Why hasn’t Sam Bankman-Fried been arrested yet?
nymag.com
nymag.com
- Enron blew up in Dec. 2001. It wasn't until mid-July 2004 that Jeffrey Skilling and Kenneth Lay were finally arrested.
- The WSJ expose on Theranos was in 2015, Holmes wasn't indicted until 2018.
- Martin Shkreli's MSBM collapsed by 2012; he wasn't indicted until 2015.
Bernie Madoff is a notable exception: he was arrested 3 days after his Ponzi was revealed. But it's not comparable at all to SBF's situation: Madoff was arrested after he confessed privately to his own family; his sons immediately went to the police.
Whether SBF is getting exceptionally soft treatment will be easier to discern in retrospect, but it might be many months or even years before he's indicted.
Billy raised $20m with fake financials. SBF raised close to a $1B, and I’m sure he didn’t disclose the fact that customer deposits flowed to a hedge fund he controlled exclusively.
Harm caused to consumers and investors is just as obvious, if not more obvious in SBF’s case, when compared to Billy’s festival.
Just skimming the Wikipedia entry, so maybe I'm missing something, but wasn't McFarland arrested 2 months after Fyre? This May 2017 [0] article, about a month after, describes McFarland still running his company as the first civil lawsuits are filed. This June 30 article [1] is about his arrest. It sounded like the civil suits against McFarland helped push along the wire fraud charge; AFAIK, SBF is named in a couple of investor suits so far, so it'll be interesting what things look like next month.
[0] https://www.nytimes.com/2017/05/21/arts/music/fyre-festival-...
[1] https://www.nytimes.com/2017/06/30/arts/music/billy-mcfarlan...
People don’t get arrested when they’ve done something bad. People get arrested (for federal crimes) when a prosecutor gets a grand jury to believe there’s probable cause they’ve committed a crime.
I tell my gambling friends that if they bet the farm and win big, their wives will be horrified at the risk they tool even though it worked out. It's a moral loss regardless of the outcome.
I'd wager that most businesses that start as a single person doing something (be it investing money or detailing cars) start as off the books, under the table, zero regard for regulatory compliance type businesses. It's only when they've made enough on that initial investment outside the rules that they turn around and incur the cost of compliance.
Whenever we participated in auctions for housing sites, my wife would stop me at a certain number. The number of times we were the second highest bidder ...
Why or why not? Should the amount of publicity matter for the justice system? What distinguishes a "humanitarian disaster" from a bunch of rich kids having to sleep rough on a beach near a resort town for a few days?
https://www.vice.com/en/article/nza8yq/that-photo-of-the-fyr...
Another point: $10bn+ is a lot of money and probably caused lots of damage (ie: suicide). But if someone pulled a knife in Time Square, the police will be quick to apprehend him and the prosecution very willing to charge him. There was no harm done and yet resources will be deployed. But SBF might be even more dangerous yet no one is panicking yet (except some people here who might appreciate how dangerous he is)
Putting human beings at actual risk is an order of magnitude worse and I don't know why that's even debatable.
No one reasonably expected Fyre Festival to turn out the way it did.
- September 25, 2010: Swartz begins using MIT network to pull JSTOR articles.
- Throughout September through December, a cat-and-mouse game ensues where JSTOR blocks access to certain MIT IPs, and then downloading starts again from a different range.
- January 5, 2011: MIT locates the laptop in a closet that Swartz had been using.
- January 6, 2011: Aaron Swartz is arrested.
- July 11, 2011: Swartz is indicted by a federal grand jury.
Additional indictments followed in November 2011 and September 2012. In Swartz's case, the judicial apparatus moved swiftly. As far as I understand, law enforcement became involved in late December 2010 or early January 2011. The timeline to arrest and indictment was short.
