March 27, 2024
Cardano Founder Compares Sam Bankman-Fried to Bernie Madoff
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Cardano Founder Compares Sam Bankman-Fried to Bernie Madoff

Cardano founder Charles Hoskinson has drawn parallels between former FTX CEO Sam “SBF” Bankman-Fried and notorious American fraudster Bernie Madoff, while also criticizing the media for what he perceives as a lenient treatment of SBF.

Bernie Madoff orchestrated the largest Ponzi scheme in history, estimated at $64.8 billion, and had even served as the chairman of the Nasdaq stock exchange.

Hoskinson accused the media of providing SBF with a “free pass” despite public evidence suggesting SBF and FTX were involved in the misappropriation and theft of customer funds. Hoskinson expressed his dismay in a post on the X platform (formerly Twitter) on October 9. He specifically called out author Michael Lewis, whose book about SBF had garnered significant media attention just before the former FTX CEO’s trial, describing it as an “apology tour.”

Hoskinson noted a trend of individuals seeking to secure public exoneration for SBF and expressed his astonishment at the media’s apparent leniency towards what he referred to as the “Bernie Madoff of my generation.” He suggested that this leniency reflects the profound corruption in the system, especially when one has the right connections.

FTX was the third-largest cryptocurrency exchange at the time of its collapse in November 2022, despite having raised substantial funding earlier that year. SBF had attributed FTX’s downfall to external market conditions and a liquidity crisis. However, investigations by multiple U.S. enforcement agencies portrayed a different narrative. Consequently, Bankman-Fried faced seven counts of conspiracy and fraud related to the FTX collapse, to which he pleaded not guilty. The trial was overseen by Judge Lewis Kaplan.

The trial’s first week revealed that Alameda Research, a trading company established by SBF before founding FTX, had a secret backdoor into FTX to divert customer funds as early as 2019. New revelations from the trial showed that Bankman-Fried spent lavishly on building his image through aggressive PR spending, including paying substantial sums to celebrities such as Tom Brady and Kevin O’Leary. Other extravagant expenses included private jets, Super Bowl advertisements, and payments to politicians. Lewis’s book even claimed that SBF considered offering Donald Trump $5 billion not to run for office.

The trial’s initial week, which commenced on October 3, centered on the disappearance of $8 billion in FTX customer funds. It featured testimony from Gary Wang, arguments from both the prosecution and defense, and a statement from Adam Yedidia on October 5.

Image by wirestock on Freepik

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