On Thursday (15 December 2022), David Schwartz, who is Ripple’s Chief Cryptographer and Chief Technology Officer (CTO), talked about the upcoming criminal prosecution of Sam Bankman-Fried (“SBF”), the disgraced Co-Founder and former CEO of crypto exchange FTX.
As you may remember, on Wednesday (30 November 2022), the New York Times held its annual DealBook Summit in New York City, an an event which was hosted by Andrew Ross Sorkin, Times columnist and DealBook founder and editor at large.
Of course, the interviewee that most people were most excited about hearing from was SBF.
Based on the full transcript of this interview, SBF said:
“Clearly, I made a lot of mistakes or things I would give anything to be able to do over again. I didn’t ever try to commit fraud on anyone… I didn’t knowingly commingle funds. And again, one piece of this you have the margin trading you have you know, customers borrowing from each other, Alameda is one of those. I was frankly surprised by how big Alameda’s position was, which points to another failure of oversight on my part. And a failure to appoint someone to be chiefly in charge of that. But I wasn’t trying to commingle funds…
“The time that I really knew there was a problem was Nov. 6. Nov. 6 was the date that the tweet about FTT came out. By late on Nov. 6, we were putting together all of the data, putting together all the information that obviously should have been put together way earlier, that obviously should have been part of the dashboards I was always looking at…
“We were spending an enormous amount of our energy on compliance. We’re spending an enormous amount of energy on regulation on licensure. We’re getting licensed in dozens of jurisdictions…
“Everything I have, I’m disclosing and you know, I’m down to…I have one working credit card left. I think it might be $100,000 or something like that in that bank account. And, I mean, everything that I had, even all the loans I had were, you know, those are all things I was reinvesting in the businesses…I put everything I had into FTX.“
Well, on 15 December 2022, the Ripple CTO took to Twitter to share his thoughts on how prosecutors are likely to treat the comments that SBF has been making about his actions since the start of the collapse of the FTX empire both on Twitter and during the various interviews he has given.
Schwartz told his over 408K followers:
“Sam made a serious miscalculation in his public communications after FTX collapsed. Almost literally everyone could see that nothing he could say would help him. Prosecutors will ignore anything he says that helps him. But anything harmful will be an exhibit in a future case. Sam likely figured his biggest risk of criminal prosecution was around him knowingly loaning, investing, or risking FTX customer funds. Thinking he could reduce that risk, he created a narrative that he failed to provide adequate controls against doing so accidentally.
“But as anyone who watches Law and Order knows, when you commit to a narrative, the prosecution can adjust their accusations to fit that narrative. There is, of course, a huge moral issue with charging people with crimes based on a narrative you know is false. But there’s no problem with charging people with crimes they actually committed in way that perfectly uses the narrative they’ve spun against them. And that’s one thing prosecutors did expertly here…
“I don’t think it ever occurred to @SBF_FTX that he could face criminal liability for these misrepresentations. So when he crafted his public narrative, he walked right into them. And this in no way paints prosecutors into a corner. Him misleading investors about having risk control measures in place is perfectly consistent with him also stealing from customers.“
On 6 December 2022, CZ, who is Co-Founder and CEO of Binance, the world’s largest crypto exchange (by trading volume), took to Twitter to address some of the “wrong narratives” he had come across in the past few weeks:
“Crypto doesn’t need saving. Crypto is fine. It’s the beauty of decentralization. We are just part of it. We want to help other good projects that may be in a cash crunch because of recent events. It’s in our collective best interest… FTX killed themselves (and their users) because they stole billions of dollars of user funds. Period… Lying is never with good intentions…
“No healthy business can be destroyed by a tweet. However, there was a tweet that may have, Caroline’s tweet 16 minutes after mine on Nov 6. Data shows it was the real cause for people to dump FTT… She gave her floor price away…
“SBF perpetuated a narrative painting me and other people as the ‘bad guys’. It was critical in maintaining the fantasy that he was a ‘hero.’ SBF is one of the greatest fraudsters in history, he is also a master manipulator when it comes to media and key opinion leaders…“
Image Credit
Featured Image via Pixabay
