Crypto can buy you a lot of things, but apparently not a good defense attorney. The trial of crypto bro. Sam Bankman freed wrapped with a guilty verdict on all seven counts of wire fraud. Of wire fraud, conspiracy, securities fraud, commodities fraud [00:00:17] and money laundering that wrapped in Manhattan and Manhattan court. And now Sam is facing multiple decades in prison. He is going to be sentenced in March. This is massive just because of the massive impact that FTX, [00:00:32] which was his cryptocurrency exchange, as well as his hedge fund, which was called Alameda Research. The impact that those had, both economically and politically, and we'll get into all of that. But the conviction is a sharp reversal for the fortune of the now 31. He's so young [00:00:51] MIT graduate who just last year was living large in a $35 million penthouse with some of his coworkers as he ran a crypto empire that was estimated to be worth tens of billions of dollars during its heyday. Prosecutors detailed how Bankman freed and some of his top lieutenants secretly funneled billions of dollars into in customer assets from FTX to [00:01:10] Alameda Research, a private trading firm. He also controlled the US government said the former billionaire treated Alameda like a personal piggy bank, using FTX customer money to buy luxury real estate for friends and family and to make political donations and risky investments. [00:01:25] In other words, I will take your money, buy crypto on your behalf, say that I'm doing my due diligence with it. Instead, I'm funneling into this hedge fund and I'm just living high on the hog. This entire story of Sam Bankman-Fried escalated incredibly quickly last year, right this week. [00:01:43] Last year, there was a balance sheet that was leaked of Ftx's finances, apparently, that alerted investors, and there was a run on the bank. They all pulled out and he declared bankruptcy. Shortly after, Alameda Research declared bankruptcy, and in December of 2022, [00:02:03] he was arrested in the Bahamas. I mean, it was within a year. Now he is has this guilty verdict. Why did it go so fast? Well, it's because a lot of his top officials or his, you know, lieutenants, as it were, they turned on him. The head of the Alameda hedge fund, Carolyn Caroline Ellison, testified [00:02:21] against him, as well as Gary Wang, who co-founded the Alameda Research NFT with Bankman-Fried, pleaded guilty to separate charges and agreed to cooperate with federal prosecutors. They told the court Bankman-Fried directed them to commit crimes, and their comments were especially compelling because the cooperating witnesses [00:02:37] weren't just Bankman-fried's colleagues, they were some of his closest friends. Caroline apparently dated freed for a time. And what's interesting about this trial is that he took the stand. Sam Bankman freed tried to defend himself multiple times. And yet, according to this, is one of the reporters in the room. [00:02:54] Bankman freed, wilted under withering cross-examination from Danielle Sassoon, a formidable prosecutor who clerked for the late Supreme Court Justice Antonin Scalia. Just there's a lot more here. But it is wild, guys, and it mirrors another financial trial. [00:03:14] I'm sure we all are thinking about which one, but here you have getting his Coconspirators and collaborators collaborators plead guilty, flip on the boss man. And here you go. Just one guy might actually have had more money than Donald Trump had, [00:03:29] but Sam Bankman freed. I mean, it's kind of a story of crypto wrapped into one person. Yeah, I love this story. I remember following it and you're so right. It happened so quickly. From the moment that we knew who this guy was to the moment that we saw that he was running this huge Ponzi scheme. [00:03:46] And like, all these things started coming out. It happened so quickly. And even now he's been found guilty. I feel like even that happened very quickly. And part of the reason why that is is because, as you said, so many people just flipped and said, yeah, this is what it was. This is what we were doing. Here are all the records. [00:04:02] So Sam really didn't have a whole lot to to defend himself with. But it is kind of funny because, you know, everybody, I think I think what's interesting about this story is that we're so used to seeing these sorts of stories play out that they've almost become formulaic. [00:04:19] Right? And maybe that's why it moves so quickly, because everybody could see the writing on the wall, right? We already knew how this was going to end, including the people who were the closest to Sam. And they saw what was going on. And they said, you know what? This is another what's that? There are no squirrel. [00:04:34] It's her all over again. You know, we're used to this. We know how it's going to end for sure. And everyone's blowing the whistle. Sorry. No. You're good. I love the parallels. Look, what I've learned here is that if it can happen to Sam Bankman freed, then it can happen to any of you guys. [00:04:49] These parallels between the Trump case and this one, it's the first thing that I thought. So it's like, yo, so where's the complaints? He had people turn on him, tell the real deal about what was going on with this, with the way he was fraudulently taking people's money and stashed it in his own pockets. [00:05:05] Yo, by the way, he donated to Democrats. It's weird. It's weird how you can be on one the left side of the political aisle. I'm not sure where his beliefs and systems were, but this is who he donated tons of money to. And so in donating all that money, apparently they come after Democrats too. It's almost like all the BS that they've been saying [00:05:21] about the proceedings that Donald Trump has had to go through with 91 charges, and what, four different indictments. It's almost like that's normal if you've been breaking all these laws. As a matter of fact, usually what Sam Bankman freed was like, he's like 29, 30 years old, 35. So Donald Trump is damn near 80. Yeah. [00:05:38] He's been pulling these kinds of schemes for decades. And now