Video from the US government outlining charges against the old boss of FTX Sam Bankman Fried. One of the charges is conspiracy to defraud the United States and violate the campaign finance laws. Not exactly an interesting video but a few quotes from the first few minutes:
“…by causing tens of millions of dollars in illegal campaign contributions to be made to candidates and committees associated with both Democrats and Republicans…
And all of this dirty money was used in service of Bankman-Fried’s desire to buy bipartisan influence and impact the direction of public policy in Washington… To any person, entity or political campaign that gas received stolen customer money, we ask that you work with us to return that money to the innocent victims.”
The last line is the very interesting as that indicates the republicans and democrats are going to be forced to give back a lot of money – and all those who received funds are going to be outed. I think it also means anyone – including all the news agencies who were rumored to have accepted essentially stolen money from FTX for favorable media coverage will be outed.
Then, if you’re really bored (doing yardwork like me) you can listen to 4 hours of testimony from John Ray, the guy who is now in charge of FTX in bankruptcy.
At about the 1h45m mark there is some questioning about basics like FTX not having a board of directors, an HR department, IT department, questionable (if any) auditing or compliance. John Ray made it very clear that a company the size of FTX should have had all those controls in place. There were questions from politicians of what level of due diligence (or lack of) the supposed smartest investors in the world – Sequoia and Blackrock were named – did before investing in FTX (which John obviously could not answer for them). The same questions were asked about the celebrity endorsements. My takeaway from that line of questioning is that we’re going to see massive class actions coming in the months going after blackrock et al for incompetence – especially considering they were managing government pension funds.
This really does look like a pretty basic and simple fraud which could have been uncovered a year or two ago by any investor doing any kind of due diligence. Doesn’t seem to actually have much to do with crypto currency in my book.
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