Charges Against SBF Shed Light On Approach Of A Potential Crypto Clampdown

Justin Freeman

Charges Against SBF Shed Light On Approach Of A Potential Crypto Clampdown

  • Charge sheet against SBF shows authorities are desperate to make some of them stick
  • A combination of crypto-specific and mainstream offences is referenced
  • Crypto might not be regulated, but that doesn’t mean SBF’s actions were legal

To the relief of many, Sam Bankman-Fried, founder of FTX, has been arrested and charged by US Federal authorities. His once much-lauded FTX exchange, at one time the third-largest crypto exchange in the world by trade volume, has imploded, and now SBF faces a long list of charges.

Bankman-Fried is facing a hefty list of charges, but FTX investors are unlikely to get their cash back. However, how the charges are laid out offers an interesting take on how the authorities are closing in on the crypto sector.

Federal Authorities Pull the Trigger on SBF Charges

At the core of the indictments against SBF is the accusation he moved billions of dollars illegally from FTX to its sister-firm Alameda. One headline-grabbing development is that prosecutors state on the charge sheet that “dirty money” was used by Bankman-Fried “to buy bipartisan influence and impact the direction of public policy in Washington.”

That political lobbying might take centre stage as the House Financial Services Committee presses on with its hearing into FTX’s recent demise. But more importantly, it sheds light on the innovative approach of the authorities. As SBF was charged in the Bahamas and lined up for extradition to the US, the legal team trying to pin him down was developing a clever cocktail of charges.

The reason that the Justice Department’s 30 charges against SBF have been so carefully tailored is that there is a risk FTX’s co-founder could use loopholes relating to the ambiguity of the crypto sector. Despite SBF’s efforts to try and project the impression that his firms were operating within the law, the fact remains that crypto assets are unregulated, so few crypto-specific laws exist.

Instead, the crimes SBF is charged with committing include breaching more mainstream protocols. The SEC and CFTC both focus on the fraud element. Still, the Justice Department’s decision to also charge SBF with money laundering, conspiracy, and violation of campaign finance laws, shows how determined the authorities are to make at least some of the charges stick.

Any court case involving Bankman-Fried and his FTX team can be expected to be high-profile. The sub-plot will be how crypto exchanges could suffer from the worst of both worlds. Stigmatised by the fact they are unregulated, but at the same time facing the full force of the law.

 

Crowdsourcing information about scam brokers can help others avoid falling into the traps set by disreputable brokers, and you can share your experiences here. If you would like to know more about this particular topic or have been scammed by a fraudulent broker, you can also contact us at [email protected]


Justin Freeman

Latest news

Forex vs Crypto: What’s Better For Beginner Traders?
The crypto and forex markets are two of the world’s most popular among investors and traders. Read more
Three Great Technical Analysis Tools for Forex Trading
You don’t have to be very technical minded to make use of technical analysis in your forex trading. Read more

Safest Forex Brokers 2024

Broker Info Best In Customer Satisfaction Score
#1 Blackbull LogoYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
4.8
#2 AvaTrade LogoYour capital is at risk Founded: 2006 Globally regulated broker
Number One Broker
BEST CUSTOMER SUPPORT Visit broker
4.9
#3 * 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money Founded: 2008 Global CFD Provider
Number One Broker
Best Trading App Visit broker
5
#4 Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
4.9
#5 Forex Broker eToro Logo76% of CFD traders lose money Founded: 2007 Global CFD & FX Broker
Number One Broker
ALL-INCLUSIVE TRADING PLATFORM Visit broker
4.9
#6 XM LogoYour capital is at risk Founded: 2009, 2015 and 2017 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
5
#7 FxPro LogoYour capital is at risk Founded: 2006 CFD and Cryptocurrency Broker
Number One Broker
CFD and Cryptocurrency Visit broker
5

    Forex Fraud Certified Brokers

    BlackBull Logo Small
    eToro Logo
    FXTM Logo
    AvaTrade logo
    FxPro logo
    XM Logo
    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.