Discredited FTX founder Sam Bankman-Fried has pledged to testify earlier than Congress about his cryptocurrency platform’s meltdown — at the same time as the highest lawyer for the late Ponzi scheme mastermind Bernie Madoff suggested him to maintain his mouth shut.
Bankman-Fried’s vow to look on Capitol Hill got here because the 30-year-old ex-billionaire embarks on a media apology tour — throughout which he has tried to distance himself from the scandal at the same time as billions are nonetheless owed to traders. Rep. Maxine Waters (D-Calif.) had known as on the previous FTX CEO to testify on Dec. 13.
“As soon as I've completed studying and reviewing what occurred, I'd really feel prefer it was my obligation to look earlier than the committee and clarify,” Bankman-Fried tweeted on Sunday. “I’m undecided that may occur by the thirteenth. However when it does, I'll testify.”
Regardless of a looming authorized crackdown and scathing public criticism, Bankman-Fried has given interviews with the New York Occasions, Bloomberg, ABC’s “Good Morning America” and different shops in current days.
Whereas showing on the New York Occasions’ DealBook summit, Bankman-Fried admitted that he was talking to the media towards the recommendation of his authorized workforce.
Ira Sorkin, a lead protection legal professional for the disgraced Madoff, mentioned Bankman-Fried is making a mistake by being so outspoken within the press.
“That’s the primary order of enterprise: don’t speak,” Sorkin informed Bloomberg on Friday. “You’re not going to sway the general public. The one individuals which can be going to take heed to what it's a must to say are regulators and prosecutors.”
“Typically purchasers imagine they're smarter than their legal professionals. This man is 30 years previous, and he's not smarter than his legal professionals,” Sorkin added. “They need to be telling him each 5 minutes to close up, however generally purchasers don’t pay attention.”
In accordance with Bloomberg, authorized consultants have proposed that Bankman-Fried “could merely be testing out an it-was-all-a-big-mistake protection” to elucidate what went mistaken at FTX.
Reuters reported that Bankman-Fried secretly transferred $10 billion in FTX consumer funds to cowl losses at Alameda Analysis, a sister cryptocurrency buying and selling agency he additionally owned. At the very least $1 billion of these consumer funds continues to be lacking.
Bankman-Fried has drawn sharp scrutiny over his public remarks since FTX imploded.
Within the final week alone, Bankman-Fried bizarrely claimed to have “misaccounted” a whopping $8 billion in FTX funds simply earlier than the cryptocurrency platform’s meltdown — telling Bloomberg he was “actual lazy about this psychological math” relating to FTX’s steadiness sheet.
Bankman-Fried additionally dodged a query about doubtlessly going through jail time whereas talking to “Good Morning America” — and dismissed comparisons between his personal mishandling of FTX consumer funds and Madoff’s notorious scheme to bilk traders.
“While you have a look at the basic Bernie Madoff story, there was no actual enterprise there,” Bankman-Fried mentioned. “The entire thing, as I perceive it, I believe, was one huge Ponzi scheme. FTX, that was an actual enterprise.”
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