Coinbase CEO Brian Armstrong says it’s ‘baffling’ FTX’s Sam Bankman-Fried isn’t ‘in custody already’

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FTX founder Sam Bankman-Fried must be in custody by now, so far as Brian Armstrong is anxious. The Coinbase CEO mentioned this week it’s “baffling to me why he’s not in custody already.”

“The DOJ or someone ought to be capable of make—simply based mostly on his public statements, I feel there’s a really open and shut case for fraud,” Armstrong mentioned on the a16z crypto Founder Summit on Tuesday. He added, “I’m not an professional on this, however the individuals I speak to appear to agree on that.”

Armstrong additionally questioned why the media has avoided calling Bankman-Fried a prison.

“I feel we had been all fairly shocked to see the scope of the fraud that occurred at FTX. And let’s name it a fraud. We’ve got to name it what it truly is. It’s been fairly weird that mainstream media hasn’t actually come out and mentioned, ‘This man’s a prison.’ Possibly they wish to wait till he’s truly indicted or one thing like that, and in custody. However it appears very clear at this level that that’s the case.”

FTX imploded in spectacular trend final month, shocking many inside and out of doors the crypto sector. The $32 billion trade had established itself as a frontrunner within the discipline, having enlisted star athletes like Tom Brady and different celebrities to bolster its picture. Its collapse shook confidence within the crypto sector and spurred requires tighter regulation.

Bankman-Fried resigned as FTX CEO on Nov. 11, the identical day that the corporate, together with affiliated buying and selling arm Alameda Analysis, filed for chapter. A key accusation leveled towards Bankman-Fried is that he used buyer funds from his crypto trade to fund dangerous bets at Alameda Analysis.

Armstrong’s Coinbase, like FTX, is a cryptocurrency trade. However whereas Bankman-Fried based mostly FTX within the Bahamas—the place he reportedly loved an extravagant penthouse life-style—Coinbase is a public firm within the U.S.

“You possibly can to learn our monetary statements,” Armstrong mentioned. “They’re audited by a 3rd celebration, you don’t must belief us. All the shopper funds are segregated. We don’t make investments any buyer funds with out their specific course.”

‘Folks will go to jail’

Armstrong was not the one crypto luminary sharing harsh views of Bankman-Fried this week. Mike Novogratz, CEO of crypto agency Galaxy Digital Holdings, advised Bloomberg TV on Thursday, “Sam and his cohorts perpetuated a fraud. They used buyer cash to make bets that he ‘poorly danger managed’ after he made them.”

“The issue was, he took our cash,” Novogratz added. “And so he must get prosecuted. Folks will go to jail, and may go to jail.”

Shares in Coinbase and Canada-listed Galaxy Digital each plunged greater than 25% final month, exacerbating an already brutal “crypto winter.” Coinbase shares have fallen roughly 80% this 12 months, erasing about $44 billion in worth. BlackRock CEO Larry Fink mentioned this week, “I truly imagine a lot of the corporations should not going to be round,” referring to the beleaguered crypto sector.

Final week Mark Cuban, billionaire proprietor of the Dallas Mavericks and a outstanding crypto investor, advised TMZ that Bankman-Fried must be frightened about jail time.

“I don’t know all the small print, but when I had been him, I’d be afraid of going to jail for a very long time,” he mentioned. “It certain sounds dangerous. I’ve truly talked to the man, and I assumed he was good, however boy, I had no concept he was going to, you already know, take different individuals’s cash and put it to his private use. Yeah, that certain…looks like what occurred.”

Armstrong lamented the truth that the crypto sector attracts an inordinate variety of dangerous actors.

“We’ve got to sort of come to phrases as an trade with the truth that, I feel our trade is attracting a disproportionate share of fraudsters and scammers. And that’s actually unlucky. That doesn’t imply it’s consultant of the entire trade. ”

This story was initially featured on Fortune.com

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