Why Is Sam Bankman-Fried Not In Jail Yet?

Sam Bankman-Fried, the former chief executive of the FTX crypto exchange, remains in the spotlight even today, but for different reasons entirely.

The former boss and the founder of the doomed FTX is currently under investigation by the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).

In fact, the disgraced entrepreneur has also been asked to appear before the House Financial Services Committee in order to testify.

Why is SBF not in jail?

The collapse of FTX was one of the most difficult and abrupt ones to have been recorded in the history of corporate America.

Billions of dollars in customer funds have vanished and the top 50 creditors of FTX are owed a whopping $3.1 billion.

Therefore, people want to know why its boss is still not in jail. The simple answer to this question is that even though it appears that Sam Bankman-Fried has wronged a lot of people, it is unclear if anything criminal occurred.

John Jay Ray III is the new CEO of FTX, who is a lawyer, known for overseeing the liquidation of Enron in the 2000s.

According to SBF’s successor, the leadership of the crypto exchange was extremely incompetent, but it remains to be seen if they were criminally so.

Ray said in a bankruptcy court filing that there was an absence of reliable financial information and corporate controls had not been implemented.

A complex case

While there are multiple investigations ongoing, it is apparent that Sam Bankman-Fried would not be put behind bars until they are complete.

After all, it is a very complex case because FTX was not a standard company and the crypto world is never straightforward and simple.

Even though there are regulations in the United States as well as restrictions, such as geofencing, FTX did have customers in the country.

Many Americans have suffered monetary losses in the fiasco, considering that FTX was a massive company with more than one hundred entities, but it is a fact that was operating from the Bahamas.

Charles Slamowitz, a Web3 lawyer, said that the ties of FTX and SBF to the Bahamas only add another layer of complexity to the entire case as well as the investigation ongoing in the United States.

He also added that since crypto fraud is still a relatively new development, most prosecutors are in unchartered waters.

The challenges

He said that this made it more opaque and challenging to gather the information needed for filing charges.

He said that charging SBF might be a matter of time, but it takes time to conduct investigations for prosecuting properly.

Thomas Gorman, the Dorsey and Whitney LLP partner specializing in defending SEC enforcement actions and investigations, also said that the fact that FTX was headquartered in the Bahamas complicates everything.

He said that this means that different laws are applicable to different aspects of an organization, which causes a lot of problems.

He added that this would have an impact on who is charged if they are charged at all. The good news is that the US and the Bahamas do have an extradition territory, which would certainly help things.

However, the most important thing to note is that despite multiple investigations, most cannot figure out what criminal charges should be brought against Sam Bankman-Fried.

Thus, it will take time before anyone is put behind bars for the FTX disaster.

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