Cointime

Download App
iOS & Android

Should US Lawmakers Go to Prison for Accepting Sam Bankman-Fried Donations?

Validated Individual Expert

Public disdain grows as we decide who is the worse person, Sam Bankman-Fried (SBF) or the man formerly known as Kanye West. Interestingly, the authorities have apprehended neither of these men. SBF's potential crimes are evident and apparent to everyone, and Kanye has committed a hate crime with his threats.

Meanwhile, on the other side of the world, one couple faces 20 years in prison for a crime many would argue they did not commit. Australian residents Thevamanogari Manivel and Jatinder Singh are being charged with theft after Crypto.com mistakenly deposited $10.5 million in their bank account.

Rather than research the source and return the funds, the couple spent the "perceived" windfall on a lavish lifestyle many of us dream about. According to Business Insider, they gave money to their children, paid off a friend's mortgage, and purchased luxury items, furniture, and art.

The argument against the Australian pair is that they should have recognized the funds were not rightfully theirs and found out who they belonged to. Hence, the prosecution equates their actions as theft and negligent dealing with the proceeds of a crime.

If Manivel and Singh are found guilty, it leads me to wonder: should US lawmakers who accepted funds from Sam Bankman-Fried be required to stand trial for accepting political donations?

I'm not a lawyer

I'm not a lawyer, never spent a day in law school, and won't pretend to know the letter of the law. I'm not trying to cite codes or regulations the Australian couple may have violated, or US political parties may have broken.

But, it raises the question of certain people facing prosecution for alleged crimes that weren't wholly their fault.

Looking at it from the Manivel and Singh side

Crypto.com messed up. They deposited $10.5 million in funds into a bank account for one of their customers. It took Crypto.com over seven months to recognize the error and figure out the mistake they made.

Manivel and Singh almost certainly knew the money was not theirs. But we aren't talking about finding a briefcase of cash in the street and deciding what to do with it. Instead, the funds were deposited into their bank account.

In theory, most of us would find out where the windfall funds came from if we magically had $10.5 million deposited in our checking account. But I'm sure most reading this would be tempted to spend at least some of the funds. I know I would.

After all, is it stealing if someone puts money in your bank account? I'm not a lawyer, but apparently, it is. And if Crypto.com hadn't been reckless, none of the funds would be in the couple's account.

Further, according to the story, $7 million of the assets were accounted for. So Crypto.com is getting a minimum of 70% of the funds they made a mistake in depositing.

Drawing a correlation to US politics

SBF is being interviewed like a celebrity for the tremendous crimes he committed on millions of investors. Yet, on a November 16 phone call, he states, "I donated to both parties. I donated about the same amount to both parties."

It was common knowledge that SBF was a substantial democratic supporter. He was Biden's second-largest donor in the 2020 presidential campaign. But, in regards to midterm elections, he states:

“All my Republican donations were dark. And the reason, was not for regulatory reasons, it’s because reporters freak the fuck out if you donate to a Republican because they’re all super liberal. And I didn’t want to have that fight so I just made all the Republican ones dark,” Bankman-Fried said on the call, claiming he was the “second or third biggest” donor to Republicans in 2022.

Surprisingly, I'm not a political expert either. So I looked up what a dark donation is, and here is the Google definition.

In the politics of the United States, dark money refers to spending to influence elections where the source of the money is not disclosed to voters. In the United States, groups that may spend on campaigns without disclosing who their donors are some nonprofit organizations.

Interestingly, we have tens of millions of dollars donated to Republicans and Democrats that we now learn have been stolen from retail and institutional investors. Unfortunately, like Manivel and Singh, the politicians didn't research where the funds were sourced and (I imagine) spent most of the funds on their campaign.

In total, SBF and his twisted menagerie of terror donated tens of millions of dollars to political campaigns. Does it seem strange that none of these politicians scratched their heads or thought to dig deeper about how this "self-made" guy under 30 could donate so much money?

Further, does the fact that SBF is not in jail now mean that his donations give him preferential treatment? Should dark contributions even be allowed? And should the politicians and their parties who accepted these donations be required to pay back the ill-gotten funds they received?

So why is the Australian couple facing 20 years for a few million, and SBF and politicians haven't had any repercussions?

Wouldn't you agree that SBF "losing" billions of investors' dollars and ruining an untold number of financial lives will have a more significant impact than the $3 million that Crypto.com lost due to its error? And, if politicians are getting windfall donations from questionable sources, should they have due diligence to seek how the funds were earned?

