Sam Bankman-Fried, once a crypto wunderkind, now faces a reckoning that could see him behind bars for 115 years. Convicted on seven counts of fraud, his trial showcased a classic tale of deception, with a modern twist: the misuse of cryptocurrency.
The prosecution painted Bankman-Fried as a mastermind of one of the most significant financial frauds in U.S. history. His defense hinged on the claim of mere business errors, not criminal intent. The jury didn’t buy it.
Some say that the crypto industry, often seen as the Wild West of finance, is responsible for enabling SBF’s crimes. This is partly true. Crypto, writ large, can be thought of as an enabling technology because the government and bank regulators allowed a fully centralized crypto exchange to operate without oversight or regulation. FTX was under the complete control of one unscrupulous criminal who committed several crimes. In practice, this has less to do with crypto than it has to do with letting a centralized bank operate without regulatory oversight.
Decentralized exchanges have their fair share of fraud, and you do hear about big crypto hacks now and again. However, decentralized exchanges generally work well because there are no central authorities controlling the platforms. (BTW, if a hack or a massive fraud ever happened at JPMC, Citi, BofA, or another large bank, you’d never hear about it – for obvious reasons.)
Notwithstanding the above, as my legal friends like to say, the SEC and several other government agencies have declared war on crypto, and they are trying very hard to burn down anything they can’t control. SBF’s quick conviction just fans the flames. We’ll see if BTC ETFs have a positive impact on the current “crypto winter.”
Author’s note: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it. This work was created with the assistance of various AI models, including but not limited to: GPT-4, Bard, Claude, Midjourney, Stable Diffusion, and others.