Nov 3, 2023
Crypto Bro Sam Bankman-Fried Found GUILTY Of Fraud, Money Laundering
Sam Bankman-Fried has been found guilty of fraud and conspiracy.
- 10 minutes
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.
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