Expert sees Bankman-Fried arrest as a warning to the crypto industry

With the arrest of former FTX chief executive Sam Bankman-Fried (SBF), authorities aim to ‘send a message’ to players in the digital-asset industry, according to Renato Mariotti, a former prosecutor in the Justice Department’s Securities and Commodities Fraud Division, CoinDesk reported.

He suggested that SBF’s media activity contributed to his arrest.

From the Justice Department’s perspective, Bankman-Fried spread misinformation and fostered distrust of the regulators overseeing the market, Mariotti explained.

The expert pointed to suspicions that authorities would not pursue SBF because he spent $40 million on political campaigns, including $5.2 million to the incumbent U.S. President Joe Biden.

The Collapse of FTX has certainly damaged the reputation of cryptocurrencies in the eyes of authorities. There is now momentum to fix shortcomings in their regulation, the expert added.

Mariotti forecast a ‘large number of law-enforcement actions’ against industry participants, especially from SEC. He does not expect friendly regulation – the situation with Bankman-Fried will become the basis for more active involvement by regulators.

The Biden administration believes that the digital asset market is not regulated, and therefore crypto firms believe that they can get away with it. For this reason, the agencies are keen to plant a flag and send a signal, the expert explained.

On December 13, Bahamian authorities arrested the founder of FTX Sam Bankman-Fried at the request of the U.S. government.

The court refused to release him on bail of $250,000, but on December 15 Eyewitness News Bahamas reported that Bankman-Fried filed a new motion.

BREAKING: FTX founder Sam Bankman-Fried has filed a new application for bail before the Supreme Court, Eyewitness News can confirm. The bail application is set to be heard before the Supreme Court on January 17, 2023. pic.twitter.com/92zmlnpocj

— Eyewitness News Bahamas (@ewnewsbahamas) December 15, 2022

As a reminder, the SEC accused SBF of deceiving FTX investors and misusing customer funds on the trading platform, CFTC — of violating the Commodity Exchange Act.

The United States prosecutors charged Bankman-Fried with eight criminal offenses, which could, in aggregate, carry up to 115 years of imprisonment.

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