'His Day Will Come': Crypto Execs and Senators Demand Criminal Action Against Sam Bankman-Fried
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'His Day Will Come': Crypto Execs and Senators Demand Criminal Action Against Sam Bankman-Fried

Two U.S. senators, including the fierce crypto critic Elizabeth Warren, want the Justice Department to prosecute. Galaxy Digital CEO Mike Novogratz agreed, saying "his day will come."

'His Day Will Come': Crypto Execs and Senators Demand Criminal Action Against Sam Bankman-Fried

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Two U.S. Senators have asked the Justice Department to remember the "flesh and blood victims" of the FTX cryptocurrency exchange's collapse and if possible prosecute executives including CEO Sam Bankman-Fried.

Senators Elizabeth Warren and Sheldon Whitehouse, both Democrats, wrote to Attorney General Merrick Garland on Nov. 23 — telling him that based on his recent "commitment to holding perpetrators of white-collar crime personally accountable, we expect [the Department of Justice] to investigate the actions leading to the collapse of FTX with the utmost scrutiny… and, if it deems necessary, prosecute the individuals responsible for their harm."

Given their comments in the rest of the letter, it's fairly clear Sens. Warren and Whitehouse believe it should be necessary. They said:

"In the days leading up to FTX's collapse, company CEO Sam Bankman-Fried attempted to downplay concerns about its liquidity, assuring customers in a since-deleted tweet that 'FTX has enough to cover all client holdings. We don't invest client assets (even in treasuries).'"

An FTX US spokesperson claimed customers "assets are backed 1:1," they added.

When customers tried to withdraw their funds, "it became clear that Bankman-Fried and company representatives were lying," the letter said.

Other comments included:

"The fall of FTX was not simply a result of sloppy business and management practices, but rather appears to have been caused by intentional and fraudulent tactics employed by Mr. Bankman-Fried and other FTX executives to enrich themselves."
"Mr. Bankman-Fried had already revealed his true interests of self-enrichment last year when he siphoned $300 million to his own wallet, an investment that was intended to 'help grow [FTX], improve user experience and allow it to engage more with regulators.'"
"[New FTX CEO John Ray] described the use of software to 'conceal the misuse of customer funds,' and told the court the financial statements produced under Bankman-Fried could not be trusted."

Mike Novogratz, CEO of crypto investment and financial services firm Galaxy Digital, was even blunter, comparing what Bankman-Fried did to some kids who broke into his apartment and stole laptops.

Calling it "shocking," he told CNBC:

"Within three days the NYPD had arrested them, and they were in jail. I see Sam Bankman-Fried — maybe I'm not a judge or a lawyer, but I read my contract and he certainly did things with our coins that were illegal. And he's running around The Bahamas giving press conferences… When you deposit your crypto or your dollars on his exchange, they're your coins, and lending them to his family office was not part of the deal… That's fraud."

Novogratz added: "I think that his day will come."

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