FTX Scandal is Tip of Iceberg: How Corruption Flourishes on the Hill & in Executive Residence
The FTX scandal is continuing to reverberate through the Capitol's corridors and Wall Street's halls. Sam Bankman-Fried, the founder of the now-collapsed crypto trading company FTX, is facing criminal inquiries, lawsuits, and other legal repercussions. The question, however, is how it all got to this point.
FTX was a Bahamas-based cryptocurrency exchange which allows customers to trade crypto or digital currencies for other assets, such as conventional fiat money or other digital currencies. It was founded in 2019 by American entrepreneur Sam Bankman-Fried (SBF) and quickly came to prominence, in a short period becoming the fifth-biggest by trade volume in 2022, and the second-largest by holdings.
However, the global crypto exchange abruptly collapsed on November 8, soon after the midterms, with traders withdrawing $6 billion in crypto tokens from the platform in just 72 hours. On November 11, 2022, FTX, FTX.US, Alameda Research, and more than 100 affiliates filed for bankruptcy in Delaware. In just days, Bankman-Fried's assets plummeted from $16 billion to zero.
On November 12, FTX claimed that it had seen "unauthorized transactions" with around $473 million worth of cryptoassets being withdrawn from the crypto exchange wallets "in suspicious circumstances," according to blockchain analytics firm Elliptic. Still, Elliptic highlighted that it could not confirm that the tokens had been particularly stolen.
John Ray III, the new CEO of FTX, who is helping clean up the crypto exchange collapse, stated in court documents on November 17: "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here."
Some US media outlets suggested that the FTX mess might not be stemming from financial errors, but fraud. They referred to Enron, an infamous American energy company from Houston, Texas. Enron resorted to accounting fraud, hid the company's financial losses in shell companies, and marked future potential profits as actual profits in order to make money at all costs.
"The smartest guys in the room," former Treasury Secretary Lawrence Summers told an American broadcaster while comparing Enron and FTX. "Not just financial error but – certainly from the reports – whiffs of fraud. Stadium namings very early in a company’s history. Vast explosion of wealth that nobody quite understands where it comes from."
21 November 2022, 17:11 GMT
Was SBF in Bed With Democrats?
There is nothing new in the fact that some American endeavors have turned out to be apparent scams. What's disturbing is SBF and FTX's ties to Washington's power circles.
"Sam Bankman-Fried was the son of two prominent Stanford University lawyers," Robert Bishop, a retired Certified Public Accountant (CPA) and business executive, told Sputnik. "Joe Bankman's specialty is tax law and Barbara Fried, whose focus is feminist legal theory and political progressivism. The parents are big supporters of the Democratic Party. Barbara Fried was the co-founder of Mind the Gap, a Silicon Valley PAC that supports Democratic candidates."
According to the US corporate media, Mind the Gap funneled over $20 million to Democratic candidates ahead of the 2018 midterms.
For his part, SBF poured over $5 million into Biden’s 2020 presidential campaign and gave Democrats around $37 million for the 2022 midterms, being second only to American-Hungarian mogul George Soros ($128 million). In May 2022, Bankman-Fried pledged to donate "north of $100 million" to Democrats in the 2024 presidential race.
Furthermore, on April 22 and May 12, 2022, SBF met with top Biden adviser Steve Ricchetti in the White House, the Washington Free Beacon, which obtatined White House visitor logs, reported on November 11. SBF's brother, Gabe Bankman-Fried, also visited the executive residence on March 7, 2022.
It appears that the Democrats had no scruples about taking SBF's money and never questioned where it came from and whether his business operated legally. In contrast, US federal prosecutors had started to probe the cryptocurrency empire months before its collapse.
"SBF ran FTX offshore, first in Hong Kong and then to the Bahamas to skirt US regulations and governance," said Bishop. "Nonetheless, he ran a foul since FTX was not a licensed money transmitter in 49 US states. Also, FTX offered up to 8% return on deposits, securities and cyber currencies. That is an authority granted to banks and runs afoul of US Treasury regulations."
Moreover, FTX's bankruptcy filing discloses that in the 2021 IRS tax return, FTX lost $3.7 billion, Bishop tweeted on November 20.
Meanwhile, FTX also cooperated with the US-aligned Ukrainian government: FTX helped launch crypto donation platform Aid for Ukraine in March 2022. The initiative was powered by the Ministry of Digital Transformation of Ukraine, FTX, and Everstake, a decentralized staking provider. FTX set itself as the central clearing house for cryptocurrency donations to Kiev. The endeavor is reported to have collected at least $60 million.
The Gateway Pundit, a US alternative media outlet, alleged that FTX could have been used to launder billions of US aid dollars for Democrats through Ukraine. It was also suggested that FTX's donations to the Democratic Party could be illegal under Executive Order 13848, which cracks down on foreign interference in an election: FTX, which also ran a lot of affiliated organizations, was housed in a foreign country.
"When stories are too good to be true and offer swift pathways to immediate financial and/or political gain, too many people let their guards down," Charles Ortel, a Wall Street analyst and investigative journalist, told Sputnik. "Moreover, regulators of markets and of political campaigns/corruption are (purposefully) not equipped to expose and prosecute complex scams. This explains FTX/Ukraine and it certainly explains apparent inaction against the Clinton family and their raft of false-front charities."
All major American mainstream outlets rushed to rubbish the story of FTX's money-laundering for the Dems. Still, suspicions persist, since it's not the first time that the US' rich and powerful have used questionable and murky schemes to earn money and bolster their influence through "pay-for-play" schemes.
