As the consequences of the collapse of FTX, what used to be one of the largest crypto exchanges in the world, are still felt across the cryptocurrency market, and after the arrest of its founder Sam Bankman-Fried, former stockbroker Jordan Belfort had a few things to say about the whole situation.
Commonly known as the “Wolf of Wall Street,” Jordan Belfort said that SBF was “done” and that the implosion of the FTX ecosystem was largely fuelled by the amphetamine use of Caroline Ellison, the former CEO of Alameda Research, who was arrested alongside SBF, as he told in the interview with Newsmax’s Eric Bolling published on December 23.
According to Belfort, the situation is playing out exactly how he thought it would, which is the cooperation of SBF and the other persons involved in the scandal.
“They have copped pleas, which means that they’re giving a roadmap to the U.S. attorney and the FBI right now. This guy has got no shot. He has no defense. He’s gonna plead guilty at some point and cop a plea. He’s not going to go to trial, and he’s going to get sentenced. My guess is somewhere north of 50 years in jail, maybe even more.”
Comparing the alleged scheme with that of Bernie Madoff, the former stockbroker said that this was “really an open-and-shut case” of stealing people’s money, for which there’s no defense.
“So people were depositing money into FTX, thinking they were putting money into a brokerage firm and the money was being segregated into each person’s account, and he had a backdoor, taking the money out into Alameda which was his trading arm.”
Belfort also said that the FTX leadership were “the worst traders on the planet,” losing billions of dollars in the bet that was “being propped up by customer funds.” As he added, losing a couple of billion dollars is “actually really easy because they were trading with leverage, and that’s the disaster.”
Ellison and amphetamines
Referring to Ellison, he also commented that “it’s very easy to lose massive sums of money” when drugs are involved, explaining that:
“The thing about amphetamines and cocaine is that you think you’re sharper when you’re on them, but you’re actually not nearly as sharp, but you really think you’re brilliant, so in her own mind, she thinks she’s got this collective brilliance around her by being high on amphetamines.”
On top of that, he believes that Ellison was lulled into the “false sense of security from when anyone could make money in crypto trading,” but that later on, “the way they make money starts to collapse and now she has to be a real trader, (…) and she got absolutely, positively slaughtered on leverage fuelled by methamphetamines.”
Missed red flags and bad trading
Earlier in November, Belfort expressed his view that the FTX collapse was likely premeditated, labeling SBF as a sociopath, and comparing FTX’s business model to a ‘frat house,’ while questioning why its backers had failed to notice the red flags, as Finbold reported.
It is also worth noting that Gregory Coleman, the retired FBI agent who was involved in the cases of the Bernie Madoff Ponzi scheme and Belfort’s prosecution, said that prosecuting SBF was simple and that investigators only needed to follow the money while treating the situation as bad trading.
Watch the entire interview below: