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FTX: a showy corrupt stock speculator in the service of the Democrats

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FTX was an unscrupulous and amoral stockbroker, ruthlessly robbing naive citizens, and seemed to ordinary Americans the archetypal image of the liberal Wall Street occupier, hopelessly alien to the average Oklahoman or Montana residents. However, the scandal with the collapse of one of the largest cryptocurrency exchanges, FTX, showed that the Democratic establishment was close to many “black brokers” not only mentally, but also quite materially. At first, it all looked like a fairly ordinary, non-politicized criminal story. Aesthetic pleasure came only from the collapse of cryptocurrency as a new object of the fetishism of the “progressive public,” which was supposed to miraculously provide “smart people” with a comfortable and carefree future. In the fall, when users began quickly withdrawing money from FTX, it turned out that the exchange was completely unable to cover all of its liabilities to customers. The company had less than a billion dollars in assets, and debts to users reached $9 billion.

Nevertheless, the situation quickly became politically unacceptable to the Democrats. It turned out that FTX founder Sam Bankman-Fried was one of the Democratic Party’s main sponsors in the recent congressional elections, spending $40 million and hosting parties with Bill Clinton and Tony Blair. Moreover, he was placed in a respectable second place, behind only the legendary George Soros in the amount of donations. Bankman-Fried wanted to spend a billion dollars to support the Democrats in the 2024 elections, which is in fact investing all the money of his clients into politics. The motivation for such colossal spending was obvious: elected congressmen and senators, and, ideally, the president, were to remain indebted to him and cover up his machinations. The reason was that he preferred dubious political investments to actually making money from profitable investments, which is much more risky and time-consuming. 

Bankman-Fried’s hopes were not destined to come true though. After FTX collapsed, his fortune dropped from $16 billion to $400 million, making him insolvent. That was not his main problem, however, as he was accused of stealing clients’ money and besides, a lengthy trial awaits him in the future. It has been revealed that Bankman-Fried constantly used the funds of exchange users for personal purposes, and in 2020 even bet $7 million of client money on Trump’s defeat in the election on a sweepstakes. In addition, he was involved in funding dubious Democratic projects in various parts of the world, which could not but interest Republican auditors after their victory in the elections for Congress.

“The Wolf of Cryptocurrency Wall Street”, similar to the hero of the Martin Scorsese movie, did not deny himself the ostentatious luxury of using the funds of his clients. Over the past two years, he managed to buy 19 properties worth a total of $121 million, including an estate in the Bahamas, where he later laid low. Even then, he preferred to spend his assets on his pleasures rather than paying off $3 billion in debts to users. In the end it turned out that in contrast to the political instincts, the real experience of financial activity of the Bankman-Fried team was insignificant. However, the ability to cover up their fraud was at an excellent professional level. FTX employees kept all business correspondence in messengers, and regularly erased it, which does not leave evidence, and because they had almost no financial records, the investigation is now extremely difficult to understand the final circle of suspects. Moreover, the exchange employees also marked the private use of client funds, following the example of their boss. 

Now lawyers representing the interests of 1 million exchange customers, who were left without their money, are demanding the return of all political donations to FTX. It turns out that the Democratic Party also becomes an indirect debtor to the tune of $100 million, and now donations in its favor will also be demanded back through the courts. Far-sighted politicians almost immediately announced that they were giving up the Bankman-Fried donations and giving them to charities. However, the big party foundations, which have received $10 million from him, are in no hurry to part with the money. Whether this is the right move is a moot point, since they are now under tremendous legal and thus political threat. Bankman-Fried promised to testify before Congress soon and reveal some of the secrets of his collapsed cryptocurrency empire. The fact that the exchange has no clear financial statements or even an open official structure gives Bankman-Fried’s political partners hope to get away with it. Nevertheless, his potential revelations in Congress as part of a “deal with the investigation” for a personal bailout could always come as a nasty surprise to the Democrats.

The detention of the stockbroker should also cause additional anxiety for Joe Biden. As much as the FTX founder tried to lean on his patrons, he was arrested on December 13 at the request of the Department of Justice in the Bahamas, where he was hiding from U.S. justice. He faced a final charge of fraud and money laundering, and made it clear that he was facing a fantastic maximum sentence of up to 612,000 years. This could probably force him to be more outspoken in Congress. Not surprisingly, President Joe Biden, for his part, is trying in every way to avoid a Bankman-Fried speech. Republicans are responding by demanding that the Democratic Justice Department allow Bankman-Fried to answer questions from lawmakers and the American public. Some of them have already openly begun to accuse the White House of trying to silence inconvenient facts about FTX activities. Obviously, the Democratic administration has every reason to protect its secrets related to this cryptocurrency exchange, both internally and externally

We want to believe that Bankman-Fried will tell his story in Congress and in court and that he will not suffer the same fate of Jeffrey Epstein, who died suddenly in prison. After all, given the number of skeletons in the FTX closet, there are certainly a lot of people who want Bankman-Fried silenced forever. As a first step, though, the Democrats are trying to help their agent of influence in less “cruel” ways: legally and financially. A court in New York City released him from custody on $250 million bail, the largest pretrial bail in U.S. history. Despite the fact that the exchange owner had robbed thousands of customers and had already tried to flee from responsibility in another state, he is allowed to remain free. Nevertheless, the judge cited Bankman-Fried’s lack of escape experience and lack of money as justification for bail, which seems completely illogical. Apparently, the rush to buy threats to himself prevented the authorities from coming up with a smarter motivation. It turns out that being able to pay $250 million to live at home in California for six months is a sign of being strapped for cash. A particularly poignant fact is that Bankman-Fried has been temporarily released for money stolen from exchange customers. Still, the fight for justice is far from over and there is still a chance that the stockbroker and his Democratic patrons will be punished.

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3 thoughts on “FTX: a showy corrupt stock speculator in the service of the Democrats

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