Cryptocurrency Fraud , Fraud Management & Cybercrime , Video

Sam Bankman-Fried, Fraud and the Future of Crypto

Policy Expert Ari Redbord Details SBF Case Standouts, Illicit Crypto Ecosystem
Ari Redbord, global head of policy, TRM Labs

Less than a week ago, FTX founder Sam Bankman-Fried filed a notice of his intent to appeal his seven counts of fraud and conspiracy convictions and 25-year prison sentence. The former crypto wunderkind's case has been the most dramatic and closely followed trial in the industry so far, and it is expected to significantly affect not just the company he founded but also the regulatory future of crypto and the illicit finance space.

See Also: Small Business. Large security risks.

Several aspects of the disposal and outcome of the case stand out, said Ari Redbord, global head of policy at blockchain intelligence company TRM Labs.

"From day one, I was really blown away by just how quickly the case moved. This is a very complicated case, involving millions of pages of documents and cooperating witnesses who have all had to plead guilty - and even an extradition. And yet, within essentially a year and a half of FTX's collapse, we had a guilty verdict and a 25-year sentence. Having been a prosecutor for over a decade, I can tell you that is very, very rare, if not unprecedented," Redbord said.

The sentence in itself is "pretty extraordinary," he said. "You don't see a lot of 25-year sentences, and there's no parole in the federal system: He will do at least 85% of those 25 years, and that extra 15% is for good behavior. It is a very, very long sentence for a defendant this age in particular."

In this video interview with Information Security Media Group, Redbord also discussed:

  • How Bankman-Fried's case serves as a lesson on the failures of the opaque segments of traditional financial systems, and not necessarily blockchain;
  • How to curb illicit activity in crypto, including the effectiveness of sanctions;
  • Why TRON blockchain is now a favorite of criminals.

In addition to leading policy at TRM Labs, Redbord serves as vice-chair of the Commodity Futures Trading Commission's Technology Advisory Committee, which addresses issues at the intersection of technology, law, policy and finance. He previously served as senior adviser to the deputy secretary and the undersecretary for terrorism and financial intelligence at the United States Treasury, working with teams in the Office of Foreign Assets Control and the Financial Crimes Enforcement Network. Prior to Treasury, he spent 11 years as an assistant attorney for the District of Columbia, where he investigated and prosecuted terrorism, espionage, threat finance and cryptocurrency.

About the Author

Rashmi Ramesh

Rashmi Ramesh

Assistant Editor, Global News Desk, ISMG

Ramesh has seven years of experience writing and editing stories on finance, enterprise and consumer technology, and diversity and inclusion. She has previously worked at formerly News Corp-owned TechCircle, business daily The Economic Times and The New Indian Express.

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