SBF’s ‘house of cards’ is the crypto industry’s problem now: Morning Brief

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Wednesday, December 14, 2022

Today’s newsletter is by Myles Udland, senior markets editor at Yahoo Finance. Follow him on Twitter @MylesUdland and on LinkedIn. Read this and more market news on the go with the Yahoo Finance app for Apple or Android.Yahoo Finance App.

Sam Bankman-Fried, the disgraced founder and former CEO of FTX, has had a bad week. A bad week that follows a bad month.

Bankman-Fried, known as SBF in the crypto world, was arrested on Monday and charged by three different U.S. authorities — the Department of Justice, the SEC, and the CFTC — on Tuesday.

As alleged in the SEC’s complaint, the offshore crypto exchange SBF claimed to have built was a mirage, or as SEC Chair Gary Gensler said: “A house of cards [built] on a foundation of deception while telling investors that it was one of the safest buildings in crypto.”

During his brief turn as the industry’s star, SBF was a regular presence in D.C. As outlined in the DoJ’s indictment, SBF, as well as “others known and unknown,” allegedly made campaign donations that exceeded federal limits.

The business of FTX, it seems, was mostly about how to create something legitimate out of something that wasn’t.