Key Takeaways:
- The judicial system in the USA is biased and anti-poor
- Sam Bankman-Fried was released on a $250 million bail, without paying a penny
- People are angry at the special treatment that the former billionaire received
YEREVAN (CoinChapter.com) — The fall of Sam Bankman-Fried’s crypto empire highlighted several problems. It showed the dangers of unregulated crypto activity, where idolized young entrepreneurs can create an economic catastrophe. It also highlighted the judiciary’s bias in the United States (US).
The criminal justice system in the country is tilted against the poor. While economically disadvantaged individuals are met with stern punishments, the law is not nearly as harsh for the rich.
Further proof of this undeniable fact is the recent release of the founder and former chief executive of the cryptocurrency exchange FTX. Earlier this month, Bankman-Fried was arrested in the Bahamas after US prosecutors filed criminal charges against him. However, days later, he received a $250 million bail from the court.
There are eight criminal charges against the former billionaire. The US attorney’s office has accused the crypto kingpin of committing fraud, conspiracy to deceive the United States Government, and violating campaign finance laws.
These follow earlier civil charges that the US Securities and Exchange Commission (SEC) brought against him.
Sam Bankman-Fried does not deserve bail
All the damning allegations are yet to stop the US legal system from allowing Sam Bankman-Fried to enjoy his life in luxury. Despite squandering billions from investors and FTX users, which Damian Williams, the US attorney for the southern district of New York, described as “one of the biggest financial frauds in American history,” he has gone home instead of jail.
He will stay with his parents in California according to his bail terms. For someone who has cheated many people, the special treatment is condemnable, to say the least.
So why doesn’t he deserve to be treated any differently? Well, there is absolutely no doubt that he has committed fraud. Not only has he admitted to having “f**ked up”, but others have also shed light on his criminal practices.
As CoinChapter earlier reported, Sam Bankman-Fried granted special privileges to his in-house trading firm Alameda Research. Now Caroline Ellison, his former girlfriend and head of the trading firm, has confessed to malpractices by her and Sam Bankman-Fried.
Ellison, who was also arrested, pleaded guilty to seven criminal charges earlier. Subsequently, she revealed that she and Fried knew that their actions were illegal and willfully deceived investors and FTX users.
Recommended: No Love! Sam Bankman-Fried’s Girlfriend Caroline Ellison Turns Key Witness in FTX Saga
The now-defunct crypto exchange’s co-founder Gary Wang, also pleaded guilty to fraud. He and Ellison have agreed to testify against the 30-year-old former billionaire.
There have been others also who have made damning revelations about Sam Bankman-Fried. John Ray, the new CEO of FTX, termed SBF’s activities nothing short of embezzlement at the House Financial Services Committee hearing.
“This is really just old fashioned embezzlement. This is just taking money from customers and using it for your own purpose. Not sophisticated at all,”
Ray said during the testimony.
Sam Bankman-Fried Received Free Bail
Sam Bankman-Fried does not deserve to be out, enjoying his life with his family when others who have done much lesser crimes are locked up.
If one was to go by the headlines, he supposedly paid $250 million for his bail. Well, for someone who is accused of embezzling billions, that amount is peanuts.
However, Fried did not even pay that amount. He was virtually set free for free. Under the bond terms, his parents offered their home (about $4 million) as collateral. He allegedly did not even pay the required 10%-15% of the bond amount, which would come to less than $40 million.
Instead, the court released him on a personal recognizance bond, which is nothing but a promise by the accused that he will pay the bond if he fails to follow the orders, like showing up for trial.
Imagine that. One of the biggest fraudsters alive was allowed to walk scot-free to enjoy his Christmas and New Year Holidays, while thousands of his victims have lost most of their hard-earned savings because of him.
Why is that, you wonder? CoinChapter has written extensively about the deep political connections that he enjoys. SBF was one of the largest political donors in the USA and generously wasted users’ money to fund campaigns.
He even donated $5 million to the US President Joe Biden in his election campaign.
Moreover, details revealed that SBF may have laundered money for Democrats using donations to war-torn Ukraine.
His parents, Joseph Bankman and Barbara Fried, professors at Stanford University, also have political connections. As compliance lawyers, their professional standing should have ensured that their son knew better. But hey, they aren’t poor, so the law is not equal for Sam Bankman-Fried.
The US Judicial system is biased and anti-poor
The judicial system in the United States is biased against the poor. The arrest and conviction rate in the country is far higher among the poor than the rich.
Moreover, many innocent poor people spend months, if not years, in pretrial detention because they, unlike the rich, cannot pay for their bail. This results in innocent people pleading guilty to get out.
Several scholars and researchers have studied this, pointing out gross inequalities in the US legal system.
For instance, Jeffrey Reiman highlights this well in his iconic book “The Rich Get Richer, and the Poor Get Prison.” As the professor points out, a criminal’s wealth status determines whether he will go to jail or remain free.
Equal Justice Under Law, a Washington, DC-based nonprofit, also points this out.
“We currently have two justice systems: one for the rich and another for everybody else. A wealthy person can buy their pre-trial freedom, keep their job, and live at home while preparing their defense. An arrestee who is poor must stay in jail for days, weeks, months, or years until their case resolves,”
the organization that fights for equal justice says.
Sam Bankman-Fried (SBF) was bound to get special treatment
This fact that the United States judicial system is biased was also evident after the 2008 financial crisis. The economic recession that ensued in 2008 wiped out over $30 trillion of the world’s wealth. Millions of people became jobless and homeless.
Yet no Wall Street Executive or rich bank manager went to jail.
Imagine what would happen in the case of the poor. So the special treatment that Bankman-Fried received is not surprising. It is not even new. For decades, the issue has remained in public discord.
Nearly 60 years ago, various articles published in the American press highlighted this issue.
“After conviction, the defendant’s financial condition may have a significant effect on whether he is placed on probation or sent to the penitentiary, on whether and when he is paroled from the penitentiary, and on whether he continues to remain at liberty,”
the New York Times wrote back in 1964.
The bias, as evidenced by this Time Magazine article, is also present in the US Supreme Court. The entire judicial system in the country needs to be updated to ensure that rich fraudsters and criminals do not get special privileges.