I would expect to see a reasonably quick (i.e. on the order of months) indictment of SBF. While other posters are correct to point out that there's a huge morass of complexity and murkiness around FTX/Alameda, my view is that this creates not one, but several cases -- some of them very straightforward and where I'd surely expect the DOJ to put a preliminary case together in a few months.
I agree with the final comment; I think the DOJ would be well-served by filing something (and that should be pretty tractable, seeing the staggering scope of apparent misdeeds) to extradite SBF as quickly as possible, and then to file amended/superseded charges in the following 12-24 months.
That's likely true.
However, it may also be a more savvy move to let SBF and other execs think little is pending in order to gather more information. Other than reputation of the justice system (which already has a justified slow reputation; "The wheels of justice turn slowly, but they grind exceedingly fine."), this might be the greater consideration...
If they don't rapidly indict, it'll be interesting to see if SBF ever voluntarily returns to US territory before an indictment.
Not only did he confess, saying it's "basically a giant Ponzi scheme," he also said that he planned to distribute the remaining $200-$300M in funds to family, friends, and employees in the next week.
Edit: The treaty itself: https://www.state.gov/wp-content/uploads/2019/05/94-922-Baha...
Which may also be why we aren't seeing a warrant. Maybe SBF is playing for sympathy. But maybe he's just delusional. If the latter is the case, there is no need to tip him off with a performative warrant.
Morality aside, that's probably his best move, assuming he has enough of that $3B loan left to grease the exit.
If all the data is spread to the winds, if everyone hits ground, can they even file charges? I suppose so, but if there is no evidence pointing to wrongdoing...
To be honest, I'm not even sure what he supposedly did wrong. He took investments, in an unregulated sector, and backed those investments and lost?
If he were a bank, that's 100% legit. No bank I know of, has 100% of investor funds backed by anything. Even in Canada, land of give-a-fuck-sorta, there used to be a requirement for banks to have hard currency (gold, cash) in a vault somewhere, 5% worth of account holder's value, which was inspected annually by the government. Yet the last time I read the bank act, it was removed as a requirement.
If banks don't need any sort of banking for account holders in CAD, why would an unregulated exchange need that?
(Again, I can imagine there are all sorts of things I'm missing... but?!)
He transferred customer funds to an unrelated hedge fund company (fraud).
He created fake accounting systems to hide the fraud (fraud).
He claimed to be making lots of money just to help others (morally reprehensible and a huge red flag).
That people are still making excuses for him tells you how rotten this entire ecosystem is.
When does it become criminal to skip the step of establishing an accounting system....prior employees say they didn't even know their cash, liability, or trading positions.
FTX customer deposits went into Alameda bank account. Could be that they stayed there and somebody just kept a spreadsheet of deposits?
My point is that the astounding lack of records and systems may make it very difficult to prosecute him. For example, trades and payments were executed just on verbal orders so it will be hard to pin specifics on SBF.
Probably testimony of insiders will be the most compelling evidence against him.
For non-capital federal crimes, the basic rule is 5 years, but there are exceptions.
That a crime occurred seems very certain, but which exact crime is a lot less clear, and until a lot of digging and cross referencing of records happens, that’s likely to continue to be the case. To arrest, they need to be able to identify a specific crime with identified specific elements in a specific jurisdiction.
It seems like they have had an equivalent of a dump truck load of legos dropped in their lap, and it won’t be hard to assemble a Lego airplane out of it (probably), but yikes.
As I said, dump truck of legos.
This is the whole thing with "what if a bank but without the regulations?"
Although rerouting the massive amounts of money + human capital in non-violent crimes (drugs) to white collar would help... and probably pay for itself in recovered money (via tax revenue and reduced government corruption).
That probably still wouldn't result in SBF-type criminals being arrested right away though.
Occupying territory is expensive.
Raphael Bostic insider trading as president of the Atlanta Fed was practically a non-story.
Most people just don't care.
Including stating his imminent intent to surrender to authorities, he also admitted to massive fraud when interviewed by the FBI immediately after that, and before the arrest.
