the end of the drug war — and he will be there for the rest of his life if nothing changes.
Meanwhile, Bankman-Fried — who took billions from unwitting customers — is sitting on stage with billionaire elites, essentially being celebrated.
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