Actor Rips Crypto As Largest Ponzi Scheme in History
Actor Sam Bankman-Fried has slammed crypto as the biggest Ponzi scheme in history, claiming that it is a scam that will destroy the financial system. In a recent video he explains why he believes that the only way to protect yourself is to invest in real assets. But that isn’t easy to do, he says.
One of the most prominent crypto skeptics, Ben McKenzie, is back in action. He testified in front of the Senate Banking Committee on Wednesday.
The Senate is investigating how to regulate the crypto industry. As a result, the White House recently proposed a framework for regulating the digital currency.
While crypto has made a splash in the media lately, McKenzie believes it’s an ad hoc fad that is out of touch with the average American. In his book, Easy Money, he wrote about the pitfalls of the alternative finance industry.
McKenzie says there are three key functions of money, and he’s found that the cryptocurrency space is missing the mark.
According to McKenzie, the most notable thing about crypto is that it moves the trust from banks to technology. This is not necessarily a good thing, but it’s better than the usual suspects, like Bernie Madoff.
One of the biggest names in the world of crypto, Sam Bankman-Fried, has been extradited to the United States to face criminal charges. He is accused of siphoning billions of dollars from the customer accounts of his infamous failed crypto exchange FTX.
Bankman-Fried is currently under house arrest in his parents’ Palo Alto, California, home. He faces eight charges of securities fraud and money laundering, as well as two counts of wire fraud. A $250 million bond was approved by a judge, and he will have to live in his parents’ home with electronic monitoring.
The US federal government is investigating whether Bankman-Fried used stolen funds for political purposes. Prosecutors have not yet pinned down which campaigns were benefited, but a straw donor scheme was uncovered last week.
The collapse of FTX
If you’ve been following the collapse of FTX, you know that it was a raging scandal. In fact, it is said to be one of the biggest financial scams of all time.
FTX was a crypto asset exchange. It had been promoted as the next big thing in technology. It had celebrities and investors funding it. But it was also a black box that wasn’t subject to the same level of regulation as a traditional brokerage.
FTX had an illiquid balance sheet, with much of its assets buried in other countries. And its main international exchange held $900 million in assets. This meant that FTX was unable to pay customers for their deposits. Eventually, FTX sought a bailout.
FTX had also been accused of selling unregistered securities. Customers also began pulling their money from the platform, as the company was unable to reimburse them.
‘Trustless’ money is a social construct
It’s no secret that money and wealth have a tumultuous relationship, and that’s a good thing. However, it’s not always the case, and a bit of savvy planning can go a long way. To this end, a few smart folks have slapped on a few shiny tokens and landed in the land of riches and shiny objects. But, what are people to do with their newly acquired riches? Some folks are taking the reins and turning the tables on the mandarins, while others are eschewing the big leagues for the more dignified confines of a smaller sex.
The best part is, you don’t have to be a rocket scientist to enjoy the ride. So, let’s look at the ‘Trustless’ monetary system in a whole new light.
FTX founder faces up to 115 years in prison
Sam Bankman-Fried, the former CEO of FTX, was arrested in the Bahamas on Monday. He is facing charges of money laundering and wire fraud. His arrest was requested by the US government. Depending on the court’s decision, Bankman-Fried faces up to 115 years in prison.
Bankman-Fried is accused of misusing billions of dollars from FTX customers. According to the Securities and Exchange Commission, he hid information from investors and customers. He allegedly used customer funds to pay for his personal expenses and for his crypto hedge fund.
The FTX founder is alleged to have illegally given campaign contributions to both Republican and Democratic candidates. He is also accused of influencing US public policy. In addition, the CFTC has filed a lawsuit against the company.