that they're finally starting to catch up to him because his dumb ass decided to broadcast all of the things he's done and put it in political terms because he thought, why not? I get away with everything else there. Finally, maybe 10% chance going to catch up to him on one of these things. [00:05:55] So yo, now that you now that we see how this normally happens, hopefully I would, I would really hope more people make these comparisons and understand if it does happen to you all the time. You and it happens to rich people very, very few times in our existence [00:06:12] we've seen it go down. So when it finally is happening to someone who deserves it, who happens to be well connected and rich, I think we should all be proudly celebrating this. Does anybody want Sam Bankman freed to walk around free and do more of this stuff? I don't think so, no. And there's going to be a lot more fallout because FTX and I just interviewed [00:06:32] actually Jacob Silverman, who wrote a book about crypto and has been at the trial, and I interviewed him for my my show, The Situation Room. It's a bonus episode, everybody, you can become a patron. But he basically was like, look, FTX was sort of marketed. I mean, we're talking Tom Brady was a spokesperson for it on an ad, [00:06:48] and it was marketed as like a safe crypto for like, you know, new crypto buyers to get involved in. So it wasn't just massive, you know, people with a lot of money who were buying a lot of bitcoin. It's just for like the everyday. Like I'm just going to, you know, buy a little bit of bitcoin, see what happens. [00:07:03] And he swindled many people out of their money. So there's going to be more fallout from this. But to Joe's point there's a lot of political connections here. Sam Bankman-Fried FTX they donated not just to Democrats but to Republicans too. This is from time magazine. [00:07:19] Bankman-Fried contributed more than 70 million to election campaigns in less than 18 months, placing him among the nation's top political donors. This was in the run up to 2022. He personally gave $40 million to politicians and political action committees ahead of the midterms, mostly to Democrats and liberal leaning [00:07:34] groups, making him the second overall top donor to Democrats, only behind George Soros, according to the center for Responsive Politics. What's interesting about that is that, you know, Republicans would be making a bigger deal of Sam Bankman-Fried if he weren't also giving to them. [00:07:53] Like George Soros doesn't give to right wingers. He just doesn't like, say what you will about him. He's a billionaire. You hate billionaires. That's fine. He also he doesn't give to right wing causes. He just doesn't. So it is interesting. I mean, there's some eccentric stuff about Bankman-Fried. He wanted to buy an island nation of Nauru in order to hide a bunch of money [00:08:12] and also, like, ride out the apocalypse. Too bad he's probably going to ride it out in a prison cell. Although I guess joke's on us, because I don't know, we'll be in the apocalypse. You know, it never happens, Francesca. You know it never happens. Yes, folks that pull off these types of fraudulent economic schemes and then [00:08:28] get away with it to a certain degree because he was living high on the hog, as we saw for a little while. They don't know how to just maybe, like, don't. Don't like. Stop me if you can be a lifelong criminal. Maybe, like, pump the brakes. Like. Yes, maybe pause at the stop sign rather than just blowing straight through it or bringing more attention to yourself. [00:08:43] This guy. It's not like he didn't know he was running a fraudulent scheme. You give 70, what, million dollars to political figures knowing that it's traceable, and they'd be like, oh, somebody is a billionaire. Where did you get your money from, bro? How does this whole thing work? It brings attention to you and they're so blatantly ahead of it, they're like, [00:09:01] nobody's gonna catch me doing this. - It's not like I'm doing it in the open. - Well, yeah. So it's like people who commit crimes and they always end up confessing it to someone just because they have to. They have to either brag on themselves or they have to relieve themselves of a guilty conscience in some way. And it is funny because, you know, we don't see them stopping [00:09:19] because it's capitalism. It's like so like psychological capitalism, right? There's no room for stopping. There's no you just keep going and going and going and growing and growing and growing until you get stopped. Not because you stopped, but because somebody stops you or something, stops you [00:09:36] and prevents you from growing any further. And with Sam, it's like he grew up, you know, he's my age, right? He grew up seeing all the same things that I've been seeing in the news. You see people like Mark Zuckerberg and Elon Musk and it's like, oh, I dropped out of Stanford, and now I'm going to do all this stuff, and I'm going to be, you know, [00:09:53] one of the most influential people in the world with all this money. And he did all the things that he, I guess, thought to do so that he could position himself as a very influential person, including donating to both the Democrats and the Republicans. [00:10:08] So it's like he really just wanted the fame, like he wanted that notoriety. And so he chased it to this point. And this is where this is where he gets stopped. - I would have had. - The island, bro. - I'd have been. - Chilling. - He never would have thought. - That's what he says behind bars, cackling. Sadly and interestingly, crypto exchanges are still lobbying on the Hill. [00:10:28] So just because Sam Bankman-Fried might be facing the music and going away for a long time doesn't mean that crypto and those who are pushing crypto as somehow a safe alternative or an addition to, you know, regular regulated currency, they're still out there. [00:10:44] - So we should be very, very concerned. - Thanks for watching. If you become a member, you get to watch all this ad free. Except for of course, this ad still hit the join button below.