““If you read your contract when you deposit your crypto or your dollars on his exchange, they’re your coins and you have title to them, and lending them to his family office was not part of the deal. So, you know, nobody who participated in that exchange signed a contract that Sam could take your coins and run a hedge fund with them. That’s fraud.””
— Mike Novogratz
Galaxy Digital CEO Mike Novogratz has every reason to be furious with FTX and Sam Bankman-Fried. After all, Novogratz has already addressed the fact that his firm doesn’t expect to recover some $77 million in cash and digital assets it had parked with FTX when the whole enterprise went belly-up.
During an interview with CNBC’s “Squawk Box” on Wednesday, Novogratz joined a growing chorus of politicians, cryptocurrency enthusiasts and others who have been asking the same question: how is it that Sam Bankman-Fried is still free to go about his business?
“I had some young kids break into my apartment four years ago, they stole a couple of laptops, and within three days the NYPD had arrested them and they were in jail,” Novogratz said.
“Maybe I’m not a judge or a lawyer, but I read my contract and [Bankman-Fried] certainly did things with our coins that were illegal. And he’s running around the Bahamas, giving press conferences, going on TV.”
What’s almost as surprising, according to Novogratz, is that SBF has continued to try and explain what went wrong at FTX, most recently in a statement to the firm’s employees that was publicized by CoinDesk on Tuesday. Nowhere does he address reports that customer funds were seemingly used to buy real-estate while SBF himself took a $1 billion loan out from Alameda, according to a Bloomberg News report.
As for whether SBF might eventually find himself in custody, Novogratz said he expects it will happen at some point.
“That whole thing kind of surprises me. I think his day will come,” Novogratz said.
“I’m shocked that his father, who is actually a lawyer, is letting him talk, or that anybody is listening to him. Liars lie, and will continue to lie,” he added.
Since FTX’s collapse, outrage has been percolating on social media and on Twitter Inc., where many have demanded that politicians — both Republicans and Democrats — who took donations from Bankman-Fried, FTX, or other FTX employees return the money.
Bankman-Fried personally donated roughly $38 million to politicians and political action committees ahead of the U.S. midterm elections in November, with much of this money going to Democratic candidates and PACs backing them, according to media reports.