CEO of Coinbase Brian Armstrong believes that Sam Bankman-Fried, the man who invented FTX, should be in Custody right now. This week, Brian Armstrong remarked that it’s “baffling to me why he’s not in custody already.”
At the a16z cryptocurrency Founder Summit on Tuesday, Armstrong said, “the DOJ or anyone should be able to make just based on his public utterances, I think there’s the very open and shut case for fraud.” by adding that he is not an expert on that but he believes the folks that he speaks with will agree with him.
Armstrong also questioned the media’s decision not to label Bankman-Fried a criminal.
He called the incident that happened at FTX ‘fraud’ adding that “It’s been pretty bizarre that mainstream media hasn’t come out and said, ‘This guy’s a criminal. Maybe they want to wait until he’s indicted or something like that, and in custody.“He made it clear that the case comes in the category of fraudsters.
Last month, FTX collapsed abruptly, surprising many both inside and outside the cryptocurrency industry. The $32 billion exchange has developed itself as a global leader with the aid of superstars like Tom Brady and other A-listed athletes. Its failure damaged public confidence in the cryptocurrency sector and led to demands for strict rules.
Bankman-Fried announced his resignation as CEO of FTX on November 11, the same day that the business and its affiliate trading arm Alameda Research filed for bankruptcy. One of the primary accusations against Bankman-Fried was that he used customers’ money from his cryptocurrency exchange to support risky bets at Alameda Research.
Armstrong’s Coinbase is a cryptocurrency exchange, just like FTX. However, Coinbase is an American publicly traded company, in contrast to Bankman-Fried, who allegedly led a luxury lifestyle while running FTX out of the Bahamas.
Armstrong argued that everyone can read their financial statements. He added that nobody has to believe them until a third party audits these financial statements and The money of the customers are all kept separate.
Armstrong wasn’t the only one in the cryptocurrency field this week to criticize Bankman-Fried. According to Mike Novogratz, CEO of cryptocurrency company Galaxy Digital Holdings, “Sam and his associates propagated a fraud.” They placed bets with customer money that he later said was “poorly risk managed.”
Novogratz added that “the issue was that he stole our money. Therefore, he needs to be prosecuted. People will be arrested and need to be arrested.”
The already severe “crypto winter” got much worse last month as shares of Coinbase and the Canadian-listed Galaxy Digital dropped more than 25%. Shares of Coinbase have lost nearly 80% of their value this year, or $44 billion. BlackRock CEO Larry Fink said last week, “I truly believe most of the companies are not going to be around,” about the shaky cryptocurrency market.
According to Mark Cuban, the wealthy owner of the Dallas Mavericks and well-known cryptocurrency investor said that Bankman-Fried should be concerned about going into custody.
He said that he doesn’t know everything, but if it was him in the place of Bankman-Fried, he’d be worried about spending a lot of time in jail. He added that it may sound horrible and he spoke with the man and found him to be intelligent but he had no clue that he would steal other people’s money and use it for his happiness.
Armstrong showed his concern about the fact that a huge number of unethical people are drawn to the cryptocurrency industry. He said that the people from the cryptocurrency sector have to come to terms as an industry because, Unfortunately, the Cryptocurrency industry is attracting a disproportionate share of fraudsters and scammers.
Sam Bankman-Fried, the founder and former CEO of FTX, may be sentenced to more than 20 years in jail if proven guilty of any legal infractions linked to the collapse of FTX.