Crypto Billionaire Mike Novogratz Says FTX’s Sam Bankman-Fried Will Go To Jail ‘If The Truth Turns Out The Way I Expected’
Both CEO of Galaxy Digital Holdings and Bitcoin maximalist, Mike Novogratz has received many blows from the crypto winter and the crash of FTX leading to bankruptcy is just the new blow. best.
Last month, Novogratz’s crypto financial services company disclosure $76.8 million in FTX exposure, while Novogratz has lost 64% of his net worth This year, that number has now dropped to $1.8 billion, according to the Bloomberg wealth index.
Follow Bankman-Fried speak the New York Times This Week’s DealBook Summit “I Never Tried to Practice Fraud,” Novogratz talk to Bloomberg TV on Thursday, and he had enough to make one call.
‘scam’ FTX
Novogratz said: “Sam and his accomplices carried out a scam. “They used the client’s money to bet that he was ‘poor risk management’ after placing the bet.” He added that it was “surprising that his lawyers let him speak,” though like Luck‘s Jacob Carpenter’s note, Bankman-Fried’s comments have increasingly had a legal effect on them. “After watching two interviews, the word ‘illusion’ kept popping into my head. He is in an unreal reality. So much narcissism, so much grandeur.”
“The problem is, he took our money. And so he needs to be prosecuted,” Novogratz said, predicting that “everyone will go to jail, and should go to jail.”
FTX exploded spectacularly last month, surprising many inside and outside the crypto world. The $32 billion exchange has established itself as a leader in the field, having star athlete enlists in the military and other celebrities to build their brand. Its demise has shaken confidence in the crypto sector and sparked renewed calls for tighter regulation.
Bankman-Fried stepped down as FTX CEO on November 11, the same day that the company, along with its affiliated trading arm Alameda Research, filed for bankruptcy. It comes after a liquidity crisis stemming from a crypto version of banking or the sudden realization of a massive scam, with FTX customers frantic demanding $6 billion withdrawals only. for several days amid questions about the exchange’s solvency.
risk betting
A key accusation against Bankman-Fried is that he used client funds from his crypto exchange. to finance risky bets at Alameda Research.
“I have never tried to scam anyone,” Bankman-Fried told the DealBook summit (note the word “try”). He added that he was excited about the prospect of FTX just a month ago, which he considers a growing and growing business. “I was shocked by what happened this month. And in rebuilding it, there are things I wish I had done differently… Obviously I made a lot of mistakes.”
Some typical investors sided with Bankman-Fried and his seemingly incompetent defense this week. Bill Ackman, billionaire founder of hedge fund Pershing Square Capital Management, tweeted Wednesday: “Call me crazy, but I think @sbf is telling the truth.”
Kevin O’Leary, a star of television recital Shark Tank and one FTX investor, who shared a similar view, wrote on Twitter: “I lost millions as an investor in @FTX and was heavily criticized for being a paid spokesperson for the company. ty, but after hearing that interview, I backed @billAckman about the kid!”
Bankman-Fried prosecution
But Novogratz believes Bankman-Fried “will be investigated, he will be prosecuted, and if the facts turn out the way I expect, he will go to jail.”
But it can take time, he added:
“I think people will wonder, why isn’t he handcuffed if he did something wrong? White-collar crimes take a long time to prosecute, and you’ll find this is slower than most people would like, both regulatory and regulatory responses. [prosecution],” added Novogratz.
Last week, Mark Cuban, the billionaire owner of the Dallas Mavericks, told TMZ that Bankman-Fried should worry about prison time.
“I don’t know the details, but if I were him, I’d be afraid of going to jail for a long time,” he said. “That sounds bad. I actually talked to him, and I thought he was smart, but man, I didn’t know he would, you know, take other people’s money and use it for his own personal gain. Yes, that certainly…seems like what happened.”
‘Failing for Cryptocurrency’
Bankman-Fried, who has the property reached 26 billion USD during FTX’s rapid ascent, indicating that he is in financial trouble this week. On Monday, he tell Axios he only has $100,000 in his bank account. At the DealBook summit, he said he had “almost nothing left”. And when he was asked how he paid his lawyer in one Twitter Space hosted by Mario Nawfal, he answered“That’s what I’m trying to figure out right now.”
Novogratz called the failure of FTX a “step backwards for crypto,” but he remains bullish on the sector, adding, “This too will pass.” His company recorded a loss of 555 million USD in the second quarter, due in part to stablecoin terra and its related cryptocurrency, luna, collapsing. Last month it announced it will cut up to 20% of the global workforce and sign up a loss of 68.1 million USD for the third quarter.
But Galaxy, now listed in Canada, still commit one Nasdaq listed at some point, and Novogratz also perceives some opportunity in the current crypto downturn. “There will be a lot of troubled assets,” he noted. “We are looking at some small acquisitions.”
Luck contacted Galaxy Digital, FTX and Bankman-Fried for comment but did not immediately receive a response.
This story was originally featured on Fortune.com
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