Current:Home > InvestThe trial of 'crypto king' SBF is the Enron scandal for millennials-VaTradeCoin
The trial of 'crypto king' SBF is the Enron scandal for millennials
View Date:2025-01-09 11:24:16
Over the past 20 years, according to authors Gretchen Morgenson and Joshua Rosner, the number of federal white-collar prosecutions fell by half. Think of the limited prosecutions following the 2008 financial crisis as proof. The question now is whether the high-profile trial of cryptocurrency magnate Sam Bankman-Fried is about to change that.
First, some history. In the 1980s after the savings and loan crisis, the Department of Justice convicted more than 1,000 bankers. This aggressive approach reached its apex with 2006’s Enron trial.
Since then, though, the number of white-collar prosecutions has dwindled. One reason may be that the financial machinations at the center of white-collar schemes became so complex that prosecutors hesitated to try to explain them to juries.
Whatever the reason, frustration is mounting. Populist movements have blossomed on the right and left, sharing a distrust of the rich. Faith in institutions has plummeted. For my generation (I’m a millennial who graduated college in 2008), we have never known a world where these sorts of cases were the top priority for authorities.
SBF trial will set mold for white-collar prosecutions
But now Sam Bankman-Fried, known as SBF, and his cryptocurrency exchange (FTX) have entered the chat. If SBF is convicted, it will be Enron for millennials − a generational case that could resuscitate the practice of white-collar convictions. Here’s why.
Set aside the complexity of margin loans, digital currency and cross-border regulations. The question facing SBF’s jury is simple: Did he lie to − did he intend to trick − his customers and use their money as his own?
Proving intent is hard. We cannot crawl inside the mind of a defendant.
Prosecutors instead use circumstantial evidence, such as altered financial statements, to connect the dots.
Crypto's former golden boy is tarnished.What investors can learn from FTX's failure.
SBF prosecutors will be challenged to prove intent
I’ve seen plenty of white-collar investigative files, and proving intent will be particularly challenging here. SBF’s defense is that he was an absent-minded professor who lost track of how much money was going in and out of a booming crypto exchange.
Showing intent is even harder when words such as “blockchain” also have to be explained to the jury.
And the stakes for winning are high. Forbes once called SBF the “richest self-made newcomer in Forbes 400 history.” For my parents, I’ve explained it as the equivalent of indicting Warren Buffett.
Will Trump go to prison?Why jail time is unlikely for the former president.
For those of us who work in white-collar law enforcement, we’re watching closely. Prosecutors make decisions about what they think a jury will believe based on what they think society will accept. Will a jury of 12 folks − a teacher, a physician assistant, a train conductor − be able to wade through abstruse finance terms and find SBF guilty?
If so, it may imbue other prosecutors with confidence to take on similar cases.
Or have prosecutors emerged from their post-2006 hidy-hole only to get kicked in the teeth? Was this the wrong case for such a gamble?
If so, law enforcement will have another piece of evidence that financial fraud trials in the age of crypto (and collateralized debt obligations and every other complex instrument) may not be worth trying.
Shad White is the state auditor of Mississippi.
veryGood! (635)
Related
- Tony Todd, star of 'Candyman,' 'Final Destination,' dies at 69
- Journalism has seen a substantial rise in philanthropic spending over the past 5 years, a study says
- A woman abandoned her dog at a Pennsylvania airport before flying to a resort, officials say
- Wild monkey seen roaming around Florida all week: Keep 'safe distance,' officials say
- Moana 2 Star Dwayne Johnson Shares the Empowering Message Film Sends to Young Girls
- Climate change made it in the GOP debate. Some young Republicans say that's a win
- Infrastructure turns into a theme in election-season speeches at Kentucky ham breakfast
- Epilogue Books serves up chapters, churros and coffee in Chapel Hill, North Carolina
- AI could help scale humanitarian responses. But it could also have big downsides
- The Ultimatum's Brian and Lisa Reveal Where Their Relationship Stands After Pregnancy Bombshell
Ranking
- Fantasy football buy low, sell high: 10 trade targets for Week 11
- The Ultimatum's Brian and Lisa Reveal Where Their Relationship Stands After Pregnancy Bombshell
- Prosecutors seek plea hearings for 2 West Virginia jail officers accused in inmate’s death
- Scores of Trump supporters show support outside Georgia jail ahead of his expected surrender
- Blake Snell free agent rumors: Best fits for two-time Cy Young winner
- The viral song 'Rich Men North of Richmond' made its way to the RNC debate stage
- Uber raises minimum age for most California drivers to 25, saying insurance costs are too high
- USA Gymnastics doesn't know who called Simone Biles a 'gold-medal token.' That's unacceptable.
Recommendation
-
NBPA reaches Kyle Singler’s family after cryptic Instagram video draws concern
-
Judge OKs updated Great Lakes fishing agreement between native tribes, state and federal agencies
-
Terry Dubrow Reveals Romantic Birthday Plans With Wife Heather After Life-Threatening Blood Clot Scare
-
The FAA will consider tighter regulation of charter flights that look more like airline service
-
Champions Classic is for elite teams. So why is Michigan State still here? | Opinion
-
Lala Kent Shares Surprising Take on Raquel Leviss' Vanderpump Rules Exit
-
Lawsuit over deadly seaplane crash in Washington state targets aircraft operator and manufacturer
-
WWE Champion Bray Wyatt Dead at 36