Black Lives Matter Fund Scandal
One glaring example is the Black Lives Matter Global Network Foundation (BLMGNF). In February 2022, the charity found itself in the crosshairs of US state attorneys general over alleged fraud
. Indiana, Connecticut, Maine, Maryland, New Jersey, New Mexico, North Carolina, and Virginia have all revoked the BLMNGF’s charitable registration.
For their part, California and Washington threatened to hold the charity's leaders personally liable for not revealing what exactly happened to tens of millions of dollars in donations amid the George Floyd protests in 2020.
In summer 2020, BLMGNF enjoyed a financial bonanza. However, Ortel and Bishop told Sputnik at the time that the charity's fundraising activities reeked of fraud
, given the financial non-transparency and questionable structure.
Furthermore, Bishop did not rule out that Democratic Party fundraising groups are cashing in on BLMGNF donations. The retired CPA cited the fact that once a netizen pushes a donate button on Black Lives Matter's official website, he or she is redirected to ActBlue.com, a Democratic and progressive fundraising group.
"I donated to BLM Global Network Foundation to trace the disposition of funds, and it passed through the leftist organization ActBlue's credit card system," Bishop told Sputnik in June 2020.
ActBlue then admitted that it took donations and then forwarded them to Thousand Currents, the organization that was meant to raise money for BLMGNF. One might ask why BLMGNF used such a scheme. Bishop suggested that the Democratic fundraising group took a cut of all donations before passing it along.
However, it is not limited to Democrats, Bishop noted: "The Republicans run an equivalent called Winred for collecting and transmitting donations. So far it hasn't had any major scandals like ActBlue."
"Nonprofits are another tool that Democrats use to fund elections, election ballot harvesting, and organize and fund protests that support their agenda. One nefarious organization that deserves attention is The Action Network," the retired CPA said.
26 November 2019, 17:02 GMT
Clinton Foundation's 'Pay-to-Play'
Yet another questionable Democratic non-profit is the Clinton Foundation – run by Bill, Hillary, and Chelsea Clinton – which is suspected of taking money from American and foreign tycoons and even foreign governments in exchange for sweet deals and backing
Ortel, who has been investigating the Clinton Foundation's alleged fraud for several years, draws attention to the fact that the charity's donations have dropped 90% since 2014, after the Clintons lost political influence.
The analyst argued that the Clintons' fund was neither validly organized nor properly audited. In any other case those flaws would have caused the IRS to shut down the charity at inception, but not the Clinton Foundation, apparently because Bill Clinton had been the US president until 20 January 2001, according to Ortel.
Even though the FBI, the IRS, and the Department of Justice performed wide-ranging investigations into the Clinton charities, they somehow failed to notice obvious flaws, the analyst noted.
Ortel fears that foreign governments could have influenced the US State Department's decisions during Hillary Clinton's tenure as secretary of state: between 2010 and 2013, the foundation got $20 million in funds from mostly foreign governments.
One might wonder whether Clinton Foundation charities were also used for Hillary's presidential campaigns.
"Political campaigns are expensive in the United States, especially in major media markets," Ortel said. "These must be paid for using after-tax funds, and not through tax-exempt charities. But, if regulators are politicized and if donors and candidates know this, then the crooked game goes on and the public is the chief loser. Moreover, politicians can now dole out billions of dollars to donor-owned companies and to donor-connected charities. So there are ample motivations to fund campaigns illegally to be repaid many times over, also illegally."
20 October 2022, 16:23 GMT
Bidens' Influence Peddling
Hunter Biden's "laptop from hell" as well as the Republican congressional investigation described a disturbing picture of influence-peddling by the first son. The bombshell story of Hunter's laptop, reportedly abandoned by the younger Biden in a Delaware repair shop, was first released by the New York Post in October 2020.
At the time, the story was shredded as "Russian disinformation"
by the Democratic lawmakers, US mainstream press, and Big Tech, apparently to save Joe Biden from a potential election defeat. Later, however, forensic investigators and mainstream press admitted that files originating from Hunter's laptop were genuine
and 100% belonged to Hunter.
Damning documents suggest that he not only used his father's name to get generous gifts, hefty salaries, and top-level positions (in fields he had zero experience in
), but also got a "10-percent" or more share, presumably, for Joe Biden, referred to in Hunter's emails as the "big guy."
In October 2022, Republican Senator from Iowa Chuck Grassley stated that new whistleblower allegations
suggest President Joe Biden "was aware of Hunter Biden’s business arrangements and may have been involved in some of them."
Earlier that month, a team of cyber detectives brought together by ex-Trump aide Garrett Ziegler claimed that they had found at least 459 legal violations
by the US president's son and his associates after a year-long examination of the "laptop from hell."
BLM, FTX, Clinton Foundation & Hunter's Schemes Just Tip of Iceberg
"A safe assumption is that actual frauds such as BLM and FTX are but a tiny fraction of total frauds," Ortel said. "As a guess, total frauds are perhaps one hundred times greater if not even larger, just in the US, not considering worldwide scams. In context, unregulated globalism is a gigantic scam in that it benefits a small handful of insiders while punishing most workers in high cost nations."
According to the Wall Street analyst, "major powers might wish to empower competent professionals as bounty hunters to expose and then seize corrupt payoffs wherever these occur and then use net proceeds for truly sensible government pursuits."
"Instead, criminal grifters see that it is far easier to steal using fake charities than it is to make lawful money in the for-profit world. So the crooked games continue and the swamp rats get bolder and bolder, for now," Ortel concluded.