Following the collapse of the FTX crypto exchange, the platform’s founder Sam Bankman-Fried (SBF), has embarked on a media tour attempting to explain what went wrong. However, Bankman-Fried has been warned regarding the approach.
In particular, Ira Sorkin, the lawyer who represented Bernie Madoff, who perpetrated the largest individual Ponzi Scheme, has urged Bankman-Fried to ‘shut up’ as a probe into the collapse continues, Bloomberg reported on December 2.
According to the attorney, the Bankman-Fried media tour will have little impact on swaying public opinion over his alleged role in the FTX debacle.
“That’s the first order of business: don’t talk. You’re not going to sway the public. The only people that are going to listen to what you have to say are regulators and prosecutors,” Sorkin said.
SBF might be going against lawyer’s counsel
At the same time, Sorkin stated that Bankman-Fried might be going against the advice of his lawyers. According to Sorkin:
“Sometimes clients believe they are smarter than their lawyers. This guy is 30 years old, and he is not smarter than his lawyers. They should be telling him every five minutes to shut up, but sometimes clients don’t listen.”
In his first-ever audio interview, Bankman-Fried acknowledged that his legal team warned him against making public Twitter posts explaining what happened before the collapse.
Indeed, across the media tours, Bankman-Fried has maintained his innocence, denying any wrongdoing and stating that the collapse caught him by surprise.
Besides media tours, SBF has also been active on Twitter Spaces. For instance, in a recent appearance, SBF was tasked to explain his initial call requesting $4 billion to help the exchange avoid bankruptcy in which he gave a vague answer.
Accusations against SBF
SBF continues to face the accusation of embezzling customer funds, with a section of the market suggesting that he was running a Ponzi scheme.
As reported by Finbold, former Securities Exchange Commission (SEC) enforcement official John Reed claimed that the FTX collapse was worse than the Bernie Madoff Ponzi scheme. Interestingly, Robert Kiyosaki, author of the personal finance book “Rich Dad, Poor Dad,” also equated the FTX collapse to the Madoff Ponzi Scheme.
Notably, Bankman-Fried and former FTX promoters face a consumer class action lawsuit worth $11 billion. The exchange is accused of the alleged violation of yield-bearing crypto accounts associated with the exchange.