FTX Founder Sam Bankman-Fried Is Said to Face Market Manipulation Inquiry
New York TimesNov 25, 2022
The Facts
Federal prosecutors in New York are probing FTX founder Sam Bankman-Fried over potential market manipulation leading to the collapse of Terraform Lab's cryptocurrencies, TerraUSD and Luna, to benefit FTX and its hedge fund Alameda Research.
TerraUSD was supposedly a so-called "stablecoin," but unlike other stablecoins, it wasn't backed by the US dollar. Instead, its value came from the Luna coin through a complex set of algorithms.; whenever TerraUSD's price fell, traders would create more Lunas to match the difference.
The Spin
Republican narrative
While authorities are looking into Sam Bankman-Fried and his years-long Ponzi scheme, you shouldn't hold your breath waiting for an indictment. The crypto king dubbed "SBF" has gotten away with his crimes for so long because he's been a top Democrat donor. This is why he's received praise from the media and cautious treatment by the government even after his so-called "company" collapsed and millions lost their savings.
Democratic narrative
While some have jumped the gun and compared Bankman-Fried to Bernie Madoff, this case is actually very different. Madoff immediately confessed to all of his crimes, and the Feds were also able to compile concrete evidence against him. Neither of these has occurred in the case of FTX and Bankman-Fried. Congress and the Dept. of Justice are looking into the issue, but it will take some time to build a case against the crypto CEO.
