by Zain Jaffer
Recently I just got my US citizenship. Being an American means the world to me. Many people around the world who immigrate here feel that if you work hard, the playing field is level. Believe it or not, everyone being equal under the eyes of the law is a big thing. Unlike in many Third World countries where entrenched interests and families rule, and justice can be bought. Here in America it’s how hard you work, and how smart you are. In Third World countries, it’s who you know. Both for business and for getting justice from the courts.
Unfortunately recent events related to Sam Bankman Fried, trading firm FTX and crypto hedge fund Alameda Research have somewhat caused me to question if all is well in the land of milk and honey.
First let me state that the decision of the Southern District of New York district attorney to charge SBF with “two counts of wire fraud conspiracy, two counts of wire fraud, one count of conspiracy to commit money laundering, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to defraud the United States and commit campaign finance violations,” is a good thing especially for the investors who lost money but also for the crypto and blockchain industry in general.
Let’s hope that there can be clawbacks to recover all the funds, but it has been rumored that some of the funds were passed through crypto mixers like Tornado Cash which makes it harder to trace where customer funds went using chain analysis. Still let us hope that every customer dollar can be recovered as much as possible.
What sours me though is, as alleged in the SDNY indictment, is how he gave massive donations to both Democrats and Republicans to push his proposed legislative agenda in Congress. While donations are not illegal, since the money was not his to begin with, the politicians should have the good sense to return any donations, even quietly, to the customers. What was worse was he was really pushing his proposed legislation to benefit FTX to everyone else’s detriment. For example, decentralized finance sites like Uniswap and Aave would have had tighter regulations because these sites take away trading business from centralized exchanges like FTX. Even Changpeng Zhao (CZ) of Binance was threatened by SBF’s moves. It doesn’t help that Congresswoman Maxine Waters was seen blowing kisses and issuing a very friendly tweet to SBF after the crash.
@SBF_FTX, we appreciate that you’ve been candid in your discussions about what happened at #FTX. Your willingness to talk to the public will help the company’s customers, investors, and others. To that end, we would welcome your participation in our hearing on the 13th.
— Maxine Waters (@RepMaxineWaters) December 2, 2022
Now to make matters worse, the Judge handling SBF’s trial recently agreed to redact the names of the persons who agreed to give part of the bail money that needed to be paid. Okay maybe there is a really good reason we don’t know about, but these numerous examples of how SBF is being handled with kids gloves doesn’t look well for the US justice system. We even saw how he flew first class back to the US from the Bahamas.
And sadly there’s more. It was also reported that the CEO of blockchain publication The Block, Michael McCaffrey, had loans from Alameda, presumably in exchange for favorable coverage of Alameda, FTX, SBF and their portfolio coins. Although reports indicate that none of the editors and reporters were aware of this arrangement.
While these black eye events hurt her image, I still believe in America and concepts like “justice is blind,” and media should “comfort the afflicted, and afflict the comfortable.” But recent events have shown me that there is a dark reality to what most foreigners abroad believe are America’s shining beliefs.