ICSM Business – Ian Carrotte’s warning on ‘Ponzie scheme’ FTX vindicated as fraudster Bankman Fried is jailed in the USA for 25 years

By Harry Mottram: The former CEO of crypto currency exchange FTX outfit Sam Bankman-Fried has been jailed in the USA in a New York court for 25 years for using billions of dollars of customers’ cash on personal projects. A luxury apartment, gifts to friends and colleagues, luxury goods and cars, real estate, a hide-out in the Bahamas and funds given to sports teams and political organisations. It was the largest fraud in history and according to his colleagues and even his girl friend said in court he knew he was committing fraud.

Speaking in 2022 ICSM’s Ian Carrotte described Bankman-Fried’s business as a Ponzie scheme as investors paid in money with no hope of realising any profits as the CEO was spending the cash on himself and his friends. He said: “His clients entrusted him with their cash as well,” said Ian Carrotte, “and he told them their investment was paying dividends and making them rich. Sadly, it was a pack of lies. If something is too good to be true, then it is just that.”

The so-called King of Crypto portrayed himself as a modest maths genius who wasn’t interested in personal wealth but who spend millions on luxury homes and goods as investors poured in money into his get rich quick business. The BBC said his crypto exchange, FTX, grew to be the second largest in the world with $10-$15bn (£7.9 - £11.8bn) traded daily. An NBA stadium was named after his company, and he secured celebrity endorsements from the likes of the NFL's Tom Brady. It unravelled when the crypto market had one of its crashes and his empire was exposed as investors wanted to withdraw funds. From business owners to small time investors from the general public lost their cash – while the authorities investigated the scam and Bankman-Fried was arrested.

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ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850. www.icsmcredit.com. Ian.carrotte@icsmcredit.com