SBF ain't in the same place as Madoff.
I'm not sure what you mean with your second half though, are you suggesting detaining people during this period and pro-rating their sentence and/or paying them? Or are you saying that they should wait outside of jail, but still have it counted towards their sentence? I don't quite follow exactly. Edit: seems the latter. I'm not sure my opinion, having a case looming over you seems potentially difficult, especially if you're later found innocent, but should the government (/citizens) foot the bill for that?
- consider the actual effects on someone to be involved in a legal process; for lawyers it's just a workday but for people it's heavy to be accused of a crime and to wait for something awful (jail) to happen.
- define some time reasonable time constraints for everything, in order to give some incentives for the process to speed up. Prosecutors could be measured by how efficient cases go, and paying out some money could be an option.
Or steam rolling cases and imprisoning defendants who are innocent.
The latter isn’t rare already, wait until some prosecutor has to get a few fast cases done so their bosses don’t cut their pay check.
It is interesting to think about the effect that coalitions of criminals have had on the criminal justice system.
Impulsive face-punchers don't tend to have sophisticated attorneys, and at least many of them probably agree that face-punching should be illegal in general, even if they had their reasons in this case.
Contrast with finance criminals. Many of them probably convince themselves they're in the right, and they have access to the best justice money can buy. So over time they've managed to raise the costs of prosecution so high that we see this - it takes multiple years to nail down a solid prosecution.
There are other aspects of course - some financial crime really is difficult to prove. But what I mean is that if all the accounting frauds before Ken Lay had depended on overworked public defenders, prosecuting him would have been much simpler.
No, you're completely on topic : the phenomenon you describe of privatised systematic perpetrator defensive hurdles is called self regulation, which is precisely what SBF was most avidly lobbying for.
Even finding a lawyer capable of writing a warrant application for fraud like FTX is difficult, partly because the evidence is hard to find and hard to understand and frankly just because financial criminal law is a mess. Add to that that if you mess that part up you jeopardize the whole case (because any evidence that you collect with a bad warrant becomes subject to being thrown out, obviously).
No one wants to get that wrong just to get a perp walk. Remember that what people are demanding here isn't punishment, it's just "an arrest". People who are arrested spend a few hours (maybe a day or two) being held before arraignment and then walk right back out of the jail.
And, more to the point:
(1) its easy to convict on that kind of assault (delays are more often due to prosecutors not starting a case they dob’t feel adequate confidence they can win than prosecutors being unable to meet the much lower bar of probable cause),
(2) prosecuting on such a case early is much less likely to foreclose other charges or obstruct attempts to identify and action on other crimes or recoverable property tied to them.
This doesn't seem like a good example. The way I understood the story, Shkreli ran an effort that collapsed. Then, he ran another effort that was very successful. Then, he took money from the successful effort and used it to pay back everyone who invested in the flop.
By that accounting, it doesn't really matter when the flop collapsed, because at that point he hadn't done anything wrong.
Interesting, I'd never heard of Lehman firing a whistle blower. Can you provide a link?
It seems like it would be tough to fire them given that Lehman went bankrupt. Also not sure how Lehman would blackball someone given that, again, they went bankrupt.
Are you maybe talking bout a different company?
> all the times they ignored anyone who pointed out flaws in their models
This isnt' a crime.
> all the ways they ignored the conflict of interest for ratings agencies being paid to rate garbage securities as AAA, etc etc etc.
Again, not a crime committed by Lehman.
I get that you are angry, but you really don't have any point here by the looks of things.
He was on the same event with Janet Yellen whose signature will be on all US currencies.
He was convicted on a technically by telling early investors that he already had investors. When at that point his start up had none.
It doesn’t matter that an endeavor he followed through later paid back his initial investors, the act itself is literally fraud. Period.
All you’re doing is petty-fogging the issue.
If you look hard enough through anyone's phone and online history you will find something to put them away for - no exception.
