Sam Bankman-Fried risks going to jail

The head of the FTX cryptocurrency exchange risks repeating the fate of Terraform Labs founder До Квон" href="https://noworries.media/biography/do-kvon/" data-bio-id="3665">Do Kwon. Fortune magazine has found a lawyer who anonymously revealed that the U.S. Department of Justice’s prosecutors have grounds to arrest Сем Бенкман-Фрід" href="https://noworries.media/biography/sem-benkman-frid/" data-bio-id="3697">Sam Bankman-Fried.

Even if, at first glance, the facts of law enforcement may seem irrefutable, the lawyer named two potential obstacles to any criminal proceedings against the FTX CEO. The first is jurisdiction. Since FTX is an offshore company headquartered in the Bahamas and did not serve Americans (FTX.US was a separate company), the crypto exchange’s lawyers may argue that the actions of its executives are beyond the influence of US law enforcement agencies.

The second potential obstacle to criminal prosecution is intent. In particular, the lawyer emphasizes that any charges brought will directly depend on whether Sam Bankman-Fried was not just incompetent, but deliberately deceived investors. This is to be determined by the investigation.

«Mismanaging your own company and losing other people’s money is not a crime. It happens all the time. For a criminal case, there must be fraud,» the lawyer said.

The anonymous lawyer added that prosecutors now have all the elements for the Ministry of Justice to initiate a criminal case under the federal criminal code. The article under which Benkman-Fried may be charged includes fraud with the use of electronic means of communication. The maximum penalty is 20 years. If the Department of Justice files criminal charges, the agency will be forced to issue an arrest warrant for all FTX top executives involved in any illegal actions. This will lead to their location and potential extradition. It should be noted that Sam Bankman-Fried is currently in the Bahamas.