Bankman-Fried charged with fraud in FTX’s collapse

Sam Bankman-Fried, who founded and led FTX, arrested in Nassau

(Reuters) – Here are reactions to accusations of fraud and other charges brought on Tuesday against Sam Bankman-Fried, the founder and former CEO of cryptocurrency exchange FTX.

OMID MALEKAN, adjunct professor at Columbia Business School: “As the details of the prosecution roll out, FTX clients will have more information about how much of their money they might someday get back, and the industry will have a better idea of what contagion may remain. These are both positive developments and will make it easier for the market to move on.”

“It certainly seems that between the Justice Department and the SEC, the hammer is being brought down (on Bankman-Fried). The tell that something was brewing may have been the leaked testimony of the current caretaker of FTX that he’s going to present in the congressional hearing today.”

VIKTOR PROKOPENYA, founder of crypto platform

“It is unsurprising that Bankman-Fried is now in U.S. custody and I hope the authorities are able to ensure all those who lost their money can see those responsible held to account.” 

“The crypto sector must see the demise of FTX as a wake-up call. We must begin to engage proactively with regulators to find a middle ground which prevents an FTX-type situation ever occurring again.” 

DAVID SCHWED, chief operating officer at blockchain security firm Halborn:

“Sam’s arrest is overall a positive event for the crypto ecosystem.”

“I’m hopeful that this will lead to increased regulation and oversight in the sector which will help restore the trust and confidence in the crypto market. It will also serve as a deterrent for others.”

ERIC PETERS, CEO of One River Asset Management, said to AI investing and trading platform Magnifi+:

“When the FTX news hit, I told our team that I think this marks the beginning of the end of this bear market. I didn’t mean that it would end on the day, but it’s when big things like this big fraud happen. They don’t happen at the highs, they happen more or less in the range of the lows. Thankfully, we didn’t have any exposure. Our investors didn’t have any exposure.”

MARCUS SOTIRIOU, market analyst at digital asset broker GlobalBlock:

“SBF was supposed to testify under oath before Congress today, who would then charge him with a crime, hence prosecutors have potentially saved SBF from incriminating himself. Nonetheless, SBF may have already incriminated himself enough.”

STEFAN RUST, CEO of blockchain development house Laguna Labs

“Overall, this is having a very positive impact on the industry as it shows that, in the crypto world, you cannot get away with stealing customers’ money.”

(Compiled by the Global Finance & Markets Breaking News team; Editing by Matthew Lewis)