I say he should not belong on the list because his company was not scam company its still alive to this day - the ethics aside of hiking drug prices.
1. Sam Bankman Fried is in the Bahamas 2. Sam Bankman Fried was Tether’s biggest customer and banked with Deltec, Tether’s bank 3. The attorney general of the Bahamas, the man with the power to arrest Sam, is Deltec’s former lawyer
The US system is probably content to watch while Sam confesses, but they can’t directly arrest him and Sam appears to have captured the local judicial apparatus.
If you won your election with SBF funds, it undermines the will to prosecute, or to view him as the conman he is instead of a stupid young guy.
For that reason, don't be surprised when Democratic Party leaders send out apologetic messages like this: https://news.ycombinator.com/item?id=33836009
(I'm still mulling whether they do or not; just commenting on the game theory.)
If you let him hang because he doesn't have more money to give you, nobody else is going to give you anything.
No politician wants to make an example of any white collar crime for they are all criminals themselves and they fear someone making an example of them
SBF was a donor to those politicians, but a conspirator with the attorney general. Whole other level of involvement.
The US can put in an extradition request and it will be handled…by the same attorney general who is in on it.
Re: your link, getting SBT to testify would be a win, especially if he was physically travels to the US to do so, where he could be arrested. The general legal strategy when under threat is to say nothing that can be used against you.
It's a good rule of thumb that if you are hacking you should target victims in another country other than your own. I think the Netherlands (say) could get you extradited from the US, but it is a lot of work and the whole process of investigation leading up to to that extradition is going to be slowed down since the police won't be able to use the same powers they could do if you were in their jurisdiction. Most likely they'll go prosecute some easier case and only go after you if the results of your hack are particularly larger, visible and embarrassing.
Even if we're assuming political corruption is in play, what drives improper political favors is the potential for future money. SBF is broke and will be for many years to come. If anything, politicians will be lining up to throw him under the bus because they've got all they money they're going to get from him and there's political capital to be had from him going to jail.
This reasoning doesn't make sense to me, they already accepted and spent the money, if anything that's an incentive to prosecute in order to cultivate a perception of distance from his wrongdoing.
If the case doesn't develop over the next, say, 11 months, I'll be as suspicious as anyone else. But at this point it feels like jumping at shadows.
The most interesting explanation is the most likely to be heard explanation.
The US has directly apprehended people in foreign countries for criminal prosecution in the US, including countries with whom they have extradition treaties, and the target being corruptly linked to and protected by local law enforcement has been a factor in favor of such action when it has occurred.
And SBF is not just a customer from that bank. He also bought another bank, in the US, which previously belonged to the owners of Deltec. And FTX's top lawyer happened to be a colleague of Bitfinex's top lawyer (they both worked for the same company which actively defrauded online poker players).
So there are ties that do go beyond: "customer of a bank".
It looks like it's a little circle of people who know very well each other.
To give an idea of the amounts involved: Tether emitted USDTs worth, so far, four times the entire GDP of the Bahamas.
Bahamas is so small (400 K people) that when the authorities stormed FTX's office and forced SBF to handle them the keys for various shitcoins, they froze an amount representing back then 5% of the Bahamas' GDP (now more like 1.5% because these shitcoins melted, but still).
The amounts in play are tiny and insignificant for a country like the US: QEs are in the trillions, bank bailouts in 2008 were done with $700 billions+, etc.
But for a tiny country like the Bahamas, we're talking about a lot of money.
I'm not saying that he's protected or that the authorities knew about his wrongdoings but you cannot rule that out (at which point many coincidences are not coincidences anymore?).
Are you saying they are friends (in which case, what is the point of pointing to the much weaker relationship)? Or are you saying the weaker relationship is evidence of friendship (presumably combined with the fact that he chose to go to the Bahamas)? Or something else?
Edit: Whoops, I just read more of the comments and am seeing there is a tribalism angle to this. I'm not sure I want to try parsing the answers to my questions :(
It's an honest question: I don't know the details of what he is accused of.
