Hey everyone,
Sean Davis of The Federalist asked me to write something on the Sam Bankman-Fried/FTX situation. It will soon become available on The Federalist website, but I thought I would share it here with you all first.
Story below:
There are likely over one million victims worldwide and untold billions of dollars forever lost through the collapse of Sam Bankman-Fried’s digital asset empire, propped up by his once enormously popular FTX cryptocurrency exchange, which last week filed for bankruptcy in the United States.
When liquidity concerns issued by FTX’s competitor sparked a crypto bank run on the exchange earlier this month, the world discovered that many of these assets turned out to be nothing more than paper IOUs. FTX’s real balance sheet did not come anywhere close to matching the numbers on the screen. And given the panicked withdrawals, the “FTT” digital token through which Bankman-Fried’s empire maintained their claimed wealth, lost about 90 percent of its value in a day’s time. FTT was a token that Bankman-Fried and his cofounders created, encouraged customers to purchase, then manipulate its value to pitch future investors on.
We have since discovered that Sam Bankman-Fried was running a massive Ponzi scheme. But with the collapse of FTT, that Ponzi now has no chance of recovering. It is officially game over for Bankman-Fried and the massive fraudulent empire he built.
There seems to be a clear consensus of overwhelming evidence that Bankman-Fried has committed an open-and-shut case of massive fraud. If justice is served equally, he would seemingly be destined to a similar fate to that of the last infamous Ponzi finance fraudster, Bernie Madoff, who was sentenced to 150 years in the big house. But Bankman-Fried has friends in high places.
As part of his efforts to de-risk the Ponzi, Bankman-Fried has made considerable efforts over the last couple of years attempting to bolster his ties to regulators and legislators, seeking to obtain both regulatory dominance for his exchange and good favor with people in positions of power. Over the most recent election cycle, Bankman-Fried granted enormous sums of political donations to Democrat politicians. He is second only to George Soros in doling out political expenditures for Democrats.
As I’ve documented on Twitter, he also has close ties to the very congressional committee that is set to investigate the collapse of FTX next month.
Maxine Waters is chairing the investigation into FTX https://t.co/oFMctH4rRh pic.twitter.com/Ox6O5w4nOl
— Jordan Schachtel @ dossier.substack.com (@JordanSchachtel) November 17, 2022
Bankman-Fried has also networked himself in with the executive branch, having secured meetings with SEC Chair Gary Gensler and other top Biden administration officials.
