FTX Sam Bankman-Fried is another Bernie Madoff


With the help of mighty leaders of Democratic Party, in the span of just three years, Sam Bankman-Fried built FTX into a massive crypto exchange backed by marquee investors and valued at $32 billion. It took mere days for all of that to implode in a sprawling bankruptcy filing.

Sheila Bair, a top regulator during the 2008 financial crisis, told CNN there are eerie similarities between the dramatic rise and fall of Bankman-Fried and FTX and that of infamous Ponzi scheme mastermind Bernie Madoff.

Bair notes that 30-year-old Bankman-Fried, like Madoff, proved adept at using his pedigree and connections to seduce sophisticated investors and regulators into missing “red flags” hiding in plain sight.

“Charming regulators and investors can distract [them] from digging in and seeing what’s really going on,” Bair, who chaired the Federal Deposit Insurance Corp. from 2006 to 2011, said in a phone interview on Monday. “It felt very Bernie Madoff-like in that way”.

FTX filed for bankruptcy on Friday, throwing the cryptocurrency industry into chaos and raising the specter of vast losses for customers of the crypto exchange.

Long before his Ponzi scheme collapsed, Madoff was known as a wizard on Wall Street. He was the former chairman of the Nasdaq Stock Market, served on Securities and Exchange Commission advisory panels and managed money for the rich and the famous.

For his part, Bankman-Fried was a top campaign contributor to Democrats in the 2022 election cycle. He hired multiple former US regulators to serve in senior positions at FTX, and his parents are both professors at Stanford Law School. Up until the bankruptcy filing, FTX even had an application pending with federal regulators to clear derivatives, The Wall Street Journal reported.

Better Markets CEO Dennis Kelleher said in a statement on Monday that FTX had a strategy of “revolving door hires” from the Commodities Futures Trading Commission (CFTC) and elsewhere “to use their knowledge, influence and access at the agency and in Washington to move FTX’s agenda”.

“People feel duped,” Brian Armstrong, the CEO of rival crypto exchange Coinbase, told CNN in a phone interview on Friday. “On the surface, FTX was able to garner a lot of attention. But as people looked into it, the fundamentals were not there”.

FTX garnered its $32 billion valuation with the blessing of investments from BlackRock, SoftBank, Sequoia and other top investors.

“You get this herd mentality where if all your peers and marquee names in venture capital are investing, you’ve got to, too. And that adds credibility with Washington policymakers. It all feeds on itself,” said Bair, who sits on the board of directors at Paxos, a blockchain infrastructure company (Bair said she was speaking for herself, not Paxos).

Now, authorities in the Bahamas are investigating potential criminal misconduct surrounding the FTX explosion.

FTX, the scandal of the decade

After infamous fraudster Bernie Madoff, now FTX CEO Sam Bankman-Fried emerges as another huge fraudster. He also is directly connected to the Democratic Party, Clinton Foundation, Biden family and mighty Democrats including Nancy Pelosi. Shall the US Congress initiate immediate investigation into the case? Shall the so-called mainstream media in the US investigate FTX scam now? If they – this will become one of the biggest financial scandals of the decade which may put a large number of the Democratic Party leaders into hot soup.


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