If he's an American citizen, why isn't he being extradited? Because of his connections?
Right, I mean, I'm not saying he's not guilty, but does anyone at this point really understand it deeply enough to file an arrest warrant? I understand the impatience emotionally, but not logically.
The reason SBF isn't arrested is because the people who would have to order him to be arrested relate to him personally, and coddle people like him as they would wish to be coddled themselves.
Law enforcement should not act in bad ways to more people.
Faith in humanity? Sometimes shaky.
It easily could have cost you your job, then your apt, etc.
To a large extent (not completely) law enforcement and the greater justice system exist to mitigate contention in society. If the target of a law enforcement action is rich or famous, and the crime is not active or physically damaging, then it will be contentious to arrest the rich/famous criminal. If the criminal is not rich or famous, or if the crime is physical (murder, assault, etc) then the arrest will be less contentious, and the police will proceed.
Up until now, it has not been at all contentious for the police to arrest/abuse lower status persons.
In the case of a contentious arrest of a high status person, arrest will be delayed until the exact charges are known and believed to be provable.
---
I am describing the system as I see it now, not the system that I think should exist.
The faults described here are not faults of individual members of any justice system, they are faults of society and we ascribe value.
Before replying to this comment, please think about policing in feudal societies and consider the lessons of Foucault in "Discipline and Punish".
I should point out that while this is unfortunate, this is all a relatively inevitable consequence of having a justice system. Since humans are deciding cases, there will always be a small chance that they screw it up (in one direction or another). You can't have arbitrary do-overs for people who feel their case was decided poorly, because everyone thinks that (or will say they do).
The closest I have experienced second-hand in authoritarian Cuba under Castro while I was visiting there, where I saw some residents arrested for nothing tangible, but they were released within 8 hours and they seemed blasé about it.
I have been arrested, but the police were respectful (it helps that I am a short white guy, and I was wearing a geek identity).
If you ever visit Christchurch, contact me via HN, and I'll feed and put you up for some days, if you're keen.
You've either been on the pointy end of the "justice" system, or you haven't. Paying "court fees" to directly fund the salaries of the people persecuting you is the icing on the cake.
And like, what happened to OP was pretty tame, all things considered. Nobody died. There wasn't months or years spent in prison. I don't think their life was drastically altered by it (but their personal world view certainly was). Nobody is going to the media with such a story, because it's not glaringly outrageous. Ask an attorney if OP would have a case against the police/state to rectify the injustice, and they'll just laugh. They're part of that system and above you, which is why even if you're paying them, they don't answer the phone after 5.
IMO the first step to reform happening is the system admitting it is fallible. Plea bargains should be drastically reformed - either make the case or STFU. When a victim is found innocent or charges are dropped, they should be mechanically compensated for all of their expenses and damages - legal fees, time lost in jail/court, emotional distress from the kidnapping. That money should come out of the coffers of the city paying the gang of violent thugs that abused OP, and ultimately the taxpayers funding them. If the cost of law enforcement ends up doubling, then the true cost of enforcing the laws was twice what was being paid - right now these damages are funded as a perverse reverse lottery where the unlucky just get stuck with them. This certainly won't fix everything, but correctly defining responsibility is the first step.
Alas, the disempowering mass media narrative we get is that the cops just need "more training" so perhaps they won't commit wanton second degree murder as much. Funny how the average citizen doesn't get a similar allowance.
Fact is: non-punk rockers merely get the right to become masters-of-the-universe revoked.
/s
I'd be fine with the new surveillance state if it actually delivered some safety-dividends, but i guess lawlessness keeps the working class in line
Speed isn't required here.
He hasn’t admitted to it as fraud, which is (I’ve heard) hard to prove.
Since when breaking and entering a looting a house can be defended with "well, I thought all was fine"?
He admitted numerous times doing things that are straight up illegal.