Further, if companies or individuals donate to both sides during an election, does this equate to bribery? Some politicians re-gifted or donated the funds after learning they came from a corrupt source. Can we argue they negligently dealt with the proceeds of a crime? I'm confident FTX investors would rather see those funds than have them donated elsewhere.

The Sickening Part

I don't expect repercussions against any political person or party for accepting stolen money. I doubt the funds will be reimbursed to FTX investors by the parties. But I don't understand how SBF and politicians' actions aren't significantly worse than those of Manivel and Singh.

On a separate point, the SEC has been going after Ripple for two years, accusing them of being a security. This illustrates that the SEC is proactively seeking to regulate crypto. So is the SEC culpable for not enforcing protecting investors from mammoth losses by the FTX bankruptcy, BlockFi bankruptcy, Celsius bankruptcy, Voyager bankruptcy, and other bankruptcies impacting millions of lives?

Further, the head of SEC, Gary Gensler, was meeting with SBF to go over regulations in the crypto space. It's like Gordon Ramsay approached Jeffrey Dahmer for instructions on cooking a vegetarian cookbook.

Takeaways

I'm not saying that the Australian couple isn't guilty of some crime. But if Crypto.com hadn't put the money in their account, none of this would have happened. Meanwhile, SBF knowingly committed fraud and stole account holders' money. In addition, he questionably donated large sums to both political parties. The political parties blindly accepted the funds, just like Manivel and Singh.

I understand one case is in Australia, and the other is in the US, so different laws may apply. Likewise, SBF is/was based in the Bahamas, so that may also have different laws applied. But how can people who fleeced billions of dollars from millions of people not be open to scrutiny or prosecution when a couple who a corporation mistakenly gave millions of dollars faces twenty years in prison?

Let me know what you think. I'm confident there are legal precedents differentiating these crimes. However, I can't see any law allowing one guy to steal billions of dollars and buy politicians. Do you think Manivel and Singh deserve prison time? Would you be tempted to spend $10.5 million if it mistakenly appeared in your account? Share your thoughts in the responses.

Comments

All Comments

Recommended for you

  • Web3 AI training company FLock raises $6 million in seed funding

    Web3 artificial intelligence training company FLock has raised $6 million in seed funding led by Lightspeed Faction and Tagus Capital. FLock will use these funds to develop its team and build a federated learning-driven artificial intelligence training platform.

  • Prisma: Vault owners need to prohibit delegation of contracts related to LST and LRT

    The LSD stablecoin protocol Prisma Finance stated in a post that for vault owners, please prohibit delegating authorization of the LST contract starting with 0xcC72 and the LRT contract starting with 0xC3eA.

  • MAS: Singapore is working on global first-tier fund tokenization regulation

    Chia Der Jiun, Managing Director of the Monetary Authority of Singapore, introduced some fund tokenization pilots at an event for asset managers. These pilots are part of the Project Guardian and MAS Global Layer 1 (GL1) tokenization plans. Chia Der Jiun emphasized the advantages of tokenization in real-time settlement and process automation, which can improve efficiency and achieve greater customization of funds. UK asset management company Schroders and fund distribution platform Calastone are exploring this as part of the Project Guardian public blockchain trial in Singapore. A recent survey by Calastone showed that 96% of asset management companies in the Asia-Pacific region plan to launch tokenized products within three years. Chia stated that as these Project Guardian pilot projects approach commercialization, MAS is working with the pilot project managers to study the legal and regulatory treatment and impact of tokenized investment funds."

  • Indonesia's Financial Services Authority to Regulate Crypto Industry in 2025 with Evaluation in Regulatory Sandbox

    Indonesia's Financial Services Authority (OJK) will take over regulation of the crypto industry from the commodities agency Bappebti. Crypto firms must undergo evaluation in a regulatory sandbox before being licensed to operate in the country. The OJK aims to prioritize consumer protection and education, and firms operating without evaluation in the sandbox will be considered illegal. The sandbox provides a safe and isolated environment for testing and innovation development, helping to enhance security and responsible management in the financial sector. Once under OJK's oversight, crypto assets will likely be reclassified as financial instruments.

