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Crypto influencers predict jail for FTX’s SBF

The mainstream financial media is treating SBF with kid gloves, but crypto influencers want justice.

Gerelyn Terzo
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UPDATE 13-12-2022 - Sam Bankman-Fried was arrested in The Bahamas on 13 December.

The cryptocurrency industry has been thrust into the spotlight in the wake of a multi-billion-dollar fraud at digital asset exchange FTX. The architect of the alleged Ponzi scheme, FTX founder Sam Bankman-Fried (SBF), is accused of using client funds to place risky bets with leverage that went up in smoke. Billions of dollars have gone missing, and SBF is playing dumb while crypto investors are left holding the bag.  

Although crypto is no stranger to critics, it is not the usual suspects who are throwing down the gauntlet this time. Instead, the cryptocurrency community has been tougher on its own than the mainstream financial media and Washington, D.C. have been, as SBF embarks on a PR tour to save his bacon. Meanwhile, crypto investors — from blockchain pioneers to bitcoin whales — are calling for his head.  

Even though SBF is the target of regulatory probes and lawsuits, he made the rounds with The New York Times, the Financial Times, and The Wall Street Journal. None of them got to the bottom of his shenanigans, including the truth behind billions of dollars in loans issued by Alameda, $3.3bn of which was given to SBF, including a $1bn personal loan. As 90% owner of the hedge fund, he basically claims the left hand did not know what the right hand was doing. 

While it might be enough for the Times, nobody in the crypto community is buying it. The disgraced executive has gained a reputation as the Bernie Madoff of crypto, and many market leaders would like to see him face a similar fate behind bars. 

Among them is Galaxy Digital founder Mike Novogratz, whose firm’s exposure to FTX

$76.8m. Novogratz has been out front confronting the FTX storm,
“delusional about what happened and his culpability in it.” Novogratz told CNBC the former FTX boss needs to be prosecuted and will spend time in jail for his hand in perpetuating a “large fraud.” 

New Twitter boss Elon Musk, who owns bitcoin, Ethereum, and Dogecoin in his investment portfolio, has also weighed in on the scandal.

Musk, SBF needs “an adult timeout in the big house.” 

Musk suggests that SBF has donated $1bn-plus to Democratic candidates. SBF says he has donated to both political parties, which would explain why Congress has

to subpoena him. Rep. Maxine Waters has clapped back, saying that a subpoena is definitely on the table” and to “stay tuned.”  The list of those who would like to see SBF
goes on. 

To be sure, the failure of FTX has been a real test for the cryptocurrency market. The bitcoin price fell below the $16,000 threshold in November. And while it has since found support at around the $17,000 level, it has sunk more than 60 per cent year-to-date. The crypto winter triggered a wave of blockchain-related bankruptcy filings in 2022, but FTX has surpassed them in size and shock factor.

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