This isn't proven. He could have bought those houses with VC money not customer deposits.
Where did you get this impression? Even that part is potentially up for debate. FTX isn't a bank or anything like that and they say that FTX USA is actually still solvent and will payout. I have my doubts about the last one but if he actually pays all US customers back he might get away with this.
That hasn't stopped prosecutors before. This is happening because there is no appetite to go after him, people can take a look at the public record so far and wonder why this might be the case.
This complete inaction on behalf of authorities is really starting to feel like any actual wrongdoing assumed by a normal person is just a whacky conspiracy theory that gets swept under the rug because nobody is getting punished for anything when the trail seemingly leads to "the establishment" or whatever you might call it. I mean, I feel a little kooky just typing all of this out.
It's always been the case that Power tends to do whatever it wants, but Power is usually polite to other Powerful entities. When enough of them are at the same table, they tend to keep their elbows tucked in, but when it's too centralized people start talking about lebensraum.
What ought to be the easy win here for prosecutors is theft, in the form of diversion of client funds. That's most likely to apply to FTX.us. Now, if FTX was registered as a "national securities exchange", or a broker/dealer, under US law, that would definitely apply. Without that, the jurisdiction issues are worse.
[1] https://www.justice.gov/usao-mdtn/pr/former-mid-state-securi...
Grand juries are complicated and can take a long time, if you issue an indictment too soon without having all your ducks in a row the defense can push for a fast trial knowing that the prosecution doesn’t have enough to convict or are at a weak position for a plea deal.
Cases like this are especially complex since whilst it’s easy for anyone to see that something really shady has transpired one would be hard pressed to actually define which laws specifically has he actually broken.
And even more so it would be even harder to gather the evidence required to indict in the first place not to mention get a conviction or a guilty plea.
https://twitter.com/RepMaxineWaters/status/15986938112528752...
(For folks who don't know, Maxine is a congresswoman sitting on U.S. House Committee on Financial Services)
Now: "SBF, would you join us for tea and coffee at a cordial executive meeting?"
About the most generous interpretation you can give the above tweet is the representative merely trying to get her name in the spotlight on a current hip topic. But that still begs the question of why she would want her name anywhere near stories about a con man - it still seems as if only some types of criminals need to be distanced from.
If you were in her position - wouldn't you reach out to SBF? If you did - wouldn't you do so with honey and not vinegar? What is there about what or how she did this that leads you to believe it's a ploy for attention rather than straightforwardly doing her job?
For me the only unusual thing is that it's over Twitter, but seeing as how he and CZ laid out all their bad blood over Twitter, that seems to be the preferred medium for this community.
I'm not saying that's a quick process, nor should it be. But congress treating this as some sort of exceptional meta issue simultaneously deemphasizes that SBF appears to be a run of the mill fraudster ("but on the Internet"), while also emphasizing the narrative that "something must be done" (in other words, never let a good crisis go to waste).
What is this assertion based on because that’s exactly how things very often work?
Say Waters throws only softballs. Why wouldn't Republicans on the committee seize the opportunity to make her look foolish and compromised by throwing hardballs?
By that metric, every nation is corrupt and the term becomes meaningless.
It would be like hyperbolically calling every person guilty of physically injuring someone else a “murderer”.
As a complementary example, you could argue all legislation is authoritarian; but describing a nation as "authoritarian" in the general (vs specific, as in certain laws/bills) goes above and beyond "normal" legislation.
And given that nations are made of people and people are corruptible, that actually sounds about right.
https://supreme.justia.com/cases/federal/us/19/204/
Not applicable in this case, though.
Or do you mean literally? Because they most definitely have officers in both chambers of Congress and they’re fully empowered LEOs.
for either party to feel really motivated to arrest or prosecute, they'd want joe regular-guy to be clamoring for that action and i don't think that's the case.
> both
He was the second biggest donor to the DNC after George Soros. I'm not aware of any RNC contributions.
