Crypto industry is ‘garden of snakes’

(NewsNation) — FTX founder and former CEO Sam Bankman-Fried has been charged with numerous financial crimes and campaign finance violations. Prosecutors allege that the disgraced crypto magnate played a key role in FTX’s demise and hid the issue from investors.

Rep. Brad Sherman is a member of the House Financial Services Committee. He has always been skeptical of cryptocurrencies and has called for more regulation.

Sherman said he has been calling for a ban on all Americans from investing in cryptocurrencies for five years. He believes cryptocurrencies are the problem, not just Sam Bankman-Fried.

“Sam Bankman-Fried is more than just a snake in a crypto garden. Crypto is a snake garden. Americans shouldn’t invest in it,” Sherman said.

Bankman-Fried has raised more than $1.8 billion from equity investors since 2019 by suggesting that FTX is a secure way to trade crypto assets, according to the SEC complaint. Instead, according to the complaint, Bankman-Fried diverted client funds without notifying Alameda Research.

“He then used Alameda as his personal piggy bank to buy luxury condominiums, support political campaigns, and make personal investments,” the complaint reads. “This has not been disclosed to FTX equity investors or trading customers of the platform.”

Bankman-Fried also made many political contributions. Sherman said he did not receive donations and that those who received the money should return it.

“Even if he takes money from Sam Bankman Freed, it is not his money. It’s simply ridiculous to be in a situation where fellow crypto billionaires are spending money.Washington is pushing crypto to deregulate.”

Authorities in the Bahamas arrested Bankman-Fried on Monday at the request of the US government. The arrest took place just one day before he was set to testify before the House Financial Services Committee. Some lawmakers have expressed disappointment that Bankman-Fried will not testify for his arrest.

A Bankman-Fried spokesperson did not immediately comment on the allegations against him on Tuesday. Bankman-Fried has the right to object to his possible extradition to the United States.

The maximum potential prison exposure from the indictment against Bankman Freed is 115 years, according to prosecutor’s spokesperson Nicholas Bierce.

The Associated Press contributed to this report.

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