What a happy coincidence for Democrats that, hours before the alleged crypto criminal Sam Bankman-Fried was due to testify before the House Financial Services Committee, he was arrested in the Bahamas. That meant that SBF, the second-biggest Democratic donor of the 2022 cycle—behind 92-year-old George Soros—was able to evade questioning from Republican House members.
Bankman-Fried helped to bankroll President Joe Biden’s 2020 campaign and threw nearly $40 million behind Democratic candidates this year, and we have a feeling that questioning from Republican lawmakers would’ve been embarrassing for the Democratic Party. His testimony under oath would also have, presumably, been a boon for prosecutors who decided to arrest him on Monday instead. The timing is puzzling.
SBF was indicted by the Southern District of New York, which in the past few decades has served as the training ground for prominent political activists, including James Comey and Preet Bharara, and which is notorious for maintaining close ties to Washington. It is not hard to imagine that some behind-the-scenes negotiating saved SBF, and the Democrats, from an embarrassing and potentially self-incriminating performance. SBF hasn’t shut his mouth since his company, FTX, went belly up, and putting him behind bars may have been the party’s only hope.
Whatever the case, the FTX scandal, which the SDNY described on Tuesday as “one of the biggest financial frauds ever,” should invite a much broader investigation. In a country with federal rules about what constitutes an onion ring, where have financial regulators been as more and more Americans were encouraged by a credulous press and their allies in the Democratic, tech, and Hollywood elite to put their savings into risky cryptocurrencies? We don’t recall warnings from federal officials, former prosecutors, or investment professionals indicating that crypto businesses—indeed, the entire industry itself—might be fraudulent.
Securities and Exchange Commission chairman Gary Gensler was busy rubbing elbows with SBF and negotiating a regulatory scheme whose blueprint originated at FTX headquarters, while most of the country’s major law firms, investing services, media companies, and politicians were on the crypto payroll.
For the unsuspecting Americans sold the pile of fairy dust known as cryptocurrency—or SRM, or FTT, or LOL—the machinations that allow Bankman-Fried’s political allies to evade accountability are a final insult.
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