Between Sam's dark money donations and Ryan's $24 million, it's possible Republicans received more FTX money than Democrats. I don't know if that's true, but it's possible.
https://fortune.com/crypto/2022/11/29/sam-bankman-fried-poli...
https://www.washingtonpost.com/opinions/2022/12/01/crypto-po...
>it's possible
>I don't know if that's true, but it's possible.
Sounds an awful lot like a conspiracy theory, my dude.
Now you are.
https://www.foxbusiness.com/politics/ftx-founder-sam-bankman...
https://www.coindesk.com/policy/2022/04/11/ftx-co-ceo-donate...
https://fortune.com/crypto/2022/11/29/sam-bankman-fried-poli...
Cynically, this makes sense to me as what he was buying was really lack of government oversight.
Yeah, I think a lot of people forget that for something like this he didn't need to actually get the government to do anything: simply delaying action gave him the chance to do hundreds of millions of dollars in fraud.
These theories are just weird HN conspiracies to add mystique to the very normal slow Federal justice process.
Sure, this may just be bullshit, we dont know, etc etc, but "he has no more money" is not a very good argument
Second, consider this comment filed in the original article:
"He hasn't been prosecuted yet because he was a major contributor to the democrat party."
Another comment made reference to his alleged Jewish heritage.
Beyond this unwarranted untrue generalization, there's an interesting underlying emotional component to the hypercritical hyper divide in many big stories like this: self created, self imagined victimization. When we contextualize the world this way we see ourselves as victims from which we manufacture moral outrage, virtue signaling, and even a kind of perverse machismo that one had the courage to call out the truth eg he's a democratic funder and the rules don't apply to him ...but they do to us the hardworking guys trying to do the right thing.
Folks, it's a dead end. The linked article I think is much more helpful and insightful.
At the end of that will come a criminal indictment (unless the grand jury declined to issue an indictment, which is rare).
At that point the investigation is over. You don’t indict then build a case. Federal prosecutions don’t work that way.
This is a complicated case because it involves a lot of money, a tenuous paper trail, lots of communications and several jurisdictions. SBF may need to be extradited and whatever court hears that case will need a strong case. A failure to extradite Matt effectively kill the whole case.
This fraud is so egregious that the US government won’t let this stand. Stealing customer assets is as open and shut as a case gets.
Also, how likely is it that he will never be convicted of violating US federal laws? (For any of the numerous possible reasons: he never did anything wrong, or it's too hard to prove, or US lacks jurisdiction, or due to political connections, or prosecutors don't prioritize this type of cases, etc.)
The wire part of wire fraud is easy since it involved the internet and there is plenty of evidence of communications. However the fraud part would be hard enough to present to a Grand Jury for an indictment and probably even harder to convict on especially within the given time frame.
Basically, do we think this is just another financial bet gone sour (not illegal in itself)? Or do we think SBF stole something, lied about something, etc?
Now what SBF is actually guilty of I can’t tell you, you’ll might be able to find a large number of various small violations in terms of fiduciary responsibility but I do not have the sufficient legal expertise to start unpacking this.
I definitely haven’t seen anything specifically that amounts of wire fraud the closest public thing might be when they insinuated that FTX deposits are covered by FDIC insurance.
Which kind of brings us to the next problem not with FTX but with crypto exchanges as a whole they don’t seem to act as only as exchanges but also as banks and investment funds. Stock, derivatives and other goods exchanges don’t tend to have customer deposits their roles is to connect between buyers and sellers and provide arbitration services to execute trades.
Every time I look at crypto exchanges my brain starts to hurt and I can only think to myself how is any of this shit is even legal.
Other potential issues would be the relationship between FTX and Alameda normally you will never be able to have that conflict of interests between an exchange and a market maker in any regulated equity market.
I also don’t understand how or why these exchanges can issue their own tokens that would normally be equivalent to a promissory note.
