Crypto Villains Join the SBF Empire’s Collapse. It’s a terrible thing to hear.
Key TakeawaysDo Kwon, Su Zhu, and Kyle Davies are back to criticize the new member of the failed founders club.
Sam Bankman-Fried’s fraud is undoubtedly more than that of all other crypto scammers.
However, the crypto space does not view either of these pariahs favorably.
Share this article2022 has seen many industry luminaries fall from grace. But Sam Bankman-Fried has been the most impressive. The extent of his financial woes and likely future legal perils seem to have encouraged a few former offenders to weigh-in. The industry is reeling after its largest fraud to date, a multibillion-dollar fraud orchestrated and coordinated by Sam Bankman Fried and his close associates at FTX. FTX’s poor record-keeping means that millions (if not billions more) may have been lost. The contagion spreads across the markets, dozens of companies transacted with FTX this week, and the full aftermath is still unfolding. Bankman-Fried’s swift and massive downfall, now known as “Scam Bankrun Fraud”, has surpassed all previous attempts to bring down an industry that is full of bad actors. Some of the space’s former friends (and now pariahs), feel comfortable posting their opinions on social media. People who were suspected of wrongdoing used to keep their mouths shut, according to counsel. There was a time when people suspected of wrongdoing kept their mouths shut, but crypto has made it easier for them to access Twitter. This behavior has not been good for him and his statements regarding seeking new capital have left observers stunned and infuriated. Su Zhu, co-founder of Three Arrows Capital (3AC), disappeared this summer along with Kyle Davies, after it became apparent that Terra was going bust. Zhu is well-known for his cryptic tweets. He was silent on Twitter about his company’s collapse in June and only briefly appeared in July to criticize 3AC liquidators. The firm owed $3Billion at the time after defaulting on a number of loans. Zhu appears to be in better spirits now. Zhu returned to Twitter on November 8, the day that FTX’s freefall started. This was after a long hiatus of several months. Many have demanded that Zhu be held accountable for investor losses, but he has been spending time on his mental health and surfing. Although Bankman-Fried is known to have donated money to Democratic campaigns, there is no evidence that any illegal collusion was established beyond speculation. Davies, who is currently on the run from South Korean authorities, appeared on CNBC’s SquawkBox today to discuss FTX. He claimed that Bankman-Fried colluded with Alameda in order to trade against 3AC clients. As FTX collapsed, Terra’s co-founder surprised everyone by appearing on UpOnly to discuss Bankman-Fried’s fall. Kwon, as he previously claimed, denied that he was on the move. However, he didn’t reveal his location and he left the call as mysteriously. Kwon answered when asked if he had any advice for Bankman Fried on crisis management. “Well, I don’t think that I did it particularly well so I don’t think I’m the best person for asking for advice.” Crypto Briefing’s TakeWith many voices calling for these fraudsters to be brought to justice, it is quite remarkable for the “lesser” fraudsters of the larger to reappear to criticize the larger one. While their antics may be amusing, we must not forget that all four of them did serious damage while on their way out. They are now trying to minimize their own mistakes by comparing them to SBF’s. While this may be amusing, it is clear that the community doesn’t want to have anything to do with these former titans of the industry. Many have accused them, if not of criminality, at the very least of mismanaging funds. There has been a lot of anger and a quick glance at Crypto Twitter shows just how many people feel. While it is easy to say that the crypto industry needs to eliminate bad actors, the reality is that there are only so many things we can do as an industry in order to stop those who would profit from the space. You need an enforcer for certain regulations, if only to show others that asking for forgiveness later does not make you a criminal. Sometimes, apologizing doesn’t cut the mustard. Sam Bankman-Fried will likely be punished severely for what he did. While he may have high-ranking friends who he believes can protect him, he has also damaged the trust of many of those same people who could have helped him. While he is innocent until proven guilty, it seems that proving SBF’s guilt might be as simple as proving 2 + 2. But the less fraudsters should not be taken for granted because there is a bigger bad guy in this room. Someone really needs to take their phones from them. Decentral Media, Inc. does not act as an investment advisor. 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