Sam Bankman-Fried Arrested

Sam Bankman-Fried was arrested yesterday, and will be facing a massive list of charges including conspiracy to commit wire fraud on customers, conspiracy to commit wire fraud on lenders, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the United States and violate campaign finance laws. He is potentially looking at decades in prison if this is prosecuted properly.

For me, what is even more interesting than the charges is some of the information disclosed by the new FTX CEO, John Ray, shared while testifying before the House Financial Services Committee. Below are some of the shocking things he shared:

• Top executives (including Bankman-Fried and co-founder Gary Wang) at FTX moved hundreds of millions of dollars out of FTX after declaring bankruptcy.

• FTX used Quickbooks, which is designed for small businesses, to run their multi-billion business.

• Ray said $8 billion is totally missing.

• FTX stored private keys without encryption.

I sincerely hope Bankman-Fried ends up spending a very long time in prison, and other leaders at FTX face similar charges. The cryptocurrency industry can not continue to take reputation hits like this if it will continue to survive going forward.