FTX collapse becomes biggest financial scandal of 2022


FTX collapse is becoming biggest financial scandal of 2022, which involves US politicians, Democratic Party and several celebrities such as Tom Brady, Steph Curry and other major endorsers of the now bankrupt cryptocurrency exchange. Although Bill Clinton was amongst the front-ranging endorsers and even promoters of this notorious scam, there is yet to be any investigation on his involvement.

According to media reports, the director of enforcement for the Texas State Securities Board has announced that state regulators are investigating multiple celebrity endorsers tied to the FTX trading platform. The probe is an effort to determine whether securities laws were violated by Brady, Curry and others while promoting FTX and cryptocurrency.

Texas regulators have begun corresponding with securities regulators in other states, and that parallel state investigations into celebrity endorsers could be announced in the coming weeks or months, a source familiar with the investigation told Yahoo Sports on November 21, 2022.

“The expectation is there will likely be a comprehensive review by many regulators across the country, depending on what securities or consumer protections might apply in other states,” the source said. “[Texas] isn’t likely to stand alone”.

Asked whether state probes could be the first steps toward an eventual federal securities investigation involving Brady and other celebrity endorsers, the source added, “That’s certainly not anything the state of Texas can influence, but it’s sensible that what is happening with FTX will occupy the attention of federal regulators at the appropriate time”.

The scrutiny of Texas state regulators comes in the wake of the trading platform collapsing earlier this month, which included freezing billions of dollars in customer accounts while founder Sam Bankman-Fried moved the company into bankruptcy protection. The total asset losses by FTX customers are still unknown, although various reports have pegged the platform’s financial shortfall at US$8 billion to US$12 billion — or possibly much more. A handful of hedge funds that were invested in the platform have already notified investors of potential losses, including venture capital fund Sequoia Capital, which reportedly apologized to its partners this week for US$150 million in anticipated losses tied to FTX.

What all of this means for Brady, Curry and a swath of other celebrity endorsers is still taking shape. But the director of enforcement for the Texas State Securities Board, Joe Rotunda, told Bloomberg this week that payments and equity received by Brady and others will be under the microscope, including their disclosures and agreements with the company. At the heart of the review for regulators — both state and federal — will be what aspects of the FTX exchange qualify as “securities,” making them applicable to various securities laws. Historically, securities violations involving endorsers are subject to potentially significant financial fines rather than criminal convictions involving jail time.

Meanwhile hundreds of people are already commenting on social media and news media sites on this issue. Here are few of those comments:

Duncan: If the regulators would do a better job at regulating businesses in Texas then this wouldn’t have happened in the first place! Why is it always after the bankruptcy? They should have audited them at formation and every year thereafter. Our entire system is turning into a big joke. Fake news, fake health care system, fake insurance system, fake jail time for crime, etc.

Larry: Anyone stupid enough to get into cryptocurrencies deserve whatever they get.

Bradley: No body complained when they were trading at massive multiples. Yet, somehow some people think that stocks are guaranteed to keep going up. At least that is how they act. Especially, shocked when their investments are getting hammered.

Kenny: I hope all the politicians that received millions in donations from FTX and its CEO SBF are also investigated to the fullest. This scam went on for so long because of all the money being thrown in the direction of politicians to help persuade regulators to turn a blind eye.

Cynthia: Every politician that received SBF money needs to give the money back into a fund to reimburse the defrauded investors. Not to some “charity” that’s going to donate the money right back to them.

Josh: Investigate and arrest the politicians that benefited and helped the fraud CEO.

Corey: When you invest in something that is supposed to be underground money, you know your risk and cannot blame anyone else except yourself.

Jay: What about Bill Clinton and Tony Blair. They were pushing FTX on a conference organized by them two months ago.

Robert: Crypto is an addiction. Too easy to make or lose money. Fun when/while you make it and cry when it fails. Where it doesn’t make much sense, are the funds and other entities that invest YOUR MONEY and not theirs, in an unstable environment!

Stephen: Not much will happen. Celebrities endorse suspect products all the time. They are paid a huge amount of money; they are given a script and they sell the product – period. If knowledge about a company, or its products, was required jails would be filled with celebrities. With the case of FTX, these celebrities would have had to know that SFB was running a Ponzi scheme and draining individual accounts to support Alameda Research. They did not. Neither did leading Silicon Valley venture capital firms, including Sequoia. Celebrities are being singled out because creditors are looking for someone to blame. The real culprits are FTX and Alameda management and their accounting firms.

Sammy: Not much different than the political parties that took ~$70 million from FTX! Did the regulators do their due-diligence before taking such money that the monies were legit? What if FTX had actually been run by Russia or some terrorist organization in the background? By accepting such large sums of monies, the political parties were essentially giving a stamp of approval that FTX is a legit organization. If the political system is able to take money from FTX, then why shouldn’t Brady be able to accept money from FTX?

Terry: Since we know that FTX was one big fraud, those that received monies for endorsements, donations, etc should be required to pay back those sums to be used to payback those who lost their monies.

Murphy: What about the MILLIONS donated to the Democratic party? All that money needs to be returned to the people who lost it.

Nicole: The fact this happened is mind-boggling – politicians and regulators were paid off. Unfortunately, this corrupt Dem administration will do nothing to punish those who allowed this to happen since they were the ones involved.

This guy set up HQ in the Bahamas in order to avoid scrutiny by the SEC – who should have told him to limit ALL of his business activities to the Bahamas – he can do nothing in the US. His girlfriend – a complete zero who knows NOTHING about finance – was his CEO and HER father is the head of the SEC. Tell me there’s no conflict of interest there. Hundreds of millions in donations to Dem campaigns and regulators so they’d turn a blind eye to his OBVIOUSLY illegal antics…moving $$ from client accts between FTX and Alameda…creating his own token – assigning it an arbitrary value – then taking out loans and buying and selling with his funny money-backed bogus token as if it was legit. This guy needs to be in jail. Sorry, “I didn’t know!” is NEVER an excuse for breaking the law – and given her father’s job, there was ZERO chance Sam Bankman-Fiend and his clown CEO DIDN’T know what they were doing was wrong and illegal.


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