Many wondering how the ex-CEO is not facing jailtime despite all the signs to push him into incarceration
•Sam Bankman-Fried, FTX CEO and Alameda Research founder, is under investigation by the SEC and Department of Justice, and has been called to testify before the House Financial Services Committee.
• There is no determination yet as to whether any criminal charges will be brought against SBF or anyone else involved with FTX.
• The fact that FTX was based in the Bahamas creates a further layer of complexity to the U.S. investigation.
• If criminal charges are brought forward, it will be some time before anyone is behind bars due to the complexities of the case.
Why Sam Isn’t a Jailbird….Yet
The financial world has been abuzz with news of an ongoing investigation into Sam Bankman-Fried, CEO of FTX and founder of Alameda Research. It appears that the Securities and Exchange Commission (SEC) and Department of Justice have both been looking into SBF’s activities, while he has also been called to testify before the House Financial Services Committee.Many are wondering what the situation is at the moment and how Sam is able to go on shows and talk about what happened so freely. There are some that are wondering how he has faced no jail-time or at the very least why the man is not arrested and is still free to walk around after the situation. The answer is quite simple..there hasn’t been any proof that he did anything wrong. The investigations are ongoing and there are many wheels being turned but at the moment as he continues his “apology tour” it seems he is free to continue his life as usual while others have seen their lives destroyed overnight.
The SEC’s Investigation
The SEC’s investigation is focused on whether FTX violated securities laws by allowing US investors to trade on its platform. The platform allegedly allowed these investors to buy and sell digital tokens that are considered securities, which is a violation of US law. The SEC is also looking into whether FTX misled investors about the risks associated with trading on the platform. Keep in mind the SEC is no fan of crypto and Gary Gensler and his team have had a vendetta against the sector for some time now, there is indeed a chance that they will expend the full effort of the agency to find whatever they can to prove Sam was fraudulent and that crypto needs the regulation of the agency.
The DOJ’s Investigation
The DOJ’s investigation is similar to the SEC’s in that it is looking into whether FTX violated US securities laws. However, the DOJ is also investigating whether FTX laundered money or engaged in other illegal activity. It is worth noting that no criminal charges have been brought against SBF or anyone else at this time — the investigations are still ongoing. Money laundering is a major negative component of crypto enacted by mischievous players in the space that the DOJ states could be a detriment to the sovereignty and safety of the United States.
Testifying Before Congress
In late September, SBF was called to testify before the House Financial Services Committee alongside two other CEOs of cryptocurrency companies — Circle’s Jeremy Allaire and Kraken’s Jesse Powell. The purpose of the hearing was to discuss “the role of digital assets in our economy.”
During his testimony, SBF spoke about how digital assets can be used for both good and bad purposes. He also discussed how he believes that crypto companies should be regulated in a way that allows innovation to thrive while protecting consumers from fraud and other risks. You can watch a video of his testimony here.
Lately Sam has been invited by Maxine Waters to attend a meeting this December 13 to discuss the situation and how things got the way they are now. Sam has declined but the house representative is not backing off at all.
The U.S. investigation into the activities of FTX has been complicated by the fact that the company is based in the Bahamas. The Bahamas is a jurisdiction known for its lax financial regulations, and this has made it difficult for investigators to obtain information about FTX’s operations. In addition, the Bahamas does not have a reciprocal agreement with the United States for the exchange of information related to criminal investigations. As a result, the U.S. investigation into FTX is likely to be further delayed by the fact that the company is based in the Bahamas.
Nothing concrete at the moment
The investigations into Sam Bankman-Fried and FTX are still ongoing, but no concrete determination has been made as to whether any criminal charges will be brought against him or anyone else involved with the company. These sorts of investigations can quickly lead to charges and a potential jail sentence, but due to the complex nature of this case, it could take months or even years for anything to come of it. If criminal charges are brought up then there is definite jail time for those involved. Only time will tell what may come from this investigation, but one thing is certain — it will captivate attention across the financial world until its conclusion.