Joe Biden’s administration is coming under more scrutiny than ever.
One of his top backers was running a massive illegal operation.
And now his arrest has sent shockwaves through the Democrat political establishment.
Sam Bankman-Fried was considered one of the top rising business stars in the U.S. after he founded FTX, a crypto exchange company.
He was also an active Democrat who gave money generously, including to the Biden presidential campaign in 2020.
Bankman-Fried was Biden’s second biggest donor. According to CoinDesk, “the Hong Kong-based CEO gifted Biden’s campaign a total of $5.2 million, behind only former New York Mayor Michael Bloomberg’s $56 million donation.”
But that all imploded after FTX collapsed in dramatic fashion, costing Bankman-Fried and his investors millions of dollars.
Now Bankman-Fried has been arrested and charged with fraud and money laundering. And that’s bad news for the Democrats that he bankrolled for so many years.
According to Forbes, “Sam Bankman-Fried, founder and CEO of FTX, was arrested Monday evening in the Bahamas. The arrest followed criminal charges filed by U.S. prosecutors and shared with the Bahamian government.”
The article continues, “FTX’s collapse followed a series of financial entanglements and allegedly fraudulent activities that rendered the company, quite simply, unviable.”
Forbes then goes into more detail about what these activities were.
“FTX’s collapse began when a CoinDesk report revealed that FTX boasted a highly concentrated position in its own digital asset, FTT coins. At the same time, Alameda Research – a separate company on paper – was accused of using FTX’s own coins as collateral for billions in crypto loans.”
“Shortly after the report dropped, rival exchange Binance announced plans to shed its stake in FTT. What followed was a virtual bank run, with customers rushing in to withdraw funds as quickly as possible.”
“By itself, questionable collateral and customer withdrawals may not have been enough to topple FTX. But later reports claimed that the commingling of FTX and Alameda Research didn’t end there. According to the SEC, FTX encouraged customers to deposit fiat currency, such as USD, into accounts controlled by Alameda. The hedge fund then used FTX customer deposits to buy companies and real estate, make larger and riskier trades and even make loans to FTX executives.”
“And then the ‘crypto winter’ hit in spring 2022. Crypto markets crashed practically overnight. Alameda’s creditors began demanding repayment on loans. To fund these requests, Alameda siphoned even more money from FTX customers.”
“The result: when FTX depositors made a run on the exchange a few months later, the company fell down an $8 billion hole. Within days, the company froze its assets and declared bankruptcy.”
It’s clear that the operation Bankman-Fried was running was a house of cards that had to collapse at some point.
And it’s equally clear that Joe Biden and the Democrats that he funded did not do adequate research into his background before taking his money.
Now they are facing a serious problem for the 2024 election, with one of their biggest donors surely headed to federal prison.