  • The Shenzhen Illegal Fund Raising Prevention Office issued a risk warning on the "DDO digital options" business

    The Shenzhen Office for Preventing and Dealing with Illegal Fundraising issued a risk warning regarding the "DDO digital option" business. The activities related to the DDO digital option business conducted in the name of Dingyifeng International are essentially the issuance and trading of virtual currencies. According to the "Notice on Further Preventing and Dealing with Risks of Speculation in Virtual Currency Trading" jointly issued by ten departments including the People's Bank of China in September 2021, it is clear that virtual currency-related business activities are illegal financial activities, and overseas virtual currency exchanges providing services to residents within China are also illegal financial activities. The activities conducted by Dingyifeng International in the name of serving residents within China are suspected of illegal fundraising and other illegal financial activities. Our office has organized relevant departments to carry out work, resolutely deal with illegal fundraising and criminal activities, and seriously investigate the legal responsibilities of relevant personnel. (Shenzhen Local Financial Supervision and Administration Bureau)

  • The Hong Kong Legislative Council plans to review the relevant stable currency consultation and sandbox legislation at the end of this year or next year

    Hong Kong legislator Wu Jiezhuang revealed that Hong Kong will release stablecoin consultation and sandbox (computer security mechanism), which will allow the industry to innovate digital asset projects in the sandbox environment. Relevant legislation will be reviewed in the Legislative Council at the end of this year or next year, which will help the entire digital asset industry ecosystem. Hong Kong has been improving the digital asset (virtual asset) market on different legal levels. Last year, there were regulations on virtual currency trading platforms and issuance systems.

  • Vitalik: Humanity needs to create a world where blockchain and artificial intelligence work together

    Vitalik Buterin, the founder of Ethereum, stated at BiddleAsia 2024 held at Signiel Seoul in the Songpa district on March 28 that artificial intelligence is a huge market and its importance is increasing day by day. We need to create a world where blockchain and artificial intelligence work together. Artificial intelligence can now create applications with 100 to 500 lines of code. Vitalik also stated that the ability to write 10,000 lines of code can eliminate most of the bugs in the Ethereum virtual machine.

  • South Korean RWA blockchain technology development company PARAMETA completed a new round of financing of approximately US$7.5 million

    South Korean RWA blockchain technology development company PARAMETA announced the completion of a new round of financing of KRW 9 billion (approximately $7.5 million), with Shinhan Hyperconnect Investment Fund under Shinhan Venture Investment and Korea Asset Investment & Securities participating. As of now, the company's total financing has reached KRW 25 billion (approximately $20.8 million). PARAMETA plans to use this investment to expand its own blockchain technology research and development capabilities to meet RWA technology needs and expand from core technologies such as engines/chains to service applications. Relevant services are expected to be launched within the year.

  • Incheon, South Korea launches blockchain hub city

    South Korea announced on the 28th that it will establish a blockchain technology innovation support center in the Songdo Michu Building in the second half of this year. Incheon was finally selected as a participant in the "2024 Regional Blockchain Technology Innovation Support Center Construction Project" jointly organized by the Korean Ministry of Science, ICT and Future Planning and the Korea Internet & Security Agency (KISA). Incheon is the third region to be selected after Busan and Daegu. In February last year, Incheon established a dedicated blockchain department and formulated a four-year plan to create a blockchain center city, which was promised by Incheon Mayor Liu Zhengfu. After being selected, Incheon will receive KRW 1.8 billion in government funding.

  • FTX agrees to sell FTX Europe back to its founders for $32.7 million

    Bankrupt cryptocurrency exchange FTX has reached a settlement in a lawsuit in which the company attempted to recover $323 million spent on acquiring a European startup. FTX stated that it paid an excessive fee for a startup that was "unable to launch and operate," and FTX Europe's founder will buy back his company for $32.7 million. It is reported that Digital Assets DA AG was acquired by FTX and renamed FTX Europe in 2021, and FTX stated in a lawsuit in July 2023 that the acquisition was a "huge overpayment" paid with FTX customer funds. According to documents submitted to the Delaware Wilmington Bankruptcy Court on Thursday, FTX stated that no other buyers would agree to purchase its European subsidiary FTX Europe, and the proposed settlement is the best result for FTX creditors. (Reuters) In July 2023, FTX Trading recently sued insiders of FTX's European division, claiming that former CEO SBF paid an obviously high acquisition price. Accounting firm BDO stated that FTX's $376 million acquisition of Swiss startup Digital Assets AG (DAAG) "reasonably represents fair value" and is not improper. DAAG was later renamed FTX Europe.