Former Federal Prosecutor: Sam Bankman-Fried Should Be ‘Very Concerned About Prison Time’
FTX founder and former CEO Sam Bankman-Fried should be “very concerned about prison time” after the collapse of his crypto empire, a former US federal prosecutor has said.
Speaking in an interview with CNBC, Renato Mariotti, a former federal prosecutor and attorney who has represented clients in cases related to dealings in financial derivatives, made it clear that the FTX case to him looks like “a chargeable fraud case.”
“If I represented Mr. Bankman-Fried, I would tell him he should be very concerned about prison time. That it should be an overriding concern for him,” Mariotti said in the interview.
According to Mariotti, fraud is a criminal offence that can put people in prison for life. And in the FTX case, the central question to determine whether fraud has happened will be whether Bankman-Fried misled customers to believe their funds were available, while in fact it was used for other purposes such as collateral for loans.
“The argument would be that Alameda was tricking these people into getting their money so they could use it to prop up a different business,” Mariotti said. He added that prosecutors could argue FTX violated its fiduciary duty by using customer funds for other purposes, such as taking positions in FTT, an exchange token issued by FTX.
According to Richard Levin, a partner at law firm Nelson Mullins Riley & Scarborough, Bankman-Fried could potentially face three different legal threats in the US.
The first of Bankman-Frieds legal threats would be criminal action from the US Justice Department for potential “criminal violations of securities laws, bank fraud laws, and wire fraud laws,” Levin explained.
Second, Bankman-Fried could also face civil enforcement action. According to Levin, this could for
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