I honestly can’t wait until this entire crypto fab dies over but I also unfortunately don’t see people going to jail over any of this nonsenses.
Will additional regulation have a negative effect on the value of crypto? It's likely. However, the tech itself will continue to provide value to those who use it to circumvent the banking system. For instance, you can still exchange coins and store them in cold, personal wallets.
The fallout of this collapse will be significant and I hope what emerges thereafter will be a more sensible approach to crypto and more stable value.
SBF himself was lobbying for regulations that many people claimed would have outlawed defi in the US, pushing people to use outfits like FTX instead. People certainly do object to that.
To be clear, I don’t wish death on SBF, but presumably at least some of the people with money are dangerous. The case of Melissa caddick in aus (stole 40m, disappeared, only her foot was found) seems similar, but currently there’s no evidence of foul play.
Lawyers are pathologically risk-adverse
I use that adjective deliberately. Their favorite phrase is "out of an abundance of caution" which means "I can't think of any reason why I must do this, so I won't."
Cynicism. But to go out on a limb and get your ass kicked by his high-priced lawyers could be career-ending for them. Or rather, their career would become "chasing ambulances."
- It's easier for the government to hunt down $600+ transactions instead of trying to navigate their own obtuse, complicated tax laws - wonder if that's intentional, but that's a tangent that doesn't need to be explored
- SBF donated millions of dollars to DNC causes and (SBF-admitted, which ANYBODY should take with a grain of salt since the guy's a sneaky little liar) to RNC causes. Why would politicians rush or push to prosecute someone who gave or could give them more money in the future?
- SBF has family that's tied to major political movements (I believe his mom runs/works for/with a larger financing arm of the DNC).
- It simply takes a long time for the evidence to be gathered, put on display, and have him sentenced/found guilty.
It is _VERY_ suspicious that most media outlets are being nice and trying to whitewash this into obscurity. The dude "LOST" 1-2 billion dollars.
SBF should be under witness protection, at the very least - if not jailed until trial.
The facetious, compulsively lying tech bro who only says "I'm sorry" after literally stealing investors' money should quite literally be barred from seeing the light of day ever again.
Not sure if SBF decided to run this racket for a self-corrupted version of "citizen justice" against a broken and unfair economic system, but he sure harmed a lot of innocent people in the crossfire if that was the intent.
I wouldn't be surprised if he's able to disappear from the eyes of the public due to the always-corporately-manipulated media conglomerates.
From a European perspective, this is strangely backwards: Madoff confessed and was fully cooperative, hence, there was no need to deprive him of freedoms without a process. In the SBF/FTX affair, on the other hand, there are no signs of full cooperation and there's some danger of obstruction of justice and tampering with potential evidence. (Which should be, apart from risk of recurrence and/or acute danger, the only reason for depriving anyone of granted freedoms without a due process.)
If he were to try to run he would likely end up locked up. But currently, it is kind of immaterial.
>> We have not seen anything like a real admission of criminal conduct from SBF yet
He seems to have made many admissions, just in an "aw shucks i mixed up the money and now its all disappeared" and this seems to fall under "ignorance of the law isnt a defense of criminal behavior"
Because Madoff's lawyer says he should shut up, and he isn't, so why not play out some line and let the fish set his own hook? Arresting him would just make him clam up.
Madoff (and Holmes) embarrassed (worse than ripping off) some very influential people. Jeffrey Epstein could have really done it, but he's boating with Charon, right now...
It's not just SBF that will be under possible arrest and jail time, expect some VCs to also be prosecuted.
he scammed worldwide users for 8B+ or more; > donated hundreds millions to US organizations and politics; > US citizen with good connections > highlighted many times that FTX US was solvent and money flowed away from international organizations > US users will get funds back; US does not press charges and probably even protect him
Scam scheme of 2022: stole money worldwide, be US citizen and share some for US donations, get profit, repeat
https://www.nytco.com/press/the-new-york-times-to-host-annua...
This a dumb question to ask.