The crypto winter reckoning is upon us, and individuals in thousand-dollar suits are now heading to Club Fed for an extended period after they were accused of fraud and making illegal donations to political campaigns. As of now, everyone around Sam Bankman-Fried, the former CEO of FTX, appears to be going down. The federal authorities have announced plea bargains in some deals, which will benefit the state’s prosecution.
The U.S. government has a vested interest in seeing these individuals pay for rocking the U.S. financial markets when they were already under strain. Many Americans who were afraid of the collapse of the U.S. dollar invested in gold or Bitcoin. Those who used FTX’s brokerage platform had their accounts frozen and are unlikely to recover all of what they once had.
Meanwhile, the chain of bankruptcies caused the value of cryptocurrency to collapse across the board, depreciating investor assets in the process.
The firms are accused of mismanaging their clients’ money, breaching their fiduciary duty, and various forms of fraud. As of now, customers of the impacted crypto exchanges have yet to receive their money. Bankman-Fried insists that investors will eventually be made whole. However, the co-founder of FTX will be providing testimony against Bankman-Fried.
What Will Happen to Bankman-Fried?
It looks pretty bad. The feds are circling all of his friends, leveraging plea deals, and announcing that defendants will aid in the prosecution’s investigation. Ultimately, the prosecution will insist that someone takes the fall. That person will be Bankman-Fried. They will want him behind bars for 20 years or more based only on the amount of money stolen and the financial fallout caused to U.S. money markets. There are also numerous victims who may never recover any money they invested. Ultimately, Bankman-Fried wants to keep the ball in play by claiming that the investors can still be made whole, and it is on the horizon. But there appears to be no legitimate plan in place, and everyone near Bankman-Fried is pleading guilty. It remains unclear how long he can make-believe in a world where everyone is enriched because of him as opposed to the literal opposite.
The way the investigation is heading, federal prosecutors will save the harshest punishment for him. It remains unclear whether he will plead guilty or fight the charges, but at this point, either seems equally possible. We do not know what the sentences look like for the coconspirators yet, so it’s hard to guess what Bankman-Fried’s will look like. We may not know for a while.
The co-founder of FTX pleaded guilty to charges that carried a 75-year maximum. In exchange for the guilty plea, the prosecutors will recommend a lower sentence. The fraud is estimated at $32 billion, making it among the largest in U.S. history.
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David Freidberg represents the interests of Cook County residents who have been accused of fraud and other white-collar crimes. Call today at (312) 560-7100 and begin preparing your defense immediately.